Return to Transcripts main page

CNN Wolf Blitzer Reports

American Hostage Killed in Saudi Arabia; Saudis Apologize for Failing to Rescue Hostage; Bush: We Will Not Be Intimated; Scholar: Beheading of Innocents Against the Quran

Aired June 18, 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.


WOLF BLITZER, CNN ANCHOR (voice-over): Happening now, first official word from the government of Saudi Arabia on the beheading of an American hostage there. We are about to hear from the Saudis live.
Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER: Beheaded: kidnappers make good on their threat to kill an American hostage. We'll look at the man behind the murder and his chilling how-to manual for hostagetakers.

Putin's surprise: a stunning revelation that Russia tipped off the U.S. to Saddam's terror plans. Why now?

Is Iran going nuclear? Will the U.S. or Israel take preemptive action? The U.N.'s watchdog is worried.

ANNOUNCER: This is WOLF BLITZER REPORTS for Friday, June 18, 2004.

(END VIDEOTAPE)

BLITZER: They first showed him bound and blindfolded and vowed to kill him if their demands weren't met. Today, al Qaeda linked terrorists in Saudi Arabia followed through on that threat. This time they showed photos on an Islamist Web site as proof they beheaded the American hostage, Paul Johnson.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): The image is gruesome, too gruesome to show on television. The accompanying warning was chilling.

A group calling itself al Qaeda in the Arab Peninsula says it beheaded 49-year-old American hostage Paul Johnson after the government of Saudi Arabia didn't free al Qaeda prisoners within 72 hours, as demanded.

In a statement, they said Johnson deserved to die, because he worked in Saudi Arabia on Apache helicopters whose missiles, they said, had tortured Muslims.

This statement also warned the more than 30,000 other Americans living and working in Saudi Arabia that they are next. "As for the Americans, and most importantly the unbelievers and the criminals who are fighting Islam, this is a lesson for them to learn, for whoever comes to our country, this will be their punishment."

Secretary of State Colin Powell reacted with a warning of his own.

COLIN POWELL, SECRETARY OF STATE: This act is an action of barbarism, an action that shows once again what the world is dealing with this kind of individuals who behead somebody or murder somebody in cold blood, an innocent individual who's just trying to help people and trying to do his job.

And if anything, it will cause us -- I am quite confident it will cause our Saudi colleagues to redouble our efforts to go after terrorists wherever they are, wherever they're trying to hide. And to go after those who support this kind of terrorist activity.

BLITZER: For months, the State Department has urged Americans to leave the oil-rich kingdom, most of whom work in oil related fields.

Johnson spent the past ten years in Saudi Arabia working for Lockheed Martin, which issued this statement. "We cannot yet confirm the news. All we can say is we're very distressed, very disheartened and are dealing with the family."

Democratic presidential candidate John Kerry offered a terse reaction of his own.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: It's a grotesque act which is a reflection of the challenge of the area and of the time.

BLITZER: Earlier in the day, there was a last-minute appeal from Johnson's wife on the Arabic language television channel al-Arabiya.

THANOM JOHNSON, WIFE OF PAUL JOHNSON: I would like to say when I saw his picture on the TV, I really wanted him so much. I don't know what I can do for him. I stay right now by myself in house. I -- I want him to come back because I don't have nobody else here.

(END VIDEOTAPE)

BLITZER: And let's go right to the Saudi embassy. Adel al- Jubeir, the foreign policy adviser to the crown prince, speaking.

ADEL AL-JUBEIR, SAUDI FOREIGN POLICY ADVISER: Good afternoon, everybody.

It is with great pain and sadness that we announce the death, the brutal murder of Mr. Paul Marshall Johnson in Saudi Arabia. His body was recovered shortly in the northern part of Riyadh.

For the past week, men and women of different faiths and nationalities have been praying and hoping that Mr. Paul Marshall Johnson would be found and returned safely to his family. Today, we are faced with the tragedy of his gruesome death at the hands of barbarians who have rejected the teachings of their faith and the principles of humanity.

His brutal murder illustrates the cruelty and inhumanity of the enemy we all are fighting.

On behalf of my country and every individual with a sense of decency and humanity, I offer our most heartfelt condolences to his family and friends.

You have gone through a terrible ordeal, and our thoughts and prayers are with you. All of us grieve with you, and your pain is our pain.

May God almighty grant you strength and patience as you go through this difficult time.

The people of Saudi Arabia are outraged by the cruel and coldblooded murder of this innocent man. His murder has shaken us to the core. It is a terrible lie that the cowards who committed this inhumane act claim to be Muslim. There is no justification in our faith for harming the innocent. Islam teaches us that the killing of an innocent soul is tantamount to the killing of all of humanity. This is what the murderers have done, and they will have to answer to God almighty for their grave sin.

Since his abduction, Saudi authorities, in close coordination with their American counterparts, have embarked upon an intensive search to find him.

Over 15,000 security personnel from Saudi Arabia were involved. Thousands of locations were searched and leads pursued. We did everything we could to find him. And we are deeply sorry that it was not enough.

For more than a decade, Mr. Johnson lived a peaceful life in our country, which he grew to love and respect. He made many friends among us who will mourn his loss. We owe him our solemn commitment to pursue the criminals and bring them to justice. And with the help of God Almighty, we will.

If the intention of the criminals was to shake our resolve, they are mistaken. We are united as nation and determined as a people to rid them from our midst.

I would like to take a couple of questions, but before I do so, I want to give you an update. As we speak, Saudi security forces are engaged in a siege in the Admilas (ph) area of Riyadh, which is in central Riyadh, where we believe members of al Qaeda are hiding out. There have been fire fights. A number of terrorists have been killed. I cannot confirm the numbers for you yet, but we will be keeping you updated, so I would urge you to follow the Saudi Press Agency on this matter.

And I'd be happy to take a couple of questions. QUESTION: Can you give us more specifics about what your forces are doing now to try to find where he was held and the people who are doing this? And is the firefight that's ongoing now, do you have an indication whether that is with people who may be guilty in this crime?

AL-JUBEIR: It is too early to tell because this is occurring as we speak. We believe that they are members of the al Qaeda cells that remain in Saudi Arabia. They may be involved in the kidnapping and murder of Mr. Johnson, but it is too early to tell. The fighting and the siege are still going on. Once it is over, we'll have a much better picture.

QUESTION: And what are you doing to try to find them otherwise? You had 15,000 out in a search for Mr. Johnson.

AL-JUBEIR: Yes. And we will continue to search. We will continue to devote all of our resources that we have at our disposal to find the criminals who murdered Mr. Johnson and to bring them to justice. This search is not over.

QUESTION: Can you explain to the American people that this -- do you believe this is an attack against Americans, or is this a consequence of an internal fight against the kingdom and royal family?

AL-JUBEIR: This is an attack against humanity. This is an attack against decency. This is an attack against the innocent. This is an attack against the universal values that we all share as human beings. And this is something that requires a response from all of us. There is no justification whatsoever for doing harm to the innocent.

QUESTION: Is this on a consequence...

AL-JUBEIR: Excuse me. I want to be organized. One question, please, because I know we have a lot of people here.

QUESTION: The State Department has issued a warning urging U.S. citizens to leave Saudi Arabia because there is a possibility for other attacks against Americans. Do you agree? Do you think they should leave?

AL-JUBEIR: We cannot tell the U.S. government what it should or should not advise its citizens. We believe that we are doing our best to maintain the safety and security of our citizens and our residents. We believe that one of the objectives of the terrorists is to drive people out of Saudi Arabia.

AL-JUBEIR: And so, as a consequence, we believe that calls for withdrawing people from Saudi Arabia could inadvertently play into the hands of terrorists.

So we don't support moves like this. But, it is not our decision. This is a decision by the State Department. .

QUESTION: Was Mr. Johnson's body found in that section of Riyadh that had been sealed by security forces? Or was it a different part of the city?

AL-JUBEIR: It was found in a remote area to the north of Riyadh. And what we're trying to ascertain is was he murdered and then his body was carried elsewhere? When was he murdered? We are just now going through the forensics. Was he murdered today? Was he murdered shortly after the video was taken? These are things that are still in progress. So I really am not in a position to comment on them accurately.

QUESTION: You mentioned this firefight with members of an al Qaeda cell that remains in Saudi Arabia. Some people today have criticized the Saudi government for statements recently that there is one cell left, that that demonstrates that the government just is not realistic about what the true threat is from the (UNINTELLIGIBLE) militants in Saudi Arabia. Are you saying that you think there's one cell left?

AL-JUBEIR: I think that we have not underestimated the threat to Saudi Arabia by these criminals. We understand the extent of their reach. We have seen the murders that they can inflict on the innocent, whether it was in May of last year in Riyadh or November again in Riyadh or whether it was this spring or whether it was today.

I believe with the issue of the one cell, when we know something, we speak about it. We know definitely of a large cell in Saudi Arabia that remains. But I personally would not go so far as to say that this is all that exists in Saudi Arabia, because they can pop up from other places.

But, our objective is to go after them. Our objective is to go after those who support them, those who condone their actions and to bring them to justice.

QUESTION: Can you talk about what the FBI's role be in the investigation of this murder?

AL-JUBEIR: Our two countries have very, very close relations in terms of intelligence sharing and law enforcement. And our two countries have engaged in very close coordination in this effort.

AL-JUBEIR: There are American security personnel in Saudi Arabia who are working with their Saudi counterparts and have been for the past year. So I would imagine that it is as extensive as you and can find anywhere. We're working this as one team.

QUESTION: In term of the forensics, I understand it's still ongoing. But is there some suspicion that, in fact, he was murdered right after the video was made and not murdered today?

AL-JUBEIR: I wouldn't want to comment on that, because we just confirmed the death shortly and the forensics are still going on.

Is it possible? It could be possible. Can I say this with certainty? No, I can't. We need a little bit more time, I think. We will make all the information that we have available so that people know the full story, but we don't want to jump the gun and confuse speculation or judgment with facts.

QUESTION: Would you welcome any military help from the United States in pursuing these terrorists?

AL-JUBEIR: I have seen the reports, which are not accurate. We have our own military forces in the war against terrorism. The main forces would be law-enforcement-type personnel, as well as what you would call SWAT teams, specialized forces.

We are training our forces in that area with the help of a number of countries, including the United States. We're increasing the numbers, we are using Special Forces from the military and from the national guard to provide them with backup when it comes to securing facilities or locations. We are using a lot of our police officers and undercover agents in the war against the terrorists. And that really is the most effective means of doing it.

We are in for a difficult time, no doubt. We recognize this. We also recognize that with the passing of time, our capabilities increase and our strength increases while, hopefully, those of the terrorists decrease. We just have to stick with it, and we have to confront them, and we have to show determination and pursue them with vigor. And we hope that, in the end, God willing, we will prevail.

AL-JUBEIR: There is no doubt in our mind.

QUESTION: Having said all that, is there anything the Saudi government should be doing differently?

AL-JUBEIR: If you have any ideas, please tell us. We are determined to do whatever we can in order to go after the terrorists. We have put in place financial control mechanisms in our banking system and regulated our charities to ensure that they cannot be taken advantage of by terrorists or evildoers.

We have beefed up our intelligence capabilities. We have beefed up our special forces. We have hardened targets that we believe are of value. We have extensive cooperation from our citizens, who are outraged by this. And with every passing day, we look at areas where we can improve our efforts and we implement it.

We have enhanced our technical capabilities, and we continue to do so; the training of our officers, and we continue to do so.

We will leave no stone unturned in our efforts to confront this evil and destroy it. Our people demand no less. And they deserve no less.

QUESTION: Can you tell us a little bit more about the firefight, when it began, how it's linked to this, was it an outgrowth, for instance, of the search for Mr. Johnson?

AL-JUBEIR: I can't give you the details, because literally it was as I was coming in that I could tell you about it. I can tell you it is in the Manas (ph) area. It involves a number of suspects. It involves two cars. There was shooting. We believe a number of the suspects were killed. I can't tell you what the number is. You should watch what comes out from the Saudi Press Agency and what happens as developments on the ground unfold.

And as we are speaking, the siege is continuing. So anything I tell you would be premature.

QUESTION: What is the government telling Americans they can do to be more aware in Saudi Arabia of these types of people so they possibly avoid kidnapping? Are there any steps that you're going to be giving out.

AL-JUBEIR: We are telling all of our citizens and residents to be vigilant, to report suspicious activity, to take care when they go about their business.

At the end of the day, one of the objectives of terrorists is to disrupt the functioning of a modern society. And if it were up to them, they would have everybody panicked and they would have everybody hiding in their homes or elsewhere.

So there is a balance between continuing with a normal life and being careful in terms of areas you go to or reporting suspicious activities and things of that nature.

QUESTION: Right after this terrorist act in Khobar two weeks ago, I think a high-ranking Saudi official, actually it was your ambassador in London and (UNINTELLIGIBLE) Saudi intelligence -- stated that this terrorist act in Khobar would be the last one, and that Saudis (UNINTELLIGIBLE)

AL-JUBEIR: I haven't seen this quote. And I don't know if it's an accurate quote or not, because our ambassador to London is a very distinguished gentleman.

AL-JUBEIR: The ambassador to London was head of our intelligence service for almost 30 years. And I doubt that the statement, as you read it, would be something that he would say. We all know that terrorism can strike whenever. Even if we eliminate all of the al Qaeda terrorists in Arabia, some other terrorist can come by and shoot.

So the notion that one can definitively say "This is the end of it," I don't believe that he would have said this. So I believe this must have been a mischaracterization of his remarks.

QUESTION: With all the fears around security for foreigners in the kingdom, how comfortable are you that you can prevent an exodus of foreigners that would (UNINTELLIGIBLE) the capability of Saudi Arabia to supply oil to the world?

AL-JUBEIR: Well, I believe the second part of your statement is not accurate. Over 90 percent of the employees of Saudi-Eram Corrasaudi (ph), less than 10 percent are foreigners. We believe we can manage our oil facilities and oil production with all Saudi personnel. We also have not seen the mass exodus of foreigners. We believe that people who are living on the ground are more aware of the situation and the dangers than people who watch it on the television where issues can be magnified.

We will have to see how the situation unfolds.

I believe people are aware of the determination and vigor with which the Saudi government is pursuing the terrorists and trying to deal with this threat. And I would believe that this would reassure people about their safety.

QUESTION: You've made several very clear statements of condemnation here today, and yet I wonder how concerned you are about the impact this will have on U.S.-Saudi relations and what message you would like to take directly to the American people right now.

AL-JUBEIR: We have very strong ties with the United States. We have had them for over 60 years. Our countries have been friends and allies during that time.

In this current phase of our relationship, we are both under siege by the terrorists. They are targeting the United States and they are targeting Saudi Arabia. And anyone who tells you otherwise is being naive.

We will win this war, no doubt, with the help of God, if we work together as we have and if we refrain from finger-pointing and leveling accusations at each other, but put our hands together as our security people have been doing and pursue the terrorists and bring them to justice.

AL-JUBEIR: The American people must know that the Saudi people are with them, just like the Saudi people know that the American people are with them.

It is the two of us who are being murdered and slaughtered by these evil terrorists. And it is the two of us, working together, who can crush them.

There is determination on the part of the U.S. government, as there is determination on the part of the Saudi government to do so.

QUESTION: Given the criticism that comes out of certain political circles here in the U.S. on Saudi Arabia, has this affected the willingness of the United States to assist and to share technologically with the means that the U.S. is alone providing in terms of fighting this terrorism, or have you detected any more reticence because of political (OFF-MIKE)

AL-JUBEIR: No. The U.S. government is determined to support us in every way it can. We are appreciative and thankful for that assistance. The cooperation between our two governments in the war on terrorism could not be stronger.

It is unfortunate that you have people in the U.S., in particular in this town, who try to make political hay and say things that are irresponsible or say things that are not correct. But that will not change the reality of the strong links between our two countries and of the strong cooperation between our two countries.

And those in positions of influence know so. Those who are not pontificate, unfortunately. And this town, especially during the month of June and July, is full of hot air.

I'll take one more question, and then I'll -- OK.

QUESTION: You mentioned 15,000 police officers were...

AL-JUBEIR: They were security personnel, because we have between -- undercover, counterterrorism and...

QUESTION: Could you talk a little bit more about what was done to try to find him, and have you found any information beyond this specific incident that would help (OFF-MIKE)

AL-JUBEIR: What they did is they went through the neighborhoods where they believed most of the terrorists were.

AL-JUBEIR: A number of them, or a large percentage of them comes from one particular area in Riyadh. Most of the safe houses that we found in Riyadh are in one particular area in Riyadh.

So they combed through the area, building by building, house by house. I believe over 2,000 locations were searched.

They brought in firefighters who know the neighborhoods and who know the people in the neighborhood to provide assistance. They pursued leads. And they just combed the area.

One of the more difficult parts of this was that the terrorists or the kidnappers did not communicate. The only communication we had from them was what they posted on the Web site several days ago. And so that's what we had to go by.

We looked at other areas that, if you allow me, I won't get into, because it gets a little bit into the operations of it. But that's what they've been pursuing.

And the firefight that I was talking to you about that is occurring as we speak, they discovered a number of suspects who were fleeing in cars. And they pursued them. And now they have them under siege.

We have a number of them killed. And as I mentioned earlier, I can't tell you how many, because we don't know yet.

But we will provide you with the details as they unfold.

QUESTION: And those people are related to the search that was going on, and that's how they found those people...

AL-JUBEIR: Pardon, do you mind repeating? QUESTION: So the people who are fleeing today that are now under siege were related to the search for...

AL-JUBEIR: Yes, we believe they are part of the al Qaeda network in the kingdom. We don't know how related they are to the murder of Mr. Johnson. And, as I mentioned earlier, we probably will not know until we apprehend them and until we put together the facts.

But I just wanted to come and offer our condolences to the Johnson family as well as give you an update on where things stand.

But we will keep you informed of the situation.

Thank you all for coming.

BLITZER: Adel al-Jubeir, the Saudi foreign policy adviser to the Crown Prince Abdullah, speaking here in Washington at the Saudi embassy, expressing his deepest sorrow in the murder of the American, Paul Johnson.

Confirmation from the Saudi government, forensic evidence, that Paul Johnson was, in fact, beheaded.

He's promising to go after the terrorist, the criminals, in his words, responsible for this act.

President Bush also expressing his sympathies to the Paul Johnson family. But he says America will never be intimidated by what he calls extremist thugs.

Our White House correspondent, Suzanne Malveaux, joining us now live with more reaction -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, we're told that Saudi officials and U.S. officials have been in constant contact about Johnson and just the case here.

The president was in Fort Lewis, Washington, earlier today. That is where he was meeting with soldiers who had just returned -- American soldiers returning from Iraq, the battlefields of Iraq. He got the news there.

The president had certainly hoped to highlight the U.S. successes in the war on terror. Instead, he's confronted with this gruesome murder. The president earlier today expressed his condolences but also his resolve.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want to express my deepest condolences to the family of Paul Johnson. We send our prayers and sympathies to them during this very troubling time.

The murder of Paul shows the evil nature of the enemy we face. These are barbaric people. There's no justification whatsoever for his murder. And yet, they killed him in cold blood. And it should remind us that -- that we must pursue these people and bring them to justice before they hurt other Americans.

See, they're trying to intimidate America. They're trying to shake our will. They're trying to get us to retreat from the world. America will not retreat. America will not be intimidated by these kinds of extremist thugs.

May God bless Paul Johnson.

(END VIDEO CLIP)

MALVEAUX: Well, Vice President Dick Cheney also from Englewood, Colorado, spoke out, using the beheading of Johnson to make the case that resolve is necessary in the broader war on terror.

I spoke with a senior administration official says they are completely satisfied that the Saudi officials did everything they could in this case -- Wolf.

BLITZER: Suzanne Malveaux, thanks very much.

We're just getting in a statement from Johnson's employer, Lockheed Martin, a spokesman saying, "All of us at Lockheed Martin are very saddened to learn the news of Paul M. Johnson Jr. and his tragic and senseless death. Paul was a valued and respected employee who bravely carried out his duties, and the news of his loss is a shock to everyone in the Lockheed Martin family. We will keep Paul and his family, along with his many friends, in our thoughts and prayers. We grieve along with his family, and we will do everything we can to support them in their hour of need." A statement from Lockheed Martin.

Paul Johnson's family had pleaded publicly repeatedly for his release. They're now in seclusion in southern New Jersey. CNN's Deborah Feyerick has been spending much of this week with them. She's joining us now live.

Deborah, what is the latest?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, minutes after word came that Paul Johnson Jr., was dead, friends flocked to the family home in New Jersey, where they've been in seclusion since Monday.

CNN spoke to a relative an hour before the pictures hit the web site, the relative telling CNN that the family was devastated by this ordeal. They are now grieving, staying together, debating whether to issue a statement.

The day after the video of Johnson was released, the Johnson sister and son made a very emotional appeal, seeming to speak directly to the kidnappers. Johnson's sister saying that Johnson had great respect for the Muslim culture. His son saying that if they let him go, Johnson would leave Saudi Arabia and never return.

Right now, they are in seclusion. They are grieving, friends going to the home -- Wolf. BLITZER: CNN's Deborah Feyerick with a very, very sad part of the story. Thanks, Deborah, very, very much.

Let's go live now to the Saudi capital, Riyadh, which for many Americans, is becoming a city under siege right now.

Hassan Fattah is a contributor to "TIME" magazine. He's joining us now live on the phone from Riyadh.

Hassan, give us a little flavor of how the security situation in Riyadh has changed in recent months.

HASSAN FATTAH, "TIME" MAGAZINE: Well, certainly today at least they've been very, very heavy security. I actually just got on this morning, and I was quite caught by -- by a lot of the security that you see around, certainly a heavy show of force by the police and such.

There is this eerie silence throughout the city tonight. And in many ways it underscores the gravity of this whole event.

BLITZER: I was in Riyadh about a year and a half ago. And it -- it was a very, very safe place at this -- at that time. Why do you think al Qaeda, at least in recent months, has made a major target of the Saudi government?

FATTAH: Well, I mean, the irony is that a lot of people here have been saying exactly as you're saying. Two years ago this was the safest place in the world. You could go out and never need to think about anything.

And ironically there are various reports and, in fact, crime -- levels of crime themselves, car theft and that sort of thing, have been rising here in the city over the past two years, along with a lot of these sorts of incidents.

Certainly -- certainly, this may be an easy time for -- for the terrorists to hit. There can be all sorts of reasons. And I think a lot of people are asking themselves the same things. No doubt from the interior ministry here as well.

BLITZER: Americans, some 30,000 of them, live and work in Saudi Arabia, have to make a difficult decision right now. The U.S. government saying, "Maybe you should leave. Good time to think about leaving."

At the same time, as Adel al-Jubeir just said and we heard live here on CNN, if all these Americans and other foreigners pick up and leave, the terrorists will have won.

What's the basic mood there among Americans and other non-Saudis who play such a critical role in the Saudi infrastructure, especially in the oil export industry?

FATTAH: Well, certainly, there's -- there's an overwhelming fear. It probably would be something along the lines of what you would have felt walking around the streets of New York in the 1980s, this fear of, you know, looking behind your back and that sort of thing.

I was in Dubai yesterday, and I was by a lot of the people who were coming out of Saudi Arabia. There's certainly a lot of people that are coming out of here going either to Dubai and to Bahrain, partly for summer vacation. I mean, this comes at a very opportune moment in many ways, but certainly also out of -- out of security concerns.

BLITZER: Hassan Fattah in Riyadh for us. Hassan, thanks very much. We'll be checking back with you.

And we'll have much more on the murder of Paul Johnson throughout this hour, including what help the FBI is now providing to the Saudis to find the killers.

Also, what action is being planned now by U.S. companies doing business in Saudi Arabia?

And we'll also have a detailed look at the man believed to be behind the killing of Paul Johnson.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: This act shows once again the nature of the enemy that we're facing in the war on terror. They have no shame, not a shred of decency and no mercy, even for the innocent.

(END VIDEO CLIP)

BLITZER: The vice president, Dick Cheney, speaking earlier today.

Welcome back to our continuing coverage.

The murder of any hostage is, of course, very chilling news. But the method used to kill Paul Johnson, namely beheading, made his death even more shocking to many of us.

Our Brian Todd has been looking into the act of beheading and what the Quran has to say about it -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, there is clearly a very chilling pattern here.

With the brutal killing of Paul Johnson, references on that Islamist web site to Muslims being tortured by his Apache helicopters and referring to Americans and others as, quote, "unbelievers," we are led back to the killing of American Nicholas Berg last month in Iraq, again at the hand of Islamic militants; plus the death of American journalist Daniel Pearl in Pakistan more than two years ago. All, of course, by the same method: beheading. Now, we went in search of any reference in the holy Quran, anything is Islamic law having to do with beheading. Just about an hour ago I spoke with a prominent Muslim scholar, Dr. Abdul al-Khouj. He is the director of the Islamic Center, the most -- the foremost congregation for Muslims in Washington.

I was actually the one who broke the news to Dr. Khouj about Paul Johnson's death. He was very distressed and had this to stay.

"First, the Islamic Center is saddened by Johnson's death and condemns the act." He says in any Islamic nation the Quran does not permit Muslims to harm people from other nations who are visiting or working inside their country.

And here is an important point he makes. In the Quran and Islamic law, beheading is a form of punishment, but only as a consequence of a criminal act, and that punishment has to be approved by a judge and by the established Islamic government of the country in question.

Wolf, clearly the Islamic Center is also shaken by this act. And he says there is really nothing in the Quran consistent with just going and abducting a person and doing this to him or her for no apparent reason.

BLITZER: All right. CNN's Brian Todd with a good explanation of that. Thanks, Brian, very much.

And we're continuing to follow this developing story. Namely, the beheading of the American hostage in Saudi Arabia. Up next, we'll have the latest from Saudi Arabia as well as here at home.

Plus, why weren't Saudi officials able to find Paul Johnson? And how can the FBI now find the killers, because they're involved in the search, as well?

And later, publicity blitz. President Clinton's book isn't even out yet. But the hype already is here.

(COMMERCIAL BREAK)

BLITZER: Welcome back. The man believed to be behind Paul Johnson's killing is a self-proclaimed leader of al-Qaeda in Saudi Arabia, is also posted what are called how-to manuals for hostage takers on Islamist Web sites. Our Nic Robertson is joining us now live from London with a closer look -- Nic.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Wolf, Abdel Aziz al-Muqrin has headed this organization, this cell of al Qaeda since at least November last year, we are told, by sources close to Saudi intelligence. He is believed to be behind the attack in Riyadh in November last year that killed 17 people, among them many Lebanese and Egyptians, many Arabs among them.

He has changed perhaps changed the tactics, had indeed changed the tactics of the group. The attack that group took part in May killing 22 westerners going door to door in a compound where westerners lived seeking out only the nonMuslims. He has rebranded, if you will, this cell of al Qaeda. He has retargeted them, not only with his instructions on Web sites, but instead of bombings outside of compounds, has gone after targeting, surveying with surveillance operations and targeting individual westerners. He has brought a big change in the dynamic in the situation for westerners in Saudi Arabia -- Wolf.

BLITZER: Is it possible -- you've been to Saudi Arabia several times, Nic, for someone like this, a terrorist like Abdel Aziz al- Muqrin, to be operating without a significant network of support, safe houses, hiding camps, training bases, if you will, in the kingdom?

ROBERTSON: Well, in the kingdom a training base has been found. There are ongoing operations. Just in the last few days, 3 militants, according to Saudi security sources, have been killed, at least one of them close to al-Muqrin's group. A handful of others rounded up and arrested in the last few days in what are described as ongoing operations.

But what kind of base supports an organization like that? One finds it very difficult, and analysts find it very difficult, to lock in and see what's happening. But if you look at the operation in May, 4 operatives took part of that operation in the space of 24 hours killing 22 westerners. Very difficult, Wolf, to put numbers inside the organization -- Wolf.

BLITZER: CNN's Nic Robertson reporting for us tonight from London. thanks, Nic, very much.

After Paul Johnson's kidnapping, the FBI sent a team to the Saudi kingdom to help in the search for the engineer. The bureau says it's now ready to help Saudi Arabia track down his killers. Our justice correspondent Kelli Arena is joining us live with more -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, FBI officials say that they are in close contact with Saudi authorities to see what can be done to assist them in the investigation into Paul Johnson's murder. But it is a sovereign country, so it depends on what the Saudis allow.

Law enforcement officials have said the Saudis are much more willing to involve them in investigations in the very beginning. We'll see how this plays out. The FBI has been tight-lipped, though, about its role in the Johnson case and other recent investigations into violence there.

Johnson, as you know, is the third American to be killed in Saudi Arabia in the last week and a half. The Saudis have said that the FBI sent in a team of 20 hostage negotiation and rescue specialists to help in the effort to rescue Johnson. In fact, FBI agents have been part of a U.S./Saudi task force on terrorism.

So the FBI has maintained a consistent presence in the kingdom pretty much since the bombings in Riyadh in May of last year. But those agents, Wolf, are not immune to the dangers themselves. FBI officials have privately expressed particular concern for their colleagues working there as they, too, could be prime targets. Back to you.

BLITZER: All right. Kelli Arena with that. Thanks, Kelli, very much.

So how grave is the threat to Americans in Saudi Arabia? And can the Saudis wage a successful crackdown on al Qaeda? Joining us now, Matthew Levitt. He's a former FBI counterterrorism analyst. He is now with the Washington Institute for Near East Policy. Matthew, thanks very much for joining us.

Let's get to the first question. How grave, in your estimate, is the threat to Americans in Saudi Arabia right now? 30,000 of them live and work there.

MATTHEW LEVITT, FRM. FBI ANALYST: It's very grave. And Murqin's cell has demonstrated its ability to penetrate even guarded compounds. I think the shift that your correspondent mentioned a moment ago from these discriminate bombings where Muslims were also killed, which diminished the support within the kingdom for these types of attacks, that shift to these more specific attacks targeting westerners is something we should pay attention to.

One of the things that the terrorists are clearly trying to do is develop a greater rift between the U.S. and Saudi Arabia. And one of the ways to do that is by targeting Americans in the kingdom.

BLITZER: Can the Saudis get the job done?

LEVITT: At the security level, at the law enforcement level, yes. That's not shocking, they have been very good for a long time at eliminating threats to the regime. When it comes to their cooperation on a more global scale, links between people like Murqin and others abroad. Murqin has fought in many parts of the world, he's got associates all over the world.

That's a bigger question. The Saudis have said they set up a financial intelligence unit. We don't have evidence of that yet. A higher commission for charities, there's no evidence of that yet. So, there's a lot more that can be done.

BLITZER: The FBI, let's talk about your former employer, the FBI. We understand there are FBI agents now on the ground searching for the killers. What can they do, as Kelli Arena just said, without full Saudi cooperation?

LEVITT: Well, there are different levels of Saudi cooperation. By virtue of just them allowing the FBI to get in, they're getting a significant level of cooperation. The Saudis are going to want to take a lead in this investigation and the FBI experts are going to be there to advice and to provide technical support and expertise. And I think that will be well received.

The law enforcement component, here, I have no worries about. I think that if Johnson could have been found, he would have been found. I think that their sorrow over this is very, very sincere. The question is, how willing are they to address the larger issues that enable someone like Murqin to develop and operate within the kingdom.

BLITZER: I have spoken to FBI agents who went to Saudi Arabia in the past to investigate the Khobar Towers bomb, they were very frustrated by what they felt wasn't necessarily the full Saudi cooperation that they had anticipated. Has it changed?

LEVITT: Very slowly. The bottom line is, as you get closer to exposing dirty laundry that may involve some members of the royal family or members of the government, doors will close. And that's what happened in Khobar. And that was in fact very frustrating, as former director Freeh has made very, very clear.

Hopefully that has changed today. And it seems to have, simply because, with the series of bombings and now these targeting of westerners, the Saudis clearly understand the knife is as much at their throat as ours.

BLITZER: Matthew Levitt, formerly of the FBI, thanks very much for joining us.

LEVITT: Thanks for having me.

BLITZER: The death of Paul Johnson is resonating loudly within the community of American workers currently living in Saudi Arabia. CNN Financial News correspondent Jen Rogers covering this part of the story from Los Angeles -- Jen.

JEN ROGERS, CNN FINANCIAL CORRESPONDENT: That's right, Wolf. You know, there are an estimated 25,000 to 35,000 Americans working in Saudi Arabia. The list of American companies doing business in the kingdom reads like a page from the Fortune 500. Microsoft, General Electric, Coca-Cola, Merill Lynch, Pfizer, just to name a few.

Now, of course, all the major oil companies also operate in the country. This afteroon we've tried reaching dozens of American countries to find out if they're making changes to security in light of Paul Johnson's murder. No one would provide any specifics.

Now, we're also trying to gauge the sentiment workers over there. We've been monitoring chat rooms this week for expats working in Saudi Arabia. Opinion is varied.

One man who identified himself as a teacher wrote, "I'm out of here. My wife and I arrived in October and we've had enough."

Another, post, "the money and the benefits are irresistible, but it will never replace your loved ones."

Now, if westerners do start to leave in some sort of mass exodus, which to this point, no one has seen, it would be an important development for Saudi oil. Oil accounts for 90 percent of the country's exports and nearly 75 percent of the government's revenues. Right now there is much debate over whether western workers are necessary to keep up the flow of oil. Some believe the lack of workers would cause disruptions, while others say those jobs could be filled by Saudis -- Wolf.

BLITZER: CNN's Jen Rogers picking up that part of the story, a very significant part of the story. Thanks, Jen, very much. Enormous ramifications for all of us if Saudi oil exports were to go down. Price of gasoline, presumably, and other expenditures would go up.

All of this represents stunning news, of course, on Iraq as well. There are connections. And there are important other developments we're following today as well, including Russia's president Vladimir Putin. He is speaking out. What he told President Bush about Saddam Hussein before the war in Iraq.

Plus, the hypes clearly building, but the book is not even out yet. Up later, how Internet users are getting a sneak peek of President Clinton's memoir.

And remembering a legend, mourners say good-bye to the late great Ray Charles. All of that coming up.

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

European Union leaders have agreed on their first ever constitution, but remain dead locked on who should be the new president of the 25-nation group. A decision on the president will probably be deferred until next month.

Russian oil: the Moscow arbitration court has rejected appeals by the Russian oil giant Yukos to postpone hearings on claims that the company owes $3.5 billion in back taxes. The company warns that if forced to pay it could face bankruptcy. Hearings are set to resume Monday.

Nuclear war threat: two years after nearly going to war, India and Pakistan hold talks this weekend aimed at reducing the risks of nuclear war. The two neighbors staged back to back nuclear tests six years ago and have fought three years since 1947. And that's our look around the world.

(COMMERCIAL BREAK)

BLITZER: Potentially a very significant development unfolding right now. The Associated Press quoting Al-Arabiya, the Arabic- language television station as saying that Abdel Aziz Al Muqrin, the alleged al Qaeda leader in Saudi Arabia, the man supposedly behind the murder of Paul Johnson has, himself, been killed. No details being provided yet by Al-Arabiya. No confirmation from the Saudi government, no confirmation from anyone here in Washington. Al- Arabiya, the Arabic-language channel, though, saying the Abdel Aziz Al Muqrin, the leading al Qaeda figure in Saudi Arabia has been killed. We know he has been target No. 1 of the Saudi intelligence authorities, the security services for weeks and months. Word now from Al-Arabiya that he's dead. We're working to try to get confirmation. We'll have much more on this.

Coming up potentially, though, a very, very significant development. There are other significant developments we're following in Iraq right now as well, including this very, very perplexing development today. A strong critic of the U.S.-led invasion of Iraq, the Russian president Vladimir Putin, he dropped literally a bombshell today, one which seemingly bolsters President Bush's case for war. Our Moscow bureau chief Jill Dougherty reports on this stunning new development.

(BEGIN VIDEOTAPE)

JILL DOUGHERTY, CNN MOSCOW BUREAU CHIEF (voice-over): Before the invasion of Iraq, Russian intelligence services were monitoring the regime of Saddam Hussein. Now, for the first time, President Vladimir Putin revealed those Russian agents uncovered Iraqi plans to attack the United States at home and abroad. And Moscow repeatedly passed on that information to Washington.

PRES. VLADIMIR PUTIN, RUSSIA (through translator): Indeed, after September 11 and before the start of the military operation in Iraq, the Russian special services received information that the official bodies of Saddam's regime were preparing terrorist attacks in the U.S. territory and on American military and civil sites outside the country. This information has, indeed, been conveyed to our American colleagues.

DOUGHERTY: According to Vladimir Putin, U.S. President George W. Bush personally thanked the chief of Russian intelligence services for the information. Mr. Putin however said his spy agencies had no proof that Saddam Hussein's special forces were involved in any specific terrorist attacks against the U.S. and he did not know how the Russian intelligence information might have been used.

The Russian president's comments come in the midst of a fierce U.S. political debate with Mr. Bush insisting Saddam Hussein had ties to the al Qaeda terrorist network. President Putin himself did not link the Iraqi threat to al Qaeda. Moscow opposed the U.S.-led war in Iraq and President Putin says that view has not changed. President Putin's comments caused some head scratching here in Moscow with political analysts venturing a guess that Mr. Putin was trying to help Mr. Bush in his reelection campaign. But those analysts also say his comments could raise more questions than they answer. Jill Dougherty, CNN, Moscow.

(END VIDEOTAPE)

BLITZER: We're following this important, potentially significant, very significant developing story, a breaking story. Al- Arabiya, the Arabic language television channel reporting that Abdel Aziz Al Muqrin, the al Qaeda leader in Saudi Arabia, the man who claimed credit for the killing of Paul Johnson, the American hostage, has, himself, been killed. No official confirmation that we have yet. Only Al-Arabiya reporting this.

Let's bring in Senator Frank Lautenberg, Democrat of New Jersey who's been watching all of this very very carefully. He's joining us on the phone. Your constituents in New Jersey, the Johnson family, of course, all of our hearts and condolences go out to them, Senator Lautenberg. But I know you've been especially concerned about what the Saudi government is doing. Why?

SEN. FRANK LAUTENBERG (D), NEW JERSEY: Well, because I think this is a kind of a culmination of a very permissive attitude. The fact is that Saudi Arabian patience has been too condescending. It's permitted this fervor to rise, I think, by lack of action. I know they tried very hard in the last couple of days. I spoke to their spokesman in Washington. I was in touch with the family. And I was in touch with our ambassador. All to no avail unfortunately. In fact, we are reaping a harvest where the seeds were sown, I think, over the past two years.

BLITZER: Just to pinpoint you on this point, everyone. I think, seems to agree, including the Saudis themselves that they didn't do enough in the past. They were negligent, they avoided obvious warning signs. The question is, are they doing everything right now that the U.S. government wants them to do?

LAUTENBERG: We're going to have to wait and see. The fact that they agree it didn't prevent the crown prince in Saudi Arabia from declaring that this was a Zionist plot and confirmed by their foreign minister. They can't get away with diverting the blame for themselves. They don't want to stand up and take the responsibility. The result is what we see.

BLITZER: What else can they do, should they do that they're not doing, Senator?

LAUTENBERG: Well, I think that they have to declare that this crazy fundamentalism is over in their country, that they're not going to give any safe harbor to organizations, that they're going to get a mosque closed down and out of there, Hezbollah, the same with the other splinter groups and prove by their deeds not their words that they're serious about this. They have long abused this relationship, going back as far as 1991 when we rescued them, (UNINTELLIGIBLE), and then they had the audacity to raise -- to lower the quota of oil production when the prices were zooming up in the air. They deny that was their intent, but that doesn't eliminate the fact that they were ready and willing to participate with the rest of OPEC in putting the squeeze on the market. They have a lot of making up to do. I wish we could do something more for that family.

BLITZER: Certainly our hearts go out to the Johnson family. Senator Lautenberg, thanks for spending a few moments with us. Senator Frank Lautenberg, a Democrat from New Jersey. We're going to take a quick break. Much more coverage of this breaking story. Supposedly the al Qaeda leader in Saudi Arabia has been killed. We'll have more on that, and other developments. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're following a breaking story. Al- Arabiya, the Arabic language television channel reporting that Abdel Aziz al-Muqrin, the al-Qaeda leader in Saudi Arabia, the man who has claimed responsibility for the murder of Paul Johnson, his kidnapping, and now his beheading, he's reported to be dead himself. Joining us from our London bureau now Nawaf Obaid. He's a Saudi national security consultant. And he has been following this story as well. What do you make of this al-Arabiya report, Nawaf?

NAWAF OBAID, SAUDI NATL. SECURITY CONSULTANT: Wolf, it's again, especially in these sensitive times, we should be careful on how we take this piece of information. But so far, from all indications, especially from my sources back in the kingdom, that this seems to be -- there seems to be a very strong indication that it is true. Abdel al-Muqrin and a handful of his associates have been killed.

BLITZER: Killed by Saudi security forces? Is that what you're hearing?

OBAID: Well, of course. I mean, who else -- Wolf, who else would they be killed by?

BLITZER: But potentially U.S. military or FBI authorities who are on the ground in Saudi Arabia on the ground as well.

OBAID: Well, that's actually one of the numerous erroneous reports, that have been coming out, unfortunately, today. No U.S. soldiers or no U.S. FBI officials have taken part in Saudi actions. No, that's completely untrue.

BLITZER: Sorry.

OBAID: It's been done by Saudi forces and they've been killed by Saudi troopers.

BLITZER: Nawaf Obaid with some more information for us from London. Nawaf, thanks very much.

Let's check on another important development we're following on top of all of this, namely Iran, and nuclear weapons. The nuclear watch dog of the United Nations is ratcheting up the pressure on Iran right now. In an unanimous resolution, the International Atomic Energy Agency has strongly reprimanded Tehran for failing to cooperate fully with IAEA inspectors.

The United States has charged the Iranian nuclear program is actually a front to build an atomic weapon, something Iran denies. The IAEA has been investigating Iran since August of 2002. The director general Mohamed ElBaradei says, 2 years should be quite enough to offer assurances to the world about Tehran's nuclear intentions.

But there are still very deep concerns. I spoke with Dr. ElBaradei from Vienna earlier today in this exclusive interview.

(BEGIN VIDEOTAPE)

BLITZER: Dr. ElBaradei, thanks very much for joining us. Let's get to the immediate issue at hand, based on everything you know, is Iran building a nuclear bomb? MOHAMED ELBARADEI, DIR. GEN. IAEA: It is still very much difficult for us, Wolf, to assess where we are insofar as Iran's nuclear program. We haven't seen, so far, concrete evidence that this is a weapons program. However, we do not yet in a position to conclude that it is exclusively peaceful. There's a lot of open issues.

A central issue for us is whether Iran has declared all its enrichment program to the agency. It has become somewhat frustrating process. And that's why today our member state issued a warning to Iran that you need to change your pattern of behavior, you need to accelerate your cooperation, because we can not continue doing this forever. We can not go from one report to the other.

And I hope Iran got the message. I hope in the next few months we see a different proactive cooperation on the part of Iran so I be able to bring that issue to a closure by the end of the year. And, hopefully, assure the international community that Iran program is peaceful one.

BLITZER: Why didn't you include in that resolution a formal deadline giving Iran a specific amount of time to come clean with full disclosure?

ELBARADEI: Well, I think somewhat implicitly there is a deadline, Wolf, because the resolution says that they expect that in the next few month that all this issues have to be clarified and have indicated to the board that I would expect, I hope, that by the end of the year we should be able to finish the issue if Iran provides the necessary cooperation. So, the time frame is very, more or less, clear.

BLITZER: Dr. ElBaradei, as you know, the United States government, the Bush administration used to refer to Iran as one of those axis of evil countries, Iraq, Iran, North Korea. As you also well know, the government of Prime Minister Sharon and Israel very concerned about Iran's nuclear programs right now.

How concerned are you? How concerned should the international community be about some preemptive strike against Iran's nuclear reactors, either by the U.S., Israel or someone else?

ELBARADEI: I hope that's not going to be the course of action, Wolf. I sincerely believe that this would be the wrong course of action to take, definitely, because it will not -- a, it will not solve the issue. It would simply lead to a country to go underground. As we have seen in the case of Saddam Hussein.

I think the issue, in my view, could best be resolved through verification, through diplomacy. Iran right now has suspended all its enrichment activities. So, there is hopefully nothing going on in producing enriched uranium.

I don't think these issues at this stage of development in Iran can, frankly, be resolved through a military strike. I think the only way to way to resolve it is through understanding, the extent of the program, make sure it is under verification and try to work with Iran to change its pattern of behavior and to be transparent and, hopefully, maybe, in a large political arrangement get Iran to rely on fuel enrichment from outside the country.

But that's not for me, that's really something for Iran and its partner. That's why I have been saying, Wolf, that we need a dialogue, the earlier we see a dialogue between the United States, Iran as is the case now between Iran and Europe, the better in resolving this issue in a sustainable way.

BLITZER: Is there any indication, as far as you can tell, that the U.S. government is about to open up some sort of dialogue, direct dialogue, with the government and Tehran?

ELBARADEI: I haven't seen such an indication, however, I have been telling the Iranian government and the U.S. government, at least my personal view, is that this is the way to go. I hope at one point, not very far in the future, that will take place. There is a lot of issues that is could only be resolved by all concerned parties sitting around a negotiating table.

BLITZER: Dr. Mohamed ElBaradei, as usual, thanks very much for joining us. Good luck to you. Good luck to your entire team from the IAEA. Thanks very much for joining us.

ELBARADEI: Pleasure, Wolf. Keep well.

(END VIDEOTAPE)

BLITZER: And a reminder, you can always catch WOLF BLITZER REPORTS weekdays at this time, 5:00 p.m. Eastern. I'll be back Sunday on "LATE EDITION." The last word in Sunday talk. Among my guests this Sunday, Senators Richard Luger and Carl Levin. We'll talk about Saudi Arabia and the imminent hand over of power in Iraq. 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 June 18, 2004 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR (voice-over): Happening now, first official word from the government of Saudi Arabia on the beheading of an American hostage there. We are about to hear from the Saudis live.
Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER: Beheaded: kidnappers make good on their threat to kill an American hostage. We'll look at the man behind the murder and his chilling how-to manual for hostagetakers.

Putin's surprise: a stunning revelation that Russia tipped off the U.S. to Saddam's terror plans. Why now?

Is Iran going nuclear? Will the U.S. or Israel take preemptive action? The U.N.'s watchdog is worried.

ANNOUNCER: This is WOLF BLITZER REPORTS for Friday, June 18, 2004.

(END VIDEOTAPE)

BLITZER: They first showed him bound and blindfolded and vowed to kill him if their demands weren't met. Today, al Qaeda linked terrorists in Saudi Arabia followed through on that threat. This time they showed photos on an Islamist Web site as proof they beheaded the American hostage, Paul Johnson.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): The image is gruesome, too gruesome to show on television. The accompanying warning was chilling.

A group calling itself al Qaeda in the Arab Peninsula says it beheaded 49-year-old American hostage Paul Johnson after the government of Saudi Arabia didn't free al Qaeda prisoners within 72 hours, as demanded.

In a statement, they said Johnson deserved to die, because he worked in Saudi Arabia on Apache helicopters whose missiles, they said, had tortured Muslims.

This statement also warned the more than 30,000 other Americans living and working in Saudi Arabia that they are next. "As for the Americans, and most importantly the unbelievers and the criminals who are fighting Islam, this is a lesson for them to learn, for whoever comes to our country, this will be their punishment."

Secretary of State Colin Powell reacted with a warning of his own.

COLIN POWELL, SECRETARY OF STATE: This act is an action of barbarism, an action that shows once again what the world is dealing with this kind of individuals who behead somebody or murder somebody in cold blood, an innocent individual who's just trying to help people and trying to do his job.

And if anything, it will cause us -- I am quite confident it will cause our Saudi colleagues to redouble our efforts to go after terrorists wherever they are, wherever they're trying to hide. And to go after those who support this kind of terrorist activity.

BLITZER: For months, the State Department has urged Americans to leave the oil-rich kingdom, most of whom work in oil related fields.

Johnson spent the past ten years in Saudi Arabia working for Lockheed Martin, which issued this statement. "We cannot yet confirm the news. All we can say is we're very distressed, very disheartened and are dealing with the family."

Democratic presidential candidate John Kerry offered a terse reaction of his own.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: It's a grotesque act which is a reflection of the challenge of the area and of the time.

BLITZER: Earlier in the day, there was a last-minute appeal from Johnson's wife on the Arabic language television channel al-Arabiya.

THANOM JOHNSON, WIFE OF PAUL JOHNSON: I would like to say when I saw his picture on the TV, I really wanted him so much. I don't know what I can do for him. I stay right now by myself in house. I -- I want him to come back because I don't have nobody else here.

(END VIDEOTAPE)

BLITZER: And let's go right to the Saudi embassy. Adel al- Jubeir, the foreign policy adviser to the crown prince, speaking.

ADEL AL-JUBEIR, SAUDI FOREIGN POLICY ADVISER: Good afternoon, everybody.

It is with great pain and sadness that we announce the death, the brutal murder of Mr. Paul Marshall Johnson in Saudi Arabia. His body was recovered shortly in the northern part of Riyadh.

For the past week, men and women of different faiths and nationalities have been praying and hoping that Mr. Paul Marshall Johnson would be found and returned safely to his family. Today, we are faced with the tragedy of his gruesome death at the hands of barbarians who have rejected the teachings of their faith and the principles of humanity.

His brutal murder illustrates the cruelty and inhumanity of the enemy we all are fighting.

On behalf of my country and every individual with a sense of decency and humanity, I offer our most heartfelt condolences to his family and friends.

You have gone through a terrible ordeal, and our thoughts and prayers are with you. All of us grieve with you, and your pain is our pain.

May God almighty grant you strength and patience as you go through this difficult time.

The people of Saudi Arabia are outraged by the cruel and coldblooded murder of this innocent man. His murder has shaken us to the core. It is a terrible lie that the cowards who committed this inhumane act claim to be Muslim. There is no justification in our faith for harming the innocent. Islam teaches us that the killing of an innocent soul is tantamount to the killing of all of humanity. This is what the murderers have done, and they will have to answer to God almighty for their grave sin.

Since his abduction, Saudi authorities, in close coordination with their American counterparts, have embarked upon an intensive search to find him.

Over 15,000 security personnel from Saudi Arabia were involved. Thousands of locations were searched and leads pursued. We did everything we could to find him. And we are deeply sorry that it was not enough.

For more than a decade, Mr. Johnson lived a peaceful life in our country, which he grew to love and respect. He made many friends among us who will mourn his loss. We owe him our solemn commitment to pursue the criminals and bring them to justice. And with the help of God Almighty, we will.

If the intention of the criminals was to shake our resolve, they are mistaken. We are united as nation and determined as a people to rid them from our midst.

I would like to take a couple of questions, but before I do so, I want to give you an update. As we speak, Saudi security forces are engaged in a siege in the Admilas (ph) area of Riyadh, which is in central Riyadh, where we believe members of al Qaeda are hiding out. There have been fire fights. A number of terrorists have been killed. I cannot confirm the numbers for you yet, but we will be keeping you updated, so I would urge you to follow the Saudi Press Agency on this matter.

And I'd be happy to take a couple of questions. QUESTION: Can you give us more specifics about what your forces are doing now to try to find where he was held and the people who are doing this? And is the firefight that's ongoing now, do you have an indication whether that is with people who may be guilty in this crime?

AL-JUBEIR: It is too early to tell because this is occurring as we speak. We believe that they are members of the al Qaeda cells that remain in Saudi Arabia. They may be involved in the kidnapping and murder of Mr. Johnson, but it is too early to tell. The fighting and the siege are still going on. Once it is over, we'll have a much better picture.

QUESTION: And what are you doing to try to find them otherwise? You had 15,000 out in a search for Mr. Johnson.

AL-JUBEIR: Yes. And we will continue to search. We will continue to devote all of our resources that we have at our disposal to find the criminals who murdered Mr. Johnson and to bring them to justice. This search is not over.

QUESTION: Can you explain to the American people that this -- do you believe this is an attack against Americans, or is this a consequence of an internal fight against the kingdom and royal family?

AL-JUBEIR: This is an attack against humanity. This is an attack against decency. This is an attack against the innocent. This is an attack against the universal values that we all share as human beings. And this is something that requires a response from all of us. There is no justification whatsoever for doing harm to the innocent.

QUESTION: Is this on a consequence...

AL-JUBEIR: Excuse me. I want to be organized. One question, please, because I know we have a lot of people here.

QUESTION: The State Department has issued a warning urging U.S. citizens to leave Saudi Arabia because there is a possibility for other attacks against Americans. Do you agree? Do you think they should leave?

AL-JUBEIR: We cannot tell the U.S. government what it should or should not advise its citizens. We believe that we are doing our best to maintain the safety and security of our citizens and our residents. We believe that one of the objectives of the terrorists is to drive people out of Saudi Arabia.

AL-JUBEIR: And so, as a consequence, we believe that calls for withdrawing people from Saudi Arabia could inadvertently play into the hands of terrorists.

So we don't support moves like this. But, it is not our decision. This is a decision by the State Department. .

QUESTION: Was Mr. Johnson's body found in that section of Riyadh that had been sealed by security forces? Or was it a different part of the city?

AL-JUBEIR: It was found in a remote area to the north of Riyadh. And what we're trying to ascertain is was he murdered and then his body was carried elsewhere? When was he murdered? We are just now going through the forensics. Was he murdered today? Was he murdered shortly after the video was taken? These are things that are still in progress. So I really am not in a position to comment on them accurately.

QUESTION: You mentioned this firefight with members of an al Qaeda cell that remains in Saudi Arabia. Some people today have criticized the Saudi government for statements recently that there is one cell left, that that demonstrates that the government just is not realistic about what the true threat is from the (UNINTELLIGIBLE) militants in Saudi Arabia. Are you saying that you think there's one cell left?

AL-JUBEIR: I think that we have not underestimated the threat to Saudi Arabia by these criminals. We understand the extent of their reach. We have seen the murders that they can inflict on the innocent, whether it was in May of last year in Riyadh or November again in Riyadh or whether it was this spring or whether it was today.

I believe with the issue of the one cell, when we know something, we speak about it. We know definitely of a large cell in Saudi Arabia that remains. But I personally would not go so far as to say that this is all that exists in Saudi Arabia, because they can pop up from other places.

But, our objective is to go after them. Our objective is to go after those who support them, those who condone their actions and to bring them to justice.

QUESTION: Can you talk about what the FBI's role be in the investigation of this murder?

AL-JUBEIR: Our two countries have very, very close relations in terms of intelligence sharing and law enforcement. And our two countries have engaged in very close coordination in this effort.

AL-JUBEIR: There are American security personnel in Saudi Arabia who are working with their Saudi counterparts and have been for the past year. So I would imagine that it is as extensive as you and can find anywhere. We're working this as one team.

QUESTION: In term of the forensics, I understand it's still ongoing. But is there some suspicion that, in fact, he was murdered right after the video was made and not murdered today?

AL-JUBEIR: I wouldn't want to comment on that, because we just confirmed the death shortly and the forensics are still going on.

Is it possible? It could be possible. Can I say this with certainty? No, I can't. We need a little bit more time, I think. We will make all the information that we have available so that people know the full story, but we don't want to jump the gun and confuse speculation or judgment with facts.

QUESTION: Would you welcome any military help from the United States in pursuing these terrorists?

AL-JUBEIR: I have seen the reports, which are not accurate. We have our own military forces in the war against terrorism. The main forces would be law-enforcement-type personnel, as well as what you would call SWAT teams, specialized forces.

We are training our forces in that area with the help of a number of countries, including the United States. We're increasing the numbers, we are using Special Forces from the military and from the national guard to provide them with backup when it comes to securing facilities or locations. We are using a lot of our police officers and undercover agents in the war against the terrorists. And that really is the most effective means of doing it.

We are in for a difficult time, no doubt. We recognize this. We also recognize that with the passing of time, our capabilities increase and our strength increases while, hopefully, those of the terrorists decrease. We just have to stick with it, and we have to confront them, and we have to show determination and pursue them with vigor. And we hope that, in the end, God willing, we will prevail.

AL-JUBEIR: There is no doubt in our mind.

QUESTION: Having said all that, is there anything the Saudi government should be doing differently?

AL-JUBEIR: If you have any ideas, please tell us. We are determined to do whatever we can in order to go after the terrorists. We have put in place financial control mechanisms in our banking system and regulated our charities to ensure that they cannot be taken advantage of by terrorists or evildoers.

We have beefed up our intelligence capabilities. We have beefed up our special forces. We have hardened targets that we believe are of value. We have extensive cooperation from our citizens, who are outraged by this. And with every passing day, we look at areas where we can improve our efforts and we implement it.

We have enhanced our technical capabilities, and we continue to do so; the training of our officers, and we continue to do so.

We will leave no stone unturned in our efforts to confront this evil and destroy it. Our people demand no less. And they deserve no less.

QUESTION: Can you tell us a little bit more about the firefight, when it began, how it's linked to this, was it an outgrowth, for instance, of the search for Mr. Johnson?

AL-JUBEIR: I can't give you the details, because literally it was as I was coming in that I could tell you about it. I can tell you it is in the Manas (ph) area. It involves a number of suspects. It involves two cars. There was shooting. We believe a number of the suspects were killed. I can't tell you what the number is. You should watch what comes out from the Saudi Press Agency and what happens as developments on the ground unfold.

And as we are speaking, the siege is continuing. So anything I tell you would be premature.

QUESTION: What is the government telling Americans they can do to be more aware in Saudi Arabia of these types of people so they possibly avoid kidnapping? Are there any steps that you're going to be giving out.

AL-JUBEIR: We are telling all of our citizens and residents to be vigilant, to report suspicious activity, to take care when they go about their business.

At the end of the day, one of the objectives of terrorists is to disrupt the functioning of a modern society. And if it were up to them, they would have everybody panicked and they would have everybody hiding in their homes or elsewhere.

So there is a balance between continuing with a normal life and being careful in terms of areas you go to or reporting suspicious activities and things of that nature.

QUESTION: Right after this terrorist act in Khobar two weeks ago, I think a high-ranking Saudi official, actually it was your ambassador in London and (UNINTELLIGIBLE) Saudi intelligence -- stated that this terrorist act in Khobar would be the last one, and that Saudis (UNINTELLIGIBLE)

AL-JUBEIR: I haven't seen this quote. And I don't know if it's an accurate quote or not, because our ambassador to London is a very distinguished gentleman.

AL-JUBEIR: The ambassador to London was head of our intelligence service for almost 30 years. And I doubt that the statement, as you read it, would be something that he would say. We all know that terrorism can strike whenever. Even if we eliminate all of the al Qaeda terrorists in Arabia, some other terrorist can come by and shoot.

So the notion that one can definitively say "This is the end of it," I don't believe that he would have said this. So I believe this must have been a mischaracterization of his remarks.

QUESTION: With all the fears around security for foreigners in the kingdom, how comfortable are you that you can prevent an exodus of foreigners that would (UNINTELLIGIBLE) the capability of Saudi Arabia to supply oil to the world?

AL-JUBEIR: Well, I believe the second part of your statement is not accurate. Over 90 percent of the employees of Saudi-Eram Corrasaudi (ph), less than 10 percent are foreigners. We believe we can manage our oil facilities and oil production with all Saudi personnel. We also have not seen the mass exodus of foreigners. We believe that people who are living on the ground are more aware of the situation and the dangers than people who watch it on the television where issues can be magnified.

We will have to see how the situation unfolds.

I believe people are aware of the determination and vigor with which the Saudi government is pursuing the terrorists and trying to deal with this threat. And I would believe that this would reassure people about their safety.

QUESTION: You've made several very clear statements of condemnation here today, and yet I wonder how concerned you are about the impact this will have on U.S.-Saudi relations and what message you would like to take directly to the American people right now.

AL-JUBEIR: We have very strong ties with the United States. We have had them for over 60 years. Our countries have been friends and allies during that time.

In this current phase of our relationship, we are both under siege by the terrorists. They are targeting the United States and they are targeting Saudi Arabia. And anyone who tells you otherwise is being naive.

We will win this war, no doubt, with the help of God, if we work together as we have and if we refrain from finger-pointing and leveling accusations at each other, but put our hands together as our security people have been doing and pursue the terrorists and bring them to justice.

AL-JUBEIR: The American people must know that the Saudi people are with them, just like the Saudi people know that the American people are with them.

It is the two of us who are being murdered and slaughtered by these evil terrorists. And it is the two of us, working together, who can crush them.

There is determination on the part of the U.S. government, as there is determination on the part of the Saudi government to do so.

QUESTION: Given the criticism that comes out of certain political circles here in the U.S. on Saudi Arabia, has this affected the willingness of the United States to assist and to share technologically with the means that the U.S. is alone providing in terms of fighting this terrorism, or have you detected any more reticence because of political (OFF-MIKE)

AL-JUBEIR: No. The U.S. government is determined to support us in every way it can. We are appreciative and thankful for that assistance. The cooperation between our two governments in the war on terrorism could not be stronger.

It is unfortunate that you have people in the U.S., in particular in this town, who try to make political hay and say things that are irresponsible or say things that are not correct. But that will not change the reality of the strong links between our two countries and of the strong cooperation between our two countries.

And those in positions of influence know so. Those who are not pontificate, unfortunately. And this town, especially during the month of June and July, is full of hot air.

I'll take one more question, and then I'll -- OK.

QUESTION: You mentioned 15,000 police officers were...

AL-JUBEIR: They were security personnel, because we have between -- undercover, counterterrorism and...

QUESTION: Could you talk a little bit more about what was done to try to find him, and have you found any information beyond this specific incident that would help (OFF-MIKE)

AL-JUBEIR: What they did is they went through the neighborhoods where they believed most of the terrorists were.

AL-JUBEIR: A number of them, or a large percentage of them comes from one particular area in Riyadh. Most of the safe houses that we found in Riyadh are in one particular area in Riyadh.

So they combed through the area, building by building, house by house. I believe over 2,000 locations were searched.

They brought in firefighters who know the neighborhoods and who know the people in the neighborhood to provide assistance. They pursued leads. And they just combed the area.

One of the more difficult parts of this was that the terrorists or the kidnappers did not communicate. The only communication we had from them was what they posted on the Web site several days ago. And so that's what we had to go by.

We looked at other areas that, if you allow me, I won't get into, because it gets a little bit into the operations of it. But that's what they've been pursuing.

And the firefight that I was talking to you about that is occurring as we speak, they discovered a number of suspects who were fleeing in cars. And they pursued them. And now they have them under siege.

We have a number of them killed. And as I mentioned earlier, I can't tell you how many, because we don't know yet.

But we will provide you with the details as they unfold.

QUESTION: And those people are related to the search that was going on, and that's how they found those people...

AL-JUBEIR: Pardon, do you mind repeating? QUESTION: So the people who are fleeing today that are now under siege were related to the search for...

AL-JUBEIR: Yes, we believe they are part of the al Qaeda network in the kingdom. We don't know how related they are to the murder of Mr. Johnson. And, as I mentioned earlier, we probably will not know until we apprehend them and until we put together the facts.

But I just wanted to come and offer our condolences to the Johnson family as well as give you an update on where things stand.

But we will keep you informed of the situation.

Thank you all for coming.

BLITZER: Adel al-Jubeir, the Saudi foreign policy adviser to the Crown Prince Abdullah, speaking here in Washington at the Saudi embassy, expressing his deepest sorrow in the murder of the American, Paul Johnson.

Confirmation from the Saudi government, forensic evidence, that Paul Johnson was, in fact, beheaded.

He's promising to go after the terrorist, the criminals, in his words, responsible for this act.

President Bush also expressing his sympathies to the Paul Johnson family. But he says America will never be intimidated by what he calls extremist thugs.

Our White House correspondent, Suzanne Malveaux, joining us now live with more reaction -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, we're told that Saudi officials and U.S. officials have been in constant contact about Johnson and just the case here.

The president was in Fort Lewis, Washington, earlier today. That is where he was meeting with soldiers who had just returned -- American soldiers returning from Iraq, the battlefields of Iraq. He got the news there.

The president had certainly hoped to highlight the U.S. successes in the war on terror. Instead, he's confronted with this gruesome murder. The president earlier today expressed his condolences but also his resolve.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want to express my deepest condolences to the family of Paul Johnson. We send our prayers and sympathies to them during this very troubling time.

The murder of Paul shows the evil nature of the enemy we face. These are barbaric people. There's no justification whatsoever for his murder. And yet, they killed him in cold blood. And it should remind us that -- that we must pursue these people and bring them to justice before they hurt other Americans.

See, they're trying to intimidate America. They're trying to shake our will. They're trying to get us to retreat from the world. America will not retreat. America will not be intimidated by these kinds of extremist thugs.

May God bless Paul Johnson.

(END VIDEO CLIP)

MALVEAUX: Well, Vice President Dick Cheney also from Englewood, Colorado, spoke out, using the beheading of Johnson to make the case that resolve is necessary in the broader war on terror.

I spoke with a senior administration official says they are completely satisfied that the Saudi officials did everything they could in this case -- Wolf.

BLITZER: Suzanne Malveaux, thanks very much.

We're just getting in a statement from Johnson's employer, Lockheed Martin, a spokesman saying, "All of us at Lockheed Martin are very saddened to learn the news of Paul M. Johnson Jr. and his tragic and senseless death. Paul was a valued and respected employee who bravely carried out his duties, and the news of his loss is a shock to everyone in the Lockheed Martin family. We will keep Paul and his family, along with his many friends, in our thoughts and prayers. We grieve along with his family, and we will do everything we can to support them in their hour of need." A statement from Lockheed Martin.

Paul Johnson's family had pleaded publicly repeatedly for his release. They're now in seclusion in southern New Jersey. CNN's Deborah Feyerick has been spending much of this week with them. She's joining us now live.

Deborah, what is the latest?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, minutes after word came that Paul Johnson Jr., was dead, friends flocked to the family home in New Jersey, where they've been in seclusion since Monday.

CNN spoke to a relative an hour before the pictures hit the web site, the relative telling CNN that the family was devastated by this ordeal. They are now grieving, staying together, debating whether to issue a statement.

The day after the video of Johnson was released, the Johnson sister and son made a very emotional appeal, seeming to speak directly to the kidnappers. Johnson's sister saying that Johnson had great respect for the Muslim culture. His son saying that if they let him go, Johnson would leave Saudi Arabia and never return.

Right now, they are in seclusion. They are grieving, friends going to the home -- Wolf. BLITZER: CNN's Deborah Feyerick with a very, very sad part of the story. Thanks, Deborah, very, very much.

Let's go live now to the Saudi capital, Riyadh, which for many Americans, is becoming a city under siege right now.

Hassan Fattah is a contributor to "TIME" magazine. He's joining us now live on the phone from Riyadh.

Hassan, give us a little flavor of how the security situation in Riyadh has changed in recent months.

HASSAN FATTAH, "TIME" MAGAZINE: Well, certainly today at least they've been very, very heavy security. I actually just got on this morning, and I was quite caught by -- by a lot of the security that you see around, certainly a heavy show of force by the police and such.

There is this eerie silence throughout the city tonight. And in many ways it underscores the gravity of this whole event.

BLITZER: I was in Riyadh about a year and a half ago. And it -- it was a very, very safe place at this -- at that time. Why do you think al Qaeda, at least in recent months, has made a major target of the Saudi government?

FATTAH: Well, I mean, the irony is that a lot of people here have been saying exactly as you're saying. Two years ago this was the safest place in the world. You could go out and never need to think about anything.

And ironically there are various reports and, in fact, crime -- levels of crime themselves, car theft and that sort of thing, have been rising here in the city over the past two years, along with a lot of these sorts of incidents.

Certainly -- certainly, this may be an easy time for -- for the terrorists to hit. There can be all sorts of reasons. And I think a lot of people are asking themselves the same things. No doubt from the interior ministry here as well.

BLITZER: Americans, some 30,000 of them, live and work in Saudi Arabia, have to make a difficult decision right now. The U.S. government saying, "Maybe you should leave. Good time to think about leaving."

At the same time, as Adel al-Jubeir just said and we heard live here on CNN, if all these Americans and other foreigners pick up and leave, the terrorists will have won.

What's the basic mood there among Americans and other non-Saudis who play such a critical role in the Saudi infrastructure, especially in the oil export industry?

FATTAH: Well, certainly, there's -- there's an overwhelming fear. It probably would be something along the lines of what you would have felt walking around the streets of New York in the 1980s, this fear of, you know, looking behind your back and that sort of thing.

I was in Dubai yesterday, and I was by a lot of the people who were coming out of Saudi Arabia. There's certainly a lot of people that are coming out of here going either to Dubai and to Bahrain, partly for summer vacation. I mean, this comes at a very opportune moment in many ways, but certainly also out of -- out of security concerns.

BLITZER: Hassan Fattah in Riyadh for us. Hassan, thanks very much. We'll be checking back with you.

And we'll have much more on the murder of Paul Johnson throughout this hour, including what help the FBI is now providing to the Saudis to find the killers.

Also, what action is being planned now by U.S. companies doing business in Saudi Arabia?

And we'll also have a detailed look at the man believed to be behind the killing of Paul Johnson.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: This act shows once again the nature of the enemy that we're facing in the war on terror. They have no shame, not a shred of decency and no mercy, even for the innocent.

(END VIDEO CLIP)

BLITZER: The vice president, Dick Cheney, speaking earlier today.

Welcome back to our continuing coverage.

The murder of any hostage is, of course, very chilling news. But the method used to kill Paul Johnson, namely beheading, made his death even more shocking to many of us.

Our Brian Todd has been looking into the act of beheading and what the Quran has to say about it -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, there is clearly a very chilling pattern here.

With the brutal killing of Paul Johnson, references on that Islamist web site to Muslims being tortured by his Apache helicopters and referring to Americans and others as, quote, "unbelievers," we are led back to the killing of American Nicholas Berg last month in Iraq, again at the hand of Islamic militants; plus the death of American journalist Daniel Pearl in Pakistan more than two years ago. All, of course, by the same method: beheading. Now, we went in search of any reference in the holy Quran, anything is Islamic law having to do with beheading. Just about an hour ago I spoke with a prominent Muslim scholar, Dr. Abdul al-Khouj. He is the director of the Islamic Center, the most -- the foremost congregation for Muslims in Washington.

I was actually the one who broke the news to Dr. Khouj about Paul Johnson's death. He was very distressed and had this to stay.

"First, the Islamic Center is saddened by Johnson's death and condemns the act." He says in any Islamic nation the Quran does not permit Muslims to harm people from other nations who are visiting or working inside their country.

And here is an important point he makes. In the Quran and Islamic law, beheading is a form of punishment, but only as a consequence of a criminal act, and that punishment has to be approved by a judge and by the established Islamic government of the country in question.

Wolf, clearly the Islamic Center is also shaken by this act. And he says there is really nothing in the Quran consistent with just going and abducting a person and doing this to him or her for no apparent reason.

BLITZER: All right. CNN's Brian Todd with a good explanation of that. Thanks, Brian, very much.

And we're continuing to follow this developing story. Namely, the beheading of the American hostage in Saudi Arabia. Up next, we'll have the latest from Saudi Arabia as well as here at home.

Plus, why weren't Saudi officials able to find Paul Johnson? And how can the FBI now find the killers, because they're involved in the search, as well?

And later, publicity blitz. President Clinton's book isn't even out yet. But the hype already is here.

(COMMERCIAL BREAK)

BLITZER: Welcome back. The man believed to be behind Paul Johnson's killing is a self-proclaimed leader of al-Qaeda in Saudi Arabia, is also posted what are called how-to manuals for hostage takers on Islamist Web sites. Our Nic Robertson is joining us now live from London with a closer look -- Nic.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Wolf, Abdel Aziz al-Muqrin has headed this organization, this cell of al Qaeda since at least November last year, we are told, by sources close to Saudi intelligence. He is believed to be behind the attack in Riyadh in November last year that killed 17 people, among them many Lebanese and Egyptians, many Arabs among them.

He has changed perhaps changed the tactics, had indeed changed the tactics of the group. The attack that group took part in May killing 22 westerners going door to door in a compound where westerners lived seeking out only the nonMuslims. He has rebranded, if you will, this cell of al Qaeda. He has retargeted them, not only with his instructions on Web sites, but instead of bombings outside of compounds, has gone after targeting, surveying with surveillance operations and targeting individual westerners. He has brought a big change in the dynamic in the situation for westerners in Saudi Arabia -- Wolf.

BLITZER: Is it possible -- you've been to Saudi Arabia several times, Nic, for someone like this, a terrorist like Abdel Aziz al- Muqrin, to be operating without a significant network of support, safe houses, hiding camps, training bases, if you will, in the kingdom?

ROBERTSON: Well, in the kingdom a training base has been found. There are ongoing operations. Just in the last few days, 3 militants, according to Saudi security sources, have been killed, at least one of them close to al-Muqrin's group. A handful of others rounded up and arrested in the last few days in what are described as ongoing operations.

But what kind of base supports an organization like that? One finds it very difficult, and analysts find it very difficult, to lock in and see what's happening. But if you look at the operation in May, 4 operatives took part of that operation in the space of 24 hours killing 22 westerners. Very difficult, Wolf, to put numbers inside the organization -- Wolf.

BLITZER: CNN's Nic Robertson reporting for us tonight from London. thanks, Nic, very much.

After Paul Johnson's kidnapping, the FBI sent a team to the Saudi kingdom to help in the search for the engineer. The bureau says it's now ready to help Saudi Arabia track down his killers. Our justice correspondent Kelli Arena is joining us live with more -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, FBI officials say that they are in close contact with Saudi authorities to see what can be done to assist them in the investigation into Paul Johnson's murder. But it is a sovereign country, so it depends on what the Saudis allow.

Law enforcement officials have said the Saudis are much more willing to involve them in investigations in the very beginning. We'll see how this plays out. The FBI has been tight-lipped, though, about its role in the Johnson case and other recent investigations into violence there.

Johnson, as you know, is the third American to be killed in Saudi Arabia in the last week and a half. The Saudis have said that the FBI sent in a team of 20 hostage negotiation and rescue specialists to help in the effort to rescue Johnson. In fact, FBI agents have been part of a U.S./Saudi task force on terrorism.

So the FBI has maintained a consistent presence in the kingdom pretty much since the bombings in Riyadh in May of last year. But those agents, Wolf, are not immune to the dangers themselves. FBI officials have privately expressed particular concern for their colleagues working there as they, too, could be prime targets. Back to you.

BLITZER: All right. Kelli Arena with that. Thanks, Kelli, very much.

So how grave is the threat to Americans in Saudi Arabia? And can the Saudis wage a successful crackdown on al Qaeda? Joining us now, Matthew Levitt. He's a former FBI counterterrorism analyst. He is now with the Washington Institute for Near East Policy. Matthew, thanks very much for joining us.

Let's get to the first question. How grave, in your estimate, is the threat to Americans in Saudi Arabia right now? 30,000 of them live and work there.

MATTHEW LEVITT, FRM. FBI ANALYST: It's very grave. And Murqin's cell has demonstrated its ability to penetrate even guarded compounds. I think the shift that your correspondent mentioned a moment ago from these discriminate bombings where Muslims were also killed, which diminished the support within the kingdom for these types of attacks, that shift to these more specific attacks targeting westerners is something we should pay attention to.

One of the things that the terrorists are clearly trying to do is develop a greater rift between the U.S. and Saudi Arabia. And one of the ways to do that is by targeting Americans in the kingdom.

BLITZER: Can the Saudis get the job done?

LEVITT: At the security level, at the law enforcement level, yes. That's not shocking, they have been very good for a long time at eliminating threats to the regime. When it comes to their cooperation on a more global scale, links between people like Murqin and others abroad. Murqin has fought in many parts of the world, he's got associates all over the world.

That's a bigger question. The Saudis have said they set up a financial intelligence unit. We don't have evidence of that yet. A higher commission for charities, there's no evidence of that yet. So, there's a lot more that can be done.

BLITZER: The FBI, let's talk about your former employer, the FBI. We understand there are FBI agents now on the ground searching for the killers. What can they do, as Kelli Arena just said, without full Saudi cooperation?

LEVITT: Well, there are different levels of Saudi cooperation. By virtue of just them allowing the FBI to get in, they're getting a significant level of cooperation. The Saudis are going to want to take a lead in this investigation and the FBI experts are going to be there to advice and to provide technical support and expertise. And I think that will be well received.

The law enforcement component, here, I have no worries about. I think that if Johnson could have been found, he would have been found. I think that their sorrow over this is very, very sincere. The question is, how willing are they to address the larger issues that enable someone like Murqin to develop and operate within the kingdom.

BLITZER: I have spoken to FBI agents who went to Saudi Arabia in the past to investigate the Khobar Towers bomb, they were very frustrated by what they felt wasn't necessarily the full Saudi cooperation that they had anticipated. Has it changed?

LEVITT: Very slowly. The bottom line is, as you get closer to exposing dirty laundry that may involve some members of the royal family or members of the government, doors will close. And that's what happened in Khobar. And that was in fact very frustrating, as former director Freeh has made very, very clear.

Hopefully that has changed today. And it seems to have, simply because, with the series of bombings and now these targeting of westerners, the Saudis clearly understand the knife is as much at their throat as ours.

BLITZER: Matthew Levitt, formerly of the FBI, thanks very much for joining us.

LEVITT: Thanks for having me.

BLITZER: The death of Paul Johnson is resonating loudly within the community of American workers currently living in Saudi Arabia. CNN Financial News correspondent Jen Rogers covering this part of the story from Los Angeles -- Jen.

JEN ROGERS, CNN FINANCIAL CORRESPONDENT: That's right, Wolf. You know, there are an estimated 25,000 to 35,000 Americans working in Saudi Arabia. The list of American companies doing business in the kingdom reads like a page from the Fortune 500. Microsoft, General Electric, Coca-Cola, Merill Lynch, Pfizer, just to name a few.

Now, of course, all the major oil companies also operate in the country. This afteroon we've tried reaching dozens of American countries to find out if they're making changes to security in light of Paul Johnson's murder. No one would provide any specifics.

Now, we're also trying to gauge the sentiment workers over there. We've been monitoring chat rooms this week for expats working in Saudi Arabia. Opinion is varied.

One man who identified himself as a teacher wrote, "I'm out of here. My wife and I arrived in October and we've had enough."

Another, post, "the money and the benefits are irresistible, but it will never replace your loved ones."

Now, if westerners do start to leave in some sort of mass exodus, which to this point, no one has seen, it would be an important development for Saudi oil. Oil accounts for 90 percent of the country's exports and nearly 75 percent of the government's revenues. Right now there is much debate over whether western workers are necessary to keep up the flow of oil. Some believe the lack of workers would cause disruptions, while others say those jobs could be filled by Saudis -- Wolf.

BLITZER: CNN's Jen Rogers picking up that part of the story, a very significant part of the story. Thanks, Jen, very much. Enormous ramifications for all of us if Saudi oil exports were to go down. Price of gasoline, presumably, and other expenditures would go up.

All of this represents stunning news, of course, on Iraq as well. There are connections. And there are important other developments we're following today as well, including Russia's president Vladimir Putin. He is speaking out. What he told President Bush about Saddam Hussein before the war in Iraq.

Plus, the hypes clearly building, but the book is not even out yet. Up later, how Internet users are getting a sneak peek of President Clinton's memoir.

And remembering a legend, mourners say good-bye to the late great Ray Charles. All of that coming up.

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

European Union leaders have agreed on their first ever constitution, but remain dead locked on who should be the new president of the 25-nation group. A decision on the president will probably be deferred until next month.

Russian oil: the Moscow arbitration court has rejected appeals by the Russian oil giant Yukos to postpone hearings on claims that the company owes $3.5 billion in back taxes. The company warns that if forced to pay it could face bankruptcy. Hearings are set to resume Monday.

Nuclear war threat: two years after nearly going to war, India and Pakistan hold talks this weekend aimed at reducing the risks of nuclear war. The two neighbors staged back to back nuclear tests six years ago and have fought three years since 1947. And that's our look around the world.

(COMMERCIAL BREAK)

BLITZER: Potentially a very significant development unfolding right now. The Associated Press quoting Al-Arabiya, the Arabic- language television station as saying that Abdel Aziz Al Muqrin, the alleged al Qaeda leader in Saudi Arabia, the man supposedly behind the murder of Paul Johnson has, himself, been killed. No details being provided yet by Al-Arabiya. No confirmation from the Saudi government, no confirmation from anyone here in Washington. Al- Arabiya, the Arabic-language channel, though, saying the Abdel Aziz Al Muqrin, the leading al Qaeda figure in Saudi Arabia has been killed. We know he has been target No. 1 of the Saudi intelligence authorities, the security services for weeks and months. Word now from Al-Arabiya that he's dead. We're working to try to get confirmation. We'll have much more on this.

Coming up potentially, though, a very, very significant development. There are other significant developments we're following in Iraq right now as well, including this very, very perplexing development today. A strong critic of the U.S.-led invasion of Iraq, the Russian president Vladimir Putin, he dropped literally a bombshell today, one which seemingly bolsters President Bush's case for war. Our Moscow bureau chief Jill Dougherty reports on this stunning new development.

(BEGIN VIDEOTAPE)

JILL DOUGHERTY, CNN MOSCOW BUREAU CHIEF (voice-over): Before the invasion of Iraq, Russian intelligence services were monitoring the regime of Saddam Hussein. Now, for the first time, President Vladimir Putin revealed those Russian agents uncovered Iraqi plans to attack the United States at home and abroad. And Moscow repeatedly passed on that information to Washington.

PRES. VLADIMIR PUTIN, RUSSIA (through translator): Indeed, after September 11 and before the start of the military operation in Iraq, the Russian special services received information that the official bodies of Saddam's regime were preparing terrorist attacks in the U.S. territory and on American military and civil sites outside the country. This information has, indeed, been conveyed to our American colleagues.

DOUGHERTY: According to Vladimir Putin, U.S. President George W. Bush personally thanked the chief of Russian intelligence services for the information. Mr. Putin however said his spy agencies had no proof that Saddam Hussein's special forces were involved in any specific terrorist attacks against the U.S. and he did not know how the Russian intelligence information might have been used.

The Russian president's comments come in the midst of a fierce U.S. political debate with Mr. Bush insisting Saddam Hussein had ties to the al Qaeda terrorist network. President Putin himself did not link the Iraqi threat to al Qaeda. Moscow opposed the U.S.-led war in Iraq and President Putin says that view has not changed. President Putin's comments caused some head scratching here in Moscow with political analysts venturing a guess that Mr. Putin was trying to help Mr. Bush in his reelection campaign. But those analysts also say his comments could raise more questions than they answer. Jill Dougherty, CNN, Moscow.

(END VIDEOTAPE)

BLITZER: We're following this important, potentially significant, very significant developing story, a breaking story. Al- Arabiya, the Arabic language television channel reporting that Abdel Aziz Al Muqrin, the al Qaeda leader in Saudi Arabia, the man who claimed credit for the killing of Paul Johnson, the American hostage, has, himself, been killed. No official confirmation that we have yet. Only Al-Arabiya reporting this.

Let's bring in Senator Frank Lautenberg, Democrat of New Jersey who's been watching all of this very very carefully. He's joining us on the phone. Your constituents in New Jersey, the Johnson family, of course, all of our hearts and condolences go out to them, Senator Lautenberg. But I know you've been especially concerned about what the Saudi government is doing. Why?

SEN. FRANK LAUTENBERG (D), NEW JERSEY: Well, because I think this is a kind of a culmination of a very permissive attitude. The fact is that Saudi Arabian patience has been too condescending. It's permitted this fervor to rise, I think, by lack of action. I know they tried very hard in the last couple of days. I spoke to their spokesman in Washington. I was in touch with the family. And I was in touch with our ambassador. All to no avail unfortunately. In fact, we are reaping a harvest where the seeds were sown, I think, over the past two years.

BLITZER: Just to pinpoint you on this point, everyone. I think, seems to agree, including the Saudis themselves that they didn't do enough in the past. They were negligent, they avoided obvious warning signs. The question is, are they doing everything right now that the U.S. government wants them to do?

LAUTENBERG: We're going to have to wait and see. The fact that they agree it didn't prevent the crown prince in Saudi Arabia from declaring that this was a Zionist plot and confirmed by their foreign minister. They can't get away with diverting the blame for themselves. They don't want to stand up and take the responsibility. The result is what we see.

BLITZER: What else can they do, should they do that they're not doing, Senator?

LAUTENBERG: Well, I think that they have to declare that this crazy fundamentalism is over in their country, that they're not going to give any safe harbor to organizations, that they're going to get a mosque closed down and out of there, Hezbollah, the same with the other splinter groups and prove by their deeds not their words that they're serious about this. They have long abused this relationship, going back as far as 1991 when we rescued them, (UNINTELLIGIBLE), and then they had the audacity to raise -- to lower the quota of oil production when the prices were zooming up in the air. They deny that was their intent, but that doesn't eliminate the fact that they were ready and willing to participate with the rest of OPEC in putting the squeeze on the market. They have a lot of making up to do. I wish we could do something more for that family.

BLITZER: Certainly our hearts go out to the Johnson family. Senator Lautenberg, thanks for spending a few moments with us. Senator Frank Lautenberg, a Democrat from New Jersey. We're going to take a quick break. Much more coverage of this breaking story. Supposedly the al Qaeda leader in Saudi Arabia has been killed. We'll have more on that, and other developments. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're following a breaking story. Al- Arabiya, the Arabic language television channel reporting that Abdel Aziz al-Muqrin, the al-Qaeda leader in Saudi Arabia, the man who has claimed responsibility for the murder of Paul Johnson, his kidnapping, and now his beheading, he's reported to be dead himself. Joining us from our London bureau now Nawaf Obaid. He's a Saudi national security consultant. And he has been following this story as well. What do you make of this al-Arabiya report, Nawaf?

NAWAF OBAID, SAUDI NATL. SECURITY CONSULTANT: Wolf, it's again, especially in these sensitive times, we should be careful on how we take this piece of information. But so far, from all indications, especially from my sources back in the kingdom, that this seems to be -- there seems to be a very strong indication that it is true. Abdel al-Muqrin and a handful of his associates have been killed.

BLITZER: Killed by Saudi security forces? Is that what you're hearing?

OBAID: Well, of course. I mean, who else -- Wolf, who else would they be killed by?

BLITZER: But potentially U.S. military or FBI authorities who are on the ground in Saudi Arabia on the ground as well.

OBAID: Well, that's actually one of the numerous erroneous reports, that have been coming out, unfortunately, today. No U.S. soldiers or no U.S. FBI officials have taken part in Saudi actions. No, that's completely untrue.

BLITZER: Sorry.

OBAID: It's been done by Saudi forces and they've been killed by Saudi troopers.

BLITZER: Nawaf Obaid with some more information for us from London. Nawaf, thanks very much.

Let's check on another important development we're following on top of all of this, namely Iran, and nuclear weapons. The nuclear watch dog of the United Nations is ratcheting up the pressure on Iran right now. In an unanimous resolution, the International Atomic Energy Agency has strongly reprimanded Tehran for failing to cooperate fully with IAEA inspectors.

The United States has charged the Iranian nuclear program is actually a front to build an atomic weapon, something Iran denies. The IAEA has been investigating Iran since August of 2002. The director general Mohamed ElBaradei says, 2 years should be quite enough to offer assurances to the world about Tehran's nuclear intentions.

But there are still very deep concerns. I spoke with Dr. ElBaradei from Vienna earlier today in this exclusive interview.

(BEGIN VIDEOTAPE)

BLITZER: Dr. ElBaradei, thanks very much for joining us. Let's get to the immediate issue at hand, based on everything you know, is Iran building a nuclear bomb? MOHAMED ELBARADEI, DIR. GEN. IAEA: It is still very much difficult for us, Wolf, to assess where we are insofar as Iran's nuclear program. We haven't seen, so far, concrete evidence that this is a weapons program. However, we do not yet in a position to conclude that it is exclusively peaceful. There's a lot of open issues.

A central issue for us is whether Iran has declared all its enrichment program to the agency. It has become somewhat frustrating process. And that's why today our member state issued a warning to Iran that you need to change your pattern of behavior, you need to accelerate your cooperation, because we can not continue doing this forever. We can not go from one report to the other.

And I hope Iran got the message. I hope in the next few months we see a different proactive cooperation on the part of Iran so I be able to bring that issue to a closure by the end of the year. And, hopefully, assure the international community that Iran program is peaceful one.

BLITZER: Why didn't you include in that resolution a formal deadline giving Iran a specific amount of time to come clean with full disclosure?

ELBARADEI: Well, I think somewhat implicitly there is a deadline, Wolf, because the resolution says that they expect that in the next few month that all this issues have to be clarified and have indicated to the board that I would expect, I hope, that by the end of the year we should be able to finish the issue if Iran provides the necessary cooperation. So, the time frame is very, more or less, clear.

BLITZER: Dr. ElBaradei, as you know, the United States government, the Bush administration used to refer to Iran as one of those axis of evil countries, Iraq, Iran, North Korea. As you also well know, the government of Prime Minister Sharon and Israel very concerned about Iran's nuclear programs right now.

How concerned are you? How concerned should the international community be about some preemptive strike against Iran's nuclear reactors, either by the U.S., Israel or someone else?

ELBARADEI: I hope that's not going to be the course of action, Wolf. I sincerely believe that this would be the wrong course of action to take, definitely, because it will not -- a, it will not solve the issue. It would simply lead to a country to go underground. As we have seen in the case of Saddam Hussein.

I think the issue, in my view, could best be resolved through verification, through diplomacy. Iran right now has suspended all its enrichment activities. So, there is hopefully nothing going on in producing enriched uranium.

I don't think these issues at this stage of development in Iran can, frankly, be resolved through a military strike. I think the only way to way to resolve it is through understanding, the extent of the program, make sure it is under verification and try to work with Iran to change its pattern of behavior and to be transparent and, hopefully, maybe, in a large political arrangement get Iran to rely on fuel enrichment from outside the country.

But that's not for me, that's really something for Iran and its partner. That's why I have been saying, Wolf, that we need a dialogue, the earlier we see a dialogue between the United States, Iran as is the case now between Iran and Europe, the better in resolving this issue in a sustainable way.

BLITZER: Is there any indication, as far as you can tell, that the U.S. government is about to open up some sort of dialogue, direct dialogue, with the government and Tehran?

ELBARADEI: I haven't seen such an indication, however, I have been telling the Iranian government and the U.S. government, at least my personal view, is that this is the way to go. I hope at one point, not very far in the future, that will take place. There is a lot of issues that is could only be resolved by all concerned parties sitting around a negotiating table.

BLITZER: Dr. Mohamed ElBaradei, as usual, thanks very much for joining us. Good luck to you. Good luck to your entire team from the IAEA. Thanks very much for joining us.

ELBARADEI: Pleasure, Wolf. Keep well.

(END VIDEOTAPE)

BLITZER: And a reminder, you can always catch WOLF BLITZER REPORTS weekdays at this time, 5:00 p.m. Eastern. I'll be back Sunday on "LATE EDITION." The last word in Sunday talk. Among my guests this Sunday, Senators Richard Luger and Carl Levin. We'll talk about Saudi Arabia and the imminent hand over of power in Iraq. 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