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CNN Wolf Blitzer Reports

Terror fears at Capitol, Kerry-Edwards campaign kicks off in Dayton, Ohio, Former Enron CEO and Chairman Ken Lay indicted, Where is Marine Corporal Wassef Hassoun?

Aired July 07, 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.


MILES O'BRIEN, CNN ANCHOR: Happening now. Terror fears, and in addition to that we have John Kerry live at Dayton, Ohio. We'll keep you up to date as the campaign heats up.
Newly-minted Democratic pair there on the campaign trail.

Also, terror fears. Capitol Hill meets behind closed doors over the political conventions and the election. We'll tell you about that.

The grand jury has spoken. Has the law caught up with former Enron chairman Ken Lay.

And phoning home. Where is Marine Corporal Wassef Hassoun? Is he safe from danger? Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

ANNOUNCER: Running mates off and running.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: We come to this with a deep, deep belief that America can do better.

ANNOUNCER: President Bush says he'll do better in Edwards' backyard.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We did well in the South last time, we'll do well in the South this time.

ANNOUNCER: Who has the edge? We'll ask Senators Barbara Boxer and Kay Bailey Hutchison.

Baghdad battle. Iraqi forces call for backup in the heart of the capital as the new government gets ready for a crackdown.

Secret airlift. Keeping potential dirty bomb ingredients out of the hands of Iraq's insurgents.

Stalking Sharon. Are Jewish extremists targeting Israel's prime minister?

This is WOLF BLITZER REPORTS for Wednesday, July 7, 2004.

(END VIDEOTAPE) O'BRIEN: Hello, I'm Miles O'Brien at CNN center in Atlanta in for Wolf Blitzer today. We're watching two developing stories at this hour. Looking at live pictures now. Dayton, Ohio, as the newly- minted Democratic ticket spends its campaign on the trail. We'll have details on that.

But we begin with the Enron case. Former Enron Chairman and CEO, the founder of the company Ken Lay has been indicted and the charges, we're told, will be unsealed tomorrow. CNN's Jen Rogers live in Houston with details on this developing story -- Jen.

JEN ROGERS, CNN CORRESPONDENT: That's right, Miles. Right now this indictment does remain under seal, but we have heard from sources that a grand jury did indict Ken Lay. He is, of course, the former chairman and CEO of Enron. He's really the man that remade that company from a sleepy pipeline company into what many people considered a new economy juggernaut.

Right now the Department of Justice is not commenting. I have also called Michael Ramsey who is Ken Lay's attorney. He has not returned calls yet. In the past so forth he has said that his client is not guilty and that he did not commit any crimes.

Of course, what we will expect if this is unsealed. Again tomorrow which is the expectation is that Ken Lay would make an initial appearance here at Houston Federal Court. He would be making that appearance again, we are expecting, tomorrow morning and at that time we will learn more about what these exact charges are. Because of course his indictment right now remains under seal -- Miles.

O'BRIEN: CNN's Jen Rodgers in Houston. Thanks very much.

Live pictures from Dayton, Ohio, where Democratic presidential candidate John Kerry and his running mate, John Edwards are making an appearance this afternoon, one day after Kerry tapped Edwards for the vice presidential race. The Democratic ticket went on the road today. But President Bush did some traveling of his own with a trip to Edwards' home state. Let's go to the trail.

(BEGIN VIDEOTAPE)

O'BRIEN (voice-over): Launching a new political partnership, the two Democrats seeking to recapture the White House made their first public appearance today flanked by their families.

KERRY: And today we're embarking on a new journey together, not for us but for our country.

O'BRIEN: A picturesque kick-start to a four-day six-state tour that takes John Kerry and John Edwards to battleground states Ohio and Florida today, West Virginia and New Mexico later and finishing up in North Carolina Saturday. The latest polls showing tight races in Florida, a dead heat. In Ohio, Kerry leads by only six points. Their first stop in the Buckeye State, Cleveland, meeting briefly with area vets. The new teammates rallied downtown. The new number two fired up after months of rest. SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: The American people are going to reject the tired old hateful, negative politics of the past. They're going to embrace the politics of hope. The politics of what's possible.

O'BRIEN: So far the new pairing is meeting with approval. In a CNN/"USA Today"/Gallup poll, 64 percent call Edwards an excellent or pretty good running mate. That's higher than both Al Gore and George Bush's choices in 2000.

AD ANNOUNCER: A combat veteran who earned three purple hearts.

O'BRIEN: Not taking anything for granted, the campaign unleashed seven new TV ads, one of which spotlights Edwards.

AD ANNOUNCER: Who all his life has stood up for ordinary people against powerful interests.

O'BRIEN: But Kerry and Edwards aren't alone on the road or in the air today. Coincidental or not, President Bush touched down in Edwards country this morning, North Carolina, where for now polls have the president on top. Meeting with judicial nominees in Raleigh, Bush pointed out Edwards is among the senators blocking some of his federal appointments and when asked he offered his opinion of the state's junior senator.

UNIDENTIFIED MALE: He's being described today as "charming," "engaging," "a nimble campaigner," "a populist" and even "sexy." How does he stack up against Dick Cheney?

BUSH: Dick Cheney can be president. Next?

O'BRIEN: After leaving the Tarheel State the president flew to suburban Detroit where he continues his push for money and votes.

Money and votes are what it is all about, of course. Live pictures once again as John Kerry continues stumping in Dayton, Ohio, it's clear Kerry had all that money and all those votes in mind when he selected the second most popular Democrat of this political season as his running mate, but is he up to the job and more importantly the job that he could be a heartbeat away from?

Let's talk VP politics with two of Kerry's Senate colleagues, California Democrat Barbara Boxer and Republican Kay Bailey Hutchison of Texas. Good to have you both with us, ladies.

Senator Hutchison, let's begin with you.

The president implied today that Senator Edwards was not up to the job of the president. You've worked with him in the Senate. Do you agree?

SEN. KAY BAILEY HUTCHINSON (R), TEXAS: I definitely agree. The comparison between Vice President Cheney and Senator Edwards, I think is a great endorsement for the Bush-Cheney ticket. Vice President Cheney has been in Congress. He's been in the cabinet, he's been in the White House and he's been in business. Thank Heavens he's been in the real world. He knows what makes an economy go. That's why I think his leadership is so important and I think the comparison with a young person who's been in the Senate for one term is just not a very good one.

O'BRIEN: Senator Hutchinson, after one term in the Senate would you have been ready to be president, you think?

HUTCHINSON: No, I certainly don't. I'm not sure I would be now and I've been here 11 years. I think that it does take a lot of time to understand how Congress works and how the relationship between Congress and the cabinet and the president function and I think it is important that we have a vice president who has served in so many roles in government and in business. He's been a CEO. He understands what it means to have a strong economy and create jobs in our country and I think that is perhaps even his best attribute.

O'BRIEN: Senator Boxer. Let's talk about that experience issue for just a moment. Lest we forget that President Bush when he came in his only experience was as governor of Texas. Would you equate that with one term in the Senate. Do you think Senator Edwards would be up to the task of being president if called upon.

SEN. BARBARA BOXER (D), CALIFORNIA: That's a very good question and I think it's kind of humorous almost to be attacking Edwards for his lack of experience. He has far more experience in federal issues and national issues and international issues than George Bush himself had.

So, clearly, we're looking at the whole person and if you look at Dick Cheney, he spent the vast majority of his life in government, government, government. I served with him in the House of Representatives and not all wisdom resides in government and I think that John Edwards' story, his life story, his struggling, he's the son of a mill worker as we've heard and we'll hear it more gives him that real world experience and he carries in his heart, I think, a true feeling for ordinary people and I think the balance of this ticket is very exiting.

O'BRIEN: Let's bring in a former colleague of yours. Senator Alfonse D'Amato on tape. He had some things today to say about the Republican ticket specifically Vice President Dick Cheney. Let's listen.

(BEGIN VIDEO CLIP)

ALFONSE D'AMATO (R), FORMER U.S. SENATOR: I will shock the Republicans and probably get them angry, but I think we could do better and I have a great deal of respect for Dick Cheney. I think he's bright. Absolutely brilliant. Having said that, I think that politically there are two other people, if we're talking about who could bring help, who could bring substantial help to the ticket.

(END VIDEO CLIP)

O'BRIEN: Now Senator Hutchinson, those two people that he mentioned as he went on were the Secretary of State Colin Powell and Senator John McCain, your colleague in the Senate and somebody who's already been actively involved in this new stage of the campaign, really on both sides. I guess the question is are Republicans, is that something that's being talked about in the halls there, about the possibility that it is time to get a new number two on the Republican side?

HUTCHINSON: Absolutely not. Everyone is very pleased that we have the secretary of state where he is. He's doing a fine job and certainly Senator McCain is a leader in the Senate. He's getting ready to be chairman of the armed services committee in a couple of years.

So I think that they are in very important positions. They're supporting the president and I think Vice President Cheney has the full support of Congress as well as the president. He is someone in whom the president trusts. He gives good advice to the president. He's experienced in government and business, I think, make him uniquely qualified. And people have great confidence that he is there as a partner with our president.

I don't think there's ever been a team that worked together so well and complemented each other so much as the president and the vice president. And when it ain't broke, don't fix it.

O'BRIEN: All right. There is a statement out from the Bush campaign. Let's -- this is in response to Alfonse D'Amato's statements, which more precisely were uttered yesterday. "Under Dick Cheney, this has been the most substantive vice presidency in history." That coming from a Bush campaign spokesman.

Senator Boxer, how would you respond to that? Should the president change his vice president -- vice presidential running mate or, you as a Democrat, would you prefer they keep it as is?

BOXER: Well, frankly, it's up to the Republicans to decide what they want to do and listening to Kay here and she's a real leader in the Republican caucus, they seem to be very satisfied.

It's fine with me, but frankly, what I'm talking about is a new team for America, and I think that our team is just so well balanced in so many ways. You know, they talk about John Edwards and saying he's not going to help Kerry. He is going to help. He won in a state where Jesse Helms was the senator. So, he has that crossover appeal in terms of region, in terms of Democrat, Republican, Independent.

You know, there's a very small number of people who are undecided, and they're looking for, I think, new leadership. And I think our team will offer them that.

O'BRIEN: Senators Barbara Boxer and Kay Bailey Huchison -- California and Texas, respectively -- thank you very much for spending some time with us today. We appreciate it.

HUTCHISON: Thank you.

BOXER: Thank you so much.

O'BRIEN: The national political conventions this summer could be a tempting target for terrorists. You've heard that before. What's being done to prevent an attack, though? We'll take a look as "WOLF BLITZER REPORTS" continues.

Here's your turn to weigh in on this important story. Our Web question of the day is this: Does John Edwards help John Kerry's chances for victory in November? You can vote right now at CNN.COM/WOLF. We'll have the results later in the broadcast.

The bizarre journey of a missing U.S. Marine takes another turn. The latest developments in the search for Corporal Wassef Hassoun.

Fears for the life of Israel's prime minister: why security is apparently being stepped up.

Plus, inside Guantanamo: Lawyers poised to meet with detainees in the wake of a landmark Supreme Court ruling. Bob Franken is there.

(COMMERCIAL BREAK)

O'BRIEN: Turning now to the mysterious odyssey of a U.S. Marine. Corporal Wassef Hassoun vanished from his post in Iraq last month. He was later shown on videotape, an apparent hostage. And at one point, he was reported killed. But the word is he is out of Iraq and now has phoned home.

Let's go live to CNN's Miguel Marquez outside the family home in West Jordan, Utah. Miguel?

MIGUEL MARQUEZ, CNN CORRESPONDENT: No, Miles. We've had the incrementally good news all day, and this may be the biggest increment yet: A senior State Department official telling CNN that they believe that Corporal Hassoun, Wassef Hassoun, is in fact alive and in Lebanon. They believe he is safe, and they are trying to locate him.

Another U.S. official telling CNN that they have talked to the family and that they are trying to find Hassoun as soon possible. Now, a short time ago, as all that's going on and the search for Hassoun overseas is occurring, two FBI agents came to his house here in West Jordan, Utah, looking to talk to the family, seeking information useful to their investigation. This according to an FBI official here in Salt Lake City.

They say that they are treating this case as an American citizen captured overseas, and they were hoping to glean whatever information about that phone call from the family today in order to help them find Marine Corporal Wassef Hassoun -- Miles.

O'BRIEN: CNN's Miguel Marquez, thank you very much.

Is Corporal Hassoun now in Lebanon? His relatives there are waiting for further word. CNN's Alphonso Van Marsh joins us now from the northern city of Tripoli -- Alfonso. ALPHONSO VAN MARSH, CNN CORRESPONDENT: That's right, Miles. That is the question of the evening: Is Hassoun in Lebanon? Family members they say know, they certainly aren't talking, even though Hassoun and the story of the Marine corporal has been in the local papers here. The family members very reluctant to talk to the press and definitely not talking on camera.

But we did spend some time today -- and to understand the family's sentiment, you need to understand the neighborhood. The neighborhood where the Hassoun family lives is a series of high-rise apartments and about 60% of the people in this neighborhood are all Hassouns -- cousins, nephews, uncles, brothers, sisters.

We spoke to brother Sammy today. He says that the family is in good spirits and that they're rallying around the brother's cause, kind of like building a castle -- except for they say this is a hard experience for them and to protect themselves from some of the emotional pain, they're building those castle walls around their hearts.

O'BRIEN: Alphonso Van Marsh in Tripoli. Thank you very much.

There's a report of another hostage taking in Iraq. The Middle East based Al-Jazeera network showed a videotape from a group that says it is part of an organization called the Islamic Army of Iraq. It shows a man identified as a Filipino hostage, but no other identification was offered. The group says it will kill the man unless the Philippines withdraws its troops from Iraq. Currently, there are only about 50 Filipino troops in the U.S.-led multinational force.

Iraq's new leaders today gave themselves far-reaching powers to deal with the insurgency, even as a bloody battle broke out in the streets of the capital. Our Senior International Correspondent, Brent Sadler, reports from Baghdad.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN SR. INTERNATIONAL CORRESPONDENT (voice-over): A gun fight rages in downtown Baghdad on the day Iraq's interim government announces tough new measures to defeat anarchy.

Bursts of machine-gun fire and explosions sent Iraqis running for cover under a hail of bullets. This shoot out involved what Iraqi officials called insurgents and criminal gangs battling the National Guard, turning normally busy streets into a killing zone.

Iraqi security forces backed by U.S. firepower contained the spread of the shoot out. And the Iraqi authorities have now armed themselves with sweeping new powers to crush a worsening insurgency.

MALIK DOHAN AL HASSAN, JUSTICE MINISTER (THROUGH TRANSLATOR): These circumstances right now and the security situation -- the deteriorating security situation right now urges these laws, because the security situation right now threatens all fields of life here. SADLER: And future Iraq's embattled leaders can impose periods of marshal law on areas that threaten national security providing it's sanctioned by the president and the cabinets. Other new emergency powers been modeled on the U.S. Patriot Act imposed after the 9/11 attacks on America. They can also call in multinational troops if Iraq's own security force are overwhelmed. The measures were being announced as terrified Iraqis shut their shops in Haifa street to escape some four hours of fighting.

This district of Central Baghdad is known locally as little Fallujah. A strong hold of hard-lined Sunni Muslims, pro-Saddam Hussein and anti-Iraq's new authorities. Some Iraqis caught in the crossfire say the tough new security law is all words and no action.

We only hear about it says shop owner, Talid Hadad (ph). No one's implementing it. There's no security. The killing and looting hasn't stopped.

Iraq's security forces are scoring some successes, though. Here intercepting and diffusing a car bomb before it could kill and maim. But insurgents sent another violent message in what appeared to be an attempt to undermine confidence in the government's new emergency law, firing rockets at the home of interim Prime Minister Iyad Allawi, missing their mark, but making their point.

Brent Sadler, CNN, Baghdad.

(END VIDEOTAPE)

O'BRIEN: He's been called the godfather of the settlements, but Israel's prime minister is now the target of Jewish extremist.

Back to the front lines, is the Pentagon stretching its reserve forces to the breaking point?

And why is a major drugmaker suddenly slashing prices for millions of Americans?

(COMMERCIAL BREAK)

Nine years after Itzhak Rabin was assassinated by a Jewish extremist there are fears that Israel's current prime minister might be targeted by right wing religious hard liners.

CNN's John Vause reports from Jerusalem.

JOHN VAUSE, CNN CORRESPONDENT (voice-over): On the lookout for assassin, the government here won't discuss it, but security around Prime Minister Ariel Sharon appears to be increased. Israel's police minister says Jewish extremists are planning to kill senior government figures to try to stop the evacuation of settlements in Gaza and the West Bank.

UNIDENTIFIED MALE (through translator): They don't always succeed and they don't always have the means to carry out the attacks, but we have no shortage of lunatics. UNIDENTIFIED MALE: It's quite sad the prime minister who all his life was protecting the security of the Jewish people in Israel now has to protect himself from Jews.

VOSS: A rabbi in Jerusalem (UNINTELLIGIBLE) warned that anyone who gives up any part of Israel could be killed under an old religious law called rodet (ph) which allows the killing of someone in self- defense.

AVIGOOR NEVENZAHL, RABBI OF THE OLD CITY: The view is a rodet ruling should be applied to anyone who wants to hand over as little as a penny of Israel's fortune to foreigners. So the conclusion is do not hand over Israel's land to foreigners.

VAUSE: Other Rabbis say violence can never be used to settle political disputes. But the same (UNINTELLIGIBLE) was issued by some Itzhak Rabin after signing the Oslo Peace Accord with the Palestinians. Two years later he was murdered by Jewish extremists who cited the religious heedings.

(on camera): When asked by his fellow politicians if he's wearing a bulletproof vest, Ariel Sharon just joked saying they don't make them in my size.

John Vause, CNN, Jerusalem.

(END VIDEOTAPE)

O'BRIEN: Happening this hour, new security concerns for the upcoming political conventions have officials acting now. The latest on a closed-door briefing to keep Washington lawmakers up to speed.

Also, hundred of detainees held at Guantanamo Bay for their alleged ties to terrorism. Now their defense attorney is speaking out. Live details coming up.

And answering the call again. Another tour for some reservists may not be what they were looking for.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back.

With the campaign season kicking into high gear, new concerns of terrorism at the major political conventions, details just ahead.

But, first, a quick check on the stories now in the news.

Federal agents now investigating 200 pounds of explosives stolen from a law enforcement facility near San Francisco. The explosives, similar to TNT, disappeared some time between Saturday and yesterday morning.

Carbon monoxide fumes spread through the lobby of a Newark, New Jersey, hotel this morning, forcing a complete evacuation, sending 15 to the hospital, all expected to recover -- the source, a transformer fire.

Lance Armstrong has the lead and the yellow jersey in the Tour de France. The five-time tour winner and his U.S. Postal Service team won today's 40-mile time trial stage. Armstrong currently has the best overall time. A sixth consecutive win would put Armstrong in the record books.

Keeping you informed, CNN, the most trusted name in news.

The political conventions are looming and federal officials are briefing congressional leaders on security plans.

CNN congressional correspondent Ed Henry on Capitol Hill with details -- Ed.

ED HENRY, CNN CORRESPONDENT: Good evening, Miles.

At this hour, the entire House of Representatives has gone behind closed doors for a terrorism update, a threat assessment from Homeland Security Secretary Tom Ridge, also FBI Director Robert Mueller.

As you mentioned, the political conventions are coming up, so lawmakers in both chambers getting updated, getting briefed. Tomorrow, in fact, all 100 senators are going to go into a secure room of the Capitol in order to get an update themselves from George Tenet, the CIA director, and also the FBI director as well.

And the bottom line here is that Senate Majority Leader Bill Frist, I spoke to him earlier today, and he noted there was a White House meeting last night. Senior officials, including Attorney General John Ashcroft, Vice President Cheney, they called up the entire congressional leadership, the top leaders in the House and Senate, in order to get updated.

And what Senator Frist was pointing out is, there's not necessarily new specific information. They just -- federal officials want to make sure that everyone is on the same page. As one federal official told CNN's Kelli Arena, these political conventions will be a tempting target. And Senator Frist also pointed out that federal officials are concerned that perhaps terrorists will see these targets as an opportunity to do what terrorists did in Spain earlier this year and affect our elections, not just this summer, but also maybe in the fall as well.

This White House meeting obviously was very important last night, as well as these congressional updates on Capitol Hill. But the bottom line is that one federal official pointed out there's nothing specific. If there was, they would alert the public as well, so that they know about specific information that would be targeting these conventions, Miles.

O'BRIEN: CNN's Ed Henry on Capitol Hill, thank you very much.

They've already been to the front lines, but they're being called up again. Is the U.S. military squeezing its reserve forces too hard? Lawmakers posed that question to Pentagon brass today on Capitol Hill. Let's go live to our senior Pentagon correspondent, Jamie McIntyre, who has more on that -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Miles, one congressman called it eating your seed corn, saying that the U.S. military was too small and in order to get through today was mortgaging its future.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT (voice-over): The decision by the Army to recall to active duty some 5,600 ready reservists to go to Iraq or Afghanistan, many of whom thought they were done with military service, is clear evidence to some in Congress the U.S. armed forces are stretched too thin.

REP. IKE SKELTON (D), MISSOURI: At what point do we stop pretending that this year will be the last? The demand is so high. I think we're taxing our part-time soldiers in the Guard and Reserve nearly to the breaking point.

REP. JOHN KLINE (R), MINNESOTA: When you have a number that's in the 40 percent-plus range in theater, that is just too high.

MCINTYRE: The Pentagon insists the problem is not size, but how the U.S. military was organized for the Cold War. It insists its transformation plan now under way will solve the problem by making a much higher percentage of the U.S. Army deployable on short notice.

But as for the burden on reservists now, Pentagon officials make no apologies for expecting them fulfill their obligation.

DAVID CHU, UNDERSECRETARY OF DEFENSE: I disagree with the conclusion we're overusing the reserves. Vigorous use of reserves is part of the answer.

MCINTYRE: Despite the grumbling, the Pentagon insists it's not seeing any significant drop-off in either recruiting or reenlistments. And officials emphatically reject persistent rumors circulating on the Internet that a return to the draft may be coming.

CHU: Let me reiterate for the record, the administration does not support resumption of the draft. There is no secret plan on this front. I do not know where these people and e-mails are getting this idea from.

(END VIDEOTAPE)

MCINTYRE: And as for adding 30,000 to 40,000 more troops, as some in Congress are advocating, as well as presidential candidate John Kerry, the Pentagon says it already has 30,000 extra troops in the service under the emergency authority it has now. It's asking Congress not to make that permanent because, it insists, those extra troops will not be needed forever -- Miles.

O'BRIEN: CNN's Jamie McIntyre at the Pentagon, thank you. A secret operation comes to light, the U.S. military working with the Energy Department to move almost two tons of radiological and nuclear material out of Iraq.

CNN's Sean Callebs in Washington with details on all that -- Sean.

SEAN CALLEBS, CNN CORRESPONDENT: Miles, the goal is simple: keep potentially dangerous materials out of the hands of terrorists and insurgents intent on disrupting Iraq's fledgling government.

(BEGIN VIDEOTAPE)

CALLEBS: For years, the Tuwaitha Nuclear Research Center, just outside Baghdad, was the heart of Saddam Hussein's nuclear program. In late June, under a veil of secrecy, it was a jumping-off point for the U.S. military to whisk nearly two tons of nuclear and radioactive material to a secure Energy Department site in the United States.

PAUL LONGSWORTH, NATIONAL NUCLEAR SECURITY ADMINISTRATION: This was an effort to make sure that when we handed over responsibility from the provisional government to the new Iraqi government, that we left the country in as safe and secure a manner as possible.

CALLEBS: The radioactive material included cobalt, which can be used to irradiate food, cesium, which can be used to check the integrity of a deal oil well. But in the wrong hands, U.S. energy officials say they can be ingredients for a so-called dirty bomb, a device that would cause few casualties, but a great deal of chaos and terror by releasing radiation and contaminating an area.

Also in U.S. possession, close to two tons of low enriched uranium, enriched enough to be used at a nuclear power plant with the potential to be further processed into weapons-grade material.

IVAN OELRICH, FEDERATION OF AMERICAN SCIENTISTS: It's not a question of being able to make a bomb or not. It's a question of, if you have some enrichment capability, now you make a bomb in one year, rather than two years.

CALLEBS: Shortly after Saddam Hussein was driven from power, museums, shops and government buildings were looted. So were sites where radioactive and nuclear material was stored.

(END VIDEOTAPE)

CALLEBS: And scientists say, for that reason, we will never know exactly how much radioactive and nuclear material was or still is in Iraq. As for the low enriched uranium seized in Iraq, it will be sold by the government to a U.S. vendor, perhaps a power plant -- Miles.

O'BRIEN: CNN's Sean Callebs in Washington, thank you very much.

The U.S. Supreme Court ruled they have legal rights. Now some detainees out at Guantanamo Bay are set to get some legal help. We'll tell you how. Plus, significant savings. Some uninsured Americans catch a break as a major drug company plans a major discount.

And later, campaigning with the kids. They're just a few feet tall, but these little guys could play a big role in this year's election.

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

(BEGIN VIDEOTAPE)

O'BRIEN (voice-over): An explosion in a Sri Lankan police station killed five people. Police say a suspected suicide bomber killed herself and four police officer. Nine others were wounded. Police say they think the woman was a Tamil Tiger rebel.

Charges were filed in Yemen in connection with the attack on the USS Cole almost four years ago. Six Yemenis were charged in connection with planning the attack that killed 17 U.S. sailors. The suspects are accused of being al Qaeda terrorists.

Four people were hurt in the first running of the bulls in Pamplona. Thousands come each year to run in front of the huge bulls being herded toward a bull ring. The festival dates to the late 16th century.

And that's our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

O'BRIEN: Coming up on WOLF BLITZER REPORTS, we'll take you inside at Gitmo, Guantanamo Bay, where, after a significant Supreme Court ruling, things may be changing.

Also, a big drug company is out to give you a big discount, maybe even free drugs. We'll explain why.

Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: If today is any indication -- and we think it is -- the Kerry-Edwards campaign will have an element of child's play do it, specifically, John Edwards' two young children. Does it help? Is it fair to the kids?

CNN's Brian Todd is on that story in Washington -- hello, Brian.

BRIAN TODD, CNN CORRESPONDENT: Hi, Miles.

Well, the opinions we sampled really do vary on whether it's a good idea to have small kids out front like that. But any way you look at it, the younger members of the Edwards family have had an impact over the past two days.

(BEGIN VIDEOTAPE)

TODD (voice-over): This may not evoke images of Camelot, but to veteran observers, it's every bit as calculated; 4-year-old Jack and 6-year-old Emma Claire Edwards are now part of the campaign.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Emma Claire was pretty excited. John got on the phone to call Elizabeth. Elizabeth gets on the phone and says, mommy, mommy, John Kerry picked daddy. Big deal. And Jack wants to get on the phone. So Jack gets on the phone right away. And Jack says, mommy, mommy, I can swim with my head out of the water.

(LAUGHTER)

KERRY: So Jack's got his priorities wired, ladies and gentlemen.

TODD: Then dad chimed in.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: I just heard my 4-year-old son, Jack, behind me asking why there are so many American flags out here. I have an answer for my son. Because when John Kerry is president of the United States, we are going to restore real American values to this country. It's what this campaign and this election is about.

(CHEERING AND APPLAUSE)

TODD: Putting aside the oddity of saying that to a 4-year-old, political analysts say this is a classic and effective campaign tactic. From the Kennedys to the Clintons and Gores, they say, kids, the younger the better, make for good politics.

STEPHEN HESS, PRESIDENTIAL HISTORIAN: I think, as we become more and more of a celebrity culture, as we expect to learn more and more about the people who we elect president or make movie stars, we are intrigued by their families.

KERRY: Thank you.

TODD: One analyst says the images from this photo-op remind him of the Clinton campaign of 1992, the kids brought out to symbolize change, vigor, a new day.

Observers say children can also promote the image of the candidate as the regular guy, experiencing life like many of us. They can sway casual voters who may be more motivated by personal characteristics than the issues. And Kerry's campaign, they say, desperately needed this to answer criticism of their candidate as called and aloof. But one historian says the appropriateness of all this is another matter.

HESS: I believe that, if the candidate expects the media to live by and to respect the privacy of their small children, then they must not make their children, in a sense, a tool or a part of their campaign.

(END VIDEOTAPE)

TODD: Now, one analyst compares this to the situation when the Clintons first came into office and set strict ground rules for inquiries about their daughter, Chelsea. Those rules eased up a bit as Chelsea got older. But this analyst says he's curious to see what kind of ground rules are set for John Edwards' two young children -- Miles.

O'BRIEN: CNN's Brian Todd in Washington, thank you very much.

Lawyers are poised to begin meeting with detainees in U.S. custody at the Guantanamo Naval Base in Cuba following a recent Supreme Court decision.

CNN national correspondent Bob Franken is at the base. He joins us live with a firsthand look inside Guantanamo -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, Miles, as a matter of fact, the military lawyer for one of the detainees -- he's Ibrahim Ahmed Qosi -- who is a Sudanese man who was taken prisoner in Pakistan and charged with conspiracy to commit violence against the United States, Lieutenant Colonel Sharon Shaffer met with him today to bring down the news of the Supreme Court decision and make plans, as she said, for legal action.

At the same time, however, the Pentagon was announcing it had come up with its own procedures which will involve hearings for detainees to determine their status that will not include attorneys. They will include military representatives who are not lawyers. That is something that you can bet is going to cause its own litigation.

We have been here at the invitation of the Pentagon for an exclusive look inside the detention center here and a very limited view at the lives of the detainees, Pentagon officials who feel that there have been unfair suspicions in their mind that there's been abuse of treatment of the prisoners.

What we've seen, of course, did not include anything that would indicate abusive treatment. It included a look at an interrogation, an interrogation room and very limited access to some of the detainees, obviously, no conversation with them.

As for the access of the lawyer Sharon Shaffer, her complaint is that the military is not cooperating and giving her dismal resources to conduct the legal battles she's supposed to fight.

(BEGIN VIDEO CLIP)

LT. COL. SHARON SHAFFER, U.S. AIR FORCE: Mission impossible. How can it even be accomplished when we're not having -- when we don't have the basic resources we need to do our jobs?

(END VIDEO CLIP) FRANKEN: She's saying this is a mission impossible that's gotten worse now because the Pentagon has added nine more detainees, bringing up to 15 those who are segregated from the other prisoners, staying at a section of the prison called Camp Echo, where they have a room to talk to their lawyers, a population that could possibly grow -- Miles.

O'BRIEN: CNN's Bob Franken, exclusive look at Guantanamo, thank you very much.

The political conventions are looming and federal officials are briefing congressional leaders on security plans. We'll tell you more about that a little bit later on the program. Stay with us for more of WOLF BLITZER REPORTS.

(COMMERCIAL BREAK)

O'BRIEN: Now a captivating story out of Baghdad that many in journalism see leading down a frightening and risky slippery slope, a reporter getting very rare access to some dangerous events from even more dangerous sources.

Once again, our senior international correspondent Brent Sadler.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): In a Baghdad hotel room, this Western journalist views horrifying video sent to him by an Islamic insurgent group in Iraq that carried out a recent terror attack.

MICHAEL WARE, TIME MAGAZINE: Oh, my God, I've not seen this. They've been filming this stuff from the beginning.

SADLER: Michael Ware, an Australian reporter, working for Time magazine, is walking a professional knife edge, an unlikely go-between for anti-Western militants.

He's viewing what purports to be the gruesome attack that killed four American security contractors in Fallujah some three months ago, when the bodies were dragged through the streets and hung from a bridge.

WARE: This video is straight from the mujahedeen. This is the Blackwater killings. They talk about planning it.

This is the seventh tape I've received in the last three or four days.

SADLER: Including the release of this tape. It illustrates how insurgent groups have developed the technique of using video to record attacks.

A group called Unity and Jihad, led by Abu Musab al-Zarqawi, the most wanted terror suspect in Iraq, claims to have made this presentation. WARE: They have reached a level of organization and sophistication that we have not seen previously. They have become incredibly savvy.

SADLER: What's claimed to be a Zarqawi camera captures this disturbing sequence of a suicide bomber bidding farewell to fighters and boarding a tanker, wired to 3. 5 tons of explosives, for start-to- finish coverage of the attack.

WARE: Something in the last few months has now got them filming the most intimate, graphic attacks, like, up close and personal. They're trying to tell the Western public, this is what your boys are dying for. This is what they're up against. Terrorism is about instilling terror. That's a part of what this is doing.

SADLER: Ware says he holds secret meetings in dangerous places, with wanted men.

WARE: Whether you think I'm fortunate or whether you think I'm doomed, the point is, I've been given a window into something that no one else has.

SADLER: A window, he says, that opened after 12 months of contact, with access to unexplored territory, straddling a moral and ethical mine field.

WARE: This kind of thing is never easy or comfortable. It doesn't sit well with you as a human being, on many levels. But that's what covering war is like.

SADLER: Ware denies he's being used by terror groups, and says he filters what he learns, regardless of the source.

WARE: This is a war. It has two sides. I feel an obligation to discover as much as I can about both sides. I feel that's what we're here to do.

SADLER (on-camera): Do you worry that you're getting too close to this, that one day they might shoot the messenger.

WARE: I worry about that every waking moment and every sleeping dream, and it terrifies me. It terrifies me on a personal level, and it terrifies me in terms of what we're up against.

SADLER (voice-over): And the danger involved.

Brent Sadler, CNN, Baghdad.

(END VIDEOTAPE)

O'BRIEN: Uninsured Americans are getting a break from a perhaps unlikely source. Pharmaceutical giant Pfizer is unveiling a new plan whereby about 43 million uninsured Americans, regardless of age or income, will get their medications free or at significant savings.

Pfizer sells medicine that treats hypertension, cardiovascular disease, depression and diabetes. Analysts believe Pfizer is making the move to stem the tide of drug purchasers who have been seeking cheaper prescriptions across the border in Canada, where those prescription are in fact much cheaper. Now, the enrollment plan begins next month. There's all kind of criteria which you'll have to provide to Pfizer in order to participate in it, including some income restrictions.

Now, here's how you're weighing in on our Web question of the day. Remember what we've been asking you, does John Edwards help John Kerry's chances for victory in November? Seventy-one percent of you say yes; 29 percent of you say no. And, as we always remind you, this is not a scientific poll. You can continue to vote on our Web site at CNN.com/Wolf.

Let's hear from you and read some of your e-mail today.

Janet writes this: "The decision to pick John Kerry over all of the other experienced and committed Democratic leaders available says a lot about John Kerry's character. Does he really feel that a tanned trial lawyer with good hair is the next best person for this country's future?"

Adele offers this: "In light of the recent world events, it's better for John Edwards to have little or no foreign policy experience. Bush-Cheney supposedly have plenty and look at the mess they got us into. We need someone like Edwards, who is young, bright, intelligent and talented, to lead us into the 21st century."

Dennis Rodman is back with the Bulls, but the former pro basketball player is not with Chicago's NBA franchise. The Worm, as Rodman is called, is in Pamplona, Spain. We told you about the running of the bulls earlier. It turns out Rodman was one of those on the run today in the Spanish festival. We don't know if he was cut or bruised. We'll try to follow that up for you tomorrow.

A reminder, you can always catch WOLF BLITZER REPORTS weekdays at this time, 5:00 Eastern. I'll see you again tomorrow -- Wolf off again. Until then, thanks for joining us.

"LOU DOBBS TONIGHT" starts right now.

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Aired July 7, 2004 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: Happening now. Terror fears, and in addition to that we have John Kerry live at Dayton, Ohio. We'll keep you up to date as the campaign heats up.
Newly-minted Democratic pair there on the campaign trail.

Also, terror fears. Capitol Hill meets behind closed doors over the political conventions and the election. We'll tell you about that.

The grand jury has spoken. Has the law caught up with former Enron chairman Ken Lay.

And phoning home. Where is Marine Corporal Wassef Hassoun? Is he safe from danger? Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

ANNOUNCER: Running mates off and running.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: We come to this with a deep, deep belief that America can do better.

ANNOUNCER: President Bush says he'll do better in Edwards' backyard.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We did well in the South last time, we'll do well in the South this time.

ANNOUNCER: Who has the edge? We'll ask Senators Barbara Boxer and Kay Bailey Hutchison.

Baghdad battle. Iraqi forces call for backup in the heart of the capital as the new government gets ready for a crackdown.

Secret airlift. Keeping potential dirty bomb ingredients out of the hands of Iraq's insurgents.

Stalking Sharon. Are Jewish extremists targeting Israel's prime minister?

This is WOLF BLITZER REPORTS for Wednesday, July 7, 2004.

(END VIDEOTAPE) O'BRIEN: Hello, I'm Miles O'Brien at CNN center in Atlanta in for Wolf Blitzer today. We're watching two developing stories at this hour. Looking at live pictures now. Dayton, Ohio, as the newly- minted Democratic ticket spends its campaign on the trail. We'll have details on that.

But we begin with the Enron case. Former Enron Chairman and CEO, the founder of the company Ken Lay has been indicted and the charges, we're told, will be unsealed tomorrow. CNN's Jen Rogers live in Houston with details on this developing story -- Jen.

JEN ROGERS, CNN CORRESPONDENT: That's right, Miles. Right now this indictment does remain under seal, but we have heard from sources that a grand jury did indict Ken Lay. He is, of course, the former chairman and CEO of Enron. He's really the man that remade that company from a sleepy pipeline company into what many people considered a new economy juggernaut.

Right now the Department of Justice is not commenting. I have also called Michael Ramsey who is Ken Lay's attorney. He has not returned calls yet. In the past so forth he has said that his client is not guilty and that he did not commit any crimes.

Of course, what we will expect if this is unsealed. Again tomorrow which is the expectation is that Ken Lay would make an initial appearance here at Houston Federal Court. He would be making that appearance again, we are expecting, tomorrow morning and at that time we will learn more about what these exact charges are. Because of course his indictment right now remains under seal -- Miles.

O'BRIEN: CNN's Jen Rodgers in Houston. Thanks very much.

Live pictures from Dayton, Ohio, where Democratic presidential candidate John Kerry and his running mate, John Edwards are making an appearance this afternoon, one day after Kerry tapped Edwards for the vice presidential race. The Democratic ticket went on the road today. But President Bush did some traveling of his own with a trip to Edwards' home state. Let's go to the trail.

(BEGIN VIDEOTAPE)

O'BRIEN (voice-over): Launching a new political partnership, the two Democrats seeking to recapture the White House made their first public appearance today flanked by their families.

KERRY: And today we're embarking on a new journey together, not for us but for our country.

O'BRIEN: A picturesque kick-start to a four-day six-state tour that takes John Kerry and John Edwards to battleground states Ohio and Florida today, West Virginia and New Mexico later and finishing up in North Carolina Saturday. The latest polls showing tight races in Florida, a dead heat. In Ohio, Kerry leads by only six points. Their first stop in the Buckeye State, Cleveland, meeting briefly with area vets. The new teammates rallied downtown. The new number two fired up after months of rest. SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: The American people are going to reject the tired old hateful, negative politics of the past. They're going to embrace the politics of hope. The politics of what's possible.

O'BRIEN: So far the new pairing is meeting with approval. In a CNN/"USA Today"/Gallup poll, 64 percent call Edwards an excellent or pretty good running mate. That's higher than both Al Gore and George Bush's choices in 2000.

AD ANNOUNCER: A combat veteran who earned three purple hearts.

O'BRIEN: Not taking anything for granted, the campaign unleashed seven new TV ads, one of which spotlights Edwards.

AD ANNOUNCER: Who all his life has stood up for ordinary people against powerful interests.

O'BRIEN: But Kerry and Edwards aren't alone on the road or in the air today. Coincidental or not, President Bush touched down in Edwards country this morning, North Carolina, where for now polls have the president on top. Meeting with judicial nominees in Raleigh, Bush pointed out Edwards is among the senators blocking some of his federal appointments and when asked he offered his opinion of the state's junior senator.

UNIDENTIFIED MALE: He's being described today as "charming," "engaging," "a nimble campaigner," "a populist" and even "sexy." How does he stack up against Dick Cheney?

BUSH: Dick Cheney can be president. Next?

O'BRIEN: After leaving the Tarheel State the president flew to suburban Detroit where he continues his push for money and votes.

Money and votes are what it is all about, of course. Live pictures once again as John Kerry continues stumping in Dayton, Ohio, it's clear Kerry had all that money and all those votes in mind when he selected the second most popular Democrat of this political season as his running mate, but is he up to the job and more importantly the job that he could be a heartbeat away from?

Let's talk VP politics with two of Kerry's Senate colleagues, California Democrat Barbara Boxer and Republican Kay Bailey Hutchison of Texas. Good to have you both with us, ladies.

Senator Hutchison, let's begin with you.

The president implied today that Senator Edwards was not up to the job of the president. You've worked with him in the Senate. Do you agree?

SEN. KAY BAILEY HUTCHINSON (R), TEXAS: I definitely agree. The comparison between Vice President Cheney and Senator Edwards, I think is a great endorsement for the Bush-Cheney ticket. Vice President Cheney has been in Congress. He's been in the cabinet, he's been in the White House and he's been in business. Thank Heavens he's been in the real world. He knows what makes an economy go. That's why I think his leadership is so important and I think the comparison with a young person who's been in the Senate for one term is just not a very good one.

O'BRIEN: Senator Hutchinson, after one term in the Senate would you have been ready to be president, you think?

HUTCHINSON: No, I certainly don't. I'm not sure I would be now and I've been here 11 years. I think that it does take a lot of time to understand how Congress works and how the relationship between Congress and the cabinet and the president function and I think it is important that we have a vice president who has served in so many roles in government and in business. He's been a CEO. He understands what it means to have a strong economy and create jobs in our country and I think that is perhaps even his best attribute.

O'BRIEN: Senator Boxer. Let's talk about that experience issue for just a moment. Lest we forget that President Bush when he came in his only experience was as governor of Texas. Would you equate that with one term in the Senate. Do you think Senator Edwards would be up to the task of being president if called upon.

SEN. BARBARA BOXER (D), CALIFORNIA: That's a very good question and I think it's kind of humorous almost to be attacking Edwards for his lack of experience. He has far more experience in federal issues and national issues and international issues than George Bush himself had.

So, clearly, we're looking at the whole person and if you look at Dick Cheney, he spent the vast majority of his life in government, government, government. I served with him in the House of Representatives and not all wisdom resides in government and I think that John Edwards' story, his life story, his struggling, he's the son of a mill worker as we've heard and we'll hear it more gives him that real world experience and he carries in his heart, I think, a true feeling for ordinary people and I think the balance of this ticket is very exiting.

O'BRIEN: Let's bring in a former colleague of yours. Senator Alfonse D'Amato on tape. He had some things today to say about the Republican ticket specifically Vice President Dick Cheney. Let's listen.

(BEGIN VIDEO CLIP)

ALFONSE D'AMATO (R), FORMER U.S. SENATOR: I will shock the Republicans and probably get them angry, but I think we could do better and I have a great deal of respect for Dick Cheney. I think he's bright. Absolutely brilliant. Having said that, I think that politically there are two other people, if we're talking about who could bring help, who could bring substantial help to the ticket.

(END VIDEO CLIP)

O'BRIEN: Now Senator Hutchinson, those two people that he mentioned as he went on were the Secretary of State Colin Powell and Senator John McCain, your colleague in the Senate and somebody who's already been actively involved in this new stage of the campaign, really on both sides. I guess the question is are Republicans, is that something that's being talked about in the halls there, about the possibility that it is time to get a new number two on the Republican side?

HUTCHINSON: Absolutely not. Everyone is very pleased that we have the secretary of state where he is. He's doing a fine job and certainly Senator McCain is a leader in the Senate. He's getting ready to be chairman of the armed services committee in a couple of years.

So I think that they are in very important positions. They're supporting the president and I think Vice President Cheney has the full support of Congress as well as the president. He is someone in whom the president trusts. He gives good advice to the president. He's experienced in government and business, I think, make him uniquely qualified. And people have great confidence that he is there as a partner with our president.

I don't think there's ever been a team that worked together so well and complemented each other so much as the president and the vice president. And when it ain't broke, don't fix it.

O'BRIEN: All right. There is a statement out from the Bush campaign. Let's -- this is in response to Alfonse D'Amato's statements, which more precisely were uttered yesterday. "Under Dick Cheney, this has been the most substantive vice presidency in history." That coming from a Bush campaign spokesman.

Senator Boxer, how would you respond to that? Should the president change his vice president -- vice presidential running mate or, you as a Democrat, would you prefer they keep it as is?

BOXER: Well, frankly, it's up to the Republicans to decide what they want to do and listening to Kay here and she's a real leader in the Republican caucus, they seem to be very satisfied.

It's fine with me, but frankly, what I'm talking about is a new team for America, and I think that our team is just so well balanced in so many ways. You know, they talk about John Edwards and saying he's not going to help Kerry. He is going to help. He won in a state where Jesse Helms was the senator. So, he has that crossover appeal in terms of region, in terms of Democrat, Republican, Independent.

You know, there's a very small number of people who are undecided, and they're looking for, I think, new leadership. And I think our team will offer them that.

O'BRIEN: Senators Barbara Boxer and Kay Bailey Huchison -- California and Texas, respectively -- thank you very much for spending some time with us today. We appreciate it.

HUTCHISON: Thank you.

BOXER: Thank you so much.

O'BRIEN: The national political conventions this summer could be a tempting target for terrorists. You've heard that before. What's being done to prevent an attack, though? We'll take a look as "WOLF BLITZER REPORTS" continues.

Here's your turn to weigh in on this important story. Our Web question of the day is this: Does John Edwards help John Kerry's chances for victory in November? You can vote right now at CNN.COM/WOLF. We'll have the results later in the broadcast.

The bizarre journey of a missing U.S. Marine takes another turn. The latest developments in the search for Corporal Wassef Hassoun.

Fears for the life of Israel's prime minister: why security is apparently being stepped up.

Plus, inside Guantanamo: Lawyers poised to meet with detainees in the wake of a landmark Supreme Court ruling. Bob Franken is there.

(COMMERCIAL BREAK)

O'BRIEN: Turning now to the mysterious odyssey of a U.S. Marine. Corporal Wassef Hassoun vanished from his post in Iraq last month. He was later shown on videotape, an apparent hostage. And at one point, he was reported killed. But the word is he is out of Iraq and now has phoned home.

Let's go live to CNN's Miguel Marquez outside the family home in West Jordan, Utah. Miguel?

MIGUEL MARQUEZ, CNN CORRESPONDENT: No, Miles. We've had the incrementally good news all day, and this may be the biggest increment yet: A senior State Department official telling CNN that they believe that Corporal Hassoun, Wassef Hassoun, is in fact alive and in Lebanon. They believe he is safe, and they are trying to locate him.

Another U.S. official telling CNN that they have talked to the family and that they are trying to find Hassoun as soon possible. Now, a short time ago, as all that's going on and the search for Hassoun overseas is occurring, two FBI agents came to his house here in West Jordan, Utah, looking to talk to the family, seeking information useful to their investigation. This according to an FBI official here in Salt Lake City.

They say that they are treating this case as an American citizen captured overseas, and they were hoping to glean whatever information about that phone call from the family today in order to help them find Marine Corporal Wassef Hassoun -- Miles.

O'BRIEN: CNN's Miguel Marquez, thank you very much.

Is Corporal Hassoun now in Lebanon? His relatives there are waiting for further word. CNN's Alphonso Van Marsh joins us now from the northern city of Tripoli -- Alfonso. ALPHONSO VAN MARSH, CNN CORRESPONDENT: That's right, Miles. That is the question of the evening: Is Hassoun in Lebanon? Family members they say know, they certainly aren't talking, even though Hassoun and the story of the Marine corporal has been in the local papers here. The family members very reluctant to talk to the press and definitely not talking on camera.

But we did spend some time today -- and to understand the family's sentiment, you need to understand the neighborhood. The neighborhood where the Hassoun family lives is a series of high-rise apartments and about 60% of the people in this neighborhood are all Hassouns -- cousins, nephews, uncles, brothers, sisters.

We spoke to brother Sammy today. He says that the family is in good spirits and that they're rallying around the brother's cause, kind of like building a castle -- except for they say this is a hard experience for them and to protect themselves from some of the emotional pain, they're building those castle walls around their hearts.

O'BRIEN: Alphonso Van Marsh in Tripoli. Thank you very much.

There's a report of another hostage taking in Iraq. The Middle East based Al-Jazeera network showed a videotape from a group that says it is part of an organization called the Islamic Army of Iraq. It shows a man identified as a Filipino hostage, but no other identification was offered. The group says it will kill the man unless the Philippines withdraws its troops from Iraq. Currently, there are only about 50 Filipino troops in the U.S.-led multinational force.

Iraq's new leaders today gave themselves far-reaching powers to deal with the insurgency, even as a bloody battle broke out in the streets of the capital. Our Senior International Correspondent, Brent Sadler, reports from Baghdad.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN SR. INTERNATIONAL CORRESPONDENT (voice-over): A gun fight rages in downtown Baghdad on the day Iraq's interim government announces tough new measures to defeat anarchy.

Bursts of machine-gun fire and explosions sent Iraqis running for cover under a hail of bullets. This shoot out involved what Iraqi officials called insurgents and criminal gangs battling the National Guard, turning normally busy streets into a killing zone.

Iraqi security forces backed by U.S. firepower contained the spread of the shoot out. And the Iraqi authorities have now armed themselves with sweeping new powers to crush a worsening insurgency.

MALIK DOHAN AL HASSAN, JUSTICE MINISTER (THROUGH TRANSLATOR): These circumstances right now and the security situation -- the deteriorating security situation right now urges these laws, because the security situation right now threatens all fields of life here. SADLER: And future Iraq's embattled leaders can impose periods of marshal law on areas that threaten national security providing it's sanctioned by the president and the cabinets. Other new emergency powers been modeled on the U.S. Patriot Act imposed after the 9/11 attacks on America. They can also call in multinational troops if Iraq's own security force are overwhelmed. The measures were being announced as terrified Iraqis shut their shops in Haifa street to escape some four hours of fighting.

This district of Central Baghdad is known locally as little Fallujah. A strong hold of hard-lined Sunni Muslims, pro-Saddam Hussein and anti-Iraq's new authorities. Some Iraqis caught in the crossfire say the tough new security law is all words and no action.

We only hear about it says shop owner, Talid Hadad (ph). No one's implementing it. There's no security. The killing and looting hasn't stopped.

Iraq's security forces are scoring some successes, though. Here intercepting and diffusing a car bomb before it could kill and maim. But insurgents sent another violent message in what appeared to be an attempt to undermine confidence in the government's new emergency law, firing rockets at the home of interim Prime Minister Iyad Allawi, missing their mark, but making their point.

Brent Sadler, CNN, Baghdad.

(END VIDEOTAPE)

O'BRIEN: He's been called the godfather of the settlements, but Israel's prime minister is now the target of Jewish extremist.

Back to the front lines, is the Pentagon stretching its reserve forces to the breaking point?

And why is a major drugmaker suddenly slashing prices for millions of Americans?

(COMMERCIAL BREAK)

Nine years after Itzhak Rabin was assassinated by a Jewish extremist there are fears that Israel's current prime minister might be targeted by right wing religious hard liners.

CNN's John Vause reports from Jerusalem.

JOHN VAUSE, CNN CORRESPONDENT (voice-over): On the lookout for assassin, the government here won't discuss it, but security around Prime Minister Ariel Sharon appears to be increased. Israel's police minister says Jewish extremists are planning to kill senior government figures to try to stop the evacuation of settlements in Gaza and the West Bank.

UNIDENTIFIED MALE (through translator): They don't always succeed and they don't always have the means to carry out the attacks, but we have no shortage of lunatics. UNIDENTIFIED MALE: It's quite sad the prime minister who all his life was protecting the security of the Jewish people in Israel now has to protect himself from Jews.

VOSS: A rabbi in Jerusalem (UNINTELLIGIBLE) warned that anyone who gives up any part of Israel could be killed under an old religious law called rodet (ph) which allows the killing of someone in self- defense.

AVIGOOR NEVENZAHL, RABBI OF THE OLD CITY: The view is a rodet ruling should be applied to anyone who wants to hand over as little as a penny of Israel's fortune to foreigners. So the conclusion is do not hand over Israel's land to foreigners.

VAUSE: Other Rabbis say violence can never be used to settle political disputes. But the same (UNINTELLIGIBLE) was issued by some Itzhak Rabin after signing the Oslo Peace Accord with the Palestinians. Two years later he was murdered by Jewish extremists who cited the religious heedings.

(on camera): When asked by his fellow politicians if he's wearing a bulletproof vest, Ariel Sharon just joked saying they don't make them in my size.

John Vause, CNN, Jerusalem.

(END VIDEOTAPE)

O'BRIEN: Happening this hour, new security concerns for the upcoming political conventions have officials acting now. The latest on a closed-door briefing to keep Washington lawmakers up to speed.

Also, hundred of detainees held at Guantanamo Bay for their alleged ties to terrorism. Now their defense attorney is speaking out. Live details coming up.

And answering the call again. Another tour for some reservists may not be what they were looking for.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back.

With the campaign season kicking into high gear, new concerns of terrorism at the major political conventions, details just ahead.

But, first, a quick check on the stories now in the news.

Federal agents now investigating 200 pounds of explosives stolen from a law enforcement facility near San Francisco. The explosives, similar to TNT, disappeared some time between Saturday and yesterday morning.

Carbon monoxide fumes spread through the lobby of a Newark, New Jersey, hotel this morning, forcing a complete evacuation, sending 15 to the hospital, all expected to recover -- the source, a transformer fire.

Lance Armstrong has the lead and the yellow jersey in the Tour de France. The five-time tour winner and his U.S. Postal Service team won today's 40-mile time trial stage. Armstrong currently has the best overall time. A sixth consecutive win would put Armstrong in the record books.

Keeping you informed, CNN, the most trusted name in news.

The political conventions are looming and federal officials are briefing congressional leaders on security plans.

CNN congressional correspondent Ed Henry on Capitol Hill with details -- Ed.

ED HENRY, CNN CORRESPONDENT: Good evening, Miles.

At this hour, the entire House of Representatives has gone behind closed doors for a terrorism update, a threat assessment from Homeland Security Secretary Tom Ridge, also FBI Director Robert Mueller.

As you mentioned, the political conventions are coming up, so lawmakers in both chambers getting updated, getting briefed. Tomorrow, in fact, all 100 senators are going to go into a secure room of the Capitol in order to get an update themselves from George Tenet, the CIA director, and also the FBI director as well.

And the bottom line here is that Senate Majority Leader Bill Frist, I spoke to him earlier today, and he noted there was a White House meeting last night. Senior officials, including Attorney General John Ashcroft, Vice President Cheney, they called up the entire congressional leadership, the top leaders in the House and Senate, in order to get updated.

And what Senator Frist was pointing out is, there's not necessarily new specific information. They just -- federal officials want to make sure that everyone is on the same page. As one federal official told CNN's Kelli Arena, these political conventions will be a tempting target. And Senator Frist also pointed out that federal officials are concerned that perhaps terrorists will see these targets as an opportunity to do what terrorists did in Spain earlier this year and affect our elections, not just this summer, but also maybe in the fall as well.

This White House meeting obviously was very important last night, as well as these congressional updates on Capitol Hill. But the bottom line is that one federal official pointed out there's nothing specific. If there was, they would alert the public as well, so that they know about specific information that would be targeting these conventions, Miles.

O'BRIEN: CNN's Ed Henry on Capitol Hill, thank you very much.

They've already been to the front lines, but they're being called up again. Is the U.S. military squeezing its reserve forces too hard? Lawmakers posed that question to Pentagon brass today on Capitol Hill. Let's go live to our senior Pentagon correspondent, Jamie McIntyre, who has more on that -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Miles, one congressman called it eating your seed corn, saying that the U.S. military was too small and in order to get through today was mortgaging its future.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT (voice-over): The decision by the Army to recall to active duty some 5,600 ready reservists to go to Iraq or Afghanistan, many of whom thought they were done with military service, is clear evidence to some in Congress the U.S. armed forces are stretched too thin.

REP. IKE SKELTON (D), MISSOURI: At what point do we stop pretending that this year will be the last? The demand is so high. I think we're taxing our part-time soldiers in the Guard and Reserve nearly to the breaking point.

REP. JOHN KLINE (R), MINNESOTA: When you have a number that's in the 40 percent-plus range in theater, that is just too high.

MCINTYRE: The Pentagon insists the problem is not size, but how the U.S. military was organized for the Cold War. It insists its transformation plan now under way will solve the problem by making a much higher percentage of the U.S. Army deployable on short notice.

But as for the burden on reservists now, Pentagon officials make no apologies for expecting them fulfill their obligation.

DAVID CHU, UNDERSECRETARY OF DEFENSE: I disagree with the conclusion we're overusing the reserves. Vigorous use of reserves is part of the answer.

MCINTYRE: Despite the grumbling, the Pentagon insists it's not seeing any significant drop-off in either recruiting or reenlistments. And officials emphatically reject persistent rumors circulating on the Internet that a return to the draft may be coming.

CHU: Let me reiterate for the record, the administration does not support resumption of the draft. There is no secret plan on this front. I do not know where these people and e-mails are getting this idea from.

(END VIDEOTAPE)

MCINTYRE: And as for adding 30,000 to 40,000 more troops, as some in Congress are advocating, as well as presidential candidate John Kerry, the Pentagon says it already has 30,000 extra troops in the service under the emergency authority it has now. It's asking Congress not to make that permanent because, it insists, those extra troops will not be needed forever -- Miles.

O'BRIEN: CNN's Jamie McIntyre at the Pentagon, thank you. A secret operation comes to light, the U.S. military working with the Energy Department to move almost two tons of radiological and nuclear material out of Iraq.

CNN's Sean Callebs in Washington with details on all that -- Sean.

SEAN CALLEBS, CNN CORRESPONDENT: Miles, the goal is simple: keep potentially dangerous materials out of the hands of terrorists and insurgents intent on disrupting Iraq's fledgling government.

(BEGIN VIDEOTAPE)

CALLEBS: For years, the Tuwaitha Nuclear Research Center, just outside Baghdad, was the heart of Saddam Hussein's nuclear program. In late June, under a veil of secrecy, it was a jumping-off point for the U.S. military to whisk nearly two tons of nuclear and radioactive material to a secure Energy Department site in the United States.

PAUL LONGSWORTH, NATIONAL NUCLEAR SECURITY ADMINISTRATION: This was an effort to make sure that when we handed over responsibility from the provisional government to the new Iraqi government, that we left the country in as safe and secure a manner as possible.

CALLEBS: The radioactive material included cobalt, which can be used to irradiate food, cesium, which can be used to check the integrity of a deal oil well. But in the wrong hands, U.S. energy officials say they can be ingredients for a so-called dirty bomb, a device that would cause few casualties, but a great deal of chaos and terror by releasing radiation and contaminating an area.

Also in U.S. possession, close to two tons of low enriched uranium, enriched enough to be used at a nuclear power plant with the potential to be further processed into weapons-grade material.

IVAN OELRICH, FEDERATION OF AMERICAN SCIENTISTS: It's not a question of being able to make a bomb or not. It's a question of, if you have some enrichment capability, now you make a bomb in one year, rather than two years.

CALLEBS: Shortly after Saddam Hussein was driven from power, museums, shops and government buildings were looted. So were sites where radioactive and nuclear material was stored.

(END VIDEOTAPE)

CALLEBS: And scientists say, for that reason, we will never know exactly how much radioactive and nuclear material was or still is in Iraq. As for the low enriched uranium seized in Iraq, it will be sold by the government to a U.S. vendor, perhaps a power plant -- Miles.

O'BRIEN: CNN's Sean Callebs in Washington, thank you very much.

The U.S. Supreme Court ruled they have legal rights. Now some detainees out at Guantanamo Bay are set to get some legal help. We'll tell you how. Plus, significant savings. Some uninsured Americans catch a break as a major drug company plans a major discount.

And later, campaigning with the kids. They're just a few feet tall, but these little guys could play a big role in this year's election.

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

(BEGIN VIDEOTAPE)

O'BRIEN (voice-over): An explosion in a Sri Lankan police station killed five people. Police say a suspected suicide bomber killed herself and four police officer. Nine others were wounded. Police say they think the woman was a Tamil Tiger rebel.

Charges were filed in Yemen in connection with the attack on the USS Cole almost four years ago. Six Yemenis were charged in connection with planning the attack that killed 17 U.S. sailors. The suspects are accused of being al Qaeda terrorists.

Four people were hurt in the first running of the bulls in Pamplona. Thousands come each year to run in front of the huge bulls being herded toward a bull ring. The festival dates to the late 16th century.

And that's our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

O'BRIEN: Coming up on WOLF BLITZER REPORTS, we'll take you inside at Gitmo, Guantanamo Bay, where, after a significant Supreme Court ruling, things may be changing.

Also, a big drug company is out to give you a big discount, maybe even free drugs. We'll explain why.

Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: If today is any indication -- and we think it is -- the Kerry-Edwards campaign will have an element of child's play do it, specifically, John Edwards' two young children. Does it help? Is it fair to the kids?

CNN's Brian Todd is on that story in Washington -- hello, Brian.

BRIAN TODD, CNN CORRESPONDENT: Hi, Miles.

Well, the opinions we sampled really do vary on whether it's a good idea to have small kids out front like that. But any way you look at it, the younger members of the Edwards family have had an impact over the past two days.

(BEGIN VIDEOTAPE)

TODD (voice-over): This may not evoke images of Camelot, but to veteran observers, it's every bit as calculated; 4-year-old Jack and 6-year-old Emma Claire Edwards are now part of the campaign.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Emma Claire was pretty excited. John got on the phone to call Elizabeth. Elizabeth gets on the phone and says, mommy, mommy, John Kerry picked daddy. Big deal. And Jack wants to get on the phone. So Jack gets on the phone right away. And Jack says, mommy, mommy, I can swim with my head out of the water.

(LAUGHTER)

KERRY: So Jack's got his priorities wired, ladies and gentlemen.

TODD: Then dad chimed in.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: I just heard my 4-year-old son, Jack, behind me asking why there are so many American flags out here. I have an answer for my son. Because when John Kerry is president of the United States, we are going to restore real American values to this country. It's what this campaign and this election is about.

(CHEERING AND APPLAUSE)

TODD: Putting aside the oddity of saying that to a 4-year-old, political analysts say this is a classic and effective campaign tactic. From the Kennedys to the Clintons and Gores, they say, kids, the younger the better, make for good politics.

STEPHEN HESS, PRESIDENTIAL HISTORIAN: I think, as we become more and more of a celebrity culture, as we expect to learn more and more about the people who we elect president or make movie stars, we are intrigued by their families.

KERRY: Thank you.

TODD: One analyst says the images from this photo-op remind him of the Clinton campaign of 1992, the kids brought out to symbolize change, vigor, a new day.

Observers say children can also promote the image of the candidate as the regular guy, experiencing life like many of us. They can sway casual voters who may be more motivated by personal characteristics than the issues. And Kerry's campaign, they say, desperately needed this to answer criticism of their candidate as called and aloof. But one historian says the appropriateness of all this is another matter.

HESS: I believe that, if the candidate expects the media to live by and to respect the privacy of their small children, then they must not make their children, in a sense, a tool or a part of their campaign.

(END VIDEOTAPE)

TODD: Now, one analyst compares this to the situation when the Clintons first came into office and set strict ground rules for inquiries about their daughter, Chelsea. Those rules eased up a bit as Chelsea got older. But this analyst says he's curious to see what kind of ground rules are set for John Edwards' two young children -- Miles.

O'BRIEN: CNN's Brian Todd in Washington, thank you very much.

Lawyers are poised to begin meeting with detainees in U.S. custody at the Guantanamo Naval Base in Cuba following a recent Supreme Court decision.

CNN national correspondent Bob Franken is at the base. He joins us live with a firsthand look inside Guantanamo -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, Miles, as a matter of fact, the military lawyer for one of the detainees -- he's Ibrahim Ahmed Qosi -- who is a Sudanese man who was taken prisoner in Pakistan and charged with conspiracy to commit violence against the United States, Lieutenant Colonel Sharon Shaffer met with him today to bring down the news of the Supreme Court decision and make plans, as she said, for legal action.

At the same time, however, the Pentagon was announcing it had come up with its own procedures which will involve hearings for detainees to determine their status that will not include attorneys. They will include military representatives who are not lawyers. That is something that you can bet is going to cause its own litigation.

We have been here at the invitation of the Pentagon for an exclusive look inside the detention center here and a very limited view at the lives of the detainees, Pentagon officials who feel that there have been unfair suspicions in their mind that there's been abuse of treatment of the prisoners.

What we've seen, of course, did not include anything that would indicate abusive treatment. It included a look at an interrogation, an interrogation room and very limited access to some of the detainees, obviously, no conversation with them.

As for the access of the lawyer Sharon Shaffer, her complaint is that the military is not cooperating and giving her dismal resources to conduct the legal battles she's supposed to fight.

(BEGIN VIDEO CLIP)

LT. COL. SHARON SHAFFER, U.S. AIR FORCE: Mission impossible. How can it even be accomplished when we're not having -- when we don't have the basic resources we need to do our jobs?

(END VIDEO CLIP) FRANKEN: She's saying this is a mission impossible that's gotten worse now because the Pentagon has added nine more detainees, bringing up to 15 those who are segregated from the other prisoners, staying at a section of the prison called Camp Echo, where they have a room to talk to their lawyers, a population that could possibly grow -- Miles.

O'BRIEN: CNN's Bob Franken, exclusive look at Guantanamo, thank you very much.

The political conventions are looming and federal officials are briefing congressional leaders on security plans. We'll tell you more about that a little bit later on the program. Stay with us for more of WOLF BLITZER REPORTS.

(COMMERCIAL BREAK)

O'BRIEN: Now a captivating story out of Baghdad that many in journalism see leading down a frightening and risky slippery slope, a reporter getting very rare access to some dangerous events from even more dangerous sources.

Once again, our senior international correspondent Brent Sadler.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): In a Baghdad hotel room, this Western journalist views horrifying video sent to him by an Islamic insurgent group in Iraq that carried out a recent terror attack.

MICHAEL WARE, TIME MAGAZINE: Oh, my God, I've not seen this. They've been filming this stuff from the beginning.

SADLER: Michael Ware, an Australian reporter, working for Time magazine, is walking a professional knife edge, an unlikely go-between for anti-Western militants.

He's viewing what purports to be the gruesome attack that killed four American security contractors in Fallujah some three months ago, when the bodies were dragged through the streets and hung from a bridge.

WARE: This video is straight from the mujahedeen. This is the Blackwater killings. They talk about planning it.

This is the seventh tape I've received in the last three or four days.

SADLER: Including the release of this tape. It illustrates how insurgent groups have developed the technique of using video to record attacks.

A group called Unity and Jihad, led by Abu Musab al-Zarqawi, the most wanted terror suspect in Iraq, claims to have made this presentation. WARE: They have reached a level of organization and sophistication that we have not seen previously. They have become incredibly savvy.

SADLER: What's claimed to be a Zarqawi camera captures this disturbing sequence of a suicide bomber bidding farewell to fighters and boarding a tanker, wired to 3. 5 tons of explosives, for start-to- finish coverage of the attack.

WARE: Something in the last few months has now got them filming the most intimate, graphic attacks, like, up close and personal. They're trying to tell the Western public, this is what your boys are dying for. This is what they're up against. Terrorism is about instilling terror. That's a part of what this is doing.

SADLER: Ware says he holds secret meetings in dangerous places, with wanted men.

WARE: Whether you think I'm fortunate or whether you think I'm doomed, the point is, I've been given a window into something that no one else has.

SADLER: A window, he says, that opened after 12 months of contact, with access to unexplored territory, straddling a moral and ethical mine field.

WARE: This kind of thing is never easy or comfortable. It doesn't sit well with you as a human being, on many levels. But that's what covering war is like.

SADLER: Ware denies he's being used by terror groups, and says he filters what he learns, regardless of the source.

WARE: This is a war. It has two sides. I feel an obligation to discover as much as I can about both sides. I feel that's what we're here to do.

SADLER (on-camera): Do you worry that you're getting too close to this, that one day they might shoot the messenger.

WARE: I worry about that every waking moment and every sleeping dream, and it terrifies me. It terrifies me on a personal level, and it terrifies me in terms of what we're up against.

SADLER (voice-over): And the danger involved.

Brent Sadler, CNN, Baghdad.

(END VIDEOTAPE)

O'BRIEN: Uninsured Americans are getting a break from a perhaps unlikely source. Pharmaceutical giant Pfizer is unveiling a new plan whereby about 43 million uninsured Americans, regardless of age or income, will get their medications free or at significant savings.

Pfizer sells medicine that treats hypertension, cardiovascular disease, depression and diabetes. Analysts believe Pfizer is making the move to stem the tide of drug purchasers who have been seeking cheaper prescriptions across the border in Canada, where those prescription are in fact much cheaper. Now, the enrollment plan begins next month. There's all kind of criteria which you'll have to provide to Pfizer in order to participate in it, including some income restrictions.

Now, here's how you're weighing in on our Web question of the day. Remember what we've been asking you, does John Edwards help John Kerry's chances for victory in November? Seventy-one percent of you say yes; 29 percent of you say no. And, as we always remind you, this is not a scientific poll. You can continue to vote on our Web site at CNN.com/Wolf.

Let's hear from you and read some of your e-mail today.

Janet writes this: "The decision to pick John Kerry over all of the other experienced and committed Democratic leaders available says a lot about John Kerry's character. Does he really feel that a tanned trial lawyer with good hair is the next best person for this country's future?"

Adele offers this: "In light of the recent world events, it's better for John Edwards to have little or no foreign policy experience. Bush-Cheney supposedly have plenty and look at the mess they got us into. We need someone like Edwards, who is young, bright, intelligent and talented, to lead us into the 21st century."

Dennis Rodman is back with the Bulls, but the former pro basketball player is not with Chicago's NBA franchise. The Worm, as Rodman is called, is in Pamplona, Spain. We told you about the running of the bulls earlier. It turns out Rodman was one of those on the run today in the Spanish festival. We don't know if he was cut or bruised. We'll try to follow that up for you tomorrow.

A reminder, you can always catch WOLF BLITZER REPORTS weekdays at this time, 5:00 Eastern. I'll see you again tomorrow -- Wolf off again. Until then, thanks for joining us.

"LOU DOBBS TONIGHT" starts right now.

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