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CNN Wolf Blitzer Reports

Deadly Blast Levels Hotel in Baghdad; Did U.S. Spyplane Spot bin Laden before 9/11?

Aired March 17, 2004 - 17:00   ET

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


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


(BEGIN VIDEOTAPE)
WOLF BLITZER, CNN ANCHOR (voice-over): Baghdad bombing. A deadly blast levels a hotel in the heart of the capital. We're at scene of the inferno.

Squaring off over Iraq and national security.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: And the administration stubbornly holds the failed unilateral policies that drive potential, significant, important, longstanding allies away from us.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: America's friends know they can trust, and America's enemies know they can fear the decisive leadership of president George W. Bush.

BLITZER: Eye on al Qaeda. Did a U.S. spy plane spot bin Laden long before 9/11?

Diva's daughter.

ALEXIS STEWART, MARTHA STEWART'S DAUGHTER: I don't think she's going to give up. I think she's incredibly saddened.

BLITZER: Martha Stewart's only child on the guilty verdict and more.

ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, March, 17, 2004.

(END VIDEOTAPE)

BLITZER: You're look live at Baghdad. Just after 1:00 a.m. in the Iraqi capital. The search continuing, the recovery effort continuing at this hour following a massive attack that occurred some five hours ago.

Hello from New York.

Almost one year after the war started in Iraq, the violence is by no means over. Authorities now put the death toll at 28 in today's terror bombing right in the heart of Baghdad. As many as 50 other people were hurt in the explosion. It's being blamed on a 1,000-pound car bomb. It virtually destroyed a five-story hotel in central Baghdad, as well as several nearby shops and homes.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): The huge blast brought U.S. troops and Iraqi ambulance racing to the scene.

Happened just after 8:00 p.m. local time at Mount Lebanon Hotel In central Baghdad. Hotel air conditioners, furniture, bricks and other debris were propelled hundreds of feet.

International journalists staying in another hotel nearby heard the explosion. "Newsweek"'s Melinda Lui was one of the reporters who arrived at the scene.

MELINDA LUI, "NEWSWEEK" CORRESPONDENT: First of all there was a flash of huge explosion. And so my photographer and I got in a car and we went over there.

When we arrived it was very early on and quite a chaotic scene. There were -- this hotel was on fire. It's a five-story hotel. Big clouds of black smoke. Of course it was night so it was hard to see what was going on.

BLITZER: U.S. officials blame the blast on a car bomb.

COL. RALPH BAKER, U.S. ARMY SPOKESMAN: It looks like a car bomb tonight, probably around 1,000 pounds. We have a crater 8 feet by 10 feet deep.

And estimates about 27 KIA and about 40 wounded right now. But it's fairly difficult to really determine exactly right now since it's dark and there's a lot of rubble.

BLITZER: The blast produced a 20-foot crater, a raging fire and sent wounded victims screaming for help. U.S. soldiers tried to help with rescue efforts but some were driven back by angry Iraqis who think the U.S. presence is provoking insurgent violence and accused the U.S. of failing to provide adequate security.

The Mount Lebanon Hotel is an unfortified residential hotel that often houses business people, including westerners.

Just two days ago, a U.S. commander talking with CNN's Aaron Brown, predicted an upswing in attacks aimed at block the transition to Iraqi self-rule.

GEN. JOHN ABIZAID, CENTCOM COMMANDER: Over the next 30 days, what makes me the most nervous is what I think is going to be a clear increase in violence by those that want to derail this process.

(END VIDEOTAPE)

BLITZER: And we received new dramatic video of the attack, just after the car bomb exploded right near the mount Lebanon hotel. Let's take a look at this new video.

You can almost feel the pain, you can feel the horror, the shock unfolding in the minutes after this car bombing.

Joining us from the scene, on the phone, once again, CNN's Baghdad bureau chief Jane Arraf. Jane, we're going to show our viewers some live pictures of what's happening on the scene. But for some of our viewers tuning in right now, set the scene for us what we're seeing.

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: Wolf, what we're seeing is the remains of a huge car bomb. And officials now say it appears to have been a suicide bomb, a car that was in motion when it detonated and it detonate an estimated 1,000 pounds of explosives.

The location, a narrow street in central Baghdad. On one side, residential homes older and modest homes, apartment buildings. On the other, a new hotel built just after the fall of Saddam Hussein. It was called Mount Lebanon Hotel. And the managing director of that hotel tells us when the explosion hit, he believes there were nine guests in the hotel, including two Britons, two Jordanians, two Egyptians and the Lebanese owner.

Now some of the Britons -- the Britons, rather, worked for Iraqi Mobile Phone Company. That's an Egyptian company that had been awarded this contract, a sign of Iraqi progress, the fact that there are now mobile phones, But a contract awarded and controversy.

No one yet is speculating who might have been behind this. But military officials say it does have the hallmarks of a foreign group. The size of the bomb, the devastation, the way it was carried out, a part of series of suicide bombs that have erupted in the country as it heads towards the June 30 handover from the U.S. and British occupation back to Iraqis who are increasingly wondering what their future holds -- Wolf.

BLITZER: Normally, on the first anniversary of the liberation of a country, Jane, you would think that there would be celebrations under way in the streets of Baghdad, other major cities of Iraq. Are we anticipating -- do we expect that to occur in the coming days, this one-year anniversary?

ARRAF: This has become the kind of climate, Wolf, where people are afraid to congregate. They do not go out late at night. This is a very social city, a very social country. People would be used to staying out late in restaurants celebrating weddings into the night, driving through streets with families parked in cars and taxis.

They don't do that anymore. They're worried about attacks as this . And for that reason, they're unlikely to be massive celebrations. The fear is they would just be inviting suicide bombs like this or attacks like this.

Wolf, people are afraid these days. They still hope that this country will recover, they hope it will recover and expect it to recover, many of them, few years from now. But in the near term, they are really quite unsettled and quite frightened, many of them.

BLITZER: CNN's Jane Arraf, doing an outstanding job for us on the scene for us for our viewers around the world. Thank you very much, Jane.

Let's get more assessment on today's explosion in Baghdad. "TIME" magazine correspondent Michael Ware is joining us on the phone also from Baghdad. Michael, where were you when you heard the bomb?

MICHAEL WARE, "TIME" CORRESPONDENT: I was in my house in a residential suburb of Baghdad, quite a normal area in a very placid street. And of course everyone was struck by this event.

When I approached the scene, it too -- I also saw the chaos, the pandemonium and the panic. I managed to press through the (UNINTELLIGIBLE) and made it through the bomb crater itself, this massive wound that's been gauged out of the road.

And the thing that most struck me having been here over a year is that I have seen this before time and time again. I remember last summer when the Jordanian embassy was hit, the first big suicide car bombing, closely followed by the U.N. Headquarters bombing. And that's the bombing that this one most closely resembles.

That was 1,500 pounds of scrounged ordnance and bombs and artillery rounds. Tonight was 1,000 pounds. This might be terrorists doing it, but they can't collect that material without Iraqi logistics support and the most tragic thing about it is so far, as much as we're aware, we still have not caught any of these bombers from the Jordan embassy, from the U.N. headquarters, nor from any of the most recent things. This is a long-term, ongoing campaign, and these guys keep getting away with it and it's only going to escalate.

BLITZER: "TIME" magazine's Michael Ware reporting for us on the phone. Be careful over there, thank you very much for that chilling assessment.

Here again is what we know about today's massive bombing at the Mount Lebanon hotel in Baghdad. It's blamed on a car bomb packed with at least 1,000 pounds of explosives. At least 28 people were killed and as many as 50 other people were wounded. It came as the U.S.-led coalition kicked off Operation Iron Promise, a citywide sweep for suspected militants.

Our live coverage of the deadly bombing in Baghdad will continue this hour. I'll discuss the immediate threats with our security expert Kelly McCann and other big picture with our CNN analyst Ken Pollack. Plus this.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: He speaks as if only those who openly oppose America's objectives have a chance of earning his respect.

(END VIDEO CLIP)

BLITZER: In no mood to wait until the fall. The vice president comes out swinging against the Democratic candidate, John Kerry. But Kerry has choice words of his own, slamming the Bush White House over the war in Iraq.

And we're also getting new information on the hunt for Osama bin Laden. A window into just how close U.S. forces came to finding the al Qaeda leader. Our special coverage will continue.

(COMMERCIAL BREAK)

BLITZER: Chaos outside a Baghdad hotel reduced to rubble, by what authorities say was a 1,000-pound car bomb. You're looking at live pictures now. Rescue workers searching that rubble, hoping to find a survivor. More realistically looking for remains. At least 28 people are dead. More than 50 people are injured. Right now people continue as you see to dig through the rubble, sometimes by hand, and the death toll easily could rise.

The devastating bombing drew a vow of resolve today from vice president Cheney. It came during a hard-hitting policy speech in which he also let loose against the Democratic presidential candidate John Kerry. Let's go live to our White House correspondent Suzanne Malveaux -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: This comes at a time when the White House has been trying to highlight U.S. successes inside Iraq, at the one-year anniversary of the U.S. invasion of that country. They're trying to convince American voters and foreign allies to stay the course. It was a previously scheduled speech when Vice President Dick Cheney using this bombing today to express America's resolve.

(BEGIN VIDEO CLIP)

CHENEY: Thugs and assassins in Iraq are desperately trying to shake our will. Just this morning, they conducted a murderous attack on a hotel in Baghdad. Their goal is to prevent the rise of democracy, but they will fail.

(END VIDEO CLIP)

MALVEAUX: And, of course, Wolf, all of that has a political component as well, national security being a central theme in the campaign this year, Cheney delivering his remarks at the Ronald Reagan Presidential Library. Meant to draw a comparison between President Bush and his war on terror and Reagan's own challenges with communism, but Cheney, essentially painting a picture of President Bush's opponent, Senator Kerry as one who is indecisive, one who is uncommitted to the troops when it comes to securing a national security and the war on terror.

(BEGIN VIDEO CLIP)

CHENEY: Even if we set aside these inconsistencies and changing rationales. This much is clear, had the decision belonged to Senator Kerry, Saddam Hussein would still be in power today in Iraq. In fact, Saddam Hussein would almost certainly still be in control of Kuwait.

(END VIDEO CLIP) MALVEAUX: Wolf, they expect to hear much more of this. President Bush tomorrow traveling to Fort Campbell, Kentucky to visit with the troops and make a major speech when it comes to the update for successes of the war on terror and Afghanistan and Iraq on Friday -- Wolf.

BLITZER: Suzanne Malveaux at White House. Thanks for that report.

The vice president's national security speech came just an hour after the likely Democratic nominee launched a similar salvo at the Bush administration. For that, we turn to CNN's Brian Todd in Washington.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT: At the very moment terror strikes in Baghdad, John Kerry is in Washington, not yet aware of the breaking news and attacking the Bush record and the war on terror.

SEN. JOHN KERRY, (D-MA), PRESIDENTIAL CANDIDATE: Today, the world is a less safe, more dangerous place.

TODD: And getting backup from different quarters.

JOSE LUIS RODRIGUEZ ZAPATERO, SPANISH P.M.-ELECT (through translator): The occupation is a fiasco.

TODD: At George Washington University, the Democratic nominee to-be, unveils what he calls a military bill of rights that he'd propose if elected. Improvements in pay, health care and other benefits for military families who he says have been left behind by their current commander in chief. Soldiers, he says, who have been left unprotected.

KERRY: Tens of thousands of troops were deployed to Iraq without the most advanced bulletproof vests that could literally make the difference between life and death.

TODD: Kerry hammers away at the president's record on military funding, counterpunching with the Bush/Cheney campaign and the White House.

SCOTT MCLELLAN, WHITE HOUSE PRESS SECRETARY: Senator Kerry's record tends to contradict his own election year rhetoric.

TODD: A reference to Kerry's vote against a bill to spend an extra $87 billion for military operations in Iraq, as John Kerry speaks, he's eclipsed by events in Iraq. Before the Baghdad bombing, Spain's new leader thrust into office in the wake of the Madrid train attacks, leaves little to interpretation on who he supports in the U.S. election.

ZAPATERO (through translator): I say to the Spanish people, this is our opportunity to do things before the Americans. Let's change our government here and then see how Kerry does in the elections over there.

TODD: Over here, John Kerry's in damage control within his own ranks. Former opponent, current ally, Howard Dean on a conference call with reporters says, the president is the one who dragged our troops to Iraq, which has apparently been a factor in the death of 200 Spaniards over the weekend. Kerry, pressured by Republicans to repudiate Dean, is later quoted as saying, it's not our position. Brian Todd, CNN, Washington.

(END VIDEOTAPE)

BLITZER: And we're just getting this into CNN. A statement from John Kerry on the Baghdad bombing earlier today. Let me read some of it.

"Today's horrific bombing in Baghdad further demonstrates that the work of building a peaceful and stable Iraq is far from done. But we cannot allow those willing to use violence against innocent civilians to succeed in undermining our commitment to seeing this process through."

Kerry continues, "We must send a strong message that these cowardly acts will only strengthen our resolve, not only to the enemies in Iraq but to our allies like the Spanish who may be questioning whether the price is too high.

"We must make it clear to all that, to all that now is the time for all nations to come together to fight our common enemies."

He winds up with this proposal. "That is why today, I reiterate my call for America to convene an international summit to coordinate our efforts against terror and to strengthen and grow our coalition in Iraq. At this critical juncture, we must show the world we will be steadfast in leading the right for the fight of civilized people to live in peace."

That statement from John Kerry issued only moment ago.

These are live pictures. You're seeing rescue workers go through the rubble at this hotel and the area surrounding it in Baghdad, looking for survivors, perhaps more realistically look for remains.

It's been a huge, huge devastation in Baghdad, that car bomb killing and injuring dozens of people. We'll have more live reports from Baghdad. Also an update from the Pentagon.

Osama bin Laden. Was he in sight? Newly released video from an unmanned CIA spy plane shows the U.S. may have had the al Qaeda leader in view.

Plus this...

(BEGIN VIDEO CLIP)

STEWART: I don't think she's going to give up. I think she's incredibly saddened. (END VIDEO CLIP)

BLITZER: Speaking out on her mother's guilty verdict and more. Hear from Martha Stewart's daughter for the first time. That's coming up.

(COMMERCIAL BREAK)

BLITZER: An update on our top story, the deadly car bomb attack in Baghdad. The huge blast destroyed the Mount Lebanon Hotel in the central part of the capital, killing at least 28 people, wounding dozens of others.

A U.S. Army officer says the attack was similar to other terrorist bombings in Iraq. No one yet has claimed responsibility for this blast. You're looking at these live pictures. Rescue workers continuing to search through the rubble.

Let's move on and get other important news we're following. We'll come back to Baghdad in just a moment. It was very secret, now it's very public. Video shot from an unmanned CIA spyplane long before 9/11. Did the United States have Osama bin Laden in its sights?

Let's go live to our national security correspondent David Ensor. He's in Washington -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Wolf, the emergence of the tape is highlighting questions whether about the Clinton administration did all that it could to combat al Qaeda.

(BEGIN VIDEOTAPE)

ENSOR (voice-over): The CIA surveillance drone videotape taken in 2000 was classified, intelligence officials say. And there will be an investigation into who leaked it.

The tape, first broadcast on NBC News, shows a group of men including one taller than the rest and dressed all in white. A senior official says the tape is genuine and analysts believe to this day, the man in white was Osama bin Laden.

STEVE COLL, AUTHOR, "GHOST WARS": It's a very compelling piece of video, very vivid reminder of how close United States was to locating bin Laden.

ENSOR: Could President Clinton have ordered a strike against bin Laden at the time? Since the Predator drone was unarmed, there was no way to strike at the site, Tarnak Farm, an al Qaeda training camp in Afghanistan, in less than about four to six hours using cruise bombs or missiles from aircraft.

Also there would have been plenty of innocent dead.

COLL: There were women and children in the farm. There were hangers-on with al Qaeda militants. Maybe that shouldn't have been an issue, but it was certainly part of the discussion.

ENSOR: At time these pictures were taken, the CIA was working on ways to arm Predators with Hellfire missiles. Officials say this may have sped things up. Armed drone service were in within service in months in early 2001.

In November 2002 a CIA Hellfire missile struck a car in Yemen, carrying a senior al Qaeda lieutenant.

(END VIDEOTAPE)

ENSOR: In the coming weeks the attention will turn to President Bush's role in the war on terrorism. The two 9/11 commission co- chairs expect to question him privately whether he did all he could against al Qaeda before the 9/11 attacks -- Wolf.

BLITZER: David Ensor with that. Thanks thank you very much.

We'll take a quick break. More on our top story. The search for victims and terrorist in Baghdad. We'll go back live to the Iraqi capital for an update on tonight's deadly car bombing.

Plus this...

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG (R), NEW YORK: I took the subway to work the day after the Madrid bombing, I take the subway almost every day.

(END VIDEO CLIP)

BLITZER: How is New York City protecting itself from another terror attack? I'll speak with the mayor, Michael Bloomberg.

And residents of a Miami suburb wonder what cause a series of powerful explosions. We'll have some answers.

(COMMERCIAL BREAK)

BLITZER: Welcome back to CNN. I'm Wolf Blitzer reporting today from New York.

You're looking at a live picture of a massive explosion, the aftermath, the explosion in Baghdad. More than two dozen people are killed, a hotel completely destroyed. We'll go back live to Iraq in just a moment.

First, though, a quick check of the latest headlines.

In the Spanish terror attack investigation, an Algerian man detained in the case will be held another 48 hours on the suspicion that he's a member of al Qaeda, that decision by a judge in Madrid. Five other suspects are scheduled to appear before a judge tomorrow. Last Thursday's bombings in the Spanish capital killed 201 people and wounded 1,500. Here in the United States, the commission investigating the September 11 terrorist attacks will have 60 additional days to complete its work. President Bush has signed the extension into law. It was passed by Congress two weeks ago. Under the bill issue, the independent panel will have until July 26 to file its report.

The Pentagon says it will withhold $300 million from Halliburton while it reviews the company's fees for meals provided to U.S. troops in Iraq and Kuwait. Halliburton is the oil field services company that was once run by the vice president, Dick Cheney. It has billed the Pentagon $2 billion for those meals. Pentagon auditors say the bill may be too high because it's based on estimates rather than the actual number of meals served.

Parts of suburban Miami were evacuated earlier this morning after a series of explosions at a gas distribution plant. The explosions happened as workers were unloading tanks of gas from a truck. Fortunately, no injuries are reported.

Returning now to our top story, the deadly car bomb attack in Baghdad.

Joining us from the scene, our Baghdad bureau chief, Jane Arraf.

Update our viewers, Jane. What's happening now?

ARRAF: Wolf, there's a frenzy of activity in front of us now. They've been going for more than five hours, Iraqi civil defense workers, standing in the rubble of what was a family home.

They're looking for what is believed to be a child, and we have to be honest. It's probably the body of a child. There's no expectation that anyone survived this massive blast, 1,000 pounds, U.S. official estimate, of explosives that detonated in what they now believe was a suicide bomb on this busy street in central Baghdad.

These workers now, after scrambling for hours literally with pickaxes in their bare hands, are now in front of us, Wolf, appear to be bringing something out. Now, they've tossed a small doll with a white dress lace trim, an indication that clearly there were children here. There was a family possibly watching television on those times when there was electricity.

Now what we're looking at is the facade of a house. It collapsed under the weight of this explosion. Across the street, a small hotel, a hotel that was frequented and was occupied at the time, according to the managing director, with two British employees of local phone, cellular phone network, as well as two Jordanians, two Egyptians and the Lebanese owner of the hotel. Most of the casualties, though, were Iraqi. Doctors from the hospital who were here tell us that they believe at least 50 people were injured, in addition to at least 28 dead, some of those injuries so horrendous that the death toll is expected to rise -- Wolf.

BLITZER: And you're right, Jane. It certainly looks like they're about to remove something or someone from that building, that rubble.

We'll go back to Jane Arraf as soon as we know more -- Jane Arraf on the scene for us as we continue to watch the fallout from this car bombing at a hotel in Baghdad.

Joining us now from the Pentagon is our senior Pentagon correspondent, Jamie McIntyre. He's monitoring all of these developments as well -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Wolf, while Pentagon officials were concerned about the prospect of some mounting violence as the anniversary of the invasion of Iraq approached this week, they had no intelligence indicating that this kind of a massive car or truck bomb attack in the heart of Baghdad was in the offing.

Nevertheless, though, they say it's a sign that the anti-U.S. insurgents are increasingly desperate as the turnover to some sort of local Iraqi authority draws near at the end of June. They're concerned they'll see more of these kinds of attacks. They're also concerned that the size and scale of this blast indicates again that perhaps the insurgents are working with al Qaeda elements or al Qaeda links in order to increase the deadliness of their attacks.

But, again, the U.S. is bracing for more violence during this interregnum period between the time when the U.S. military is in control and before the turnover to Iraqi authority at the end of June.

BLITZER: A chilling picture you paint. Jamie McIntyre, at the Pentagon, thank you very much.

Joining us now with their take on the bombing in Baghdad, CNN contributor, our terrorism expert Kelly McCann and CNN analyst Ken Pollack.

Ken Pollack, tell what you -- your initial assessment. Who might have been responsible for this?

KENNETH POLLACK, CNN ANALYST: Well, obviously, Wolf, nothing is certain right now.

But it does look from the signs that we've seen so far, that al Qaeda was probably involved in some way, shape, or form, one of the foreign groups. The fact that it was a car bomb, the fact that it was a very large car bomb, the fact that they seem to done have some fairly sophisticated reconnaissance for the attack, and in particular the fact that it was a suicide bomber.

One the real hallmarks of the insurgency we're seeing in Iraq is that, by and large, the homegrown insurgents are not determined and committed to be willing to lay down their life in pursuit of this cause. That seems to be a real hallmark of the al Qaeda fighters, who are fired up with this Salafi jihadist interpretation of Islam. They have been willing to lay down their life. The fact this was a suicide bombing suggests that it was probably al Qaeda.

BLITZER: Ken, hold on one second.

Kelly, how sophisticated of an operation was this terrorist, this car bombing in Baghdad today?

J. KELLY MCCANN, CNN SECURITY ANALYST: Well, interestingly, surveillance in Baghdad is omnipresent. You're never quite sure who it is that is conducting that surveillance.

There are ongoing communicative between cells to try to find vulnerabilities. And in recent months, Wolf, we know that there are car bombs that are prepared and they basically troll for targets off of maybe a target list of three to five long, and whoever is vulnerable at that night, that's where they'll strike. So it's a difficult thing to discern.

But the devices themselves are not terribly sophisticated. We did see an increase in radio-fire devices recently and also in cellular phone devices, which does tell there is some sophistication. But routinely, it's high explosives that is delivered in a vehicle and not terribly sophisticated. Sophistication is the surveillance.

BLITZER: If the terrorist, Ken, are trying to divide the Iraqi people from the U.S.-led coalition, will these kinds of -- will these terrorist operations succeed if that's their goal?

POLLACK: Well, it's certainly not going to help matters. But ultimately it comes down to other factors. Early on, in the broadcast in the CNN coverage of this, one of the points that Jane Arraf and a number of others made was that initially the Iraqis were pushing the United States' forces back or keeping the Americans out. There was a great deal of anger being expressed by the Iraqis.

This gets to a larger problem we've got there, which is that the Iraqis are increasingly frustrated with the inability or, as they say, the unwillingness of the United States to provide broader day-to-day security for them. The more that the insurgents can strike at the Iraqis and just kind of drive home this point that the United States can't keep them safe from these kinds of attacks, it is going to increase resentment against the United States, which of course is something that the insurgents are looking to do.

BLITZER: Kelly, you were at this hotel, the Mount Lebanon Hotel in Baghdad, when you were there not long ago, and you told our viewers earlier that you think two of your friends may have been staying there. Have you heard of their fate?

MCCANN: I've not. Virtually, the communication is very difficult because a lot of people are trying to determine if people they knew were staying there. So I have not been able to determine that, unlikely to do so, Wolf, until likely tomorrow.

BLITZER: What was this hotel like when you saw it?

MCCANN: Fairly upscale, newly renovated, street-front hotel. But it was very, very apparent there was not a lot of security there. And I heard the major general speak out about, there's simply not enough concrete barriers to put up all over Baghdad. In some parts, that's true. However, a lot of this goes to the commercial interests. This particular proprietor didn't want a big security footprint. He wanted people to understand there was a multicultural kind of clientele there and thought that that would be a better security play.

The problem is, is that these adversaries are willing to break many eggs to make the omelet. And the trouble is, people get in the way. I knew right off the bat and I had said to one of my friends that he was in a dangerous situation. He knew it, but there wasn't much he could do about it -- Wolf.

BLITZER: CNN's Kelly McCann and CNN's Ken Pollack helping us understand this horrible series of events that unfolded earlier today in Baghdad, thanks very much to both of you for joining us.

And our coverage of the deadly car bombing in Iraq continues.

Also, protecting the homeland. How secure is New York City right now? I'll speak with the mayor, Michael Bloomberg.

California killings. The man charged in the worst mass murder in Fresno appears in court.

And Martha Stewart's only child speak exclusively to CNN on how her mother is handling the guilty verdict. All that coming up.

First, though, a quick look at some other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): A NATO peacekeeper from France was killed and almost a dozen other French troops were wounded today in Kosovo when they were caught in the middle of clashes between ethnic Albanians and Serbs. At least six other people died in the violence. A NATO spokesman says the clashes were sparked by the drowning of some ethnic Albanian children in a river.

Deadly day in Gaza. Tensions are on the rise again today after more Israeli missile strikes on the Rafah refugee camp. At least four deaths are reported.

Winged destroyers. Millions of locusts have descended on rural Australia after swarming in from the outback. The insects are devouring crops on the fringe of Australia's most populated area, New South Wales. The outbreak was triggered by heavy rains last month that ended Australia's worst drought in a century.

And that's our look around the world.

(COMMERCIAL BREAK)

BLITZER: An update now on the deadly car bomb attack in Baghdad. At least 28 people were killed when a car packed with more than 1,000 pounds of explosives and artillery shells blew up outside a hotel in the central part of the city. Dozens of people were wounded.

The U.S. Army says it apparently was a suicide attack and similar to other terrorist bombings in Iraq. You're looking at these live pictures, rescue workers desperately searching through the rubble, attempting to find perhaps a survivor, more realistically looking for remains.

We'll get back to that search shortly.

Today's attack in Baghdad and last week's bombings in Madrid once again underscore just how difficult it is to fight terror. Just a short while ago here in New York, I discussed all of this and more with New York City's mayor, Michael Bloomberg.

(BEGIN VIDEOTAPE)

BLITZER: Mr. Mayor, thanks very much for joining us.

This is a sensitive moment right now, the first anniversary this week of the U.S.-led invasion of Iraq. In New York City, what does it mean to you?

MICHAEL BLOOMBERG (R), MAYOR OF NEW YORK: Well, it means that we have to have a little more vigil than normal.

But, remember, we have stayed at orange alert since the 9/11 disaster. We have trained. We have deployed our resources. We believe we're doing everything possible to keep this city the safest big city in the nation, and every day is a symbolic day. We live in a dangerous world. Our hearts have to go out to the people in Madrid, the bombing in Beirut.

BLITZER: In Baghdad.

BLOOMBERG: In Baghdad.

We are being attacked, we democracy-, we freedom-loving people around the world, and we cannot let the terrorists think that, if they attack us, we're just going to cave in. Then they'll win without a shot.

BLITZER: You see what's happening in Baghdad as we speak right now. What goes through your mind, the mayor of this city, which has been a target before?

BLOOMBERG: Well, first, your instincts are to feel sorry for the people that are killed and injured there.

And then, of course, you have to turn and look in the mirror and say let's make sure it doesn't happen here, or do everything we can to prevent it. Do I think that we live in a dangerous world? Yes. Do I think you're safe in the streets of New York? Yes. We had Times Square, millions of people, done safely. We have event after event and we know how to handle crowds and we know how to look and try to make this so difficult for a terrorist to come in. Having said that, there are no guarantees. BLITZER: Are you doing anything different this week than you would have done a week ago or three weeks ago?

BLOOMBERG: Well, whenever we have a big event, for example, the St. Patrick's Day Parade, you have different strategies that you use, and you change them from parade to parade, from event to event, from significant date to significant date to keep any potential terrorists off guard.

Sometimes, you see heavy police presence. Sometimes, you don't, but the police presence is there. You never know who that person sitting next to you on the subway is. But that's, I think, why New Yorkers feel safe. I took the subway to work the day after the Madrid bombing. I take the subway almost every day. And the subway was packed, and people did not seem to me to be any more worried than you would normally be.

Yes, you have to be careful in this world, but New York has been able to prevent terrorism since 9/11, and let us pray that we continue to do it.

BLITZER: Should there be heightened at least public security measures imposed at subway stations in New York City in the aftermath of what happened in Madrid?

BLOOMBERG: Well, No. 1, you're assuming we don't have any heightened -- and you may be wrong there.

BLITZER: But make it very visible, though.

BLOOMBERG: There are times when you will come into a subway station and see one our Atlas teams, very heavily arm men and women, standing there. There are other times you will see police officers at almost every corner. Other times, you won't see anybody. But that doesn't mean that we're not there.

The fact of the matter is, 3.5 million people take the subway in New York every single day. They want to be able to go about their business. They are intelligent enough to look for things and, when they see them, turn it over to professionals. And that's what we've got to do.

We also have to understand that you can't let the terrorists beat us. If you go and stay in your home and lock the door, we've lost. We've lost our freedom to practice our religion. We've lost our freedom to say what we want to say. We've lost our freedom for a future for ourselves and for our children. Can't do that.

(END VIDEOTAPE)

BLITZER: Mayor Michael Bloomberg speaking with me just a little while ago here in New York. The full interview with the mayor on "LATE EDITION" this Sunday, noon Eastern.

A massive explosion -- that's our top story -- two days before the first anniversary the war in Iraq. Our special coverage will continue.

Plus, this:

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

ALEXIS STEWART, DAUGHTER OF MARTHA STEWART: She's disappointed of feeling like her life was wasted, everything she did is ignored.

(END VIDEO CLIP)

BLITZER: Martha Stewart's daughter speaking out for the first time about the guilty verdict and more.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Let's go right back to Baghdad.

CNN's Jane Arraf is on the scene, where rescue workers are continuing to search through the rubble.

What's happening now, Jane?

ARRAF: Wolf, it's been almost six hours and they appear to be about to pull another body out of the ground. They've been looking here for a mother and her children. The father, injured in hospital, begging rescue workers to come and find them. It appears there are no survivors, Wolf, only the remains, 28 people dead at least, 40 to 50 injured, the remains of what's left of an extremely powerful car bomb on the street -- Wolf.

BLITZER: All right, we'll get back to you, CNN's Jane Arraf reporting from the scene, a horrible scene, in Baghdad. She's been doing an outstanding job for all of our viewers around the world.

Let's check some other news in today's "Justice Report."

Ohio sniper suspect Charles McCoy Jr. is now in custody. He was captured this morning in Las Vegas after someone said he spotted McCoy and recognized his car in a motel parking lot. McCoy is suspected in two dozen highway shootings in the Columbus area. One of those shootings was fatal.

In Fresno, California, Marcus Wesson, the suspect in the city's worst-ever mass murder, made a brief appearance just a short time ago, where he waived his right to an arraignment. He scheduled to be back in court tomorrow. The nine victims, all of them believed to be Wesson's children, were shot to death last Friday in the family's home. Wesson could face the death penalty if convicted.

Martha Stewart's trial was one of the most closely watched cases in recent years. Now we're getting a rare and personal look at the embattled businesswoman from one of the people who knows her best, her daughter, Alexis.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): The consequences are anything but trivial. Monday, Stewart resigned from the board of her company, whose stock has plunged since her convictions. Two networks are dumping her television show. And she's facing prison time. It's a thought Alexis Stewart says she avoids.

LARRY KING, "LARRY KING LIVE": Are you nervous?

STEWART: About the verdict?

KING: About the possibility that your mother might have to go away?

STEWART: Nervous? I guess. I try not to focus on it.

KING: You're a realist, right? That could happen.

STEWART: Yes, I realize that. I think it would be incredibly wrong.

BLITZER: And what about the unflattering portrait of Martha Stewart that came out in testimony? Some witnesses portrayed her as a controlling and intimidating figure who barked at underlings. That's not how Alexis Stewart describes her mother.

KING: What's her biggest fault?

STEWART: She's too, ironically, forgiving and kind. And I know. People don't know that, but she's incredibly generous and she forgives too much, I think.

KING: So would that be...

STEWART: She's too trusting.

BLITZER: Ironically, it was Alexis who introduced her mother to Sam Waksal, the founder of ImClone, whose stock is at the center of Martha Stewart's case. He pleaded guilty to insider trading and is serving a seven-year sentence. Stewart's lawyers say they'll appeal her conviction, but analysts agree jail time is likely to come her way.

KING: And if it did, she would handle it well?

STEWART: Oh, yes.

KING: Boy, you have a lot of confidence in mom, don't you?

STEWART: Well, yes, sure.

(END VIDEOTAPE)

BLITZER: And this important note to our viewers. You can see the complete and exclusive interview with Alexis Stewart tonight on "LARRY KING LIVE." That begins 9:00 p.m. Eastern, 6:00 Pacific, only seen here on CNN.

We'll have a recap of our top story, the deadly bombing in Baghdad. That's coming up next.

(COMMERCIAL BREAK)

BLITZER: Recapping our top story, a very large car bomb exploded outside the Mount Lebanon Hotel in Baghdad shortly after 8:00 p.m. local time. At least 28 people were killed, dozens injured.

Our coverage continues with "LOU DOBBS TONIGHT."

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





Spot bin Laden before 9/11?>


Aired March 17, 2004 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
WOLF BLITZER, CNN ANCHOR (voice-over): Baghdad bombing. A deadly blast levels a hotel in the heart of the capital. We're at scene of the inferno.

Squaring off over Iraq and national security.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: And the administration stubbornly holds the failed unilateral policies that drive potential, significant, important, longstanding allies away from us.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: America's friends know they can trust, and America's enemies know they can fear the decisive leadership of president George W. Bush.

BLITZER: Eye on al Qaeda. Did a U.S. spy plane spot bin Laden long before 9/11?

Diva's daughter.

ALEXIS STEWART, MARTHA STEWART'S DAUGHTER: I don't think she's going to give up. I think she's incredibly saddened.

BLITZER: Martha Stewart's only child on the guilty verdict and more.

ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, March, 17, 2004.

(END VIDEOTAPE)

BLITZER: You're look live at Baghdad. Just after 1:00 a.m. in the Iraqi capital. The search continuing, the recovery effort continuing at this hour following a massive attack that occurred some five hours ago.

Hello from New York.

Almost one year after the war started in Iraq, the violence is by no means over. Authorities now put the death toll at 28 in today's terror bombing right in the heart of Baghdad. As many as 50 other people were hurt in the explosion. It's being blamed on a 1,000-pound car bomb. It virtually destroyed a five-story hotel in central Baghdad, as well as several nearby shops and homes.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): The huge blast brought U.S. troops and Iraqi ambulance racing to the scene.

Happened just after 8:00 p.m. local time at Mount Lebanon Hotel In central Baghdad. Hotel air conditioners, furniture, bricks and other debris were propelled hundreds of feet.

International journalists staying in another hotel nearby heard the explosion. "Newsweek"'s Melinda Lui was one of the reporters who arrived at the scene.

MELINDA LUI, "NEWSWEEK" CORRESPONDENT: First of all there was a flash of huge explosion. And so my photographer and I got in a car and we went over there.

When we arrived it was very early on and quite a chaotic scene. There were -- this hotel was on fire. It's a five-story hotel. Big clouds of black smoke. Of course it was night so it was hard to see what was going on.

BLITZER: U.S. officials blame the blast on a car bomb.

COL. RALPH BAKER, U.S. ARMY SPOKESMAN: It looks like a car bomb tonight, probably around 1,000 pounds. We have a crater 8 feet by 10 feet deep.

And estimates about 27 KIA and about 40 wounded right now. But it's fairly difficult to really determine exactly right now since it's dark and there's a lot of rubble.

BLITZER: The blast produced a 20-foot crater, a raging fire and sent wounded victims screaming for help. U.S. soldiers tried to help with rescue efforts but some were driven back by angry Iraqis who think the U.S. presence is provoking insurgent violence and accused the U.S. of failing to provide adequate security.

The Mount Lebanon Hotel is an unfortified residential hotel that often houses business people, including westerners.

Just two days ago, a U.S. commander talking with CNN's Aaron Brown, predicted an upswing in attacks aimed at block the transition to Iraqi self-rule.

GEN. JOHN ABIZAID, CENTCOM COMMANDER: Over the next 30 days, what makes me the most nervous is what I think is going to be a clear increase in violence by those that want to derail this process.

(END VIDEOTAPE)

BLITZER: And we received new dramatic video of the attack, just after the car bomb exploded right near the mount Lebanon hotel. Let's take a look at this new video.

You can almost feel the pain, you can feel the horror, the shock unfolding in the minutes after this car bombing.

Joining us from the scene, on the phone, once again, CNN's Baghdad bureau chief Jane Arraf. Jane, we're going to show our viewers some live pictures of what's happening on the scene. But for some of our viewers tuning in right now, set the scene for us what we're seeing.

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: Wolf, what we're seeing is the remains of a huge car bomb. And officials now say it appears to have been a suicide bomb, a car that was in motion when it detonated and it detonate an estimated 1,000 pounds of explosives.

The location, a narrow street in central Baghdad. On one side, residential homes older and modest homes, apartment buildings. On the other, a new hotel built just after the fall of Saddam Hussein. It was called Mount Lebanon Hotel. And the managing director of that hotel tells us when the explosion hit, he believes there were nine guests in the hotel, including two Britons, two Jordanians, two Egyptians and the Lebanese owner.

Now some of the Britons -- the Britons, rather, worked for Iraqi Mobile Phone Company. That's an Egyptian company that had been awarded this contract, a sign of Iraqi progress, the fact that there are now mobile phones, But a contract awarded and controversy.

No one yet is speculating who might have been behind this. But military officials say it does have the hallmarks of a foreign group. The size of the bomb, the devastation, the way it was carried out, a part of series of suicide bombs that have erupted in the country as it heads towards the June 30 handover from the U.S. and British occupation back to Iraqis who are increasingly wondering what their future holds -- Wolf.

BLITZER: Normally, on the first anniversary of the liberation of a country, Jane, you would think that there would be celebrations under way in the streets of Baghdad, other major cities of Iraq. Are we anticipating -- do we expect that to occur in the coming days, this one-year anniversary?

ARRAF: This has become the kind of climate, Wolf, where people are afraid to congregate. They do not go out late at night. This is a very social city, a very social country. People would be used to staying out late in restaurants celebrating weddings into the night, driving through streets with families parked in cars and taxis.

They don't do that anymore. They're worried about attacks as this . And for that reason, they're unlikely to be massive celebrations. The fear is they would just be inviting suicide bombs like this or attacks like this.

Wolf, people are afraid these days. They still hope that this country will recover, they hope it will recover and expect it to recover, many of them, few years from now. But in the near term, they are really quite unsettled and quite frightened, many of them.

BLITZER: CNN's Jane Arraf, doing an outstanding job for us on the scene for us for our viewers around the world. Thank you very much, Jane.

Let's get more assessment on today's explosion in Baghdad. "TIME" magazine correspondent Michael Ware is joining us on the phone also from Baghdad. Michael, where were you when you heard the bomb?

MICHAEL WARE, "TIME" CORRESPONDENT: I was in my house in a residential suburb of Baghdad, quite a normal area in a very placid street. And of course everyone was struck by this event.

When I approached the scene, it too -- I also saw the chaos, the pandemonium and the panic. I managed to press through the (UNINTELLIGIBLE) and made it through the bomb crater itself, this massive wound that's been gauged out of the road.

And the thing that most struck me having been here over a year is that I have seen this before time and time again. I remember last summer when the Jordanian embassy was hit, the first big suicide car bombing, closely followed by the U.N. Headquarters bombing. And that's the bombing that this one most closely resembles.

That was 1,500 pounds of scrounged ordnance and bombs and artillery rounds. Tonight was 1,000 pounds. This might be terrorists doing it, but they can't collect that material without Iraqi logistics support and the most tragic thing about it is so far, as much as we're aware, we still have not caught any of these bombers from the Jordan embassy, from the U.N. headquarters, nor from any of the most recent things. This is a long-term, ongoing campaign, and these guys keep getting away with it and it's only going to escalate.

BLITZER: "TIME" magazine's Michael Ware reporting for us on the phone. Be careful over there, thank you very much for that chilling assessment.

Here again is what we know about today's massive bombing at the Mount Lebanon hotel in Baghdad. It's blamed on a car bomb packed with at least 1,000 pounds of explosives. At least 28 people were killed and as many as 50 other people were wounded. It came as the U.S.-led coalition kicked off Operation Iron Promise, a citywide sweep for suspected militants.

Our live coverage of the deadly bombing in Baghdad will continue this hour. I'll discuss the immediate threats with our security expert Kelly McCann and other big picture with our CNN analyst Ken Pollack. Plus this.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: He speaks as if only those who openly oppose America's objectives have a chance of earning his respect.

(END VIDEO CLIP)

BLITZER: In no mood to wait until the fall. The vice president comes out swinging against the Democratic candidate, John Kerry. But Kerry has choice words of his own, slamming the Bush White House over the war in Iraq.

And we're also getting new information on the hunt for Osama bin Laden. A window into just how close U.S. forces came to finding the al Qaeda leader. Our special coverage will continue.

(COMMERCIAL BREAK)

BLITZER: Chaos outside a Baghdad hotel reduced to rubble, by what authorities say was a 1,000-pound car bomb. You're looking at live pictures now. Rescue workers searching that rubble, hoping to find a survivor. More realistically looking for remains. At least 28 people are dead. More than 50 people are injured. Right now people continue as you see to dig through the rubble, sometimes by hand, and the death toll easily could rise.

The devastating bombing drew a vow of resolve today from vice president Cheney. It came during a hard-hitting policy speech in which he also let loose against the Democratic presidential candidate John Kerry. Let's go live to our White House correspondent Suzanne Malveaux -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: This comes at a time when the White House has been trying to highlight U.S. successes inside Iraq, at the one-year anniversary of the U.S. invasion of that country. They're trying to convince American voters and foreign allies to stay the course. It was a previously scheduled speech when Vice President Dick Cheney using this bombing today to express America's resolve.

(BEGIN VIDEO CLIP)

CHENEY: Thugs and assassins in Iraq are desperately trying to shake our will. Just this morning, they conducted a murderous attack on a hotel in Baghdad. Their goal is to prevent the rise of democracy, but they will fail.

(END VIDEO CLIP)

MALVEAUX: And, of course, Wolf, all of that has a political component as well, national security being a central theme in the campaign this year, Cheney delivering his remarks at the Ronald Reagan Presidential Library. Meant to draw a comparison between President Bush and his war on terror and Reagan's own challenges with communism, but Cheney, essentially painting a picture of President Bush's opponent, Senator Kerry as one who is indecisive, one who is uncommitted to the troops when it comes to securing a national security and the war on terror.

(BEGIN VIDEO CLIP)

CHENEY: Even if we set aside these inconsistencies and changing rationales. This much is clear, had the decision belonged to Senator Kerry, Saddam Hussein would still be in power today in Iraq. In fact, Saddam Hussein would almost certainly still be in control of Kuwait.

(END VIDEO CLIP) MALVEAUX: Wolf, they expect to hear much more of this. President Bush tomorrow traveling to Fort Campbell, Kentucky to visit with the troops and make a major speech when it comes to the update for successes of the war on terror and Afghanistan and Iraq on Friday -- Wolf.

BLITZER: Suzanne Malveaux at White House. Thanks for that report.

The vice president's national security speech came just an hour after the likely Democratic nominee launched a similar salvo at the Bush administration. For that, we turn to CNN's Brian Todd in Washington.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT: At the very moment terror strikes in Baghdad, John Kerry is in Washington, not yet aware of the breaking news and attacking the Bush record and the war on terror.

SEN. JOHN KERRY, (D-MA), PRESIDENTIAL CANDIDATE: Today, the world is a less safe, more dangerous place.

TODD: And getting backup from different quarters.

JOSE LUIS RODRIGUEZ ZAPATERO, SPANISH P.M.-ELECT (through translator): The occupation is a fiasco.

TODD: At George Washington University, the Democratic nominee to-be, unveils what he calls a military bill of rights that he'd propose if elected. Improvements in pay, health care and other benefits for military families who he says have been left behind by their current commander in chief. Soldiers, he says, who have been left unprotected.

KERRY: Tens of thousands of troops were deployed to Iraq without the most advanced bulletproof vests that could literally make the difference between life and death.

TODD: Kerry hammers away at the president's record on military funding, counterpunching with the Bush/Cheney campaign and the White House.

SCOTT MCLELLAN, WHITE HOUSE PRESS SECRETARY: Senator Kerry's record tends to contradict his own election year rhetoric.

TODD: A reference to Kerry's vote against a bill to spend an extra $87 billion for military operations in Iraq, as John Kerry speaks, he's eclipsed by events in Iraq. Before the Baghdad bombing, Spain's new leader thrust into office in the wake of the Madrid train attacks, leaves little to interpretation on who he supports in the U.S. election.

ZAPATERO (through translator): I say to the Spanish people, this is our opportunity to do things before the Americans. Let's change our government here and then see how Kerry does in the elections over there.

TODD: Over here, John Kerry's in damage control within his own ranks. Former opponent, current ally, Howard Dean on a conference call with reporters says, the president is the one who dragged our troops to Iraq, which has apparently been a factor in the death of 200 Spaniards over the weekend. Kerry, pressured by Republicans to repudiate Dean, is later quoted as saying, it's not our position. Brian Todd, CNN, Washington.

(END VIDEOTAPE)

BLITZER: And we're just getting this into CNN. A statement from John Kerry on the Baghdad bombing earlier today. Let me read some of it.

"Today's horrific bombing in Baghdad further demonstrates that the work of building a peaceful and stable Iraq is far from done. But we cannot allow those willing to use violence against innocent civilians to succeed in undermining our commitment to seeing this process through."

Kerry continues, "We must send a strong message that these cowardly acts will only strengthen our resolve, not only to the enemies in Iraq but to our allies like the Spanish who may be questioning whether the price is too high.

"We must make it clear to all that, to all that now is the time for all nations to come together to fight our common enemies."

He winds up with this proposal. "That is why today, I reiterate my call for America to convene an international summit to coordinate our efforts against terror and to strengthen and grow our coalition in Iraq. At this critical juncture, we must show the world we will be steadfast in leading the right for the fight of civilized people to live in peace."

That statement from John Kerry issued only moment ago.

These are live pictures. You're seeing rescue workers go through the rubble at this hotel and the area surrounding it in Baghdad, looking for survivors, perhaps more realistically look for remains.

It's been a huge, huge devastation in Baghdad, that car bomb killing and injuring dozens of people. We'll have more live reports from Baghdad. Also an update from the Pentagon.

Osama bin Laden. Was he in sight? Newly released video from an unmanned CIA spy plane shows the U.S. may have had the al Qaeda leader in view.

Plus this...

(BEGIN VIDEO CLIP)

STEWART: I don't think she's going to give up. I think she's incredibly saddened. (END VIDEO CLIP)

BLITZER: Speaking out on her mother's guilty verdict and more. Hear from Martha Stewart's daughter for the first time. That's coming up.

(COMMERCIAL BREAK)

BLITZER: An update on our top story, the deadly car bomb attack in Baghdad. The huge blast destroyed the Mount Lebanon Hotel in the central part of the capital, killing at least 28 people, wounding dozens of others.

A U.S. Army officer says the attack was similar to other terrorist bombings in Iraq. No one yet has claimed responsibility for this blast. You're looking at these live pictures. Rescue workers continuing to search through the rubble.

Let's move on and get other important news we're following. We'll come back to Baghdad in just a moment. It was very secret, now it's very public. Video shot from an unmanned CIA spyplane long before 9/11. Did the United States have Osama bin Laden in its sights?

Let's go live to our national security correspondent David Ensor. He's in Washington -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Wolf, the emergence of the tape is highlighting questions whether about the Clinton administration did all that it could to combat al Qaeda.

(BEGIN VIDEOTAPE)

ENSOR (voice-over): The CIA surveillance drone videotape taken in 2000 was classified, intelligence officials say. And there will be an investigation into who leaked it.

The tape, first broadcast on NBC News, shows a group of men including one taller than the rest and dressed all in white. A senior official says the tape is genuine and analysts believe to this day, the man in white was Osama bin Laden.

STEVE COLL, AUTHOR, "GHOST WARS": It's a very compelling piece of video, very vivid reminder of how close United States was to locating bin Laden.

ENSOR: Could President Clinton have ordered a strike against bin Laden at the time? Since the Predator drone was unarmed, there was no way to strike at the site, Tarnak Farm, an al Qaeda training camp in Afghanistan, in less than about four to six hours using cruise bombs or missiles from aircraft.

Also there would have been plenty of innocent dead.

COLL: There were women and children in the farm. There were hangers-on with al Qaeda militants. Maybe that shouldn't have been an issue, but it was certainly part of the discussion.

ENSOR: At time these pictures were taken, the CIA was working on ways to arm Predators with Hellfire missiles. Officials say this may have sped things up. Armed drone service were in within service in months in early 2001.

In November 2002 a CIA Hellfire missile struck a car in Yemen, carrying a senior al Qaeda lieutenant.

(END VIDEOTAPE)

ENSOR: In the coming weeks the attention will turn to President Bush's role in the war on terrorism. The two 9/11 commission co- chairs expect to question him privately whether he did all he could against al Qaeda before the 9/11 attacks -- Wolf.

BLITZER: David Ensor with that. Thanks thank you very much.

We'll take a quick break. More on our top story. The search for victims and terrorist in Baghdad. We'll go back live to the Iraqi capital for an update on tonight's deadly car bombing.

Plus this...

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG (R), NEW YORK: I took the subway to work the day after the Madrid bombing, I take the subway almost every day.

(END VIDEO CLIP)

BLITZER: How is New York City protecting itself from another terror attack? I'll speak with the mayor, Michael Bloomberg.

And residents of a Miami suburb wonder what cause a series of powerful explosions. We'll have some answers.

(COMMERCIAL BREAK)

BLITZER: Welcome back to CNN. I'm Wolf Blitzer reporting today from New York.

You're looking at a live picture of a massive explosion, the aftermath, the explosion in Baghdad. More than two dozen people are killed, a hotel completely destroyed. We'll go back live to Iraq in just a moment.

First, though, a quick check of the latest headlines.

In the Spanish terror attack investigation, an Algerian man detained in the case will be held another 48 hours on the suspicion that he's a member of al Qaeda, that decision by a judge in Madrid. Five other suspects are scheduled to appear before a judge tomorrow. Last Thursday's bombings in the Spanish capital killed 201 people and wounded 1,500. Here in the United States, the commission investigating the September 11 terrorist attacks will have 60 additional days to complete its work. President Bush has signed the extension into law. It was passed by Congress two weeks ago. Under the bill issue, the independent panel will have until July 26 to file its report.

The Pentagon says it will withhold $300 million from Halliburton while it reviews the company's fees for meals provided to U.S. troops in Iraq and Kuwait. Halliburton is the oil field services company that was once run by the vice president, Dick Cheney. It has billed the Pentagon $2 billion for those meals. Pentagon auditors say the bill may be too high because it's based on estimates rather than the actual number of meals served.

Parts of suburban Miami were evacuated earlier this morning after a series of explosions at a gas distribution plant. The explosions happened as workers were unloading tanks of gas from a truck. Fortunately, no injuries are reported.

Returning now to our top story, the deadly car bomb attack in Baghdad.

Joining us from the scene, our Baghdad bureau chief, Jane Arraf.

Update our viewers, Jane. What's happening now?

ARRAF: Wolf, there's a frenzy of activity in front of us now. They've been going for more than five hours, Iraqi civil defense workers, standing in the rubble of what was a family home.

They're looking for what is believed to be a child, and we have to be honest. It's probably the body of a child. There's no expectation that anyone survived this massive blast, 1,000 pounds, U.S. official estimate, of explosives that detonated in what they now believe was a suicide bomb on this busy street in central Baghdad.

These workers now, after scrambling for hours literally with pickaxes in their bare hands, are now in front of us, Wolf, appear to be bringing something out. Now, they've tossed a small doll with a white dress lace trim, an indication that clearly there were children here. There was a family possibly watching television on those times when there was electricity.

Now what we're looking at is the facade of a house. It collapsed under the weight of this explosion. Across the street, a small hotel, a hotel that was frequented and was occupied at the time, according to the managing director, with two British employees of local phone, cellular phone network, as well as two Jordanians, two Egyptians and the Lebanese owner of the hotel. Most of the casualties, though, were Iraqi. Doctors from the hospital who were here tell us that they believe at least 50 people were injured, in addition to at least 28 dead, some of those injuries so horrendous that the death toll is expected to rise -- Wolf.

BLITZER: And you're right, Jane. It certainly looks like they're about to remove something or someone from that building, that rubble.

We'll go back to Jane Arraf as soon as we know more -- Jane Arraf on the scene for us as we continue to watch the fallout from this car bombing at a hotel in Baghdad.

Joining us now from the Pentagon is our senior Pentagon correspondent, Jamie McIntyre. He's monitoring all of these developments as well -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Wolf, while Pentagon officials were concerned about the prospect of some mounting violence as the anniversary of the invasion of Iraq approached this week, they had no intelligence indicating that this kind of a massive car or truck bomb attack in the heart of Baghdad was in the offing.

Nevertheless, though, they say it's a sign that the anti-U.S. insurgents are increasingly desperate as the turnover to some sort of local Iraqi authority draws near at the end of June. They're concerned they'll see more of these kinds of attacks. They're also concerned that the size and scale of this blast indicates again that perhaps the insurgents are working with al Qaeda elements or al Qaeda links in order to increase the deadliness of their attacks.

But, again, the U.S. is bracing for more violence during this interregnum period between the time when the U.S. military is in control and before the turnover to Iraqi authority at the end of June.

BLITZER: A chilling picture you paint. Jamie McIntyre, at the Pentagon, thank you very much.

Joining us now with their take on the bombing in Baghdad, CNN contributor, our terrorism expert Kelly McCann and CNN analyst Ken Pollack.

Ken Pollack, tell what you -- your initial assessment. Who might have been responsible for this?

KENNETH POLLACK, CNN ANALYST: Well, obviously, Wolf, nothing is certain right now.

But it does look from the signs that we've seen so far, that al Qaeda was probably involved in some way, shape, or form, one of the foreign groups. The fact that it was a car bomb, the fact that it was a very large car bomb, the fact that they seem to done have some fairly sophisticated reconnaissance for the attack, and in particular the fact that it was a suicide bomber.

One the real hallmarks of the insurgency we're seeing in Iraq is that, by and large, the homegrown insurgents are not determined and committed to be willing to lay down their life in pursuit of this cause. That seems to be a real hallmark of the al Qaeda fighters, who are fired up with this Salafi jihadist interpretation of Islam. They have been willing to lay down their life. The fact this was a suicide bombing suggests that it was probably al Qaeda.

BLITZER: Ken, hold on one second.

Kelly, how sophisticated of an operation was this terrorist, this car bombing in Baghdad today?

J. KELLY MCCANN, CNN SECURITY ANALYST: Well, interestingly, surveillance in Baghdad is omnipresent. You're never quite sure who it is that is conducting that surveillance.

There are ongoing communicative between cells to try to find vulnerabilities. And in recent months, Wolf, we know that there are car bombs that are prepared and they basically troll for targets off of maybe a target list of three to five long, and whoever is vulnerable at that night, that's where they'll strike. So it's a difficult thing to discern.

But the devices themselves are not terribly sophisticated. We did see an increase in radio-fire devices recently and also in cellular phone devices, which does tell there is some sophistication. But routinely, it's high explosives that is delivered in a vehicle and not terribly sophisticated. Sophistication is the surveillance.

BLITZER: If the terrorist, Ken, are trying to divide the Iraqi people from the U.S.-led coalition, will these kinds of -- will these terrorist operations succeed if that's their goal?

POLLACK: Well, it's certainly not going to help matters. But ultimately it comes down to other factors. Early on, in the broadcast in the CNN coverage of this, one of the points that Jane Arraf and a number of others made was that initially the Iraqis were pushing the United States' forces back or keeping the Americans out. There was a great deal of anger being expressed by the Iraqis.

This gets to a larger problem we've got there, which is that the Iraqis are increasingly frustrated with the inability or, as they say, the unwillingness of the United States to provide broader day-to-day security for them. The more that the insurgents can strike at the Iraqis and just kind of drive home this point that the United States can't keep them safe from these kinds of attacks, it is going to increase resentment against the United States, which of course is something that the insurgents are looking to do.

BLITZER: Kelly, you were at this hotel, the Mount Lebanon Hotel in Baghdad, when you were there not long ago, and you told our viewers earlier that you think two of your friends may have been staying there. Have you heard of their fate?

MCCANN: I've not. Virtually, the communication is very difficult because a lot of people are trying to determine if people they knew were staying there. So I have not been able to determine that, unlikely to do so, Wolf, until likely tomorrow.

BLITZER: What was this hotel like when you saw it?

MCCANN: Fairly upscale, newly renovated, street-front hotel. But it was very, very apparent there was not a lot of security there. And I heard the major general speak out about, there's simply not enough concrete barriers to put up all over Baghdad. In some parts, that's true. However, a lot of this goes to the commercial interests. This particular proprietor didn't want a big security footprint. He wanted people to understand there was a multicultural kind of clientele there and thought that that would be a better security play.

The problem is, is that these adversaries are willing to break many eggs to make the omelet. And the trouble is, people get in the way. I knew right off the bat and I had said to one of my friends that he was in a dangerous situation. He knew it, but there wasn't much he could do about it -- Wolf.

BLITZER: CNN's Kelly McCann and CNN's Ken Pollack helping us understand this horrible series of events that unfolded earlier today in Baghdad, thanks very much to both of you for joining us.

And our coverage of the deadly car bombing in Iraq continues.

Also, protecting the homeland. How secure is New York City right now? I'll speak with the mayor, Michael Bloomberg.

California killings. The man charged in the worst mass murder in Fresno appears in court.

And Martha Stewart's only child speak exclusively to CNN on how her mother is handling the guilty verdict. All that coming up.

First, though, a quick look at some other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): A NATO peacekeeper from France was killed and almost a dozen other French troops were wounded today in Kosovo when they were caught in the middle of clashes between ethnic Albanians and Serbs. At least six other people died in the violence. A NATO spokesman says the clashes were sparked by the drowning of some ethnic Albanian children in a river.

Deadly day in Gaza. Tensions are on the rise again today after more Israeli missile strikes on the Rafah refugee camp. At least four deaths are reported.

Winged destroyers. Millions of locusts have descended on rural Australia after swarming in from the outback. The insects are devouring crops on the fringe of Australia's most populated area, New South Wales. The outbreak was triggered by heavy rains last month that ended Australia's worst drought in a century.

And that's our look around the world.

(COMMERCIAL BREAK)

BLITZER: An update now on the deadly car bomb attack in Baghdad. At least 28 people were killed when a car packed with more than 1,000 pounds of explosives and artillery shells blew up outside a hotel in the central part of the city. Dozens of people were wounded.

The U.S. Army says it apparently was a suicide attack and similar to other terrorist bombings in Iraq. You're looking at these live pictures, rescue workers desperately searching through the rubble, attempting to find perhaps a survivor, more realistically looking for remains.

We'll get back to that search shortly.

Today's attack in Baghdad and last week's bombings in Madrid once again underscore just how difficult it is to fight terror. Just a short while ago here in New York, I discussed all of this and more with New York City's mayor, Michael Bloomberg.

(BEGIN VIDEOTAPE)

BLITZER: Mr. Mayor, thanks very much for joining us.

This is a sensitive moment right now, the first anniversary this week of the U.S.-led invasion of Iraq. In New York City, what does it mean to you?

MICHAEL BLOOMBERG (R), MAYOR OF NEW YORK: Well, it means that we have to have a little more vigil than normal.

But, remember, we have stayed at orange alert since the 9/11 disaster. We have trained. We have deployed our resources. We believe we're doing everything possible to keep this city the safest big city in the nation, and every day is a symbolic day. We live in a dangerous world. Our hearts have to go out to the people in Madrid, the bombing in Beirut.

BLITZER: In Baghdad.

BLOOMBERG: In Baghdad.

We are being attacked, we democracy-, we freedom-loving people around the world, and we cannot let the terrorists think that, if they attack us, we're just going to cave in. Then they'll win without a shot.

BLITZER: You see what's happening in Baghdad as we speak right now. What goes through your mind, the mayor of this city, which has been a target before?

BLOOMBERG: Well, first, your instincts are to feel sorry for the people that are killed and injured there.

And then, of course, you have to turn and look in the mirror and say let's make sure it doesn't happen here, or do everything we can to prevent it. Do I think that we live in a dangerous world? Yes. Do I think you're safe in the streets of New York? Yes. We had Times Square, millions of people, done safely. We have event after event and we know how to handle crowds and we know how to look and try to make this so difficult for a terrorist to come in. Having said that, there are no guarantees. BLITZER: Are you doing anything different this week than you would have done a week ago or three weeks ago?

BLOOMBERG: Well, whenever we have a big event, for example, the St. Patrick's Day Parade, you have different strategies that you use, and you change them from parade to parade, from event to event, from significant date to significant date to keep any potential terrorists off guard.

Sometimes, you see heavy police presence. Sometimes, you don't, but the police presence is there. You never know who that person sitting next to you on the subway is. But that's, I think, why New Yorkers feel safe. I took the subway to work the day after the Madrid bombing. I take the subway almost every day. And the subway was packed, and people did not seem to me to be any more worried than you would normally be.

Yes, you have to be careful in this world, but New York has been able to prevent terrorism since 9/11, and let us pray that we continue to do it.

BLITZER: Should there be heightened at least public security measures imposed at subway stations in New York City in the aftermath of what happened in Madrid?

BLOOMBERG: Well, No. 1, you're assuming we don't have any heightened -- and you may be wrong there.

BLITZER: But make it very visible, though.

BLOOMBERG: There are times when you will come into a subway station and see one our Atlas teams, very heavily arm men and women, standing there. There are other times you will see police officers at almost every corner. Other times, you won't see anybody. But that doesn't mean that we're not there.

The fact of the matter is, 3.5 million people take the subway in New York every single day. They want to be able to go about their business. They are intelligent enough to look for things and, when they see them, turn it over to professionals. And that's what we've got to do.

We also have to understand that you can't let the terrorists beat us. If you go and stay in your home and lock the door, we've lost. We've lost our freedom to practice our religion. We've lost our freedom to say what we want to say. We've lost our freedom for a future for ourselves and for our children. Can't do that.

(END VIDEOTAPE)

BLITZER: Mayor Michael Bloomberg speaking with me just a little while ago here in New York. The full interview with the mayor on "LATE EDITION" this Sunday, noon Eastern.

A massive explosion -- that's our top story -- two days before the first anniversary the war in Iraq. Our special coverage will continue.

Plus, this:

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

ALEXIS STEWART, DAUGHTER OF MARTHA STEWART: She's disappointed of feeling like her life was wasted, everything she did is ignored.

(END VIDEO CLIP)

BLITZER: Martha Stewart's daughter speaking out for the first time about the guilty verdict and more.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Let's go right back to Baghdad.

CNN's Jane Arraf is on the scene, where rescue workers are continuing to search through the rubble.

What's happening now, Jane?

ARRAF: Wolf, it's been almost six hours and they appear to be about to pull another body out of the ground. They've been looking here for a mother and her children. The father, injured in hospital, begging rescue workers to come and find them. It appears there are no survivors, Wolf, only the remains, 28 people dead at least, 40 to 50 injured, the remains of what's left of an extremely powerful car bomb on the street -- Wolf.

BLITZER: All right, we'll get back to you, CNN's Jane Arraf reporting from the scene, a horrible scene, in Baghdad. She's been doing an outstanding job for all of our viewers around the world.

Let's check some other news in today's "Justice Report."

Ohio sniper suspect Charles McCoy Jr. is now in custody. He was captured this morning in Las Vegas after someone said he spotted McCoy and recognized his car in a motel parking lot. McCoy is suspected in two dozen highway shootings in the Columbus area. One of those shootings was fatal.

In Fresno, California, Marcus Wesson, the suspect in the city's worst-ever mass murder, made a brief appearance just a short time ago, where he waived his right to an arraignment. He scheduled to be back in court tomorrow. The nine victims, all of them believed to be Wesson's children, were shot to death last Friday in the family's home. Wesson could face the death penalty if convicted.

Martha Stewart's trial was one of the most closely watched cases in recent years. Now we're getting a rare and personal look at the embattled businesswoman from one of the people who knows her best, her daughter, Alexis.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): The consequences are anything but trivial. Monday, Stewart resigned from the board of her company, whose stock has plunged since her convictions. Two networks are dumping her television show. And she's facing prison time. It's a thought Alexis Stewart says she avoids.

LARRY KING, "LARRY KING LIVE": Are you nervous?

STEWART: About the verdict?

KING: About the possibility that your mother might have to go away?

STEWART: Nervous? I guess. I try not to focus on it.

KING: You're a realist, right? That could happen.

STEWART: Yes, I realize that. I think it would be incredibly wrong.

BLITZER: And what about the unflattering portrait of Martha Stewart that came out in testimony? Some witnesses portrayed her as a controlling and intimidating figure who barked at underlings. That's not how Alexis Stewart describes her mother.

KING: What's her biggest fault?

STEWART: She's too, ironically, forgiving and kind. And I know. People don't know that, but she's incredibly generous and she forgives too much, I think.

KING: So would that be...

STEWART: She's too trusting.

BLITZER: Ironically, it was Alexis who introduced her mother to Sam Waksal, the founder of ImClone, whose stock is at the center of Martha Stewart's case. He pleaded guilty to insider trading and is serving a seven-year sentence. Stewart's lawyers say they'll appeal her conviction, but analysts agree jail time is likely to come her way.

KING: And if it did, she would handle it well?

STEWART: Oh, yes.

KING: Boy, you have a lot of confidence in mom, don't you?

STEWART: Well, yes, sure.

(END VIDEOTAPE)

BLITZER: And this important note to our viewers. You can see the complete and exclusive interview with Alexis Stewart tonight on "LARRY KING LIVE." That begins 9:00 p.m. Eastern, 6:00 Pacific, only seen here on CNN.

We'll have a recap of our top story, the deadly bombing in Baghdad. That's coming up next.

(COMMERCIAL BREAK)

BLITZER: Recapping our top story, a very large car bomb exploded outside the Mount Lebanon Hotel in Baghdad shortly after 8:00 p.m. local time. At least 28 people were killed, dozens injured.

Our coverage continues with "LOU DOBBS TONIGHT."

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





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