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American Morning

Terror Investigation; Tracking Terrorism; Carbs and Cancer

Aired August 06, 2004 - 9:00   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.


BILL HEMMER, CNN ANCHOR: Good morning. Terror fears in three U.S. cities. Now British police have captured a man who may have staked out U.S. financial centers.
Where does the Scott Peterson case go now after a judge halts testimony so that defense attorneys can examine some surprise evidence?

And a developing story in Tennessee. A Greyhound bus, a tractor- trailer colliding on an interstate.

All ahead this hour here on AMERICAN MORNING as we continue now.

ANNOUNCER: From the CNN Broadcast Center in New York, this is AMERICAN MORNING with Bill Hemmer and Soledad O'Brien.

HEMMER: Good morning, everyone. Soledad is resting. Heidi Collins is here on a Friday morning.

Again, good morning. Nice to see you.

HEIDI COLLINS, CNN ANCHOR: Thank god it's Friday.

HEMMER: Yes. That's right. I'm right there with you.

In a moment here, authorities on both sides of the Atlantic very interested in a man arrested in an anti-terror sweep in Britain. We'll look at what they're learning about Esa al-Hindi and his connection to the terror warnings announced last Sunday. We'll get to that in a moment.

COLLINS: Also, Sanjay Gupta will be with us explaining some new research drawing a correlation between breast cancer and a high-carb diet.

HEMMER: Also, the story about U.S. baseball players going to the Olympic after all. If they win gold, they will not be wearing the red, white and blue, however. That's coming up this hour, also.

COLLINS: Hearing the red, white and blue, correct? All right. Interesting.

Jack here now.

JACK CAFFERTY, CNN ANCHOR: It should be pointed out that you're doing yeoman's work here at CNN this week.

COLLINS: Sure.

CAFFERTY: Not only are you doing AMERICAN MORNING, but you're also -- aren't you working at night?

COLLINS: Where's the -- where's the victim cam?

CAFFERTY: Yes. Aren't you -- what show are you doing tonight? Paula's program, right?

COLLINS: I'm doing the 8:00 p.m. show. Thank you so much.

CAFFERTY: That's "PAULA ZAHN NOW."

COLLINS: It is.

CAFFERTY: Only this week it's Heidi Collins now. Where is old Paula?

COLLINS: Heidi, Paula, whatever. She is on vacation.

CAFFERTY: On vacation.

COLLINS: Yes.

CAFFERTY: But they pay you a lot of overtime for this, right?

COLLINS: Indeed, they do.

CAFFERTY: I mean, you get like double, triple time for the nighttime show?

COLLINS: Vacation time, extra pay, dinners out.

CAFFERTY: Yes. There you go.

COLLINS: Good stuff.

CAFFERTY: It's a great company, CNN.

The question today is whether or not they should convene a special session of the Congress to deal with the recommendations of the 9/11 Commission report or should they just stay on vacation until after Labor Day. Unbelievable.

COLLINS: All right. We've got that clock ticking, that's for sure.

CAFFERTY: Let me know if you need any help.

COLLINS: Hey, thanks. Will you come at 8:00?

CAFFERTY: On second thought, don't let me know if you need any help. I don't want to.

COLLINS: Vacation (ph) starts soon. All right, Jack. Thanks a lot. U.S. government officials say a terror suspect arrested in Britain is a key al Qaeda operative who in 2001 personally cased some of the buildings that sparked this week's terror alerts. Here now, justice correspondent Kelli Arena.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): Law enforcement sources say they believe one of the men arrested this week in Britain personally conducted some of the surveillance of potential terror targets in the United States. Esa al-Hindi is described as a senior al Qaeda operative. Sources tell CNN he was on the ground in New York City in early 2001. And one source says law enforcement has definitively placed him in three of the buildings that were surveilled, the New York Stock Exchange, the Citigroup building and the Prudential building in Newark, New Jersey.

EVAN KOHLMANN, GLOBALTERRORALERT.COM: He's someone with military experience, he's someone who's perfectly fluent in -- in English, in Erdu, in Arabic. He's a transnational al Qaeda operative who has his fingers in many pots.

ARENA: U.S. officials say al-Hindi can currently be described as al Qaeda's chief of operations in the U.K. They say he moved operational information between key components of al Qaeda in Britain, Pakistan and the United States.

Terrorism experts say al-Hindi is a Muslim convert and former commander of an al Qaeda training camp in Afghanistan. Investigators believe he was plotting to attack London's Heathrow Airport based in part on intelligence from Pakistan.

KOHLMANN: I think it's an ominous sign. Whenever there's an attack of this scale going on in London, it's not just a British thing. It's a U.S. thing, too, because most of the time when al Qaeda strikes it tends to strike in multiple simultaneous attacks.

ARENA: Al-Hindi's arrest and others in Pakistan, including that of alleged al Qaeda computer expert Muhammad Naeem Noor Khan, have led to multiple intelligence leads. Especially troubling, government officials say alleged operatives in Pakistan recently contacted an individual or individuals in the United States.

JAMES COMEY, DEPUTY ATTORNEY GENERAL: We have, as we've said before, reason to believe that we are in a very serious threat environment. And we're working like crazy to try and make sure that threat does not come to fruition.

ARENA (on camera): Investigators say given his alleged position, al-Hindi may have knowledge of plans to attack in the United States. The trick is getting him to divulge all he knows.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE) COLLINS: And another development this morning to tell you about. Saudi security forces say they have arrested an important al Qaeda leader. An interior ministry official says Faris al-Zahrani was captured last night near the Yemeni border. The cleric was number 12 on the kingdom's list of the 26 most wanted terror suspects.

HEMMER: Meanwhile, the leader and the founder of a mosque in Albany, New York, charged with money laundering and conspiracy caught in an FBI anti-terrorist sting. The announcement came right around this time yesterday.

Mohammed Hossain cofounded the Masjid As-Salam mosque in Albany. He's lived in America for nearly 20 years. Also, Yassin Aref came from Syria three years ago. He's the imam at the mosque.

Faisal Ahmad teaches at the mosque, knows them both. He's our guest now live in Albany.

And we thank you for your time this morning.

FAISAL AHMAD, KNOWS MOSQUE SUSPECTS: Good morning.

HEMMER: Your reaction to these charges?

AHMAD: Well, you know, our community, we've reacted by keeping in mind that in the hereafter all people will be brought to account. And true justice can only be found in the hereafter. And that's essential to our -- to Muslim belief.

And that has kept us together as a community. And we -- we have come together with the realization that, you know, we have to keep in mind that any justice that we seek after should ultimately rest in our hopes in the hereafter.

HEMMER: Mohammed Hossain, you've known him, the founder of the mosque, for several years, I'm told. Describe him for us and our viewers.

AHMAD: Mohammed Hossain is a very, very good brother. He's good to children. He -- he definitely exemplifies the character of the prophet Mohammed, showing kindness, peace and good character.

And he's always doing work with -- with charity. He gives free pizza to his customers. And, you know, he's a very, very good person.

And I'm really surprised, and our whole community is really surprised and a little bit cautious about, you know, labeling Mr. Hossain or Mr. Aref as terrorists, because there's great -- there's tremendous implications to such statements. And we really have been trying to urge the community at large to -- to have -- to presume innocence. And that's part of our civic duty.

HEMMER: George Pataki is the governor here in New York. He was with us two hours ago here on AMERICAN MORNING. Very strong words about this, saying the target was a diplomat from Pakistan who worked in New York, worked for the U.N. Was there ever an anti-American message preached in that mosque?

AHMAD: Not at all. I've been a member of the mosque since the five years that -- that it's been in existence. And I'm a teacher. I teach with Mr. Aref. And I teach with -- and I know Mr. Hossain.

And we are -- we're a community founded on love and brotherhood. And our doors have always been open. We welcome anybody, any new people into our community.

And Mr. Aref, for example, he teaches the kids, and he brings the children to the playland. Both gentlemen have many children of their own. And they're upstanding members of the community.

And Muslims, in general, we -- we have patience, and our religion teaches us to show good character and kindness, even to those who don't understand us. And I think the problem really in this upstate area, and especially in New York, is we have a lot of misunderstandings and misconceptions about our religion. And actually, how much it has in common with the other Abrahamic faiths is something that we need to learn more about. And we're working to try to educate the local community about that.

HEMMER: If I could, just one final comment here. Government officials say there are ties now to Ansar al-Islam, this group that works in northeastern Iraq and other parts of the Middle East. Is it possible, in your judgment...

AHMAD: Well...

HEMMER: ... that this could have been happening, this plot could have been developing without your knowledge?

AHMAD: Well, I've been present for all of the speeches and the classes that Imam Aref has given. And I'm a very active member in the mosque. I'm a teacher there. And I"ve never even heard of any type of political activity or political organization in the mosque.

These -- again, these are two gentlemen that are family men, that are teachers of children. And I'm really -- I would really be surprised if there was any correlation whatsoever.

HEMMER: Faisal Ahmad is there in Albany, New York, this morning. Thanks for your time.

AHMAD: Thank you again.

HEMMER: All right -- Heidi.

COLLINS: The Albany case is one of a sudden flurry of arrests in the U.S., Britain and Pakistan. And new intelligence appears to show action at al Qaeda training camps along the Pakistan-Afghan border. CNN terrorism analyst Peter Bergen is in Washington this morning. He joins us now to shed some more light on all this activity.

Want to get first, Peter, if we could, to those training camps. Are you surprised that the activity has sort of come up all over again?

PETER BERGEN, CNN TERRORISM ANALYST: A little bit. You know, two weeks ago, Richard Armitage, the deputy secretary of state, said publicly that there were terrorist training camps in Pakistan and Kashmir that were operating. So obviously the U.S. government has been feeling that these -- these camps have been coming back, despite the official pronouncements from the Pakistani government that they're all closed.

When I asked a Pakistani government official recently about Richard Armitage's statement that terrorist training camps were coming back, he said that was, you know, basically absolutely nonsense. So the Pakistani government's sort of point of view is this is -- this is not happening.

However, you know, it's a large country. They don't really exert a lot of control over this border region between Afghanistan and Pakistan. It's perfectly plausible that camps would be running.

We're reporting based on defense and intelligence resources and overhead imagery that this is happening. And so, unfortunately, they seem to be back.

COLLINS: Well, how sophisticated are these camps? Can you put that into perspective for us?

BERGEN: I think that they -- you know, even when they were operating in a very open manner in Afghanistan in the late '90s, they were basically a bunch of mud huts. When we -- when the United States attacked these camps after the embassy bombing attacks in '98 in eastern Afghanistan, they were back in operation within two weeks because they're not -- there's really no infrastructure.

It's basically, you know, just a bunch of guys and some -- some mud huts. So it's not like these things are particularly sophisticated. They can go out of business and go back into business pretty easily.

COLLINS: So why not just shut the camps down? I mean, we've heard so much about the relationship, much better relationship, if you will, between the United States and the Pakistanis on this very issue of the war on terror. Why can't they just go in there and shut them down if everybody knows that they're there?

BERGEN: Well, that's a good question. I think that, you know, the Pakistani government is doing what it can.

Musharraf, the president, himself, survived two assassination attempts by al Qaeda within the last two months. The prime minister designate, just within the last week, also survived an assassination attempt.

For top Pakistani officials like Musharraf, this is a very personal effort to get rid of al Qaeda. But, of course, it's a large country. There are sympathizers within the military with al Qaeda. In fact, there were nine lower-level military people involved in the assassination attempts against Musharraf. People in the army, people in the air force. So the problem is, while Musharraf is personally committed to this, perhaps people within the government, within the military are not.

COLLINS: I see. Quickly, Peter, before we let you go, with all of these arrests and -- detentions, I should say -- around the world lately, does the United States have the upper hand on the war on terror? Or are these just kind of being seen as a drop in the bucket?

BERGEN: Well, I think, you know, these are -- these are significant moves. I mean, the war on terrorism is not something that's ever going to be won. It is going to be managed into a kind of area where it's no longer significant. I think we're still not at that point yet.

COLLINS: All right. Peter Bergen, always nice to see you, our CNN terrorism analyst. Thanks so much.

BERGEN: Thank you, Heidi.

HEMMER: About 13 minutes past the hour. We talked about this story about 45 minutes ago, that major collision in Tennessee that happened earlier today. Three people are dead, 25 injured.

A tractor-trailer and a Greyhound bus colliding. This in western Tennessee, right along I-40, about the midway point between Memphis and Nashville.

All of those injured have been transported to hospitals in Jackson, Tennessee. Five listed in serious condition. We'll update this story throughout the morning.

Also, that jobs report, reaction from the White House coming up in 15 minutes from the White House.

And with the opening bell up at 9:30 Eastern Time, about 15 minutes away, too, we'll see how the markets respond as well. Weaker than predicted we are told.

Daryn Kagan has the other news live in Atlanta.

Good morning, Daryn.

DARYN KAGAN, CNN ANCHOR: Good morning to you, Bill.

Let's begin in Chicago. A man there will be back in court on Tuesday to face terror charges. Prosecutors say that Gail William Nevels (ph) was arrested with a pickup truck containing 1,500 pounds of fertilizer. He will be charged with plotting to blow up a federal courthouse in a plot similar to the Oklahoma City bombing. But since it was a government sting operation, authorities say that he never actually had the materials to make a truck bomb.

President Bush addresses a convention of minority journalists in Washington this morning. The president will speak at the same conference that heard from Senator John Kerry yesterday. We will have live coverage of that coming up.

And this viewer's note. President Bush and first lady Laura Bush will appear together exclusively on "LARRY KING LIVE." That is next Thursday at 9:00 p.m. Eastern.

The United Nations envoy and Sudan's foreign minister has an agreement. They have worked out a plan to disarm Arab militias who have terrorized refugees in Darfur. Last week, the U.N. Security Council passed a resolution. It set a deadline for Sudan to crack down on violent Arab militias or face other economic sanctions.

And in Los Angeles, the Extreme Games are on. ESPN's 10th annual X-Games will run through the weekend, 17 bone-crunching events. Athletes from 14 to 43 years old are competing this year. The skateboard big air finals will be the first ever mega-ramp.

Check that out. It features a nine-story ramp. It is one of the highest and longest skateboard ramps ever built.

I would say don't try this at home, but you know that there's kids all across America who are doing just that.

HEMMER: That's right.

KAGAN: And if they do well, can grow up to do that.

HEMMER: Yes. There you go. You know, holding it in LA, too, is going to get some major media exposure, too, as the X-Games continue to grow year after year, huh?

KAGAN: It's cool stuff.

HEMMER: Your home town.

KAGAN: Yes.

HEMMER: Thank you, Daryn.

Chilly Chad, that's what we call him today.

Good morning.

(WEATHER REPORT)

HEMMER: All right, Chad. Thanks for that.

In a moment here, there is news today of a possible link between carbs and breast cancer. Sanjay explains that a bit later.

Also ahead, a bombshell in the Scott Peterson case could bring the trial to an early end. So says some. Jeff Toobin, his thoughts in a moment on that.

And some all-American baseball players will play baseball in Athens this summer. They will not be playing, though, for team USA. We'll explain ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

COLLINS: Eating lots of carbs may raise the risk of breast cancer, according to a new study out today. It raises concerns that high-carb diets may affect women's health. Dr. Sanjay Gupta joins us from the CNN Center with more.

So what's with this?

DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: Yes, good morning.

You know, there's a lot of conflicting studies on this particular topic in terms of diet and its impact potentially on cancer. I'll tell you that this is another study, one of the latest ones. Let's take a quick look at it.

Actually, a study done in Mexico. This was sponsored by the Harvard School of Public Health, looking at newly diagnoses very healthy women with breast cancer.

They found -- what they found was these women were eating main corn products, tortilla products, things like that, a lot of soda, bread. High intake of carbohydrates, and found that -- after a while, they found that the increased risk of breast cancer was certainly present. Let me give you the exact numbers here.

They were eating about 62 percent or more of their diets made up of carbohydrates. If that was the case, they were two times more likely to develop breast cancer, as compared to women who were eating 52 percent or less of their diet being carbohydrates. Heidi, both those numbers are high. That's a lot of carbohydrates in your diet, period. But what they seem to have shown here in a very cursory sort of way, Heidi, is that very high concentrations of carbohydrate calories in your diet seemed to have an impact on breast cancer.

COLLINS: All right. So talk about the carb intake now, for a minute, if you would. Are there current guidelines right now for how much we should be eating?

GUPTA: Yes. You know, and that's one of the reasons they're not ready to directly say that this is applicable to the United States population, because the guidelines of the United States actually much lower. You can take a look at the numbers there.

Forty-five to 65 percent of your calories typically going to be from carbohydrates. Now with the low-carb craze that you and I have talked about so many times, the average intake of carbohydrates is probably even going to be smaller than that, only 20 percent of that coming from sugar calories specifically, Heidi.

COLLINS: So why would carbohydrates or eating too many of them actually raise your risk of getting cancer?

GUPTA: You know, that's actually a very good question. There's a couple of different theories on that. One is that actually eating a lot of sugar, rapid changes in sugar, may somehow cause cells to divide more quickly, possibly causing cancer. There's also been the theory that people who are just heavier, they produce more estrogen. And that could potentially cause cancer.

One of the other theories I think is important to point out with regards to this study is the food in Mexico and the food in the United States is different in that the food in the United States is often fortified with things like folate, which might be protective against cancer. The food in Mexico is not. And that might be a problem as well -- Heidi.

COLLINS: All right. Interesting point . Sanjay Gupta, thanks so much for that.

GUPTA: Thank you.

HEMMER: About 22 minutes now past the hour. Down in D.C., President Bush is speaking at the Unity -- Unity Convention, rather. We're watching that. There may be a chance for questions a little bit later in the hour. We'll get to that, if that takes place.

Also, John Kerry running for president in part on his record in Vietnam. A controversial new ad says that record is based on lies. Kerry supporters firing back. Both sides on this issue still to come this hour.

Back in a moment.

(COMMERCIAL BREAK)

HEMMER: Welcome back, everyone. Here's Jack, "Question of the Day."

CAFFERTY: Is it the 13th the Olympics start?

HEMMER: This thing says the 5th. I thought you were -- I thought it was next Friday.

CAFFERTY: Maybe it's Sunday night.

HEMMER: You know what? I'm going to go to Google.

(CROSSTALK)

CAFFERTY: Just one of the long list of things I don't know anything about. But one...

HEMMER: Your answer forthcoming, onward.

CAFFERTY: What we are doing, though, this morning is finding out about how you feel about this idea of calling Congress back into a special session to deal with the recommendations of the 9/11 Commission. When the recommendations came out, the Congress said we're much too busy, we can't do this until next year. And then they went on vacation for six weeks.

Well, a lot of people didn't think that was the right way to respond. So we're asking, should they called back now to deal with this stuff?

Donna in Chevy Chase, Maryland, writes, "If they skip vacation to take action on the report, those actions would not have any immediate effect." Apparently Donna knows more about how they work down there than I do. "But the results of rushing to do things to quell critics like Jack will have effects that we'll have to live with for decades."

Kay in Savannah writes this -- this is interesting to me -- "Is history repeating itself? The summer before September 11, and especially the month of August, we had intelligence agents running around with their hair on fire because of the intel coming in that we were going to be attacked. But everyone was on vacation."

"Now we have intel of another possible attack. Tom Ridge has been on TV telling us the threat level has been increased. The 9/11 Commission has released their recommendations, but instead of dealing with the threat, once again, everyone is on vacation."

And Hugh in Taylorsville, Kentucky, "Maybe not so bad. Remember Mark Twain's observation: 'No man's life, liberty or property are safe while the Congress is in session.'"

Mark Twain had it going on, didn't he?

HEMMER: That he did.

COLLINS: All along.

HEMMER: We were talking about the Olympics a short time ago. There is no U.S. baseball team competing this year. There will be American players, though, in Greece.

The home team now has its own team, and it's American-made, too. Here's Larry Smith on that.

(BEGIN VIDEOTAPE)

LARRY SMITH, CNN CORRESPONDENT (voice-over): Erik Pappas hasn't played major league baseball in 10 years.

ERIK PAPPAS, BASEBALL PLAYER: My grandfather is 100 percent Greek, and he really practiced (ph).

SMITH: Clay Bellinger has a 193 career Major League average.

CLAY BELLINGER, INFIELDER: My mother's grandmother was born there. And then her father was a Greek citizen.

SMITH: And Sean Spencer (ph) hasn't even made it that far.

UNIDENTIFIED MALE: My great-grand information was born in Greece. SMITH: They're all teammates now, united proudly, if haphazardly, beneath the Greek flag.

BELLINGER: I heard the Greek anthem for the first time today. You know, just before the game. It was kind of nice.

DUSTY RHODES, MANAGER, GREEK OLYMPIC BASEBALL: A lot of these guys have told me, you know, we got a break by coming to the United States and our relatives came over from Greece. And we've got the chance to learn the game of baseball, and now we're going to go back and try to represent our people in Greece.

SMITH: As hosts of the summer Olympics, Greece's baseball team automatically qualified for the games. Except they didn't have a baseball team.

Instead, they sought help from Peter Angelos, the Greek-American owner of the Baltimore Orioles and his son, Louis. They bought uniforms, paid for travel, even let the team train in the Orioles stadium. What was harder to find were Greek players, or at least players with Greek relatives. Even distant Greek relatives.

PAPPAS: I know growing up in baseball I never even played with any other Greek ball players.

LOUIS ANGELOS, SPONSOR, GREEK OLYMPIC BASEBALL: I understand why there may be skepticism in Greece. Where are the Greek players on this team? Well, we would submit these are the Greek players. These are ancestors of people who were born in Greece, perhaps removed to grandparents or great-grandparents.

UNIDENTIFIED MALE: Hopefully, they can get some teaching over there, and maybe in 2008 they can have their own team of people that are living there.

SMITH: For now, these Americans will try to honor their adopted nation and the birthplace of the Olympic games. And they might just bring honor to their American ancestors as well. You see, the team from the U.S., the birthplace of baseball, did not qualify for the Olympics.

Larry Smith, CNN.

(END VIDEOTAPE)

HEMMER: Next Friday, they kick off in Athens, Friday -- right around 6:00 in Athens. About noontime here, I believe

CAFFERTY: It's also when the Giants and Chiefs play their first pre-season football game.

CAFFERTY: We know what you're going to be watching.

CAFFERTY: I'll bet you the ratings in New York are higher for the Giants than they are for the Olympics.

HEMMER: We'll see.

CAFFERTY: Yes.

HEMMER: Thank you.

COLLINS: Still to come this morning, a surprising delay in the murder trial of Scott Peterson. The defense thinks it may have found a way to end the trial now. We'll talk to senior legal analyst Jeffrey Toobin.

Stay with us on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: 9:30 here in New York. Beautiful day in Manhattan. Chilly temperatures for August, and we like it.

Opening bell on Wall Street just went off a short time ago. We'll get you reaction in a moment, how stocks are responding to the jobs reports. Weaker than expected.

COLLINS: (UNINTELLIGIBLE).

HEMMER: Yes.

Also, watching the president speaking before the Unity Convention in Washington, a group made up of minority journalists. We'll go there live also when he starts taking questions.

And a political commercial also, too, causing a storm today over John Kerry's Vietnam War record. One rep of veterans who say Kerry is lying about his record, a Kerry supporter who served at his side in southeast Asia. That debate still to come this half-hour also.

COLLINS: Also, a big surprise in the Scott Peterson case as the judge puts the trial on hold so the defense can look at some surprise evidence. Jeff Toobin up next, explaining what this mystery evidence might be all about.

HEMMER: As we kick of the half-hour, just into us here up in Connecticut, Alina Cho is reporting in New Haven one of the arrests in Britain was caused by a warrant that went out from here in the U.S. We expect a press conference within the hour. Alina is there now live.

Good morning.

ALINA CHO, CNN CORRESPONDENT: Good morning to you, Bill.

In fact, that news conference is set to start here at the U.S. attorney's office in New Haven at 10:00 a.m. Eastern Time. But we have just been handed the criminal complaint, an arrest affidavit., about a 30-page document.

Here is the headline on the arrest and charges on 30-year-old Barbar Ahmad (ph). Authorities allege that he sought to use U.S.- based Web sites, in particular one called azzam.com, A-Z-Z-A-M.com, in connection with acts of terrorism in Chechnya and Afghanistan on behalf of waging a jihad and on behalf of the Taliban.

Here is what else we know from this document. Very significant to note that computer files were found in which allegedly detail a U.S. Navy battle group plan from April 2001, including formation drawings, details of specific assignments of individual ships, and details of the ship's vulnerability. Basically, the document concluded that nothing could stop a small boat or a rocket-propelled grenade, even a stinger missile, from hitting this U.S. battle group plan, which was patrolling the Persian Gulf for operations against al Qaeda and to enforce sanctions in Iraq.

He appeared in court in London this morning, saying that he did not want to go to the U.S. Of course, these Web sites, I should mention the Connecticut connection. The Web site was based in Connecticut, we understand.

He is to remain in jail until his next hearing on August 13. He was arrested last night in London following a raid on his home.

Again, appeared in court today. The headline being he operated Web sites in connection with acts of terrorism. Also, documents dealing -- dealing with a U.S. battle group plan.

Bill, back to you.

HEMMER: All right. Alina, thanks. Alina Cho.

We're watching the room there. When that press conference gets under way, we'll get our viewers back to there.

In the meantime, though, politics and the politics of war. The Kerry campaign said to be quite angry about a new attack add that accuses the senator of lying about his service in Vietnam. Set to air in three different battleground states, here now is that ad in full.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: If you have any question about what John Kerry's made of, just spend three minutes with the men who served with him...

UNIDENTIFIED MALE: I served with John Kerry.

UNIDENTIFIED MALE: I served with John Kerry.

UNIDENTIFIED MALE: John Kerry has not been honest about what happened in Vietnam.

UNIDENTIFIED MALE: He is lying about his record.

UNIDENTIFIED MALE: I know John Kerry is lying about his first Purple Heart because I treated him for that injury.

UNIDENTIFIED MALE: John Kerry lied to get his Bronze Star. I know. I was there. I saw what happened.

UNIDENTIFIED MALE: His account of what happened and what actually happened are the difference between night and day.

UNIDENTIFIED MALE: John Kerry has not been honest.

UNIDENTIFIED MALE: And he lacks the capacity to lead.

UNIDENTIFIED MALE: When the chips were down, you could not count on John Kerry.

UNIDENTIFIED MALE: John Kerry is no war hero.

UNIDENTIFIED MALE: He betrayed all his shipmates. He lied before the Senate.

UNIDENTIFIED MALE: John Kerry betrayed the men and women he served with in Vietnam.

UNIDENTIFIED MALE: He dishonored his country, he most certainly did.

UNIDENTIFIED MALE: I served with John Kerry.

UNIDENTIFIED MALE: John Kerry cannot be trusted.

UNIDENTIFIED MALE: Swift Boat Veterans for Truth is responsible for the content of this advertisement.

(END VIDEO CLIP)

HEMMER: One of the gentlemen in that advertisement is Bob Elder, with Swift Boat Veterans for Truth. And also, Del Sandusky piloted John Kerry's swift boat in Vietnam. He is campaigning on behalf of the senator. A bit earlier, I spoke with both gentlemen. First Mr. Elder about his claims from 35 years ago.

(BEGIN VIDEOTAPE)

HEMMER: In the ad, you say -- and quoting now -- "John Kerry is no war hero." Why do you make that claim?

BOB ELDER, SWIFT BOAT VETERANS FOR TRUTH: I make that claim for two reasons. One, as you could see, it was that he betrayed all of us when he came home and went in front of the Congress of the United States and accused all of us of war crimes. That is not what a war hero is made of. Secondly, we believe he grossly exaggerated, and even lied about some of the circumstances under which certain awards were given to him.

HEMMER: Let me be a little more specific. The ad says -- and quoting -- "John Kerry lied about his first Purple Heart." The ad says, "John Kerry lied to get his Bronze Star." What did he lie about?

ELDER: That first Purple Heart was the result of him firing an M-79 grenade over the side of his boat. The grenade went off too close to the boat, and he was wounded very slightly, a scratch on his arm by his own grenade.

There was no hostile fire. And one of the qualifications for a Purple Heart is that there be hostile fire. Both the doctor who treated him and his commanding officer denied him that Purple Heart because there was no hostile fire.

HEMMER: Mr. Elder, were you there that day?

ELDER: I was not there.

HEMMER: How can you give that account then, based on what?

ELDER: I could fill this studio with people who were eyewitnesses to the events that we recount in our testimony.

HEMMER: Mr. Sandusky, you were there in marriage of 1969 when this incident occurred in the Mekong Delta. Apparently four boats who were patrolling this area; boat number three hit a mine. Your version of the events for Senator Kerry at that point are what?

DEL SANDUSKY, VIETNAM VETERAN: I was with John Kerry. I was the leading petty officer and the helmsman on PCF-94.

I served with John Kerry. Those men did not serve with John Kerry. We were all in the same war at the same time, possibly, but I could say the same thing. I served with General Westmoreland.

Their ad is a pack of lies. They're shooting theirself in the foot. Senator John McCain has said that their ad is "dishonest" and "dishonorable," and asked for them to cease fire. Senator McCain has asked the president to get them to cease fire. You know, back down.

I don't know where they're coming from. I don't know what their agenda is. I was with John Kerry. I know that he deserved his Bronze Star, his Silver Star, and two of his three Purple Hearts. I was not there for the first.

HEMMER: If I could, though, can you address this story about this grenade firing that Mr. Elder just talked about?

SANDUSKY: No, that was his first Purple Heart in 1968. John Kerry came on my boat in 1969.

HEMMER: All right. Back to Mr. Elder, then, how do you respond and react to what Senator McCain is saying? I think his words yesterday were "dishonest" and "dishonorable," this ad. The White House apparently saying it has never and will never question John Kerry's service in Vietnam.

Your reaction to that?

ELDER: I think John Kerry knows a lot about dishonor. When he came back and dishonored himself by betraying the men who he had bonded with in combat, and betraying them and accusing them of war crimes, he knows dishonor.

(END VIDEOTAPE)

HEMMER: Again, Bob Elder with Swift Boat Veterans for Truth, Del Sandusky, piloting along with John Kerry's swift boat back in Vietnam, campaigning for the senator. Both men with us earlier today -- Heidi.

COLLINS: Want to take you to the Washington Convention Center now, where President Bush is addressing a group of minority journalists, once again, called the Unity Convention. We're waiting for him to get to the question-and-answer session. And when he does, we will bring some of that up live for you.

In the meantime, Daryn Kagan is standing by at 9:38 this morning with some other news of the day -- Daryn.

KAGAN: Heidi, good morning to you.

Let's begin with military source sources telling CNN in Iraq that two Marines were killed in Najaf. The city is the scene of intermittent fighting between American troops and fighters who are loyal to radical cleric Muqtada al-Ssadr.

Meanwhile, religious leader, the Grand Ayatollah Ali Al-Sistani, has left Baghdad and is heading to London for medical treatment.

Back here in the U.S., in Utah, a judge has granted as extension until Monday to hold Mark Hacking without filing any charges. Hacking was jailed earlier this week on suspicion of killing his wife and disposing of her body. The Associate Press reports that Hacking's attorney will raise the issue of mental illness and challenge his client's confession that he killed his wife. The search for Lori Hacking's body continues at a Salt Lake City landfill.

New research suggests that delaying the birth of premature babies may prevent brain damage. The study suggests that waiting just a few days may improve brain development. It is published in the "Lancet Medical Journal."

An Arizona man is suing the "Dr. Phil" talk show, claiming the show violated the Americans with Disabilities Act. According to this lawsuit, prospective audience members were asked to sign a waiver attesting they didn't suffer from mental illness and weren't under psychiatric care. The man who's being treated for bipolar disorder claims that he was told he could watch the taping as long as he didn't participate in the programming.

Heidi, back to you.

COLLINS: All right, Daryn. Thanks so much for that. Tell us what's coming up at 10:00, though, real quick, before we let you go.

KAGAN: Yes. We are going to be following the candidates, also following President Bush. As you mentioned, we're standing by waiting for him to take questions at the Unity Conference.

Also, on a much lighter note, some big movies out over the weekend. We'll be taking a look at that as well.

COLLINS: All right. I might actually get to see one of those for once. Daryn, thanks so much for that.

KAGAN: There's a concept, huh?

COLLINS: Yes.

Let's get a look at the weather now for the day ahead and for the weekend. Chad Myers at the CNN Center with the very latest.

(WEATHER REPORT)

HEMMER: We're watching the president in D.C. We'll get you down there in a moment. The Unity Convention continues there. We'll get you there as soon as comments are made.

COLLINS: And also, the cola wars are about to get pretty spicy. Andy Sewer is "Minding Your Business" on that. He'll explain what we're talking about.

(COMMERCIAL BREAK)

COLLINS: Now to what could be a major development in Scott Peterson's double murder trial. The judge is putting the case on hold until Tuesday while the defense examines new evidence it says may clear Scott Peterson.

The "San Francisco Chronicle" is reporting new evidence is Duct tape found in San Francisco Bay near Laci Peterson's body. CNN senior legal analyst Jeffrey Toobin joined us earlier. I asked him what the significance of this new evidence could be for the whole case.

(BEGIN VIDEOTAPE)

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: Sometimes you can identify the origin of Duct tape, the store it was purchased in, the kind of Duct tape it was, potentially fingerprints on it. Of course, it's unlikely since it was found in a bay that any of that will be able to be identified.

But it is potentially significant. And frankly, it's surprising to me that this kind of testing hasn't been done yet since it's been so long since her body's been discovered.

COLLINS: Right. Good point there.

You know, if you look at this whole case, and obviously, you know, you're the legal analyst here, but there has been a lot of talk about the prosecution's case just really not being that strong. And now there's this delay. So what is the jury likely to think about all of this?

TOOBIN: Well, there has been a pattern of prosecution mistakes in this case. I mean, here, you know, just another delay. This trial is in its third month, and this is not the world's most complicated trial.

This trial should not be taking this long. And Amber Frey, Scott Peterson's girlfriend, hasn't even been called as a witness, and supposedly may make it to the stand next week.

Last week, the judge excluded one of the prosecution's witnesses because of prosecutorial misconduct, not turning over records of her prior statements, or inconsistencies that she has said.

COLLINS: Right.

TOOBIN: So there have been problems in the prosecution case. However, it is worth keeping in mind, the jurors do try to reach the right result, regardless of the behavior of the lawyers.

COLLINS: Sure.

TOOBIN: And the key fact in this case remains that Laci Peterson's body was discovered 80 miles away from her home, virtually in the precise location that Scott Peterson was on the day that she disappeared. That's a very bad fact for Scott Peterson.

He is very far from in the clear in this case. So, you know, day by day, there have been some bad developments for the prosecution, but it's worth keeping in mind that this case is not all that weak after all.

(END VIDEOTAPE)

COLLINS: CNN senior analyst Jeffrey Toobin with us earlier.

Bill now.

HEMMER: All right, Heidi. Watching the event down there in Washington, D.C. at the convention center in Washington, watching the president now ending his speech. And we anticipate any moment now to start a question-and-answer session there.

This conference takes place every five years. It brings together minority journalists from all across the country, black, Hispanic, Native American, Asian-American. Let's drop in now and hear what we're hearing now in D.C.

(JOINED IN PROGRESS)

QUESTION: Good morning, Mr. President. I'm Joie Chen with CBS News and with the Asian American Journalists Association.

(APPLAUSE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: You've got quite a following out there.

CHEN: It is, after all, the season, isn't it?

(LAUGHTER) I wanted to ask you about protecting all Americans, as well. There are many Arab-Americans and Muslims in this country who find themselves unfairly scrutinized by law enforcement and by society at large.

Just yesterday we had arrests in Albany, New York. Immediately afterwards, some neighbors in the community said they feared that the law would come for them, unfairly, next.

We have a new book out today that suggests perhaps we should reconsider internment camps.

How do we balance the need to pursue and detain some individuals from not-well-known communities while, at the same time, keeping innocent people from being painted by the broad brush of suspicion?

BUSH: Yes, I appreciate that.

First, we don't need internment camps. I mean, forget it.

(APPLAUSE)

Look, right after 9/11, I knew this was going to be an issue in our country. I knew that people would say, you know, there goes a Muslim-looking person, therefore, that person might be viewed as a terrorist. I knew that was going to be a problem.

That's why I went to a mosque to send a signal right after the attacks that said, you know, let's uphold our values. People are innocent until judged guilty. Religious people, people who go to mosques, you know, need to be -- Americans need to be viewed as equally American as their neighbor. Be tolerant. Let law enforcement, to the best of their ability, determine guilt or innocence.

BUSH: But our fellow citizens need to treat people with respect. By far, most Americans in this country did that -- not because I asked them to, just because, by far, the vast majority of Americans are decent people. They care about their neighbors.

I don't care where you're from or what your walk of life is, by far, the vast majority of our citizens are willing to reach out to somebody who is different. And that needed to be done. As a matter of fact, the anecdotal stories of neighbors helping neighbors across religious lines were heart-warming.

Now, in terms of the balance between running down intelligence and bringing people to justice obviously is -- we need to be very sensitive on that.

Lackawanna, for example, there was a cell there. And it created a lot of nervousness in the community because the FBI skillfully ferreted out intelligence that indicated that these people were in communication with terrorist networks.

And I thought they handled the case very well, but at the time there was a lot of nervousness. People said, well, you know, "I may be next." But they weren't next, because it was just a focused, targeted investigation.

And, by the way, some were then incarcerated and told their stories, and it turned out the intelligence was accurate intelligence.

I guess my answer to your question is, is that we've always got to make sure that people are judged innocent before guilty. That's the best insurance policy for law enforcement overstepping its bounds.

I will also tell you, however, that the threats we're dealing with are real. And, therefore, we must do everything we can to ferret out the truth and follow leads.

It's a -- we cannot -- again, you know, it's interesting, these recent threats, they're becoming more and more enriched, as you're finding out. There was more than one thread line, threat line. People are now saying there was other reasons why we took the action we took.

You know, when we find out intelligence that is real, that threatens people, I believe we have an obligation as government to share that with people.

BUSH: And imagine what happens if we didn't share that information with the people in those buildings and something were to happen? Then what would you write? What would you say?

And so we have, in terms of law enforcement, we have a duty to uphold innocence and guilt. In terms of a government, we have the solemn duty to follow every lead we find and share information we have with people that could be harmed. And that's exactly what we've, done and I'll continue to do as a president.

This is a dangerous time. I wish it wasn't this way. Now, I wish I wasn't "the war president." Who in the heck wants to be a war president?

(LAUGHTER)

I don't. But this is what came our way. And this is our duty: to protect our people. And it's a solemn duty. And I'll continue to do it to the best of my ability.

MARK TRAHANT, "SEATTLE POST INTELLIGENCER": Good morning. My name is Mark Trahant. I'm the editorial page editor of the Seattle Post Intelligencer and a member of the Native American Journalists Association.

(APPLAUSE)

Most schoolkids learn about government in the context of city, county, state and federal. And of course, tribal governments are not part of that at all.

Mr. President, you've been a governor and a president, so you have a unique experience looking at it from two directions. What do you think tribal sovereignty means in the 21st century? And how do we resolve conflicts between tribes in the federal and state governments?

BUSH: Tribal sovereignty means that; it's sovereign. I mean, you're a -- you've been given sovereignty, and you're viewed as a sovereign entity. And therefore, the relationship between the federal government and tribes is one between sovereign entities.

Now, the federal government has got a responsibility on matters like education and security to help, and health care. And it's a solemn duty. And from this perspective, we must continue to uphold that duty.

I think that one of the most promising areas of all is to help with economic development. And that means helping people understand what it means to start a business. That's why the Small Business Administration has increased loans. It means, obviously, encouraging capital flows.

But none of that will happen unless the education systems flourish and are strong. And that's why I told you we've spent $1.1 billion in the reconstruction of Native American schools.

(APPLAUSE)

RAY SUAREZ, PBS'S "NEWSHOUR WITH JIM LEHRER": Good morning, Mr. President. Thanks for coming.

I'm Ray Suarez, a member of the National Association of Hispanic Journalists.

(APPLAUSE)

There's a couple of others here, too.

And senior correspondent for "The NewsHour with Jim Lehrer on PBS."

BUSH: Yes. I recognized you.

(LAUGHTER)

SUAREZ: In one of the most closely watched cases of the 2003 term, the Supreme Court split the difference on affirmative action, allowing Bakke to stand, but rejecting the numerical formulas used by the University of Michigan undergraduate schools.

I'd like to hear your own view about when, and if, race and ethnicity are admissible as factors for consideration, both in college admissions and in hiring in the workplace.

BUSH: I think...

(APPLAUSE)

I didn't get to answer.

Yes, I agreed with the court in saying that we ought to reject quotas. I think quotas are discriminatory by nature. I think they discriminate on the bottom, and I know they discriminate on the top. And so, I agreed with their assessment that a quota system was an unfair system for all.

As you might remember, we also agreed with the finding that, in terms of admissions policy, race-neutral admissions policies ought to be tried. If they don't work to achieve an objective which is diversification, race ought to be a factor. I agree with that assessment.

I think it's very important for all institutions to strive for diversity. And I believe there are ways to do so.

When I was the governor of Texas, there was concerns that our big institutions were not -- big educational institutions were not diversified enough. So I went to the legislature and said, "Why don't we work together and say that there's automatic admission to our universities if you finish in the top 10 percent of your high school class, no matter what high school you go to?"

BUSH: And it worked. It worked, because the student bodies began to diversify at the University of Texas and at Texas A&M.

That's an inside joke up here.

(LAUGHTER)

You're about to hear why.

You know, I have a responsibility to work for diversity as well, and the administration, I've met the obligation. If you look at my administration, it's diverse. And I'm proud of that.

I mean, Condi Rice is there because she happens to be a very competent, smart, capable woman. She's also African-American. And she is my closest foreign policy advisor. I see her every day. When I see Condi, I think, you know, brilliant person. And I'm glad she's there.

Colin Powell, he was here yesterday evidently. Rod Paige. Rod Paige was a superintendent of schools in Houston. You know, I wanted somebody who knew what it meant to run a school district, not a theorist; somebody who knows what it means to challenge the soft bigotry of low expectations. He had; he's there.

Alfonso Jackson, Elaine Chow, Norm Mineta. You know, Mel Martinez was in my Cabinet. I mean, we've got a diverse Cabinet. I've got a diverse administration.

I hope that sets an example for people when it comes to hiring, including news organizations.

(APPLAUSE) ROLAND MARTIN, CHICAGO DEFENDER: Mr. President, Roland Martin...

BUSH: Tell them what it's about, Martin.

MARTIN: Oh, I will.

Nationally syndicated columnist with Creators Syndicate and also the editorial consultant for the Chicago Defender, the nation's only daily black newspaper.

(APPLAUSE)

BUSH: Get to the (OFF-MIKE)

QUESTION: I will.

And representing the National Association of Black Journalists...

(APPLAUSE)

... the world's largest minority media organization.

And, the inside joke, a 1991 graduate of Texas A&M University.

(LAUGHTER)

Mr. President, before I ask the question, I hope you'll give our governor, Rick Perry, a call. You spend a lot of time in D.C., Mr. President, but they're trying to cap the top 10 percent in Texas, so that may have an impact on those students going to college.

(APPLAUSE)

BUSH: Yes. But I appreciate you recognizing that it's working in the first place.

MARTIN: It is. But, actually, the percentage of white students increased as well. But I understand.

BUSH: See, sometimes they talk, sometimes they deliver.

MARTIN: I understand. It's OK. I'm working with the A&M president on that.

I also hope that you will take a send round of questions from Texan to Texan, so we can ask a second question, if you would do me that favor.

BUSH: All right, just ask your two questions.

MARTIN: Mr. President, in your remarks, you said that 8 million people in Afghanistan registered to vote and, as you said, exercised their God-given right to vote.

BUSH: Right. MARTIN: That may be a right from God, but it's not guaranteed in the U.S. Constitution. In 2000, an estimated 2 million people, half African-American, had their votes discounted from Florida to Cook County, Illinois, to other cities.

(APPLAUSE)

Come on, that cuts into other questions.

Are you going to order Attorney General John Ashcroft to send federal election monitors to Florida and other Southern states?

And in this age of new constitutional amendments, will you endorse a constitutional amendment guaranteeing every American the right to vote in federal elections?

(APPLAUSE)

BUSH: First of all, look, I can understand why African- Americans, in particular, you know, are worried about being able to vote, since the vote had been denied for so long, in the South in particular. I understand that.

And this administration wants everybody to vote.

BUSH: Now, I -- the best thing we did was to pass the Helping America Vote Act, with over, I think it's $3 billion of help to states and local governments, to make sure the voting process is fair.

And, you know, it's not just the South, by the way. The voting process needs help all over the country to make sure that everybody's vote counts and everybody's vote matters. I understand that. And that's why I was happy to work with Congress to achieve this important piece of legislation.

Just don't focus on Florida. I've talked to the governor down there to make sure it works.

(LAUGHTER)

But it's the whole country that needs -- voter registration files need to be updated. Machines need to work. And that's why there's $3 billion in the budget to help, Roland.

And obviously everybody ought to have a vote.

And what was your other question?

MARTIN: Should we put it...

BUSH: Constitutional amendment?

MARTIN: Should we guarantee it in the Constitution?

BUSH: I'll consider it. I'll consider it.

Now, what's your second question?

MARTIN: Well, but you say that it should be guaranteed in Iraq. Why not America?

BUSH: Well, it's not guaranteed in Iraq. People have got to show up to vote in the first place. I mean, this is -- the thing about democracy is people need to step up and decide to participate in the first place. There's no guarantees people are going to vote. They should be allowed to vote. But the problem we have in our society is too many people choose not to vote.

And we have a duty in the political process...

(APPLAUSE)

... and you have a duty as journalists to encourage people to register to vote, to do their duty.

I'm not saying -- I'm saying, people are choosing. It's not guaranteed they're going to. That's part of the problem we have in America, not enough people do vote.

And you have a duty, on your radio stations, on your TV stations, to encourage people to register to vote. I have a duty to call them out to vote.

Of course, I'm going to try to call them out to vote for me.

(LAUGHTER)

Second round.

CHEN: All right. We'll come back around, sir.

Early in your administration you talked a good deal about immigration reforms and the possibilities there. I have not heard you talk to that issue so much recently.

I wonder what you still think is possible, given the circumstances that we find ourselves in today. What is doable, particularly in the short term?

BUSH: Actually, I have talked about it lately. I talked about it this winter, because I think it's necessary that we reform our immigration laws.

I believe where there's a willing worker and a willing employer, and they can't find work here in America, that people ought to be allowed to be here legally to work. That's what I believe.

BUSH: And I believe there ought to be a process that allows a person to work here legally and go home and come back without fear of being arrested. I think there needs to be a...

(APPLAUSE) I think there needs to be a -- first of all, this will help bring people out of the shadows of our society. This will help, kind of, legalize a system that takes place every day, without employers feeling like they have got to be subjected, or employees feeling like they're going to be arrested, subjected to fines or arrested.

And so, we need to reform our immigration laws.

Now, the issue there is whether or not people automatically get to step in the front of the line when it comes to citizenship. I don't think they should. I think those who have been waiting in line to be a citizen ought to be allowed to keep that priority in line.

I think people ought to, in this process, ought to be allowed to apply for citizenship, but I don't think they ought to be treated specially in relation to those who have been in line for quite a while.

And in order to solve the logjam for citizenship, Congress has got to raise the quotas on who can become a citizen. And I support raising the quotas on certain population groups, like the Mexican nationals, on who can become a citizen.

(APPLAUSE)

The long-run solution, particularly to Mexican immigration, is going to be help Mexico develop a middle class.

(APPLAUSE)

That's why free trade is so important between our countries. That's why we better be careful about rhetoric that begins to unwind a free-trade agreement that is making an enormous difference in the lifestyles of people in Mexico.

See, trade, to me, is the great hope for developing nations. That's why I was a strong supporter of AGOA, the African Growth and Opportunity Act. It gives people a chance to have a job that's a meaningful job because of the trade between the world's largest market and their countries. NAFTA has made a big difference in lifting lives of people. It has improved the living standard in Mexico.

Listen, people are coming to the United States to work from Mexico because they want to make a living for their families. And if they can't make a living for their families at home, they'll come here to work. And therefore, we must work with Mexico to develop a middle class in the long run, so people can do their duty as a parent at home. That's what they want.

And we need to change our immigration laws. Will it get done? Probably not this year. This is an election year. Not much gets done, except for a lot of yelling and elbowing. But I would like to see reasonable immigration reform come out of the Congress.

TRAHANT: A few minutes ago, you mentioned every American received a tax cut, that's working. The most onerous tax for many Americans, particularly on the low end of the scale, is the payroll tax. What can be done about payroll taxes?

BUSH: Well, obviously I chose to provide tax relief by income tax cuts, not by payroll taxes. And the reason why is, payroll tax relief will affect the solvency of Social Security. So I chose not to deal with the payroll tax.

SUAREZ: Mr. President, this week General Tommy Franks, your former CENTCOM commander, has been on tour, talking about his book, talking about his Iraqi experience.

And he conservatively estimated two to four more years of a large-scale American presence in Iraq.

This morning, there's fresh fighting in Najaf, Nasiriyah, Samarra.

What is the mission, at this point, for 140,000 American forces? And how will we know when they're done?

BUSH: The mission is for the...

(APPLAUSE)

The mission is there to be a democratic Iraq, where they have elections to elect their government. That's the mission, to help them achieve that. And that's important. And that's necessary work.

And, you know, the tactics to achieve that are, one, we help provide security to the Allawi government as they move toward elections.

Obviously there are people there that are still trying to disrupt the election process. They can't stand the thought of a free society in the midst of a part of the world that's just desperate for freedom.

These people don't like freedom. You know why? Because it clashes with their ideology. We actually misnamed the war on terror; it ought to be the struggle against ideological extremists who do not believe in free societies, who happen to use terror as a weapon to try to shake the conscience of the free world. And...

(LAUGHTER)

No, that's what they do. They use terror to -- and they use it effectively.

KAGAN: We've been listening in to President Bush. He's been adressing minority journalists at the Unity Conference in Washington D.C.

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 August 6, 2004 - 9:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Good morning. Terror fears in three U.S. cities. Now British police have captured a man who may have staked out U.S. financial centers.
Where does the Scott Peterson case go now after a judge halts testimony so that defense attorneys can examine some surprise evidence?

And a developing story in Tennessee. A Greyhound bus, a tractor- trailer colliding on an interstate.

All ahead this hour here on AMERICAN MORNING as we continue now.

ANNOUNCER: From the CNN Broadcast Center in New York, this is AMERICAN MORNING with Bill Hemmer and Soledad O'Brien.

HEMMER: Good morning, everyone. Soledad is resting. Heidi Collins is here on a Friday morning.

Again, good morning. Nice to see you.

HEIDI COLLINS, CNN ANCHOR: Thank god it's Friday.

HEMMER: Yes. That's right. I'm right there with you.

In a moment here, authorities on both sides of the Atlantic very interested in a man arrested in an anti-terror sweep in Britain. We'll look at what they're learning about Esa al-Hindi and his connection to the terror warnings announced last Sunday. We'll get to that in a moment.

COLLINS: Also, Sanjay Gupta will be with us explaining some new research drawing a correlation between breast cancer and a high-carb diet.

HEMMER: Also, the story about U.S. baseball players going to the Olympic after all. If they win gold, they will not be wearing the red, white and blue, however. That's coming up this hour, also.

COLLINS: Hearing the red, white and blue, correct? All right. Interesting.

Jack here now.

JACK CAFFERTY, CNN ANCHOR: It should be pointed out that you're doing yeoman's work here at CNN this week.

COLLINS: Sure.

CAFFERTY: Not only are you doing AMERICAN MORNING, but you're also -- aren't you working at night?

COLLINS: Where's the -- where's the victim cam?

CAFFERTY: Yes. Aren't you -- what show are you doing tonight? Paula's program, right?

COLLINS: I'm doing the 8:00 p.m. show. Thank you so much.

CAFFERTY: That's "PAULA ZAHN NOW."

COLLINS: It is.

CAFFERTY: Only this week it's Heidi Collins now. Where is old Paula?

COLLINS: Heidi, Paula, whatever. She is on vacation.

CAFFERTY: On vacation.

COLLINS: Yes.

CAFFERTY: But they pay you a lot of overtime for this, right?

COLLINS: Indeed, they do.

CAFFERTY: I mean, you get like double, triple time for the nighttime show?

COLLINS: Vacation time, extra pay, dinners out.

CAFFERTY: Yes. There you go.

COLLINS: Good stuff.

CAFFERTY: It's a great company, CNN.

The question today is whether or not they should convene a special session of the Congress to deal with the recommendations of the 9/11 Commission report or should they just stay on vacation until after Labor Day. Unbelievable.

COLLINS: All right. We've got that clock ticking, that's for sure.

CAFFERTY: Let me know if you need any help.

COLLINS: Hey, thanks. Will you come at 8:00?

CAFFERTY: On second thought, don't let me know if you need any help. I don't want to.

COLLINS: Vacation (ph) starts soon. All right, Jack. Thanks a lot. U.S. government officials say a terror suspect arrested in Britain is a key al Qaeda operative who in 2001 personally cased some of the buildings that sparked this week's terror alerts. Here now, justice correspondent Kelli Arena.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): Law enforcement sources say they believe one of the men arrested this week in Britain personally conducted some of the surveillance of potential terror targets in the United States. Esa al-Hindi is described as a senior al Qaeda operative. Sources tell CNN he was on the ground in New York City in early 2001. And one source says law enforcement has definitively placed him in three of the buildings that were surveilled, the New York Stock Exchange, the Citigroup building and the Prudential building in Newark, New Jersey.

EVAN KOHLMANN, GLOBALTERRORALERT.COM: He's someone with military experience, he's someone who's perfectly fluent in -- in English, in Erdu, in Arabic. He's a transnational al Qaeda operative who has his fingers in many pots.

ARENA: U.S. officials say al-Hindi can currently be described as al Qaeda's chief of operations in the U.K. They say he moved operational information between key components of al Qaeda in Britain, Pakistan and the United States.

Terrorism experts say al-Hindi is a Muslim convert and former commander of an al Qaeda training camp in Afghanistan. Investigators believe he was plotting to attack London's Heathrow Airport based in part on intelligence from Pakistan.

KOHLMANN: I think it's an ominous sign. Whenever there's an attack of this scale going on in London, it's not just a British thing. It's a U.S. thing, too, because most of the time when al Qaeda strikes it tends to strike in multiple simultaneous attacks.

ARENA: Al-Hindi's arrest and others in Pakistan, including that of alleged al Qaeda computer expert Muhammad Naeem Noor Khan, have led to multiple intelligence leads. Especially troubling, government officials say alleged operatives in Pakistan recently contacted an individual or individuals in the United States.

JAMES COMEY, DEPUTY ATTORNEY GENERAL: We have, as we've said before, reason to believe that we are in a very serious threat environment. And we're working like crazy to try and make sure that threat does not come to fruition.

ARENA (on camera): Investigators say given his alleged position, al-Hindi may have knowledge of plans to attack in the United States. The trick is getting him to divulge all he knows.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE) COLLINS: And another development this morning to tell you about. Saudi security forces say they have arrested an important al Qaeda leader. An interior ministry official says Faris al-Zahrani was captured last night near the Yemeni border. The cleric was number 12 on the kingdom's list of the 26 most wanted terror suspects.

HEMMER: Meanwhile, the leader and the founder of a mosque in Albany, New York, charged with money laundering and conspiracy caught in an FBI anti-terrorist sting. The announcement came right around this time yesterday.

Mohammed Hossain cofounded the Masjid As-Salam mosque in Albany. He's lived in America for nearly 20 years. Also, Yassin Aref came from Syria three years ago. He's the imam at the mosque.

Faisal Ahmad teaches at the mosque, knows them both. He's our guest now live in Albany.

And we thank you for your time this morning.

FAISAL AHMAD, KNOWS MOSQUE SUSPECTS: Good morning.

HEMMER: Your reaction to these charges?

AHMAD: Well, you know, our community, we've reacted by keeping in mind that in the hereafter all people will be brought to account. And true justice can only be found in the hereafter. And that's essential to our -- to Muslim belief.

And that has kept us together as a community. And we -- we have come together with the realization that, you know, we have to keep in mind that any justice that we seek after should ultimately rest in our hopes in the hereafter.

HEMMER: Mohammed Hossain, you've known him, the founder of the mosque, for several years, I'm told. Describe him for us and our viewers.

AHMAD: Mohammed Hossain is a very, very good brother. He's good to children. He -- he definitely exemplifies the character of the prophet Mohammed, showing kindness, peace and good character.

And he's always doing work with -- with charity. He gives free pizza to his customers. And, you know, he's a very, very good person.

And I'm really surprised, and our whole community is really surprised and a little bit cautious about, you know, labeling Mr. Hossain or Mr. Aref as terrorists, because there's great -- there's tremendous implications to such statements. And we really have been trying to urge the community at large to -- to have -- to presume innocence. And that's part of our civic duty.

HEMMER: George Pataki is the governor here in New York. He was with us two hours ago here on AMERICAN MORNING. Very strong words about this, saying the target was a diplomat from Pakistan who worked in New York, worked for the U.N. Was there ever an anti-American message preached in that mosque?

AHMAD: Not at all. I've been a member of the mosque since the five years that -- that it's been in existence. And I'm a teacher. I teach with Mr. Aref. And I teach with -- and I know Mr. Hossain.

And we are -- we're a community founded on love and brotherhood. And our doors have always been open. We welcome anybody, any new people into our community.

And Mr. Aref, for example, he teaches the kids, and he brings the children to the playland. Both gentlemen have many children of their own. And they're upstanding members of the community.

And Muslims, in general, we -- we have patience, and our religion teaches us to show good character and kindness, even to those who don't understand us. And I think the problem really in this upstate area, and especially in New York, is we have a lot of misunderstandings and misconceptions about our religion. And actually, how much it has in common with the other Abrahamic faiths is something that we need to learn more about. And we're working to try to educate the local community about that.

HEMMER: If I could, just one final comment here. Government officials say there are ties now to Ansar al-Islam, this group that works in northeastern Iraq and other parts of the Middle East. Is it possible, in your judgment...

AHMAD: Well...

HEMMER: ... that this could have been happening, this plot could have been developing without your knowledge?

AHMAD: Well, I've been present for all of the speeches and the classes that Imam Aref has given. And I'm a very active member in the mosque. I'm a teacher there. And I"ve never even heard of any type of political activity or political organization in the mosque.

These -- again, these are two gentlemen that are family men, that are teachers of children. And I'm really -- I would really be surprised if there was any correlation whatsoever.

HEMMER: Faisal Ahmad is there in Albany, New York, this morning. Thanks for your time.

AHMAD: Thank you again.

HEMMER: All right -- Heidi.

COLLINS: The Albany case is one of a sudden flurry of arrests in the U.S., Britain and Pakistan. And new intelligence appears to show action at al Qaeda training camps along the Pakistan-Afghan border. CNN terrorism analyst Peter Bergen is in Washington this morning. He joins us now to shed some more light on all this activity.

Want to get first, Peter, if we could, to those training camps. Are you surprised that the activity has sort of come up all over again?

PETER BERGEN, CNN TERRORISM ANALYST: A little bit. You know, two weeks ago, Richard Armitage, the deputy secretary of state, said publicly that there were terrorist training camps in Pakistan and Kashmir that were operating. So obviously the U.S. government has been feeling that these -- these camps have been coming back, despite the official pronouncements from the Pakistani government that they're all closed.

When I asked a Pakistani government official recently about Richard Armitage's statement that terrorist training camps were coming back, he said that was, you know, basically absolutely nonsense. So the Pakistani government's sort of point of view is this is -- this is not happening.

However, you know, it's a large country. They don't really exert a lot of control over this border region between Afghanistan and Pakistan. It's perfectly plausible that camps would be running.

We're reporting based on defense and intelligence resources and overhead imagery that this is happening. And so, unfortunately, they seem to be back.

COLLINS: Well, how sophisticated are these camps? Can you put that into perspective for us?

BERGEN: I think that they -- you know, even when they were operating in a very open manner in Afghanistan in the late '90s, they were basically a bunch of mud huts. When we -- when the United States attacked these camps after the embassy bombing attacks in '98 in eastern Afghanistan, they were back in operation within two weeks because they're not -- there's really no infrastructure.

It's basically, you know, just a bunch of guys and some -- some mud huts. So it's not like these things are particularly sophisticated. They can go out of business and go back into business pretty easily.

COLLINS: So why not just shut the camps down? I mean, we've heard so much about the relationship, much better relationship, if you will, between the United States and the Pakistanis on this very issue of the war on terror. Why can't they just go in there and shut them down if everybody knows that they're there?

BERGEN: Well, that's a good question. I think that, you know, the Pakistani government is doing what it can.

Musharraf, the president, himself, survived two assassination attempts by al Qaeda within the last two months. The prime minister designate, just within the last week, also survived an assassination attempt.

For top Pakistani officials like Musharraf, this is a very personal effort to get rid of al Qaeda. But, of course, it's a large country. There are sympathizers within the military with al Qaeda. In fact, there were nine lower-level military people involved in the assassination attempts against Musharraf. People in the army, people in the air force. So the problem is, while Musharraf is personally committed to this, perhaps people within the government, within the military are not.

COLLINS: I see. Quickly, Peter, before we let you go, with all of these arrests and -- detentions, I should say -- around the world lately, does the United States have the upper hand on the war on terror? Or are these just kind of being seen as a drop in the bucket?

BERGEN: Well, I think, you know, these are -- these are significant moves. I mean, the war on terrorism is not something that's ever going to be won. It is going to be managed into a kind of area where it's no longer significant. I think we're still not at that point yet.

COLLINS: All right. Peter Bergen, always nice to see you, our CNN terrorism analyst. Thanks so much.

BERGEN: Thank you, Heidi.

HEMMER: About 13 minutes past the hour. We talked about this story about 45 minutes ago, that major collision in Tennessee that happened earlier today. Three people are dead, 25 injured.

A tractor-trailer and a Greyhound bus colliding. This in western Tennessee, right along I-40, about the midway point between Memphis and Nashville.

All of those injured have been transported to hospitals in Jackson, Tennessee. Five listed in serious condition. We'll update this story throughout the morning.

Also, that jobs report, reaction from the White House coming up in 15 minutes from the White House.

And with the opening bell up at 9:30 Eastern Time, about 15 minutes away, too, we'll see how the markets respond as well. Weaker than predicted we are told.

Daryn Kagan has the other news live in Atlanta.

Good morning, Daryn.

DARYN KAGAN, CNN ANCHOR: Good morning to you, Bill.

Let's begin in Chicago. A man there will be back in court on Tuesday to face terror charges. Prosecutors say that Gail William Nevels (ph) was arrested with a pickup truck containing 1,500 pounds of fertilizer. He will be charged with plotting to blow up a federal courthouse in a plot similar to the Oklahoma City bombing. But since it was a government sting operation, authorities say that he never actually had the materials to make a truck bomb.

President Bush addresses a convention of minority journalists in Washington this morning. The president will speak at the same conference that heard from Senator John Kerry yesterday. We will have live coverage of that coming up.

And this viewer's note. President Bush and first lady Laura Bush will appear together exclusively on "LARRY KING LIVE." That is next Thursday at 9:00 p.m. Eastern.

The United Nations envoy and Sudan's foreign minister has an agreement. They have worked out a plan to disarm Arab militias who have terrorized refugees in Darfur. Last week, the U.N. Security Council passed a resolution. It set a deadline for Sudan to crack down on violent Arab militias or face other economic sanctions.

And in Los Angeles, the Extreme Games are on. ESPN's 10th annual X-Games will run through the weekend, 17 bone-crunching events. Athletes from 14 to 43 years old are competing this year. The skateboard big air finals will be the first ever mega-ramp.

Check that out. It features a nine-story ramp. It is one of the highest and longest skateboard ramps ever built.

I would say don't try this at home, but you know that there's kids all across America who are doing just that.

HEMMER: That's right.

KAGAN: And if they do well, can grow up to do that.

HEMMER: Yes. There you go. You know, holding it in LA, too, is going to get some major media exposure, too, as the X-Games continue to grow year after year, huh?

KAGAN: It's cool stuff.

HEMMER: Your home town.

KAGAN: Yes.

HEMMER: Thank you, Daryn.

Chilly Chad, that's what we call him today.

Good morning.

(WEATHER REPORT)

HEMMER: All right, Chad. Thanks for that.

In a moment here, there is news today of a possible link between carbs and breast cancer. Sanjay explains that a bit later.

Also ahead, a bombshell in the Scott Peterson case could bring the trial to an early end. So says some. Jeff Toobin, his thoughts in a moment on that.

And some all-American baseball players will play baseball in Athens this summer. They will not be playing, though, for team USA. We'll explain ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

COLLINS: Eating lots of carbs may raise the risk of breast cancer, according to a new study out today. It raises concerns that high-carb diets may affect women's health. Dr. Sanjay Gupta joins us from the CNN Center with more.

So what's with this?

DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: Yes, good morning.

You know, there's a lot of conflicting studies on this particular topic in terms of diet and its impact potentially on cancer. I'll tell you that this is another study, one of the latest ones. Let's take a quick look at it.

Actually, a study done in Mexico. This was sponsored by the Harvard School of Public Health, looking at newly diagnoses very healthy women with breast cancer.

They found -- what they found was these women were eating main corn products, tortilla products, things like that, a lot of soda, bread. High intake of carbohydrates, and found that -- after a while, they found that the increased risk of breast cancer was certainly present. Let me give you the exact numbers here.

They were eating about 62 percent or more of their diets made up of carbohydrates. If that was the case, they were two times more likely to develop breast cancer, as compared to women who were eating 52 percent or less of their diet being carbohydrates. Heidi, both those numbers are high. That's a lot of carbohydrates in your diet, period. But what they seem to have shown here in a very cursory sort of way, Heidi, is that very high concentrations of carbohydrate calories in your diet seemed to have an impact on breast cancer.

COLLINS: All right. So talk about the carb intake now, for a minute, if you would. Are there current guidelines right now for how much we should be eating?

GUPTA: Yes. You know, and that's one of the reasons they're not ready to directly say that this is applicable to the United States population, because the guidelines of the United States actually much lower. You can take a look at the numbers there.

Forty-five to 65 percent of your calories typically going to be from carbohydrates. Now with the low-carb craze that you and I have talked about so many times, the average intake of carbohydrates is probably even going to be smaller than that, only 20 percent of that coming from sugar calories specifically, Heidi.

COLLINS: So why would carbohydrates or eating too many of them actually raise your risk of getting cancer?

GUPTA: You know, that's actually a very good question. There's a couple of different theories on that. One is that actually eating a lot of sugar, rapid changes in sugar, may somehow cause cells to divide more quickly, possibly causing cancer. There's also been the theory that people who are just heavier, they produce more estrogen. And that could potentially cause cancer.

One of the other theories I think is important to point out with regards to this study is the food in Mexico and the food in the United States is different in that the food in the United States is often fortified with things like folate, which might be protective against cancer. The food in Mexico is not. And that might be a problem as well -- Heidi.

COLLINS: All right. Interesting point . Sanjay Gupta, thanks so much for that.

GUPTA: Thank you.

HEMMER: About 22 minutes now past the hour. Down in D.C., President Bush is speaking at the Unity -- Unity Convention, rather. We're watching that. There may be a chance for questions a little bit later in the hour. We'll get to that, if that takes place.

Also, John Kerry running for president in part on his record in Vietnam. A controversial new ad says that record is based on lies. Kerry supporters firing back. Both sides on this issue still to come this hour.

Back in a moment.

(COMMERCIAL BREAK)

HEMMER: Welcome back, everyone. Here's Jack, "Question of the Day."

CAFFERTY: Is it the 13th the Olympics start?

HEMMER: This thing says the 5th. I thought you were -- I thought it was next Friday.

CAFFERTY: Maybe it's Sunday night.

HEMMER: You know what? I'm going to go to Google.

(CROSSTALK)

CAFFERTY: Just one of the long list of things I don't know anything about. But one...

HEMMER: Your answer forthcoming, onward.

CAFFERTY: What we are doing, though, this morning is finding out about how you feel about this idea of calling Congress back into a special session to deal with the recommendations of the 9/11 Commission. When the recommendations came out, the Congress said we're much too busy, we can't do this until next year. And then they went on vacation for six weeks.

Well, a lot of people didn't think that was the right way to respond. So we're asking, should they called back now to deal with this stuff?

Donna in Chevy Chase, Maryland, writes, "If they skip vacation to take action on the report, those actions would not have any immediate effect." Apparently Donna knows more about how they work down there than I do. "But the results of rushing to do things to quell critics like Jack will have effects that we'll have to live with for decades."

Kay in Savannah writes this -- this is interesting to me -- "Is history repeating itself? The summer before September 11, and especially the month of August, we had intelligence agents running around with their hair on fire because of the intel coming in that we were going to be attacked. But everyone was on vacation."

"Now we have intel of another possible attack. Tom Ridge has been on TV telling us the threat level has been increased. The 9/11 Commission has released their recommendations, but instead of dealing with the threat, once again, everyone is on vacation."

And Hugh in Taylorsville, Kentucky, "Maybe not so bad. Remember Mark Twain's observation: 'No man's life, liberty or property are safe while the Congress is in session.'"

Mark Twain had it going on, didn't he?

HEMMER: That he did.

COLLINS: All along.

HEMMER: We were talking about the Olympics a short time ago. There is no U.S. baseball team competing this year. There will be American players, though, in Greece.

The home team now has its own team, and it's American-made, too. Here's Larry Smith on that.

(BEGIN VIDEOTAPE)

LARRY SMITH, CNN CORRESPONDENT (voice-over): Erik Pappas hasn't played major league baseball in 10 years.

ERIK PAPPAS, BASEBALL PLAYER: My grandfather is 100 percent Greek, and he really practiced (ph).

SMITH: Clay Bellinger has a 193 career Major League average.

CLAY BELLINGER, INFIELDER: My mother's grandmother was born there. And then her father was a Greek citizen.

SMITH: And Sean Spencer (ph) hasn't even made it that far.

UNIDENTIFIED MALE: My great-grand information was born in Greece. SMITH: They're all teammates now, united proudly, if haphazardly, beneath the Greek flag.

BELLINGER: I heard the Greek anthem for the first time today. You know, just before the game. It was kind of nice.

DUSTY RHODES, MANAGER, GREEK OLYMPIC BASEBALL: A lot of these guys have told me, you know, we got a break by coming to the United States and our relatives came over from Greece. And we've got the chance to learn the game of baseball, and now we're going to go back and try to represent our people in Greece.

SMITH: As hosts of the summer Olympics, Greece's baseball team automatically qualified for the games. Except they didn't have a baseball team.

Instead, they sought help from Peter Angelos, the Greek-American owner of the Baltimore Orioles and his son, Louis. They bought uniforms, paid for travel, even let the team train in the Orioles stadium. What was harder to find were Greek players, or at least players with Greek relatives. Even distant Greek relatives.

PAPPAS: I know growing up in baseball I never even played with any other Greek ball players.

LOUIS ANGELOS, SPONSOR, GREEK OLYMPIC BASEBALL: I understand why there may be skepticism in Greece. Where are the Greek players on this team? Well, we would submit these are the Greek players. These are ancestors of people who were born in Greece, perhaps removed to grandparents or great-grandparents.

UNIDENTIFIED MALE: Hopefully, they can get some teaching over there, and maybe in 2008 they can have their own team of people that are living there.

SMITH: For now, these Americans will try to honor their adopted nation and the birthplace of the Olympic games. And they might just bring honor to their American ancestors as well. You see, the team from the U.S., the birthplace of baseball, did not qualify for the Olympics.

Larry Smith, CNN.

(END VIDEOTAPE)

HEMMER: Next Friday, they kick off in Athens, Friday -- right around 6:00 in Athens. About noontime here, I believe

CAFFERTY: It's also when the Giants and Chiefs play their first pre-season football game.

CAFFERTY: We know what you're going to be watching.

CAFFERTY: I'll bet you the ratings in New York are higher for the Giants than they are for the Olympics.

HEMMER: We'll see.

CAFFERTY: Yes.

HEMMER: Thank you.

COLLINS: Still to come this morning, a surprising delay in the murder trial of Scott Peterson. The defense thinks it may have found a way to end the trial now. We'll talk to senior legal analyst Jeffrey Toobin.

Stay with us on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: 9:30 here in New York. Beautiful day in Manhattan. Chilly temperatures for August, and we like it.

Opening bell on Wall Street just went off a short time ago. We'll get you reaction in a moment, how stocks are responding to the jobs reports. Weaker than expected.

COLLINS: (UNINTELLIGIBLE).

HEMMER: Yes.

Also, watching the president speaking before the Unity Convention in Washington, a group made up of minority journalists. We'll go there live also when he starts taking questions.

And a political commercial also, too, causing a storm today over John Kerry's Vietnam War record. One rep of veterans who say Kerry is lying about his record, a Kerry supporter who served at his side in southeast Asia. That debate still to come this half-hour also.

COLLINS: Also, a big surprise in the Scott Peterson case as the judge puts the trial on hold so the defense can look at some surprise evidence. Jeff Toobin up next, explaining what this mystery evidence might be all about.

HEMMER: As we kick of the half-hour, just into us here up in Connecticut, Alina Cho is reporting in New Haven one of the arrests in Britain was caused by a warrant that went out from here in the U.S. We expect a press conference within the hour. Alina is there now live.

Good morning.

ALINA CHO, CNN CORRESPONDENT: Good morning to you, Bill.

In fact, that news conference is set to start here at the U.S. attorney's office in New Haven at 10:00 a.m. Eastern Time. But we have just been handed the criminal complaint, an arrest affidavit., about a 30-page document.

Here is the headline on the arrest and charges on 30-year-old Barbar Ahmad (ph). Authorities allege that he sought to use U.S.- based Web sites, in particular one called azzam.com, A-Z-Z-A-M.com, in connection with acts of terrorism in Chechnya and Afghanistan on behalf of waging a jihad and on behalf of the Taliban.

Here is what else we know from this document. Very significant to note that computer files were found in which allegedly detail a U.S. Navy battle group plan from April 2001, including formation drawings, details of specific assignments of individual ships, and details of the ship's vulnerability. Basically, the document concluded that nothing could stop a small boat or a rocket-propelled grenade, even a stinger missile, from hitting this U.S. battle group plan, which was patrolling the Persian Gulf for operations against al Qaeda and to enforce sanctions in Iraq.

He appeared in court in London this morning, saying that he did not want to go to the U.S. Of course, these Web sites, I should mention the Connecticut connection. The Web site was based in Connecticut, we understand.

He is to remain in jail until his next hearing on August 13. He was arrested last night in London following a raid on his home.

Again, appeared in court today. The headline being he operated Web sites in connection with acts of terrorism. Also, documents dealing -- dealing with a U.S. battle group plan.

Bill, back to you.

HEMMER: All right. Alina, thanks. Alina Cho.

We're watching the room there. When that press conference gets under way, we'll get our viewers back to there.

In the meantime, though, politics and the politics of war. The Kerry campaign said to be quite angry about a new attack add that accuses the senator of lying about his service in Vietnam. Set to air in three different battleground states, here now is that ad in full.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: If you have any question about what John Kerry's made of, just spend three minutes with the men who served with him...

UNIDENTIFIED MALE: I served with John Kerry.

UNIDENTIFIED MALE: I served with John Kerry.

UNIDENTIFIED MALE: John Kerry has not been honest about what happened in Vietnam.

UNIDENTIFIED MALE: He is lying about his record.

UNIDENTIFIED MALE: I know John Kerry is lying about his first Purple Heart because I treated him for that injury.

UNIDENTIFIED MALE: John Kerry lied to get his Bronze Star. I know. I was there. I saw what happened.

UNIDENTIFIED MALE: His account of what happened and what actually happened are the difference between night and day.

UNIDENTIFIED MALE: John Kerry has not been honest.

UNIDENTIFIED MALE: And he lacks the capacity to lead.

UNIDENTIFIED MALE: When the chips were down, you could not count on John Kerry.

UNIDENTIFIED MALE: John Kerry is no war hero.

UNIDENTIFIED MALE: He betrayed all his shipmates. He lied before the Senate.

UNIDENTIFIED MALE: John Kerry betrayed the men and women he served with in Vietnam.

UNIDENTIFIED MALE: He dishonored his country, he most certainly did.

UNIDENTIFIED MALE: I served with John Kerry.

UNIDENTIFIED MALE: John Kerry cannot be trusted.

UNIDENTIFIED MALE: Swift Boat Veterans for Truth is responsible for the content of this advertisement.

(END VIDEO CLIP)

HEMMER: One of the gentlemen in that advertisement is Bob Elder, with Swift Boat Veterans for Truth. And also, Del Sandusky piloted John Kerry's swift boat in Vietnam. He is campaigning on behalf of the senator. A bit earlier, I spoke with both gentlemen. First Mr. Elder about his claims from 35 years ago.

(BEGIN VIDEOTAPE)

HEMMER: In the ad, you say -- and quoting now -- "John Kerry is no war hero." Why do you make that claim?

BOB ELDER, SWIFT BOAT VETERANS FOR TRUTH: I make that claim for two reasons. One, as you could see, it was that he betrayed all of us when he came home and went in front of the Congress of the United States and accused all of us of war crimes. That is not what a war hero is made of. Secondly, we believe he grossly exaggerated, and even lied about some of the circumstances under which certain awards were given to him.

HEMMER: Let me be a little more specific. The ad says -- and quoting -- "John Kerry lied about his first Purple Heart." The ad says, "John Kerry lied to get his Bronze Star." What did he lie about?

ELDER: That first Purple Heart was the result of him firing an M-79 grenade over the side of his boat. The grenade went off too close to the boat, and he was wounded very slightly, a scratch on his arm by his own grenade.

There was no hostile fire. And one of the qualifications for a Purple Heart is that there be hostile fire. Both the doctor who treated him and his commanding officer denied him that Purple Heart because there was no hostile fire.

HEMMER: Mr. Elder, were you there that day?

ELDER: I was not there.

HEMMER: How can you give that account then, based on what?

ELDER: I could fill this studio with people who were eyewitnesses to the events that we recount in our testimony.

HEMMER: Mr. Sandusky, you were there in marriage of 1969 when this incident occurred in the Mekong Delta. Apparently four boats who were patrolling this area; boat number three hit a mine. Your version of the events for Senator Kerry at that point are what?

DEL SANDUSKY, VIETNAM VETERAN: I was with John Kerry. I was the leading petty officer and the helmsman on PCF-94.

I served with John Kerry. Those men did not serve with John Kerry. We were all in the same war at the same time, possibly, but I could say the same thing. I served with General Westmoreland.

Their ad is a pack of lies. They're shooting theirself in the foot. Senator John McCain has said that their ad is "dishonest" and "dishonorable," and asked for them to cease fire. Senator McCain has asked the president to get them to cease fire. You know, back down.

I don't know where they're coming from. I don't know what their agenda is. I was with John Kerry. I know that he deserved his Bronze Star, his Silver Star, and two of his three Purple Hearts. I was not there for the first.

HEMMER: If I could, though, can you address this story about this grenade firing that Mr. Elder just talked about?

SANDUSKY: No, that was his first Purple Heart in 1968. John Kerry came on my boat in 1969.

HEMMER: All right. Back to Mr. Elder, then, how do you respond and react to what Senator McCain is saying? I think his words yesterday were "dishonest" and "dishonorable," this ad. The White House apparently saying it has never and will never question John Kerry's service in Vietnam.

Your reaction to that?

ELDER: I think John Kerry knows a lot about dishonor. When he came back and dishonored himself by betraying the men who he had bonded with in combat, and betraying them and accusing them of war crimes, he knows dishonor.

(END VIDEOTAPE)

HEMMER: Again, Bob Elder with Swift Boat Veterans for Truth, Del Sandusky, piloting along with John Kerry's swift boat back in Vietnam, campaigning for the senator. Both men with us earlier today -- Heidi.

COLLINS: Want to take you to the Washington Convention Center now, where President Bush is addressing a group of minority journalists, once again, called the Unity Convention. We're waiting for him to get to the question-and-answer session. And when he does, we will bring some of that up live for you.

In the meantime, Daryn Kagan is standing by at 9:38 this morning with some other news of the day -- Daryn.

KAGAN: Heidi, good morning to you.

Let's begin with military source sources telling CNN in Iraq that two Marines were killed in Najaf. The city is the scene of intermittent fighting between American troops and fighters who are loyal to radical cleric Muqtada al-Ssadr.

Meanwhile, religious leader, the Grand Ayatollah Ali Al-Sistani, has left Baghdad and is heading to London for medical treatment.

Back here in the U.S., in Utah, a judge has granted as extension until Monday to hold Mark Hacking without filing any charges. Hacking was jailed earlier this week on suspicion of killing his wife and disposing of her body. The Associate Press reports that Hacking's attorney will raise the issue of mental illness and challenge his client's confession that he killed his wife. The search for Lori Hacking's body continues at a Salt Lake City landfill.

New research suggests that delaying the birth of premature babies may prevent brain damage. The study suggests that waiting just a few days may improve brain development. It is published in the "Lancet Medical Journal."

An Arizona man is suing the "Dr. Phil" talk show, claiming the show violated the Americans with Disabilities Act. According to this lawsuit, prospective audience members were asked to sign a waiver attesting they didn't suffer from mental illness and weren't under psychiatric care. The man who's being treated for bipolar disorder claims that he was told he could watch the taping as long as he didn't participate in the programming.

Heidi, back to you.

COLLINS: All right, Daryn. Thanks so much for that. Tell us what's coming up at 10:00, though, real quick, before we let you go.

KAGAN: Yes. We are going to be following the candidates, also following President Bush. As you mentioned, we're standing by waiting for him to take questions at the Unity Conference.

Also, on a much lighter note, some big movies out over the weekend. We'll be taking a look at that as well.

COLLINS: All right. I might actually get to see one of those for once. Daryn, thanks so much for that.

KAGAN: There's a concept, huh?

COLLINS: Yes.

Let's get a look at the weather now for the day ahead and for the weekend. Chad Myers at the CNN Center with the very latest.

(WEATHER REPORT)

HEMMER: We're watching the president in D.C. We'll get you down there in a moment. The Unity Convention continues there. We'll get you there as soon as comments are made.

COLLINS: And also, the cola wars are about to get pretty spicy. Andy Sewer is "Minding Your Business" on that. He'll explain what we're talking about.

(COMMERCIAL BREAK)

COLLINS: Now to what could be a major development in Scott Peterson's double murder trial. The judge is putting the case on hold until Tuesday while the defense examines new evidence it says may clear Scott Peterson.

The "San Francisco Chronicle" is reporting new evidence is Duct tape found in San Francisco Bay near Laci Peterson's body. CNN senior legal analyst Jeffrey Toobin joined us earlier. I asked him what the significance of this new evidence could be for the whole case.

(BEGIN VIDEOTAPE)

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: Sometimes you can identify the origin of Duct tape, the store it was purchased in, the kind of Duct tape it was, potentially fingerprints on it. Of course, it's unlikely since it was found in a bay that any of that will be able to be identified.

But it is potentially significant. And frankly, it's surprising to me that this kind of testing hasn't been done yet since it's been so long since her body's been discovered.

COLLINS: Right. Good point there.

You know, if you look at this whole case, and obviously, you know, you're the legal analyst here, but there has been a lot of talk about the prosecution's case just really not being that strong. And now there's this delay. So what is the jury likely to think about all of this?

TOOBIN: Well, there has been a pattern of prosecution mistakes in this case. I mean, here, you know, just another delay. This trial is in its third month, and this is not the world's most complicated trial.

This trial should not be taking this long. And Amber Frey, Scott Peterson's girlfriend, hasn't even been called as a witness, and supposedly may make it to the stand next week.

Last week, the judge excluded one of the prosecution's witnesses because of prosecutorial misconduct, not turning over records of her prior statements, or inconsistencies that she has said.

COLLINS: Right.

TOOBIN: So there have been problems in the prosecution case. However, it is worth keeping in mind, the jurors do try to reach the right result, regardless of the behavior of the lawyers.

COLLINS: Sure.

TOOBIN: And the key fact in this case remains that Laci Peterson's body was discovered 80 miles away from her home, virtually in the precise location that Scott Peterson was on the day that she disappeared. That's a very bad fact for Scott Peterson.

He is very far from in the clear in this case. So, you know, day by day, there have been some bad developments for the prosecution, but it's worth keeping in mind that this case is not all that weak after all.

(END VIDEOTAPE)

COLLINS: CNN senior analyst Jeffrey Toobin with us earlier.

Bill now.

HEMMER: All right, Heidi. Watching the event down there in Washington, D.C. at the convention center in Washington, watching the president now ending his speech. And we anticipate any moment now to start a question-and-answer session there.

This conference takes place every five years. It brings together minority journalists from all across the country, black, Hispanic, Native American, Asian-American. Let's drop in now and hear what we're hearing now in D.C.

(JOINED IN PROGRESS)

QUESTION: Good morning, Mr. President. I'm Joie Chen with CBS News and with the Asian American Journalists Association.

(APPLAUSE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: You've got quite a following out there.

CHEN: It is, after all, the season, isn't it?

(LAUGHTER) I wanted to ask you about protecting all Americans, as well. There are many Arab-Americans and Muslims in this country who find themselves unfairly scrutinized by law enforcement and by society at large.

Just yesterday we had arrests in Albany, New York. Immediately afterwards, some neighbors in the community said they feared that the law would come for them, unfairly, next.

We have a new book out today that suggests perhaps we should reconsider internment camps.

How do we balance the need to pursue and detain some individuals from not-well-known communities while, at the same time, keeping innocent people from being painted by the broad brush of suspicion?

BUSH: Yes, I appreciate that.

First, we don't need internment camps. I mean, forget it.

(APPLAUSE)

Look, right after 9/11, I knew this was going to be an issue in our country. I knew that people would say, you know, there goes a Muslim-looking person, therefore, that person might be viewed as a terrorist. I knew that was going to be a problem.

That's why I went to a mosque to send a signal right after the attacks that said, you know, let's uphold our values. People are innocent until judged guilty. Religious people, people who go to mosques, you know, need to be -- Americans need to be viewed as equally American as their neighbor. Be tolerant. Let law enforcement, to the best of their ability, determine guilt or innocence.

BUSH: But our fellow citizens need to treat people with respect. By far, most Americans in this country did that -- not because I asked them to, just because, by far, the vast majority of Americans are decent people. They care about their neighbors.

I don't care where you're from or what your walk of life is, by far, the vast majority of our citizens are willing to reach out to somebody who is different. And that needed to be done. As a matter of fact, the anecdotal stories of neighbors helping neighbors across religious lines were heart-warming.

Now, in terms of the balance between running down intelligence and bringing people to justice obviously is -- we need to be very sensitive on that.

Lackawanna, for example, there was a cell there. And it created a lot of nervousness in the community because the FBI skillfully ferreted out intelligence that indicated that these people were in communication with terrorist networks.

And I thought they handled the case very well, but at the time there was a lot of nervousness. People said, well, you know, "I may be next." But they weren't next, because it was just a focused, targeted investigation.

And, by the way, some were then incarcerated and told their stories, and it turned out the intelligence was accurate intelligence.

I guess my answer to your question is, is that we've always got to make sure that people are judged innocent before guilty. That's the best insurance policy for law enforcement overstepping its bounds.

I will also tell you, however, that the threats we're dealing with are real. And, therefore, we must do everything we can to ferret out the truth and follow leads.

It's a -- we cannot -- again, you know, it's interesting, these recent threats, they're becoming more and more enriched, as you're finding out. There was more than one thread line, threat line. People are now saying there was other reasons why we took the action we took.

You know, when we find out intelligence that is real, that threatens people, I believe we have an obligation as government to share that with people.

BUSH: And imagine what happens if we didn't share that information with the people in those buildings and something were to happen? Then what would you write? What would you say?

And so we have, in terms of law enforcement, we have a duty to uphold innocence and guilt. In terms of a government, we have the solemn duty to follow every lead we find and share information we have with people that could be harmed. And that's exactly what we've, done and I'll continue to do as a president.

This is a dangerous time. I wish it wasn't this way. Now, I wish I wasn't "the war president." Who in the heck wants to be a war president?

(LAUGHTER)

I don't. But this is what came our way. And this is our duty: to protect our people. And it's a solemn duty. And I'll continue to do it to the best of my ability.

MARK TRAHANT, "SEATTLE POST INTELLIGENCER": Good morning. My name is Mark Trahant. I'm the editorial page editor of the Seattle Post Intelligencer and a member of the Native American Journalists Association.

(APPLAUSE)

Most schoolkids learn about government in the context of city, county, state and federal. And of course, tribal governments are not part of that at all.

Mr. President, you've been a governor and a president, so you have a unique experience looking at it from two directions. What do you think tribal sovereignty means in the 21st century? And how do we resolve conflicts between tribes in the federal and state governments?

BUSH: Tribal sovereignty means that; it's sovereign. I mean, you're a -- you've been given sovereignty, and you're viewed as a sovereign entity. And therefore, the relationship between the federal government and tribes is one between sovereign entities.

Now, the federal government has got a responsibility on matters like education and security to help, and health care. And it's a solemn duty. And from this perspective, we must continue to uphold that duty.

I think that one of the most promising areas of all is to help with economic development. And that means helping people understand what it means to start a business. That's why the Small Business Administration has increased loans. It means, obviously, encouraging capital flows.

But none of that will happen unless the education systems flourish and are strong. And that's why I told you we've spent $1.1 billion in the reconstruction of Native American schools.

(APPLAUSE)

RAY SUAREZ, PBS'S "NEWSHOUR WITH JIM LEHRER": Good morning, Mr. President. Thanks for coming.

I'm Ray Suarez, a member of the National Association of Hispanic Journalists.

(APPLAUSE)

There's a couple of others here, too.

And senior correspondent for "The NewsHour with Jim Lehrer on PBS."

BUSH: Yes. I recognized you.

(LAUGHTER)

SUAREZ: In one of the most closely watched cases of the 2003 term, the Supreme Court split the difference on affirmative action, allowing Bakke to stand, but rejecting the numerical formulas used by the University of Michigan undergraduate schools.

I'd like to hear your own view about when, and if, race and ethnicity are admissible as factors for consideration, both in college admissions and in hiring in the workplace.

BUSH: I think...

(APPLAUSE)

I didn't get to answer.

Yes, I agreed with the court in saying that we ought to reject quotas. I think quotas are discriminatory by nature. I think they discriminate on the bottom, and I know they discriminate on the top. And so, I agreed with their assessment that a quota system was an unfair system for all.

As you might remember, we also agreed with the finding that, in terms of admissions policy, race-neutral admissions policies ought to be tried. If they don't work to achieve an objective which is diversification, race ought to be a factor. I agree with that assessment.

I think it's very important for all institutions to strive for diversity. And I believe there are ways to do so.

When I was the governor of Texas, there was concerns that our big institutions were not -- big educational institutions were not diversified enough. So I went to the legislature and said, "Why don't we work together and say that there's automatic admission to our universities if you finish in the top 10 percent of your high school class, no matter what high school you go to?"

BUSH: And it worked. It worked, because the student bodies began to diversify at the University of Texas and at Texas A&M.

That's an inside joke up here.

(LAUGHTER)

You're about to hear why.

You know, I have a responsibility to work for diversity as well, and the administration, I've met the obligation. If you look at my administration, it's diverse. And I'm proud of that.

I mean, Condi Rice is there because she happens to be a very competent, smart, capable woman. She's also African-American. And she is my closest foreign policy advisor. I see her every day. When I see Condi, I think, you know, brilliant person. And I'm glad she's there.

Colin Powell, he was here yesterday evidently. Rod Paige. Rod Paige was a superintendent of schools in Houston. You know, I wanted somebody who knew what it meant to run a school district, not a theorist; somebody who knows what it means to challenge the soft bigotry of low expectations. He had; he's there.

Alfonso Jackson, Elaine Chow, Norm Mineta. You know, Mel Martinez was in my Cabinet. I mean, we've got a diverse Cabinet. I've got a diverse administration.

I hope that sets an example for people when it comes to hiring, including news organizations.

(APPLAUSE) ROLAND MARTIN, CHICAGO DEFENDER: Mr. President, Roland Martin...

BUSH: Tell them what it's about, Martin.

MARTIN: Oh, I will.

Nationally syndicated columnist with Creators Syndicate and also the editorial consultant for the Chicago Defender, the nation's only daily black newspaper.

(APPLAUSE)

BUSH: Get to the (OFF-MIKE)

QUESTION: I will.

And representing the National Association of Black Journalists...

(APPLAUSE)

... the world's largest minority media organization.

And, the inside joke, a 1991 graduate of Texas A&M University.

(LAUGHTER)

Mr. President, before I ask the question, I hope you'll give our governor, Rick Perry, a call. You spend a lot of time in D.C., Mr. President, but they're trying to cap the top 10 percent in Texas, so that may have an impact on those students going to college.

(APPLAUSE)

BUSH: Yes. But I appreciate you recognizing that it's working in the first place.

MARTIN: It is. But, actually, the percentage of white students increased as well. But I understand.

BUSH: See, sometimes they talk, sometimes they deliver.

MARTIN: I understand. It's OK. I'm working with the A&M president on that.

I also hope that you will take a send round of questions from Texan to Texan, so we can ask a second question, if you would do me that favor.

BUSH: All right, just ask your two questions.

MARTIN: Mr. President, in your remarks, you said that 8 million people in Afghanistan registered to vote and, as you said, exercised their God-given right to vote.

BUSH: Right. MARTIN: That may be a right from God, but it's not guaranteed in the U.S. Constitution. In 2000, an estimated 2 million people, half African-American, had their votes discounted from Florida to Cook County, Illinois, to other cities.

(APPLAUSE)

Come on, that cuts into other questions.

Are you going to order Attorney General John Ashcroft to send federal election monitors to Florida and other Southern states?

And in this age of new constitutional amendments, will you endorse a constitutional amendment guaranteeing every American the right to vote in federal elections?

(APPLAUSE)

BUSH: First of all, look, I can understand why African- Americans, in particular, you know, are worried about being able to vote, since the vote had been denied for so long, in the South in particular. I understand that.

And this administration wants everybody to vote.

BUSH: Now, I -- the best thing we did was to pass the Helping America Vote Act, with over, I think it's $3 billion of help to states and local governments, to make sure the voting process is fair.

And, you know, it's not just the South, by the way. The voting process needs help all over the country to make sure that everybody's vote counts and everybody's vote matters. I understand that. And that's why I was happy to work with Congress to achieve this important piece of legislation.

Just don't focus on Florida. I've talked to the governor down there to make sure it works.

(LAUGHTER)

But it's the whole country that needs -- voter registration files need to be updated. Machines need to work. And that's why there's $3 billion in the budget to help, Roland.

And obviously everybody ought to have a vote.

And what was your other question?

MARTIN: Should we put it...

BUSH: Constitutional amendment?

MARTIN: Should we guarantee it in the Constitution?

BUSH: I'll consider it. I'll consider it.

Now, what's your second question?

MARTIN: Well, but you say that it should be guaranteed in Iraq. Why not America?

BUSH: Well, it's not guaranteed in Iraq. People have got to show up to vote in the first place. I mean, this is -- the thing about democracy is people need to step up and decide to participate in the first place. There's no guarantees people are going to vote. They should be allowed to vote. But the problem we have in our society is too many people choose not to vote.

And we have a duty in the political process...

(APPLAUSE)

... and you have a duty as journalists to encourage people to register to vote, to do their duty.

I'm not saying -- I'm saying, people are choosing. It's not guaranteed they're going to. That's part of the problem we have in America, not enough people do vote.

And you have a duty, on your radio stations, on your TV stations, to encourage people to register to vote. I have a duty to call them out to vote.

Of course, I'm going to try to call them out to vote for me.

(LAUGHTER)

Second round.

CHEN: All right. We'll come back around, sir.

Early in your administration you talked a good deal about immigration reforms and the possibilities there. I have not heard you talk to that issue so much recently.

I wonder what you still think is possible, given the circumstances that we find ourselves in today. What is doable, particularly in the short term?

BUSH: Actually, I have talked about it lately. I talked about it this winter, because I think it's necessary that we reform our immigration laws.

I believe where there's a willing worker and a willing employer, and they can't find work here in America, that people ought to be allowed to be here legally to work. That's what I believe.

BUSH: And I believe there ought to be a process that allows a person to work here legally and go home and come back without fear of being arrested. I think there needs to be a...

(APPLAUSE) I think there needs to be a -- first of all, this will help bring people out of the shadows of our society. This will help, kind of, legalize a system that takes place every day, without employers feeling like they have got to be subjected, or employees feeling like they're going to be arrested, subjected to fines or arrested.

And so, we need to reform our immigration laws.

Now, the issue there is whether or not people automatically get to step in the front of the line when it comes to citizenship. I don't think they should. I think those who have been waiting in line to be a citizen ought to be allowed to keep that priority in line.

I think people ought to, in this process, ought to be allowed to apply for citizenship, but I don't think they ought to be treated specially in relation to those who have been in line for quite a while.

And in order to solve the logjam for citizenship, Congress has got to raise the quotas on who can become a citizen. And I support raising the quotas on certain population groups, like the Mexican nationals, on who can become a citizen.

(APPLAUSE)

The long-run solution, particularly to Mexican immigration, is going to be help Mexico develop a middle class.

(APPLAUSE)

That's why free trade is so important between our countries. That's why we better be careful about rhetoric that begins to unwind a free-trade agreement that is making an enormous difference in the lifestyles of people in Mexico.

See, trade, to me, is the great hope for developing nations. That's why I was a strong supporter of AGOA, the African Growth and Opportunity Act. It gives people a chance to have a job that's a meaningful job because of the trade between the world's largest market and their countries. NAFTA has made a big difference in lifting lives of people. It has improved the living standard in Mexico.

Listen, people are coming to the United States to work from Mexico because they want to make a living for their families. And if they can't make a living for their families at home, they'll come here to work. And therefore, we must work with Mexico to develop a middle class in the long run, so people can do their duty as a parent at home. That's what they want.

And we need to change our immigration laws. Will it get done? Probably not this year. This is an election year. Not much gets done, except for a lot of yelling and elbowing. But I would like to see reasonable immigration reform come out of the Congress.

TRAHANT: A few minutes ago, you mentioned every American received a tax cut, that's working. The most onerous tax for many Americans, particularly on the low end of the scale, is the payroll tax. What can be done about payroll taxes?

BUSH: Well, obviously I chose to provide tax relief by income tax cuts, not by payroll taxes. And the reason why is, payroll tax relief will affect the solvency of Social Security. So I chose not to deal with the payroll tax.

SUAREZ: Mr. President, this week General Tommy Franks, your former CENTCOM commander, has been on tour, talking about his book, talking about his Iraqi experience.

And he conservatively estimated two to four more years of a large-scale American presence in Iraq.

This morning, there's fresh fighting in Najaf, Nasiriyah, Samarra.

What is the mission, at this point, for 140,000 American forces? And how will we know when they're done?

BUSH: The mission is for the...

(APPLAUSE)

The mission is there to be a democratic Iraq, where they have elections to elect their government. That's the mission, to help them achieve that. And that's important. And that's necessary work.

And, you know, the tactics to achieve that are, one, we help provide security to the Allawi government as they move toward elections.

Obviously there are people there that are still trying to disrupt the election process. They can't stand the thought of a free society in the midst of a part of the world that's just desperate for freedom.

These people don't like freedom. You know why? Because it clashes with their ideology. We actually misnamed the war on terror; it ought to be the struggle against ideological extremists who do not believe in free societies, who happen to use terror as a weapon to try to shake the conscience of the free world. And...

(LAUGHTER)

No, that's what they do. They use terror to -- and they use it effectively.

KAGAN: We've been listening in to President Bush. He's been adressing minority journalists at the Unity Conference in Washington D.C.

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