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CNN Wolf Blitzer Reports

Disaster Averted in Spain, New Terror Concerns in the U.S., Police and Protesters Clash at a Holy Site, Madison Police Say Student Seiler's Abduction Claim Bizarre.

Aired April 02, 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, HOST: Happening now. A terror scare abroad involving explosives and now similar concerns right here in the United States. Why are law enforcement officers around the country now on the look-out? Stand by for hard news on WOLF BLITZER REPORTS.

Target: America. Will terrorists try to bomb rail and bus lines in U.S. cities this summer? We'll tell you about a new warning.

Train bomb -- another disaster averted in Spain.

Job boom -- all of a sudden the U.S. economy hangs out the help wanted sign, is there a political payoff in those growing payrolls?

Tyco trial -- make that mistrial. The judge pulls the plug in a huge corporate corruption case.

ANNOUNCER: This is WOLF BLITZER REPORTS for Friday, April 2, 2004.

(END VIDEOTAPE)

BLITZER: Could this summer bring a wave of terror attacks against American cities? We begin with a new warning from the FBI and the Department of Homeland Security that terrorists may be planning to target mass transit systems in this country much as they did last month in Madrid. Let's go straight to our justice correspondent Kelli Arena -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, that warning about trains and buses went out to law enforcement officials nationwide. It says that terrorists may try to hide explosives in luggage or carry-on bags like backpacks.

(BEGIN VIDEO CLIP)

ASA HUTCHINSON, DHS UNDER SECRETARY: Clearly, the information that we receive intelligencewise with the reality of the bombings overseas in transit. This is an area of concern. We're working with our transit authorities to enhance that security. Put the appropriate protective measures in place. Public awareness as well. Alerting law enforcement.

(END VIDEO CLIP) ARENA: The advisory clearly states the intelligence is uncorroborated meaning it hasn't been matched by other sources. It does not name specific U.S. cities and only offers summer as a time frame. Officials say the train bombings last month in Madrid have increased concern about mass transit attacks here in the United States, and officials do get specific about what the bombs could be made of. They say the plot calls for the use of improvised explosive devices, possibly constructed of ammonium nitrate and diesel fuel similar to what was used to blow up the federal building in Oklahoma nine years ago -- Wolf.

BLITZER: Are you getting any rumblings or thinking of changing the terror threat level?

ARENA: No, we're not. This was information sent directly to the transportation industry. We've seen that happen before. Nothing on that front yet. I mean, obviously, if new intelligence comes in that would warrant that, we may see something, but right now, no.

BLITZER: All right. Kelli Arena. Thank you very much for that.

Spanish authorities today foiled a terror plot targeting a high- speed rail line weeks after the bloody train bombings in Madrid. CNN's Al Goodman has the story from (UNINTELLIGIBLE), Spain.

(BEGIN VIDEOTAPE)

AL GOODMAN, CNN CORRESPONDENT: There was a bomb placed along the bullet train railroad network between Madrid and Seville (ph) this Friday. The interior minister saying the bomb contained 10 to 12 kilos or 22 to 26 pounds of explosives. It was attached to a detonator, he said, and in turn the detonator was attached to a very long cable. Obviously, someone trying to wreak havoc on this railroad network just three weeks after the Madrid commuter train bombings killed 190 people and injured more than 1,800.

The interior minister and the defense minister held an emergency meeting on Friday to review security measures. They came out of meeting saying there would be stepped-up vigilance on the railroad networks in a nation that thought vigilance already had been stepped up after the train bombings three weeks ago in Madrid, further revealing that the type of explosive found in this bomb which has been deactivated by police is the same type, they believe, that was used in the Madrid train bombings three weeks ago. Al Goodman, CNN, (UNINTELLIGIBLE), Spain.

(END VIDEOTAPE)

BLITZER: U.S. Homeland Security officials today announced a big change in the way some visitors entering the United States will be screened. And it's almost certain to raise complaints. CNN homeland security correspondent Jeanne Meserve joins us now. She has the latest details -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, it is a major expansion of a program intended to tighten the nation's borders and catch terrorists.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): A digital fingerprint scan, a photograph, a check against terrorists and criminal databases. A process that takes 23 seconds. Travelers who require visas to enter the U.S. have been going through the process at U.S. airports and seaports since January 5. But by the end of September even travelers from countries like the United Kingdom and Japan who do not need visas must also go through it. Only Canadians who do not need a visa and Mexicans with border crossing cards will be exempt. The intent is to close a loophole exploited by terrorists.

HUTCHINSON: Some of the terrorists of the past have not just come in with a visa, they've actually traveled through visa waiver country passports. And that's been attractive to them, and we've recognized that, that we need to address. That's one of the reasons we're doing this.

MESERVE: For scientific and technical reasons the so-called visa waiver countries will not meet a congressionally mandated October deadline for instituting passports with facial scans embedded in a computer chip. U.S. Visit will act as a security sub-gap. With 2.5 million screened so far officials say it is effective.

HUTCHINSON: Over 12,000 potential visa overstays have been identified. That's been referred for further investigation review. In addition, there's been over 200 criminal watchlist hits.

MESERVE: But not one known terrorist has been stopped by U.S. Visit.

(END VIDEOTAPE)

MESERVE: We checked with a number of embassies, as yet no reaction, but when the more limited program began in January, Brazil was so offended it retaliated by photographing and fingerprinting American visitors. There is certainly the potential for more of that. Hutchinson says we recognize it is a two-way street. Wolf, back to you.

BLITZER: Thank you very much, Jeanne Meserve. The photo and fingerprint requirement is already in effect, of course, for visitors from many countries. National correspondent Bob Franken got a firsthand look at exactly how this part of the entry procedure works.

(BEGIN VIDEOTAPE)

JEFFREY TETRAULT, DHS INSPECTOR: Takes no more than five to ten seconds.

OK, left hand first, press down.

Left index finger first. Press down in the box until I tell to you to release. Press down and hold. Great. Captured and use the right index finger for the same procedure. Press down and hold. Excellent. Look in the camera for a quick picture.

This gives you a digitized photo that is checked against the database. All done.

BOB FRANKEN, CNN CORRESPONDENT: Well, the good news is these finger scans are digital, there's no ink smudge, the bad news is we live in times that are so extraordinary, that security measures like this are becoming common place. Bob Franken, CNN, Dulles International Airport.

(END VIDEOTAPE)

BLITZER: Issues of global security were the focus for NATO today as the alliance welcomed seven new members. The largest expansion in its 55-year history. The flags of Romania, Bulgaria, Slovakia, Lithuania, Slovenia, Latvia and Astonia were raised outside NATO headquarters in Brussels in a special ceremony. Afterward the foreign ministers of all member nations got to work talking about the alliance's role in Afghanistan, arms control and the war on terror. Here to talk about all of that, retired U.S. Air Force General Joseph Ralston, he's the former NATO supreme allied commander, now the vice chairman of the Cohen Group here in Washington. Thank you for joining us. NATO is deeply involved in Afghanistan right now. What's the holdup in getting NATO involved in Iraq?

GEN. JOSEPH RALSTON, FMR. NATO SUPREME ALLIED COMMANDER: Well, NATO's involvement in Iraq is clearly a political decision not a military one. And as soon as the member nations of NATO agree that they should have a broader role in Iraq, then it will happen. So far, as you say, they have taken the step in Afghanistan, I think they're doing a credible job in Kabul do that.

BLITZER: We'll get to that in a moment. Would it really make a significant difference from the U.S. military perspective, in terms of dealing with security in Iraq if NATO took a more robust role?

RALSTON: I think it would be helpful. It's not going to result in tens of thousands of more troops because the troops are not available. It would result in some troops. But it would send, I think, a very, very powerful political message. If you had the 26 nations of NATO united in the mission in Iraq.

BLITZER: Why do you say they're not ready to provide the thousands, tens of thousands of troops? NATO has all these member states right now. Why can't they come up with 50, 60, 70,000 troops to help the U.S. stabilize the situation? Ease some of the burden on the U.S.?

RALSTON: Sometimes we forget about the 30,000 troops or so that NATO are providing in the Balkans today. On top of the 6,000 troops they have in Afghanistan. They do have more troops, there's no question about that, but it's not going to be tens of thousands of troops.

BLITZER: How divided, fractured is NATO, the NATO alliance right now? RALSTON: Not at all. I think there is much, more agreement in the NATO alliance today than what it gets credit for. Let's go back a year. Prior to the conflict in Iraq, there was all these stories about the fracture in the alliance. Remember, in February, all 18 members of the integrated military structure voted to do exactly what the United States had asked of them. NATO AWACS over Turkey, patriot missiles in Turkey. Guarding the Straits of Gibraltar and the entry way to the Suez Canal. So there is much more harmony than NATO gets credit for.

BLITZER: How is the NATO operation doing in Afghanistan? Specifically, are the NATO troops doing anything directly to look for Osama bin Laden, al Qaeda and the Taliban or simply seeking to shore up Hamid Karzai's presidency in Afghanistan.

RALSTON: There's a division of labor between what the U.S. troops are doing on the eastern borders of Afghanistan and what NATO is doing in Kabul. NATO has agreed to do the preventual reconstruction team efforts. So they are moving beyond Kabul, there is a definite division of labor between the two organizations.

BLITZER: Is there more that NATO should be doing on the war on terror? Do you believe there could be more what they should be doing?

RALSTON: I believe there is more NATO could be doing, just like there's more all of us can be doing in terms of intelligence sharing, in terms of trying to clean out hot bets of unrest. NATO has done a very, credible job in Sarajevo, for example, in terms of break up terrorist cells. So, NATO is very actively involved in it. Could we do more? Sure, we could all do more.

BLITZER: General Ralston, thanks very much for joining us.

RALSTON: Thank you, Wolf.

BLITZER: A stunning jump in job growth. What it means for the presidential election and for all of us. Plus this...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So we do not believe that there is a suspect at large, period.

(END VIDEO CLIP)

BLITZER: A college student's tale of abduction and the confusing clues simply don't add up.

Stones and stun grenades: police and protesters clash at a holy site. Also coming up.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I watch TV and I see the pros do it, and I go does and imitate them on the field. And when I got the move down, I get so happy. (END VIDEO CLIP)

BLITZER: Meet 14-year-old Freddie Adu, the child prodigy. He's the highest paid soccer player in the United States. We'll get to all of that. First, though, today's news quiz.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): 14 Year old Soccer phenom, Freedy Adu, is poised to make his Major League Soccer debut. Which African country did he once call home? Liberia, Ghana, South Africa, Ethiopia. The answer coming up.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: High anxiety over unemployment is easing a bit today on word from the labor department that hiring soared last month, 308,000 new jobs added to the U.S. ecomony, but at the same time, the unemployment rate actually climbed. Kathleen Hays is in New York with more on the numbers, what they really mean -- Kathleen.

KATHLEEN HAYS, CNN FINANCIAL CORRESPONDENT: Hi, Wolf. Well you know, there's a lot to this report, and it's not just the big jump in March. You know, the numbers for January and February rise sharply higher, too. So a lot of economists are saying this looks like a lot more than a one month wonder.

(BEGIN VIDEOTAPE)

HAYS (voice-over): Spring is here, and the long winter of labor market discontent may finally be over. The U.S. economy added 308,000 new jobs in March, the biggest gain in four years. Great news for the White House.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The economy is growing and people are finding work. Today, the statistics show that we added 308,000 jobs for the month of March.

HAYS: And a big surprise on Wall Street.

(on camera): This was the last thing I expected to happen! This is all we've been talking about. They came out. The numbers are marvelous.

(voice-over): It's true some of the jobs were created where the average wage is lower and benefits are not always part of a job. Restaurants and hotels added 27,000 workers. Retail businesses like department stores, delis and gas stations added 47,000 jobs.

But industries where wages are growing faster and most workers do get benefits also scored solid job gains, the hot health care field added 36,000. Construction jobs jumped 71,000 boosted by warm weather in some regions. And it looks like the hemorrhaging of high-paid factory jobs is coming to an end. For the first time in 44 months, the number of jobs in manufacturing did not go down. The unemployment rate rose slightly to 5.7 percent, but economists said that was actually good news, because it shows disillusioned workers are starting to look for jobs again.

BILL CHENEY, ECOMONIST: The moment they think there are jobs they'll be looking and the unemployment rate will head up again, that's on the whole a good sign at this point in the cycle.

HAYS: Here's the downside, wages are barely growing. They rose less than 2 percent annualized in March. That's not even keeping up with inflation.

PROF. THOMAS KOCHAN, MIT SCHOOL OF MANAGEMENT: Remember, this only is a very small down payment on the job losses that we've experienced in the last four years. We've got a long, long way to go to get this labor market back in shape.

(END VIDEOTAPE)

HAYS: So now in the first three months of the year, the economy has added more than a half a million jobs, looks like a decent down payment on the president's promise of 2.5 million this year -- Wolf.

BLITZER: Kathleen Hays in New York, thanks, Kathleen, for explaining all of that to us. Unemployment is always a politically charged issue, but never more so than in an election year. Our White House correspondent Suzanne Malveaux is traveling with the president. She's joining us now live from Augusta, Georgia. Pretty happy at the White House, I assume, Suzanne?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Absolutely, Wolf. The first reaction of the president this morning, he gave us the thumbs-up when he heard about the new economic numbers. Earlier today, he was also at Huntington, West Virginia at Marshall University. That is where he was toting his economic plan, talking about $250 million in grant money for community colleges, $500 million for education and job training programs. All of this to try to convince the American people that the economy is turning around and that it is his plan that is working.

(BEGIN VIDEO CLIP)

BUSH: The economy is growing, and people are finding work. Today, the statistics show that we add 308,000 jobs for the month of March. We've added 759,000 jobs since August. This economy is strong. It is getting stronger.

(END VIDEO CLIP)

MALVEAUX: Now, the president brought that message to West Virginia, a key battleground state. That is where more than 20,000 people in that state have lost their job under President Bush's watch, 10,000 of those manufacturing jobs. That is a very important state. Democrats up a brought the point that it's 2.6 million jobs that have been lost over President Bush's term. And they say that they don't believe that one month is a trend -- Wolf.

BLITZER: Suzanne, let's switch gears to the 9/11 commission. I understand the White House now going forward with handing over some important documents from the Clinton administration on 9/11 that earlier had not been handed over. What exactly is going on?

MALVEAUX: Well here's compromise that they've struck. Essentially the White House counsel as well as the counsel from the 9/11 commission will go to the National Archives on Monday and they'll go through the Clinton documents. They'll take a look at boxes and boxes of material to see which ones are duplicates, which ones are relevant, and they'll decide together, jointly, which ones are appropriate to be submitted to the 9/11 commission -- Wolf.

BLITZER: Looks like they're moving ahead on that as well. Thank you very much, Suzanne, for that report.

While Democratic presidential candidate John Kerry welcomed the positive employment numbers, he also offered this opposing viewpoint and I'm quoting now, "for too many families living through the worst job recovery since the Great Depression has been and continues to be far too painful. With nearly 2.6 million private sector jobs lost during the Bush presidency, America's families need and deserve a new economic strategy. Kerry says if elected he has a plan for creating 10 million jobs over the next four years.

Here's your chance to weigh in on this story. Our web question of the day is this, "do you think the U.S. job market is improving?" You can vote right now. Go to CNN.com/wolf. We'll have the results later in this broadcast. While you're there, though, I'd love to hear directly from you. Send me your comments any time. I'll try to read some of them on the air each day at the end of this program, that's also where you can read my daily online column, CNN.com/wolf.

A stunning, stunning end to the Tyco trial. We'll tell you what happened and why.

Also ahead, the latest twist in the puzzling missing student case in Madison, Wisconsin.

Plus this...

(BEGIN VIDEO CLIP)

CARLOS WATSON, CNN POLITICAL ANALYST: I'm Carlos Watson, stay tuned for the inside edge, I'll tell you why the pundits may be wrong about this year's election.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: The troubled Tyco trial came to a surprise end today. The judge declared a mistrial, not because of the jury's inability to reach an agreement, but sources say because of a mysterious letter. CNN's Allan Chernoff joins us live from New York with more -- Allan.

ALLAN CHERNOFF, CNN CORRESPONDENT: Wolf, Dennis Kozlowski and Mark Swartz appear to have dodged a conviction. Jurors tell CNN they were very close to convicting both defendants on the charge of grand larceny, which carries a maximum prison term of 25 years. According to one juror, he believes the entire panel would have convicted both defendants on seven counts of grand larceny plus conspiracy, plus securities fraud.

(BEGIN VIDEO CLIP)

PETER MCENTEGART, TYCO JUROR: It's just so frustrating because literally we virtually had a verdict yesterday afternoon. There was even talk, someone said why don't we stay an extra half hour, we were that close. And then, come in this morning and we thought it would be another -- well, nothing takes ten minutes in this trial...

(END VIDEO CLIP)

CHERNOFF: But Judge Obus declared a mistrial because of an effort to influence one of the jurors, although he didn't reveal exactly what happened in open court. However, a person who was in the judge's chambers when this was being discussed said that juror No. 4, the controversial juror who had appeared to be the holdout on some counts had received a coercive letter yesterday. The judge questioned juror No. 4 all about this, she answered, and based upon her answers, the judge said he had no choice but to declare a mistrial. The judge called this a shame, district attorney Robert Morgenthau said it is unfortunate. And he said he would seek a new trial as soon as possible. The judge has set May 7 to discuss a new trial.

BLITZER: Allan, what does a coercive letter mean?

CHERNOFF: Coercive letter appears to mean that somebody wrote to this juror, trying to get her to change her opinion to convict Kozlowski and Swartz. There had been many media reports indicating that she was holding out. In fact, in a note she had written to the judge last week, she said that many members of the jury appear unwilling to believe that the defendants may be innocent, and after that there were many reports saying she was the person holding out -- Wolf.

BLITZER: Allan Chernoff reporting for us. Thank you very much.

This note to our viewers, CNN's Paula Zahn will be talking with three of the jurors tonight on "PAULA ZAHN NOW." That begins 8:00 p.m. Eastern, 5:00 Pacific.

Violence shatters the peace at a holy site. Worshipers seek refuge inside. We'll show you how this tense standoff ended.

Also ahead...

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: So immediately a lot of the people nationwide assumed that, hey, this has got to be bogus, which was true.

(END VIDEO CLIP)

BLITZER: Surprising developments in a case that captured nationwide attention. Now investigators try to figure out why they were told a bogus story.

Plus this...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They don't think a 14-year-old is supposed to be doing, that hey, like I said, it's a compliment.

(END VIDEO CLIP)

BLITZER: The highest paid soccer player in the United States about to make his debut. Get this -- he's only 14 years old! We'll meet him this hour.

(COMMERCIAL BREAK)

ANNOUNCER: From our studios in Washington, once again, Wolf Blitzer.

BLITZER: Welcome back to CNN.

There are new indications that the ambush of American civilians in Fallujah was a carefully planned death trap. We'll have that. That's coming up.

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

The FBI and the Department of Homeland Security expressed concerns about an alleged bombing plot against commercial bus and rail systems in major cities around the United States this summer. The explosives allegedly would be carried in luggage, duffle bags and backpacks. Federal law enforcement officials say the plot information is uncorroborated. We're watching this story.

A car making an illegal turn is blamed for a bus crash in central Florida that injured 20 people. Authorities say the bus, which was mostly carrying children, and a truck were trying to avoid the car. The bus hit the truck, flipped and went down an embankment and struck a tree.

Firefighters battling a huge 6,000-acre blaze northwest of Fort Collins, Colorado hope for rain. The flames have already destroyed at least one home and forced several families to flee. Colorado's governor has authorized state disaster funds to help cover firefighting costs.

The Pentagon is investigating the circumstances behind this week's deadly attack in Fallujah. Our Pentagon Correspondent Barbara Starr is standing by with more details -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well indeed, Wolf, military officials now saying that there are growing indications that the attack in Fallujah may have been well coordinated, planned ahead, essentially a deadly ambush that four contractor security personnel drove straight into.

Military officials telling CNN those indicators are initial reports that just before the attacks the streets were cleared of people, shops closed up and a number of local Iraqi media were in the streets of Fallujah.

Now, the Bush administration continues to plan a military response using Marines now positioned just outside the town. Deputy Secretary of State Richard Armitage on this earlier today.

(BEGIN VIDEO CLIP)

RICHARD ARMITAGE, DEPUTY SECRETARY OF STATE: What happened in Fallujah is not in keeping with any Quranic teachings or any of the tenets of Islam and there will be a price extracted. There will be a response and it will be obvious to all.

(END VIDEO CLIP)

STARR: Now, officials saying there is no indication that the townspeople or the local media knew exactly what was being planned but there was plenty of talk on the streets perhaps that trouble might erupt.

Investigators also looking the possibility, they say that Abu Musab Zarqawi, that al Qaeda associate suspected of operating in Iraq who has called for civil war between Sunni or Shia might have been involved, no firm evidence yet, but they are looking at all the possibilities -- Wolf.

BLITZER: Barbara Starr at the Pentagon, thanks Barbara very much.

Police and protesters clashed at a Jerusalem holy site today. At least a dozen people were treated for injuries but while tensions are high, diplomatic efforts may be making a little bit of headway.

CNN's Chris Burns reports from Jerusalem.

(BEGIN VIDEOTAPE)

CHRIS BURNS, CNN CORRESPONDENT (voice-over): Israeli police stormed the epicenter of the Israeli-Palestinian conflict what Muslims call the Noble Sanctuary and what Jews call Temple Mount.

Israeli police fired stun grenades and rubber bullets at stone- throwing youths. Amid the battles, Israeli police say many, perhaps thousands of Muslims, protesters and worshippers alike, took refuge in the sanctuary's mosques which the police say they did not enter. Sanctuary officials and Israeli police negotiated a peaceful end to the standoff but the clashes are a sign of heightened tensions after Israel's recent assassination in Gaza of Hamas militant leader Sheikh Ahmed Yassin. Meanwhile in southern Gaza, Israeli forces again raided the border town of Rafah saying they were search for tunnels militants use to smuggle weapons from Egypt.

Israeli Prime Minister Ariel Sharon is sticking to his plan to withdraw from the Gaza Strip. In interviews with Israeli media before Monday's Passover holidays, Mr. Sharon said settlement building in Gaza was halted and that the pullout will be in full swing come Passover next year.

Sharon also threatened Palestinian Leader Yasser Arafat again saying he's a marked man if he's behind any future attacks on Jews. An Arafat spokesman shot back that Sharon is "playing with fire." The Israeli prime minister is under heavy international pressure not to touch the Palestinian leader.

Fighting words aside, the Israelis and Palestinians are discussing Sharon's pullout plan with the Americans and the Palestinians are expressing qualified support.

AHMAD QOREI, PALESTINIAN PRIME MINISTER: We are not against the withdrawal from Gaza but as a step toward implementation of the roadmap.

BURNS (on camera): A U.S.-led roadmap for peace that envisions a Palestinian state by next year. The effort now is to fit Mr. Sharon's disengagement plan into the roadmap. The prime minister will be seeking President Bush's blessing when he comes to Washington April 14th.

Chris Burns, CNN, Jerusalem.

(END VIDEOTAPE)

BLITZER: And the Bush administration today again warned Israel against harming Yasser Arafat. The Deputy Secretary of State Richard Armitage said the United States has made it "very clear that it opposes the exile or the assassination of the Palestinian leader."

The continuing turmoil in the Middle East, the possibility of new terrorist attacks at home and abroad and the continuing controversy over U.S. policy in Iraq are all factors that could contribute to a very volatile presidential election campaign.

CNN Political Analyst Carlos Watson is joining us now with the "Inside Edge." Carlos, thanks very much for joining us. This job report out today, 300,000-plus new jobs got to be great news for the president.

CARLOS WATSON, CNN POLITICAL ANALYST: Very good news for the president. You'll hear him trumpet not just in TV ads but more significantly you'll begin to see it in radio ads and I predict you'll see it a lot on his website, which now is being hit by several million people each month.

BLITZER: So, how should Senator Kerry and his campaign respond to this?

WATSON: I think he's got to take a page out of President Clinton's book and there are two critical things I think President Clinton did successfully during his term.

One, he also trumpeted jobs but he gave a very human face to it and so expect to see the Kerry people have President Clinton and former Treasury Secretary Bob Rubin touring the country really putting a very human face on what was a successful eight years of job growth, 22 million jobs.

The second thing he's got to get CEOs to come out for him in a major way, John Kerry does. Remember, Bill Clinton did that very successfully in '92. He had the CEO of Apple, of HP, of Silicon Graphics at the time and that was unusual for a Democrat and, again, it said that he was a new kind of Democrat, a pro-growth Democrat, so look for those two things among others.

BLITZER: All right. Let's talk a little bit about Condoleezza Rice. Next Thursday the entire nation, indeed much of the world will be watching these hearings up on Capitol Hill, the 9/11 commission. What are you going to be looking for?

WATSON: I'm going to watch the first ten to 15 minutes, Wolf. I think it's going to be style over substance. I think if the nation sees Dr. Rice as someone who is competent, who is secure, who is well poised, who doesn't seem to be on the defensive, I think with all due respect, frankly I think a lot of the substance will be lost.

If they see someone nervous, someone who is caught off guard, someone who seems somewhat unsure, I think this could become a very difficult and a pivotal moment for the president.

BLITZER: We'll all be watching and CNN, of course, will have live coverage of all of that.

Let's talk a little bit about the election right now. You're looking at it down the road in November, still a long time to go.

WATSON: It's a long time to go. Wolf, you know, I got to disagree with a lot of my fellow pundits. A lot of people are expecting this will be a close race, decided just like the 2000 race by one or two percent but for a couple of reasons I don't think that's the case.

I think what's more accurate is to call this a volatile race. We've seen just in the last six weeks, for example, a swing in the polls, 16 points. The president was down by 12 and now is up by four.

And, if you look back at history, the reality is we've had five elections in the last 100 years decided by three percent or less. The election that followed that close election has always been decided by double digits. In fact, the closest was the Jimmy Carter-Ronald Reagan race, which was decided by ten points but the biggest has been 23 or 24 points. So, I think we'll see lots of swings for a number of different reasons but I think calling it a close race is a mistake and I would look to see who begins to do well in October.

BLITZER: But it's really close, the polls all show it's very close right now.

WATSON: Close today and I think it will go back and forth and, remember, the Republican Convention is very late this year, right. It's in essentially early September but I think it's going to be a volatile race.

You've got more people participating in this debate. You've got more money at stake and the issues are big and the distinctions are sharp. I don't think we'll see a close race when the final numbers come in in November.

BLITZER: The "Inside Edge" with Carlos Watson. People can read your column right?

WATSON: CNN.com/carlos ever week starting on Wednesdays but it's still up now.

BLITZER: I'll be reading it. I do every week. Thanks very much, Carlos.

WATSON: Appreciate you doing that.

BLITZER: A frantic search and a joyous reunion, now the truth comes out in the case of a missing student, the surprising twist.

A potentially key decision by the judge in the Michael Jackson molestation case, details in our "Justice Report." That's coming up.

Plus this...

(BEGIN VIDEO CLIP)

FREDDY ADU, DC UNITED: It just feels so great. She motivates me to play. That's why I'm here right now.

(END VIDEO CLIP)

BLITZER: He's 14 years old, yes, 14 years old and he's the country's highest paid professional soccer player. Find out whom he gives credit to. We'll get to that.

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

(BEGIN VIDEOTAPE)

BLITZER (voice-over): The only suspect ever convicted in the 9/11 attacks may go free. A Moroccan man was found guilty in Germany last year of being an accessory to the September 11th attacks in New York City and Washington but a German Appeals Court ordered a retrial. Now, a judge says there's a possibility the case may collapse.

Jail time, a British court has sentenced a former U.S. Marine to four and a half years in jail. Thirty-three-year-old Tony Studebaker (ph) admitted abducting a 12-year-old English girl he met over the Internet. The pair stayed in a Paris hotel for several days before the girl returned to her parents.

Changing channels, Britain's BBC is getting a new chairman. The former head of an independent television network, Michael Gray. The BBC's previous chairman resigned amid controversy over the network's coverage of the war in Iraq.

Hong Kong, protests, two arrests and a dozen injuries are reported after pro-democracy demonstrators scuffled with police in Hong Kong. They accuse the Chinese government of threatening Hong Kong's autonomy breaking promises made when China assumed control over the former British colony in 1997.

Load up the truck, the European Union may scrap a rule limiting the amount of alcohol that can be transported across national borders. The change would benefit residents of Britain and several Scandinavian countries where taxes on alcohol are significantly higher, and that's our look "Around the World."

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Police in Madison, Wisconsin say college student Audrey Seiler's recent abduction claim simply does not add up and they do not believe an abductor is at large. It's such a bizarre story. It's still unfolding. It's been bizarre since the woman was found on Wednesday.

CNN's Eric Phillips reports.

(BEGIN VIDEOTAPE)

ERIC PHILLIPS, CNN CORRESPONDENT (voice-over): After an exhaustive search for a suspect using choppers, dogs and scores of officers and loved ones, it all comes down to a final conclusion.

ASST. CHIEF NOBLE WRAY, MADISON POLICE: We do not believe that there is a suspect at large period.

PHILLIPS: Public skepticism over the college sophomore's story began mounting almost immediately. She had been missing since Saturday when surveillance cameras caught her leaving her apartment at 2:30 in the morning without a coat or a purse.

Police say a passerby spotted her four days later in a marshy field about two miles from her apartment. She said a stranger had abducted her at knifepoint and she gave information for a composite sketch. But her story began to unravel when several inconsistencies surfaced, such as her reporting her assailant had used duct tape, rope, cold medicine, gum and a knife against her. Some of those items were found at the crime scene.

WRAY: We were able to get videotape showing Audrey going into a local store purchasing these items.

PHILLIPS: Police also say Audrey's computer had been used in the days that she was allegedly missing and that it had been used to find five-day forecasts for local wooded areas and parks, plus two people reported seeing her walking freely during the time she was allegedly being held. Authorities offer no apologies for spending the time and resources to investigate the case.

WRAY: It would have been a disservice to the community, a disservice to the country in this particular case and also a disservice to the family for a professional law enforcement organization in the United States to jump to conclusions and assume that this was bogus.

PHILLIPS (on camera): Many unanswered questions remain, among them where was Audrey Seiler in reality during the days when she was allegedly abducted?

In Madison, Wisconsin, Eric Phillips, CNN.

(END VIDEOTAPE)

BLITZER: Topping our "Justice Report," a psychiatrist testifies the Texas mother accused in the beating deaths of two of her sons is a textbook example of insanity. Five mental health experts agree 39- year-old Deanna Laney (ph) suffered severe psychotic delusions that prevented her from knowing right from wrong. Laney has pleaded not guilty by reason of insanity.

In the Michael Jackson child molestation case, a judge says he will allow Jackson's attorneys to see the school and psychiatric reports of the accuser and his family.

The judge also said he'd decide which written responses attorneys can give to the news media. Jackson has pleaded not guilty. A grand jury continues hearing testimony and the case is tentatively set to go to trial in December.

Walt Disney World suspends an employee without pay pending the outcome of an investigation. Authorities say Michael Shertrand (ph) was dressed as the character Tigger when he allegedly fondled a mother and a daughter as they posed for a photo. Shartrand says he may have inadvertently touched the child's breast and adds he suffers from dyslexia which he says impairs his memory.

How much did you make when you were 14 years old? Coming up, we'll introduce you to the highest paid soccer player in the United States.

Also, find out why these baby birds, look at them, why they're so special.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BLITZER (voice-over): Earlier we asked, "Which African country did Freddy Adu once call home?" The answer Ghana, he emigrated to the United States in 1997.

(END VIDEO CLIP)

BLITZER: And now he's the highest paid soccer player in the United States and he hasn't even appeared in his first professional game yet. That comes tomorrow when Freddy Adu makes his debut. By the way, have we told you yet, Freddy is only just 14 years old.

CNN's Elaine Quijano reports.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN CORRESPONDENT (voice-over): He's not old enough to vote or even drive himself to practice yet but those who have studied Freddy Adu's game say he can maneuver a soccer ball better than most players twice his age.

PETER NOWAK, DC UNITED COACH: Freddy is very mobile. He's playing in the front position, you know. A lot of people ask what position he plays but he's, you know, flowing with the game and he ends up playing in a different part of the field and that's why he's very dangerous.

QUIJANO: Freddy thinks of soccer not simply as a game but more an extension of himself, a connection he first discovered in his native Ghana.

ADU: When I was born, my mother said when I saw a soccer ball I started crying because I wanted to hold it so bad in my hands.

QUIJANO: Some say the future popularity of American soccer rests in large part on Freddy's 14-year-old shoulders. The teenager was major league soccer's number one draft pick in January and signed with DC United for half a million dollars.

Add to that $1 million endorsement deal with Nike plus a third contract with Pepsi and you might wonder how he stays grounded. The answer his mother, who once worked two jobs to support them.

ADU: I'm just paying her back, paying her back. She doesn't have to work anymore. I want her to do whatever she wants, catch up on the times that she missed and just have fun, enjoy life.

QUIJANO (on camera): Six years after he emigrated to the U.S. after winning a visa lottery, Freddy Adu is set to make his professional debut here at RFK Stadium in the nation's capital at a sold-out event to be broadcast on national TV, immense pressure for some players but Freddy says it's simply a chance to get paid doing what he loves.

Elaine Quijano, CNN, Washington.

(END VIDEOTAPE)

BLITZER: And we will all be watching Freddy. Good luck Freddy tomorrow.

The eagles have landed, what's new at the zoo coming up in our "Picture of the Day."

And our hot web question of the day, "Do you think the U.S. job market is improving?" We'll have the results for you when we come back.

(COMMERCIAL BREAK)

BLITZER: Bald but beautiful, it's our "Picture of the Day." These three young bald eagles are cause for celebration at the San Francisco Zoo. They're from eggs collected on California's Catalina Island and hatched at the zoo's conservation center, which is working to rebuild California's dwindling bird population. Look at that. They're cute.

Here's how you're weighing in on our web question of the day. "Do you think the U.S. job market is improving?" Forty-six percent of you say yes, 54 percent say no. Remember this is not a scientific poll.

Let's hear from you, some of your e-mail.

Barbara writes this: "I cannot believe my ears and eyes. After a six-month trial and 12 days of jury deliberation, the judge in the Tyco trial has declared a mistrial. May I ask who is footing the legal bill for this epic? Hopefully not the taxpayers."

Frank sends us this: "What a sad day in our judicial system when Martha Stewart can be convicted of selling her own stock and the Tyco trial ends in a mistrial where millions of dollars were at stake."

This from Brendan: "A mistrial is in order. There is no proof the juror did anything wrong. The media that revealed her identity should be held responsible for interfering with the trial and making her a target for attack."

A reminder, you can always catch WOLF BLITZER REPORTS weekdays 5:00 p.m. Eastern. I'll see you again Sunday at Noon Eastern for "LATE EDITION," the last word in Sunday talk. Among my guests this Sunday the former Democratic presidential candidate Howard Dean.

Until then thanks very much for joining us. "LOU DOBBS TONIGHT" starts right now.

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


Aired April 2, 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, HOST: Happening now. A terror scare abroad involving explosives and now similar concerns right here in the United States. Why are law enforcement officers around the country now on the look-out? Stand by for hard news on WOLF BLITZER REPORTS.

Target: America. Will terrorists try to bomb rail and bus lines in U.S. cities this summer? We'll tell you about a new warning.

Train bomb -- another disaster averted in Spain.

Job boom -- all of a sudden the U.S. economy hangs out the help wanted sign, is there a political payoff in those growing payrolls?

Tyco trial -- make that mistrial. The judge pulls the plug in a huge corporate corruption case.

ANNOUNCER: This is WOLF BLITZER REPORTS for Friday, April 2, 2004.

(END VIDEOTAPE)

BLITZER: Could this summer bring a wave of terror attacks against American cities? We begin with a new warning from the FBI and the Department of Homeland Security that terrorists may be planning to target mass transit systems in this country much as they did last month in Madrid. Let's go straight to our justice correspondent Kelli Arena -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, that warning about trains and buses went out to law enforcement officials nationwide. It says that terrorists may try to hide explosives in luggage or carry-on bags like backpacks.

(BEGIN VIDEO CLIP)

ASA HUTCHINSON, DHS UNDER SECRETARY: Clearly, the information that we receive intelligencewise with the reality of the bombings overseas in transit. This is an area of concern. We're working with our transit authorities to enhance that security. Put the appropriate protective measures in place. Public awareness as well. Alerting law enforcement.

(END VIDEO CLIP) ARENA: The advisory clearly states the intelligence is uncorroborated meaning it hasn't been matched by other sources. It does not name specific U.S. cities and only offers summer as a time frame. Officials say the train bombings last month in Madrid have increased concern about mass transit attacks here in the United States, and officials do get specific about what the bombs could be made of. They say the plot calls for the use of improvised explosive devices, possibly constructed of ammonium nitrate and diesel fuel similar to what was used to blow up the federal building in Oklahoma nine years ago -- Wolf.

BLITZER: Are you getting any rumblings or thinking of changing the terror threat level?

ARENA: No, we're not. This was information sent directly to the transportation industry. We've seen that happen before. Nothing on that front yet. I mean, obviously, if new intelligence comes in that would warrant that, we may see something, but right now, no.

BLITZER: All right. Kelli Arena. Thank you very much for that.

Spanish authorities today foiled a terror plot targeting a high- speed rail line weeks after the bloody train bombings in Madrid. CNN's Al Goodman has the story from (UNINTELLIGIBLE), Spain.

(BEGIN VIDEOTAPE)

AL GOODMAN, CNN CORRESPONDENT: There was a bomb placed along the bullet train railroad network between Madrid and Seville (ph) this Friday. The interior minister saying the bomb contained 10 to 12 kilos or 22 to 26 pounds of explosives. It was attached to a detonator, he said, and in turn the detonator was attached to a very long cable. Obviously, someone trying to wreak havoc on this railroad network just three weeks after the Madrid commuter train bombings killed 190 people and injured more than 1,800.

The interior minister and the defense minister held an emergency meeting on Friday to review security measures. They came out of meeting saying there would be stepped-up vigilance on the railroad networks in a nation that thought vigilance already had been stepped up after the train bombings three weeks ago in Madrid, further revealing that the type of explosive found in this bomb which has been deactivated by police is the same type, they believe, that was used in the Madrid train bombings three weeks ago. Al Goodman, CNN, (UNINTELLIGIBLE), Spain.

(END VIDEOTAPE)

BLITZER: U.S. Homeland Security officials today announced a big change in the way some visitors entering the United States will be screened. And it's almost certain to raise complaints. CNN homeland security correspondent Jeanne Meserve joins us now. She has the latest details -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, it is a major expansion of a program intended to tighten the nation's borders and catch terrorists.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): A digital fingerprint scan, a photograph, a check against terrorists and criminal databases. A process that takes 23 seconds. Travelers who require visas to enter the U.S. have been going through the process at U.S. airports and seaports since January 5. But by the end of September even travelers from countries like the United Kingdom and Japan who do not need visas must also go through it. Only Canadians who do not need a visa and Mexicans with border crossing cards will be exempt. The intent is to close a loophole exploited by terrorists.

HUTCHINSON: Some of the terrorists of the past have not just come in with a visa, they've actually traveled through visa waiver country passports. And that's been attractive to them, and we've recognized that, that we need to address. That's one of the reasons we're doing this.

MESERVE: For scientific and technical reasons the so-called visa waiver countries will not meet a congressionally mandated October deadline for instituting passports with facial scans embedded in a computer chip. U.S. Visit will act as a security sub-gap. With 2.5 million screened so far officials say it is effective.

HUTCHINSON: Over 12,000 potential visa overstays have been identified. That's been referred for further investigation review. In addition, there's been over 200 criminal watchlist hits.

MESERVE: But not one known terrorist has been stopped by U.S. Visit.

(END VIDEOTAPE)

MESERVE: We checked with a number of embassies, as yet no reaction, but when the more limited program began in January, Brazil was so offended it retaliated by photographing and fingerprinting American visitors. There is certainly the potential for more of that. Hutchinson says we recognize it is a two-way street. Wolf, back to you.

BLITZER: Thank you very much, Jeanne Meserve. The photo and fingerprint requirement is already in effect, of course, for visitors from many countries. National correspondent Bob Franken got a firsthand look at exactly how this part of the entry procedure works.

(BEGIN VIDEOTAPE)

JEFFREY TETRAULT, DHS INSPECTOR: Takes no more than five to ten seconds.

OK, left hand first, press down.

Left index finger first. Press down in the box until I tell to you to release. Press down and hold. Great. Captured and use the right index finger for the same procedure. Press down and hold. Excellent. Look in the camera for a quick picture.

This gives you a digitized photo that is checked against the database. All done.

BOB FRANKEN, CNN CORRESPONDENT: Well, the good news is these finger scans are digital, there's no ink smudge, the bad news is we live in times that are so extraordinary, that security measures like this are becoming common place. Bob Franken, CNN, Dulles International Airport.

(END VIDEOTAPE)

BLITZER: Issues of global security were the focus for NATO today as the alliance welcomed seven new members. The largest expansion in its 55-year history. The flags of Romania, Bulgaria, Slovakia, Lithuania, Slovenia, Latvia and Astonia were raised outside NATO headquarters in Brussels in a special ceremony. Afterward the foreign ministers of all member nations got to work talking about the alliance's role in Afghanistan, arms control and the war on terror. Here to talk about all of that, retired U.S. Air Force General Joseph Ralston, he's the former NATO supreme allied commander, now the vice chairman of the Cohen Group here in Washington. Thank you for joining us. NATO is deeply involved in Afghanistan right now. What's the holdup in getting NATO involved in Iraq?

GEN. JOSEPH RALSTON, FMR. NATO SUPREME ALLIED COMMANDER: Well, NATO's involvement in Iraq is clearly a political decision not a military one. And as soon as the member nations of NATO agree that they should have a broader role in Iraq, then it will happen. So far, as you say, they have taken the step in Afghanistan, I think they're doing a credible job in Kabul do that.

BLITZER: We'll get to that in a moment. Would it really make a significant difference from the U.S. military perspective, in terms of dealing with security in Iraq if NATO took a more robust role?

RALSTON: I think it would be helpful. It's not going to result in tens of thousands of more troops because the troops are not available. It would result in some troops. But it would send, I think, a very, very powerful political message. If you had the 26 nations of NATO united in the mission in Iraq.

BLITZER: Why do you say they're not ready to provide the thousands, tens of thousands of troops? NATO has all these member states right now. Why can't they come up with 50, 60, 70,000 troops to help the U.S. stabilize the situation? Ease some of the burden on the U.S.?

RALSTON: Sometimes we forget about the 30,000 troops or so that NATO are providing in the Balkans today. On top of the 6,000 troops they have in Afghanistan. They do have more troops, there's no question about that, but it's not going to be tens of thousands of troops.

BLITZER: How divided, fractured is NATO, the NATO alliance right now? RALSTON: Not at all. I think there is much, more agreement in the NATO alliance today than what it gets credit for. Let's go back a year. Prior to the conflict in Iraq, there was all these stories about the fracture in the alliance. Remember, in February, all 18 members of the integrated military structure voted to do exactly what the United States had asked of them. NATO AWACS over Turkey, patriot missiles in Turkey. Guarding the Straits of Gibraltar and the entry way to the Suez Canal. So there is much more harmony than NATO gets credit for.

BLITZER: How is the NATO operation doing in Afghanistan? Specifically, are the NATO troops doing anything directly to look for Osama bin Laden, al Qaeda and the Taliban or simply seeking to shore up Hamid Karzai's presidency in Afghanistan.

RALSTON: There's a division of labor between what the U.S. troops are doing on the eastern borders of Afghanistan and what NATO is doing in Kabul. NATO has agreed to do the preventual reconstruction team efforts. So they are moving beyond Kabul, there is a definite division of labor between the two organizations.

BLITZER: Is there more that NATO should be doing on the war on terror? Do you believe there could be more what they should be doing?

RALSTON: I believe there is more NATO could be doing, just like there's more all of us can be doing in terms of intelligence sharing, in terms of trying to clean out hot bets of unrest. NATO has done a very, credible job in Sarajevo, for example, in terms of break up terrorist cells. So, NATO is very actively involved in it. Could we do more? Sure, we could all do more.

BLITZER: General Ralston, thanks very much for joining us.

RALSTON: Thank you, Wolf.

BLITZER: A stunning jump in job growth. What it means for the presidential election and for all of us. Plus this...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So we do not believe that there is a suspect at large, period.

(END VIDEO CLIP)

BLITZER: A college student's tale of abduction and the confusing clues simply don't add up.

Stones and stun grenades: police and protesters clash at a holy site. Also coming up.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I watch TV and I see the pros do it, and I go does and imitate them on the field. And when I got the move down, I get so happy. (END VIDEO CLIP)

BLITZER: Meet 14-year-old Freddie Adu, the child prodigy. He's the highest paid soccer player in the United States. We'll get to all of that. First, though, today's news quiz.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): 14 Year old Soccer phenom, Freedy Adu, is poised to make his Major League Soccer debut. Which African country did he once call home? Liberia, Ghana, South Africa, Ethiopia. The answer coming up.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: High anxiety over unemployment is easing a bit today on word from the labor department that hiring soared last month, 308,000 new jobs added to the U.S. ecomony, but at the same time, the unemployment rate actually climbed. Kathleen Hays is in New York with more on the numbers, what they really mean -- Kathleen.

KATHLEEN HAYS, CNN FINANCIAL CORRESPONDENT: Hi, Wolf. Well you know, there's a lot to this report, and it's not just the big jump in March. You know, the numbers for January and February rise sharply higher, too. So a lot of economists are saying this looks like a lot more than a one month wonder.

(BEGIN VIDEOTAPE)

HAYS (voice-over): Spring is here, and the long winter of labor market discontent may finally be over. The U.S. economy added 308,000 new jobs in March, the biggest gain in four years. Great news for the White House.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The economy is growing and people are finding work. Today, the statistics show that we added 308,000 jobs for the month of March.

HAYS: And a big surprise on Wall Street.

(on camera): This was the last thing I expected to happen! This is all we've been talking about. They came out. The numbers are marvelous.

(voice-over): It's true some of the jobs were created where the average wage is lower and benefits are not always part of a job. Restaurants and hotels added 27,000 workers. Retail businesses like department stores, delis and gas stations added 47,000 jobs.

But industries where wages are growing faster and most workers do get benefits also scored solid job gains, the hot health care field added 36,000. Construction jobs jumped 71,000 boosted by warm weather in some regions. And it looks like the hemorrhaging of high-paid factory jobs is coming to an end. For the first time in 44 months, the number of jobs in manufacturing did not go down. The unemployment rate rose slightly to 5.7 percent, but economists said that was actually good news, because it shows disillusioned workers are starting to look for jobs again.

BILL CHENEY, ECOMONIST: The moment they think there are jobs they'll be looking and the unemployment rate will head up again, that's on the whole a good sign at this point in the cycle.

HAYS: Here's the downside, wages are barely growing. They rose less than 2 percent annualized in March. That's not even keeping up with inflation.

PROF. THOMAS KOCHAN, MIT SCHOOL OF MANAGEMENT: Remember, this only is a very small down payment on the job losses that we've experienced in the last four years. We've got a long, long way to go to get this labor market back in shape.

(END VIDEOTAPE)

HAYS: So now in the first three months of the year, the economy has added more than a half a million jobs, looks like a decent down payment on the president's promise of 2.5 million this year -- Wolf.

BLITZER: Kathleen Hays in New York, thanks, Kathleen, for explaining all of that to us. Unemployment is always a politically charged issue, but never more so than in an election year. Our White House correspondent Suzanne Malveaux is traveling with the president. She's joining us now live from Augusta, Georgia. Pretty happy at the White House, I assume, Suzanne?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Absolutely, Wolf. The first reaction of the president this morning, he gave us the thumbs-up when he heard about the new economic numbers. Earlier today, he was also at Huntington, West Virginia at Marshall University. That is where he was toting his economic plan, talking about $250 million in grant money for community colleges, $500 million for education and job training programs. All of this to try to convince the American people that the economy is turning around and that it is his plan that is working.

(BEGIN VIDEO CLIP)

BUSH: The economy is growing, and people are finding work. Today, the statistics show that we add 308,000 jobs for the month of March. We've added 759,000 jobs since August. This economy is strong. It is getting stronger.

(END VIDEO CLIP)

MALVEAUX: Now, the president brought that message to West Virginia, a key battleground state. That is where more than 20,000 people in that state have lost their job under President Bush's watch, 10,000 of those manufacturing jobs. That is a very important state. Democrats up a brought the point that it's 2.6 million jobs that have been lost over President Bush's term. And they say that they don't believe that one month is a trend -- Wolf.

BLITZER: Suzanne, let's switch gears to the 9/11 commission. I understand the White House now going forward with handing over some important documents from the Clinton administration on 9/11 that earlier had not been handed over. What exactly is going on?

MALVEAUX: Well here's compromise that they've struck. Essentially the White House counsel as well as the counsel from the 9/11 commission will go to the National Archives on Monday and they'll go through the Clinton documents. They'll take a look at boxes and boxes of material to see which ones are duplicates, which ones are relevant, and they'll decide together, jointly, which ones are appropriate to be submitted to the 9/11 commission -- Wolf.

BLITZER: Looks like they're moving ahead on that as well. Thank you very much, Suzanne, for that report.

While Democratic presidential candidate John Kerry welcomed the positive employment numbers, he also offered this opposing viewpoint and I'm quoting now, "for too many families living through the worst job recovery since the Great Depression has been and continues to be far too painful. With nearly 2.6 million private sector jobs lost during the Bush presidency, America's families need and deserve a new economic strategy. Kerry says if elected he has a plan for creating 10 million jobs over the next four years.

Here's your chance to weigh in on this story. Our web question of the day is this, "do you think the U.S. job market is improving?" You can vote right now. Go to CNN.com/wolf. We'll have the results later in this broadcast. While you're there, though, I'd love to hear directly from you. Send me your comments any time. I'll try to read some of them on the air each day at the end of this program, that's also where you can read my daily online column, CNN.com/wolf.

A stunning, stunning end to the Tyco trial. We'll tell you what happened and why.

Also ahead, the latest twist in the puzzling missing student case in Madison, Wisconsin.

Plus this...

(BEGIN VIDEO CLIP)

CARLOS WATSON, CNN POLITICAL ANALYST: I'm Carlos Watson, stay tuned for the inside edge, I'll tell you why the pundits may be wrong about this year's election.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: The troubled Tyco trial came to a surprise end today. The judge declared a mistrial, not because of the jury's inability to reach an agreement, but sources say because of a mysterious letter. CNN's Allan Chernoff joins us live from New York with more -- Allan.

ALLAN CHERNOFF, CNN CORRESPONDENT: Wolf, Dennis Kozlowski and Mark Swartz appear to have dodged a conviction. Jurors tell CNN they were very close to convicting both defendants on the charge of grand larceny, which carries a maximum prison term of 25 years. According to one juror, he believes the entire panel would have convicted both defendants on seven counts of grand larceny plus conspiracy, plus securities fraud.

(BEGIN VIDEO CLIP)

PETER MCENTEGART, TYCO JUROR: It's just so frustrating because literally we virtually had a verdict yesterday afternoon. There was even talk, someone said why don't we stay an extra half hour, we were that close. And then, come in this morning and we thought it would be another -- well, nothing takes ten minutes in this trial...

(END VIDEO CLIP)

CHERNOFF: But Judge Obus declared a mistrial because of an effort to influence one of the jurors, although he didn't reveal exactly what happened in open court. However, a person who was in the judge's chambers when this was being discussed said that juror No. 4, the controversial juror who had appeared to be the holdout on some counts had received a coercive letter yesterday. The judge questioned juror No. 4 all about this, she answered, and based upon her answers, the judge said he had no choice but to declare a mistrial. The judge called this a shame, district attorney Robert Morgenthau said it is unfortunate. And he said he would seek a new trial as soon as possible. The judge has set May 7 to discuss a new trial.

BLITZER: Allan, what does a coercive letter mean?

CHERNOFF: Coercive letter appears to mean that somebody wrote to this juror, trying to get her to change her opinion to convict Kozlowski and Swartz. There had been many media reports indicating that she was holding out. In fact, in a note she had written to the judge last week, she said that many members of the jury appear unwilling to believe that the defendants may be innocent, and after that there were many reports saying she was the person holding out -- Wolf.

BLITZER: Allan Chernoff reporting for us. Thank you very much.

This note to our viewers, CNN's Paula Zahn will be talking with three of the jurors tonight on "PAULA ZAHN NOW." That begins 8:00 p.m. Eastern, 5:00 Pacific.

Violence shatters the peace at a holy site. Worshipers seek refuge inside. We'll show you how this tense standoff ended.

Also ahead...

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: So immediately a lot of the people nationwide assumed that, hey, this has got to be bogus, which was true.

(END VIDEO CLIP)

BLITZER: Surprising developments in a case that captured nationwide attention. Now investigators try to figure out why they were told a bogus story.

Plus this...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They don't think a 14-year-old is supposed to be doing, that hey, like I said, it's a compliment.

(END VIDEO CLIP)

BLITZER: The highest paid soccer player in the United States about to make his debut. Get this -- he's only 14 years old! We'll meet him this hour.

(COMMERCIAL BREAK)

ANNOUNCER: From our studios in Washington, once again, Wolf Blitzer.

BLITZER: Welcome back to CNN.

There are new indications that the ambush of American civilians in Fallujah was a carefully planned death trap. We'll have that. That's coming up.

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

The FBI and the Department of Homeland Security expressed concerns about an alleged bombing plot against commercial bus and rail systems in major cities around the United States this summer. The explosives allegedly would be carried in luggage, duffle bags and backpacks. Federal law enforcement officials say the plot information is uncorroborated. We're watching this story.

A car making an illegal turn is blamed for a bus crash in central Florida that injured 20 people. Authorities say the bus, which was mostly carrying children, and a truck were trying to avoid the car. The bus hit the truck, flipped and went down an embankment and struck a tree.

Firefighters battling a huge 6,000-acre blaze northwest of Fort Collins, Colorado hope for rain. The flames have already destroyed at least one home and forced several families to flee. Colorado's governor has authorized state disaster funds to help cover firefighting costs.

The Pentagon is investigating the circumstances behind this week's deadly attack in Fallujah. Our Pentagon Correspondent Barbara Starr is standing by with more details -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well indeed, Wolf, military officials now saying that there are growing indications that the attack in Fallujah may have been well coordinated, planned ahead, essentially a deadly ambush that four contractor security personnel drove straight into.

Military officials telling CNN those indicators are initial reports that just before the attacks the streets were cleared of people, shops closed up and a number of local Iraqi media were in the streets of Fallujah.

Now, the Bush administration continues to plan a military response using Marines now positioned just outside the town. Deputy Secretary of State Richard Armitage on this earlier today.

(BEGIN VIDEO CLIP)

RICHARD ARMITAGE, DEPUTY SECRETARY OF STATE: What happened in Fallujah is not in keeping with any Quranic teachings or any of the tenets of Islam and there will be a price extracted. There will be a response and it will be obvious to all.

(END VIDEO CLIP)

STARR: Now, officials saying there is no indication that the townspeople or the local media knew exactly what was being planned but there was plenty of talk on the streets perhaps that trouble might erupt.

Investigators also looking the possibility, they say that Abu Musab Zarqawi, that al Qaeda associate suspected of operating in Iraq who has called for civil war between Sunni or Shia might have been involved, no firm evidence yet, but they are looking at all the possibilities -- Wolf.

BLITZER: Barbara Starr at the Pentagon, thanks Barbara very much.

Police and protesters clashed at a Jerusalem holy site today. At least a dozen people were treated for injuries but while tensions are high, diplomatic efforts may be making a little bit of headway.

CNN's Chris Burns reports from Jerusalem.

(BEGIN VIDEOTAPE)

CHRIS BURNS, CNN CORRESPONDENT (voice-over): Israeli police stormed the epicenter of the Israeli-Palestinian conflict what Muslims call the Noble Sanctuary and what Jews call Temple Mount.

Israeli police fired stun grenades and rubber bullets at stone- throwing youths. Amid the battles, Israeli police say many, perhaps thousands of Muslims, protesters and worshippers alike, took refuge in the sanctuary's mosques which the police say they did not enter. Sanctuary officials and Israeli police negotiated a peaceful end to the standoff but the clashes are a sign of heightened tensions after Israel's recent assassination in Gaza of Hamas militant leader Sheikh Ahmed Yassin. Meanwhile in southern Gaza, Israeli forces again raided the border town of Rafah saying they were search for tunnels militants use to smuggle weapons from Egypt.

Israeli Prime Minister Ariel Sharon is sticking to his plan to withdraw from the Gaza Strip. In interviews with Israeli media before Monday's Passover holidays, Mr. Sharon said settlement building in Gaza was halted and that the pullout will be in full swing come Passover next year.

Sharon also threatened Palestinian Leader Yasser Arafat again saying he's a marked man if he's behind any future attacks on Jews. An Arafat spokesman shot back that Sharon is "playing with fire." The Israeli prime minister is under heavy international pressure not to touch the Palestinian leader.

Fighting words aside, the Israelis and Palestinians are discussing Sharon's pullout plan with the Americans and the Palestinians are expressing qualified support.

AHMAD QOREI, PALESTINIAN PRIME MINISTER: We are not against the withdrawal from Gaza but as a step toward implementation of the roadmap.

BURNS (on camera): A U.S.-led roadmap for peace that envisions a Palestinian state by next year. The effort now is to fit Mr. Sharon's disengagement plan into the roadmap. The prime minister will be seeking President Bush's blessing when he comes to Washington April 14th.

Chris Burns, CNN, Jerusalem.

(END VIDEOTAPE)

BLITZER: And the Bush administration today again warned Israel against harming Yasser Arafat. The Deputy Secretary of State Richard Armitage said the United States has made it "very clear that it opposes the exile or the assassination of the Palestinian leader."

The continuing turmoil in the Middle East, the possibility of new terrorist attacks at home and abroad and the continuing controversy over U.S. policy in Iraq are all factors that could contribute to a very volatile presidential election campaign.

CNN Political Analyst Carlos Watson is joining us now with the "Inside Edge." Carlos, thanks very much for joining us. This job report out today, 300,000-plus new jobs got to be great news for the president.

CARLOS WATSON, CNN POLITICAL ANALYST: Very good news for the president. You'll hear him trumpet not just in TV ads but more significantly you'll begin to see it in radio ads and I predict you'll see it a lot on his website, which now is being hit by several million people each month.

BLITZER: So, how should Senator Kerry and his campaign respond to this?

WATSON: I think he's got to take a page out of President Clinton's book and there are two critical things I think President Clinton did successfully during his term.

One, he also trumpeted jobs but he gave a very human face to it and so expect to see the Kerry people have President Clinton and former Treasury Secretary Bob Rubin touring the country really putting a very human face on what was a successful eight years of job growth, 22 million jobs.

The second thing he's got to get CEOs to come out for him in a major way, John Kerry does. Remember, Bill Clinton did that very successfully in '92. He had the CEO of Apple, of HP, of Silicon Graphics at the time and that was unusual for a Democrat and, again, it said that he was a new kind of Democrat, a pro-growth Democrat, so look for those two things among others.

BLITZER: All right. Let's talk a little bit about Condoleezza Rice. Next Thursday the entire nation, indeed much of the world will be watching these hearings up on Capitol Hill, the 9/11 commission. What are you going to be looking for?

WATSON: I'm going to watch the first ten to 15 minutes, Wolf. I think it's going to be style over substance. I think if the nation sees Dr. Rice as someone who is competent, who is secure, who is well poised, who doesn't seem to be on the defensive, I think with all due respect, frankly I think a lot of the substance will be lost.

If they see someone nervous, someone who is caught off guard, someone who seems somewhat unsure, I think this could become a very difficult and a pivotal moment for the president.

BLITZER: We'll all be watching and CNN, of course, will have live coverage of all of that.

Let's talk a little bit about the election right now. You're looking at it down the road in November, still a long time to go.

WATSON: It's a long time to go. Wolf, you know, I got to disagree with a lot of my fellow pundits. A lot of people are expecting this will be a close race, decided just like the 2000 race by one or two percent but for a couple of reasons I don't think that's the case.

I think what's more accurate is to call this a volatile race. We've seen just in the last six weeks, for example, a swing in the polls, 16 points. The president was down by 12 and now is up by four.

And, if you look back at history, the reality is we've had five elections in the last 100 years decided by three percent or less. The election that followed that close election has always been decided by double digits. In fact, the closest was the Jimmy Carter-Ronald Reagan race, which was decided by ten points but the biggest has been 23 or 24 points. So, I think we'll see lots of swings for a number of different reasons but I think calling it a close race is a mistake and I would look to see who begins to do well in October.

BLITZER: But it's really close, the polls all show it's very close right now.

WATSON: Close today and I think it will go back and forth and, remember, the Republican Convention is very late this year, right. It's in essentially early September but I think it's going to be a volatile race.

You've got more people participating in this debate. You've got more money at stake and the issues are big and the distinctions are sharp. I don't think we'll see a close race when the final numbers come in in November.

BLITZER: The "Inside Edge" with Carlos Watson. People can read your column right?

WATSON: CNN.com/carlos ever week starting on Wednesdays but it's still up now.

BLITZER: I'll be reading it. I do every week. Thanks very much, Carlos.

WATSON: Appreciate you doing that.

BLITZER: A frantic search and a joyous reunion, now the truth comes out in the case of a missing student, the surprising twist.

A potentially key decision by the judge in the Michael Jackson molestation case, details in our "Justice Report." That's coming up.

Plus this...

(BEGIN VIDEO CLIP)

FREDDY ADU, DC UNITED: It just feels so great. She motivates me to play. That's why I'm here right now.

(END VIDEO CLIP)

BLITZER: He's 14 years old, yes, 14 years old and he's the country's highest paid professional soccer player. Find out whom he gives credit to. We'll get to that.

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

(BEGIN VIDEOTAPE)

BLITZER (voice-over): The only suspect ever convicted in the 9/11 attacks may go free. A Moroccan man was found guilty in Germany last year of being an accessory to the September 11th attacks in New York City and Washington but a German Appeals Court ordered a retrial. Now, a judge says there's a possibility the case may collapse.

Jail time, a British court has sentenced a former U.S. Marine to four and a half years in jail. Thirty-three-year-old Tony Studebaker (ph) admitted abducting a 12-year-old English girl he met over the Internet. The pair stayed in a Paris hotel for several days before the girl returned to her parents.

Changing channels, Britain's BBC is getting a new chairman. The former head of an independent television network, Michael Gray. The BBC's previous chairman resigned amid controversy over the network's coverage of the war in Iraq.

Hong Kong, protests, two arrests and a dozen injuries are reported after pro-democracy demonstrators scuffled with police in Hong Kong. They accuse the Chinese government of threatening Hong Kong's autonomy breaking promises made when China assumed control over the former British colony in 1997.

Load up the truck, the European Union may scrap a rule limiting the amount of alcohol that can be transported across national borders. The change would benefit residents of Britain and several Scandinavian countries where taxes on alcohol are significantly higher, and that's our look "Around the World."

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Police in Madison, Wisconsin say college student Audrey Seiler's recent abduction claim simply does not add up and they do not believe an abductor is at large. It's such a bizarre story. It's still unfolding. It's been bizarre since the woman was found on Wednesday.

CNN's Eric Phillips reports.

(BEGIN VIDEOTAPE)

ERIC PHILLIPS, CNN CORRESPONDENT (voice-over): After an exhaustive search for a suspect using choppers, dogs and scores of officers and loved ones, it all comes down to a final conclusion.

ASST. CHIEF NOBLE WRAY, MADISON POLICE: We do not believe that there is a suspect at large period.

PHILLIPS: Public skepticism over the college sophomore's story began mounting almost immediately. She had been missing since Saturday when surveillance cameras caught her leaving her apartment at 2:30 in the morning without a coat or a purse.

Police say a passerby spotted her four days later in a marshy field about two miles from her apartment. She said a stranger had abducted her at knifepoint and she gave information for a composite sketch. But her story began to unravel when several inconsistencies surfaced, such as her reporting her assailant had used duct tape, rope, cold medicine, gum and a knife against her. Some of those items were found at the crime scene.

WRAY: We were able to get videotape showing Audrey going into a local store purchasing these items.

PHILLIPS: Police also say Audrey's computer had been used in the days that she was allegedly missing and that it had been used to find five-day forecasts for local wooded areas and parks, plus two people reported seeing her walking freely during the time she was allegedly being held. Authorities offer no apologies for spending the time and resources to investigate the case.

WRAY: It would have been a disservice to the community, a disservice to the country in this particular case and also a disservice to the family for a professional law enforcement organization in the United States to jump to conclusions and assume that this was bogus.

PHILLIPS (on camera): Many unanswered questions remain, among them where was Audrey Seiler in reality during the days when she was allegedly abducted?

In Madison, Wisconsin, Eric Phillips, CNN.

(END VIDEOTAPE)

BLITZER: Topping our "Justice Report," a psychiatrist testifies the Texas mother accused in the beating deaths of two of her sons is a textbook example of insanity. Five mental health experts agree 39- year-old Deanna Laney (ph) suffered severe psychotic delusions that prevented her from knowing right from wrong. Laney has pleaded not guilty by reason of insanity.

In the Michael Jackson child molestation case, a judge says he will allow Jackson's attorneys to see the school and psychiatric reports of the accuser and his family.

The judge also said he'd decide which written responses attorneys can give to the news media. Jackson has pleaded not guilty. A grand jury continues hearing testimony and the case is tentatively set to go to trial in December.

Walt Disney World suspends an employee without pay pending the outcome of an investigation. Authorities say Michael Shertrand (ph) was dressed as the character Tigger when he allegedly fondled a mother and a daughter as they posed for a photo. Shartrand says he may have inadvertently touched the child's breast and adds he suffers from dyslexia which he says impairs his memory.

How much did you make when you were 14 years old? Coming up, we'll introduce you to the highest paid soccer player in the United States.

Also, find out why these baby birds, look at them, why they're so special.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BLITZER (voice-over): Earlier we asked, "Which African country did Freddy Adu once call home?" The answer Ghana, he emigrated to the United States in 1997.

(END VIDEO CLIP)

BLITZER: And now he's the highest paid soccer player in the United States and he hasn't even appeared in his first professional game yet. That comes tomorrow when Freddy Adu makes his debut. By the way, have we told you yet, Freddy is only just 14 years old.

CNN's Elaine Quijano reports.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN CORRESPONDENT (voice-over): He's not old enough to vote or even drive himself to practice yet but those who have studied Freddy Adu's game say he can maneuver a soccer ball better than most players twice his age.

PETER NOWAK, DC UNITED COACH: Freddy is very mobile. He's playing in the front position, you know. A lot of people ask what position he plays but he's, you know, flowing with the game and he ends up playing in a different part of the field and that's why he's very dangerous.

QUIJANO: Freddy thinks of soccer not simply as a game but more an extension of himself, a connection he first discovered in his native Ghana.

ADU: When I was born, my mother said when I saw a soccer ball I started crying because I wanted to hold it so bad in my hands.

QUIJANO: Some say the future popularity of American soccer rests in large part on Freddy's 14-year-old shoulders. The teenager was major league soccer's number one draft pick in January and signed with DC United for half a million dollars.

Add to that $1 million endorsement deal with Nike plus a third contract with Pepsi and you might wonder how he stays grounded. The answer his mother, who once worked two jobs to support them.

ADU: I'm just paying her back, paying her back. She doesn't have to work anymore. I want her to do whatever she wants, catch up on the times that she missed and just have fun, enjoy life.

QUIJANO (on camera): Six years after he emigrated to the U.S. after winning a visa lottery, Freddy Adu is set to make his professional debut here at RFK Stadium in the nation's capital at a sold-out event to be broadcast on national TV, immense pressure for some players but Freddy says it's simply a chance to get paid doing what he loves.

Elaine Quijano, CNN, Washington.

(END VIDEOTAPE)

BLITZER: And we will all be watching Freddy. Good luck Freddy tomorrow.

The eagles have landed, what's new at the zoo coming up in our "Picture of the Day."

And our hot web question of the day, "Do you think the U.S. job market is improving?" We'll have the results for you when we come back.

(COMMERCIAL BREAK)

BLITZER: Bald but beautiful, it's our "Picture of the Day." These three young bald eagles are cause for celebration at the San Francisco Zoo. They're from eggs collected on California's Catalina Island and hatched at the zoo's conservation center, which is working to rebuild California's dwindling bird population. Look at that. They're cute.

Here's how you're weighing in on our web question of the day. "Do you think the U.S. job market is improving?" Forty-six percent of you say yes, 54 percent say no. Remember this is not a scientific poll.

Let's hear from you, some of your e-mail.

Barbara writes this: "I cannot believe my ears and eyes. After a six-month trial and 12 days of jury deliberation, the judge in the Tyco trial has declared a mistrial. May I ask who is footing the legal bill for this epic? Hopefully not the taxpayers."

Frank sends us this: "What a sad day in our judicial system when Martha Stewart can be convicted of selling her own stock and the Tyco trial ends in a mistrial where millions of dollars were at stake."

This from Brendan: "A mistrial is in order. There is no proof the juror did anything wrong. The media that revealed her identity should be held responsible for interfering with the trial and making her a target for attack."

A reminder, you can always catch WOLF BLITZER REPORTS weekdays 5:00 p.m. Eastern. I'll see you again Sunday at Noon Eastern for "LATE EDITION," the last word in Sunday talk. Among my guests this Sunday the former Democratic presidential candidate Howard Dean.

Until then thanks very much for joining us. "LOU DOBBS TONIGHT" starts right now.

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