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CNN Wolf Blitzer Reports

Interview with Condoleezza Rice; Saudi Arabia Takes on Michael Moore

Aired August 18, 2004 - 17:00   ET

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


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


WOLF BLITZER, HOST: Happening now: The Saudis take on Michael Moore and "Fahrenheit 9/11" with a new ad campaign, insisting the bin Laden family got no special treatment from the Bush White house in the days after the terror attacks.
And the former head of Israel's super-secret spy agency, the Mossad, has a message for America: Don't repeat Israel's mistake. He'll explain in a live television interview with me. That's coming up, from Tel Aviv.

Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): On the offensive...

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Nobody wants to bring troops home more than those of us who have fought in foreign wars, but it needs to be done at the right time and in a sensible way.

BLITZER: Kerry attacks Bush on national security. We'll get a counterattack from Condoleezza Rice.

Al Sadr's last stand: Is a renegade cleric calling it quits? If not, Iraqi troops are ready to call his bluff.

Bionic man: High-tech help for the war wounded.

SPEC. KEVIN PANNELL, U.S. ARMY: Other than, you know, playing in the NBA, I don't see anything that I won't be able to do.

BLITZER: Homecoming: Residents are finally allowed back to a battered barrier island.

(END VIDEOTAPE)

ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, August 18th, 2004.

BLITZER (on camera): It's the latest battle in the heated contest for the White House. This one a war of words over the Bush plan for a massive withdrawal of U.S. troops from strategic locations. And the battleground couldn't be more fitting.

(BEGIN VIDEOTAPE) (voice-over): Almost exactly 48 hours after President Bush addressed the Veterans of Foreign Wars at their meeting in Cincinnati, Democratic Presidential Nominee John Kerry showed up and directly took aim at the president's plan to bring home 70,000 U.S. troops from Europe and Asia.

KERRY: Nobody wants to bring troops home more than those of us who have fought in foreign wars. But it needs to be done at the right time and in a sensible way. This is not that time or that way.

BLITZER: Kerry charged the president's plan undermines the U.S. war on terror by raising doubts about U.S. intentions and commitments around the world.

KERRY: With al Qaeda operating in 60 countries, we need closer alliances in every part of the world to fight and win the war on terrorism.

BLITZER: Kerry specifically questioned the timing of withdrawing 12,000 troops from South Korea, just when the U.S. is negotiating with North Korea over its nuclear bomb program. And he pointedly cited the view of a key Republican supporter of the president.

KERRY: As Senator John McCain said, quote, I'm concerned -- "I'm particularly concerned about moving troops out of South Korea when North Korea has probably never been more dangerous at any time since the end of the Korean War. This is clearly the wrong signal to send at the wrong time."

BLITZER: The White House quickly shot right back, insisting the redeployment has been in the works for three years and South Korea is on board.

SEAN MCCORMACK, NATL. SEC. COUNCIL SPOKESMAN: Our commitment to South Korea and our defense commitments, not only to South Korea as well as our other treaty allies in northeast Asia, are unshakable. And nobody should mistake the fact that we are committed to them.

BLITZER: And as far as removing troops from western Europe, McCormack noted that Germany has been reunited, the Cold War is over, and the Soviet Union has collapsed.

MCCORMACK: Many of those units were placed where they are right now in order to defend a border that no longer exists, to fight an army that no longer is there, and to fight a war that was contested and won 10 years ago.

UNIDENTIFIED MALE: Ladies and gentlemen, the president of the United States.

BLITZER: The president, while campaigning in Wisconsin, didn't respond directly to Kerry, but did announce a new $10 million plan to help activated National Guard and Reserve personnel pay for their education.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: These brave Americans put their jobs on hold and leave their family behind when we called.

(END VIDEOTAPE)

BLITZER (on camera): And we'll get more reaction from the Bush administration when I speak with the National Security Advisor Condoleezza Rice. That's coming up later this hour.

Here's your chance to weigh in on this important story. Our Web question of the day is this: Whose military policy do you agree with more? President Bush's or Senator John Kerry's? You can vote -- go to cnn.com/wolf. We'll have results for you later in this broadcast.

After weeks of bloody fighting, the renegade Shiite cleric Muqtada al-Sadr has agreed to disarm his militia and withdraw from a revered shrine in Najaf, that's at least what says. But if the agreement holds, it would be a significant victory for the government in Baghdad.

CNN's John Vause reports from the Iraqi capital.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT: The standoff in Najaf may have ended not with a bang, but a letter.

UNIDENTIFIED FEMALE (through translator): We have news from martyr's office, the approval of Sayed Muqtada al-Sadr for the conditions that the National Conference has suggested.

VAUSE: In a statement from his Baghdad office to the Iraqi National Conference, al-Sadr said he was ready to leave the Imam Ali Mosque, dissolve his Mehdi Militia, and join the political process.

Demands made by a peace delegation, which never met with al-Sadr face-to-face.

JALIL SHAMARI, SHIITE DAWN PARTY (through translator): Our duty is to deliver peace. And in my opinion, although the delegation's task did not reach a conclusive stage, it was successful because it paved the way for a decisive conclusion.

VAUSE: In return, the Shiite cleric gets safe passage from the mosque and will not be arrested. But he wants a complete cease-fire and U.S. and Iraqi forces to pull back before he orders his militia to stand down. With 2,000 U.S. Marines and more than 1,000 Iraqi forces encircling the Imam Ali Mosque, Iraq's defense minister had earlier warned the clock was ticking. A military strike could have been just hours away.

HUSSEIN AL-SADR, IRAQI PEACE DELEGATION (through translator): We will teach these people a lesson in their lives which they will never forget.

VAUSE: If this peace deal holds, it will be a major success for the Iraqi National Conference, a meeting of more than 1,000 delegates in Baghdad. For three days, they did little else but work on a negotiated end to the fighting in Najaf. They scheduled an extra day and chose an interim assembly of 100 people to oversee the Iraqi government.

HAZIM SHA'ALAN, IRAQI INTERIM DEFENSE MINISTER (through translator): Let Iraq live freely in democracy and in a federal and in prosperity, and may peace be upon you.

VAUSE: The first delicate steps of democracy, they called it -- shaky steps down an uncertain road.

(on camera): In the end, the interim council was more appointed than elected. Delegates voted either yes or no for just one list of 100 names. And delegates from Basra, Mosul, Tikrit, and Anbar complained that left them underrepresented. The whole process, they said, was stacked by the major parties.

Given these tensions, it seems it will be a long time between now and elections in January.

John Vause, CNN, Baghdad.

(END VIDEOTAPE)

BLITZER: If Muqtada al-Sadr backs out of this agreement, an elite, new Iraqi force is ready to move in.

CNN's Matthew Chance joins us now live from Najaf with an exclusive look at what al Sadr's militia may be up against -- Matthew.

MATTHEW CHANCE, CNN CORRESPONDENT: Wolf, thanks.

And skirmishing is continuing inside Najaf as the confusion reigns over what the status of these peace talks and this peace agreement that seems to be on the table.

The Iraqi interim government is continuing to focus on the military options that are available to it. It said, though U.S. forces would be involved in any assault on Najaf and on the Mehdi Army of Muqtada al-Sadr, whenever any holy shrines are involved, then they'd make sure that Iraqi forces would be leading the way in any such assault.

Iraqi forces that we've had exclusive access to as they train in the deserts of southern Iraq.

(BEGIN VIDEOTAPE)

(voice-over): These are the shock troops of the new Iraq. We gained exclusive access to their desert training grounds to see them prepare for battle.

Here, their targets are pictures of Osama bin Laden. Soon, fighters of the Mehdi Army holed up in shrines of Najaf could be in their sights.

This Iraqi force is ethnically mixed -- mostly Kurds, but with Sunnis and Shiites, as well, fighting together. Few would be identified on camera, too frightened, they said, their families would be attacked. Fehemi (ph) said he'd speak only if we hid his face.

"I joined up because I believe it's right that we fight terrorists," he said.

I asked him what he felt about fighting other Iraqis. If he were ordered to do that, he said, he'd leave.

The battle for Najaf, it seems, even with these troops, could be tough.

(on camera): We're told there's no plan to attack just yet. But when there is, these men will have to be ready. Iraqi government says stakes a great deal of its credibility on ending the Najaf standoff either with Iraqi diplomacy or Iraqi troops. And these are the best they've got.

UNIDENTIFIED MALE: They'll only move with an adviser behind them.

CHANCE (voice-over): U.S. military advisers are training Iraqis. We couldn't show their faces either, but they told us they're confident this is a reliable force. It's Iraqi commander insists ordinary Iraqis have confidence in them, too.

LT. COL. YARAB AL-HISHAMI, IRAQI SECURITY FORCE: See, we see Iraqis dealing with us totally in a different way, sometimes they even cooperate in very friendly ways when they see Iraqis operating on the street. And they supply with information and help and directions in a way. Because they see that, it gives them independence.

CHANCE: But with so much at stake in Najaf: holy shrines, civilians, even the course of this war, much depends on how well this Iraqi force, however independent, will perform.

(END VIDEOTAPE)

CHANCE: We know the numbers of this Iraqi force have been strengthened by the day reinforcements are brought in from various areas around the country to bolster the troops actually on the ground here. Even so, they face a difficult battle with the Mehdi Army over the past few weeks or so, since May -- August 5, when the latest crisis broke out.

The Mehdi Army demonstrated themselves, to be at the very least, resilient fighter. Many observers here still believe if there's a large-scale assault on the Mehdi Army inside Najaf, U.S. forces will be playing a significant role -- Wolf.

BLITZER: Matthew Chance with that exclusive report for us. Thank you, Matthew, very much. Matthew reporting from Najaf.

Elsewhere in the Middle East, Israeli helicopter gun ships tonight fired missiles into buildings in Gaza City. The Israeli military describes the targets as weapons workshops. Palestinians say one of the targets belonged to a family of a suicide bomber. No injuries were reported. But earlier, 5 people were killed in an explosion at a home in Gaza. Israel says it targeted a top Hamas activist.

In Britain, 8 terror suspects made their first appearance in a London court. They're charged with conspiracy to murder, and conspiracy to use radioactive materials, toxic gases or explosives. One of the suspects is described by U.S. officials as a senior al Qaeda operative linked to the alleged surveillance of financial centers in New York, New Jersey and Washington.

Moving U.S. troops, is it the right plan?

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: It was high time that we find a way to consolidate some of our facilities in South Korea, to move our forces away from Seoul and, therefore, less of an irritant for the Korean people.

(END VIDEO CLIP)

BLITZER: I'll speak with the national security adviser to the president, Condoleezza Rice, and General Dan Christman. He's a supporter of John Kerry's.

Is the U.S. making a critical mistake in the aftermath of 9/11? In a rare television interview, the former head of the super secret Mosad in Israel speaks out. You'll want to hear what he has to say.

Plus this:

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: One of them landed at my heels. So it went off. That's how I lost both of these.

(END VIDEO CLIP)

BLITZER: Loss of limbs but not loss of spirit. An amazing story of how an American soldier wounded in Iraq will stand tall again. You'll see it that's coming up.

And this just in to CNN, a breaking political story on how President Bush and Senator Kerry are faring in Ohio. You'll see it for the first time here on this program. We'll go live to Ohio.

And CNN's Paula Zahn, all of that coming up.

(COMMERCIAL BREAK)

BLITZER: We're just getting this story in to CNN. The Reuters news service says the Arab language network al Jazeera is reporting that Iraqi militants are threatening to kill an American hostage unless U.S. troops leave Najaf. That's where they have been engaged, as you know, in a long-running battle with forces loyal to the radical Shia Cleric Muqtada al Sadr.

Reuters says the al Jazeera report identified the hostage as a Micah Garen. He's a French journalist with an American citizenship. CNN has not yet confirmed the information and we have not seen the al Jazeera report.

Once again, Reuters reporting that Iraqi militants are threatening to kill an American hostage unless U.S. forces pull out of Najaf.

Micah Garen was on assignment for the New York Times. The New York Times reported this the other day, "taken at gun point, U.S. journalist and his interpreter are missing in Iraq."

We'll continue to follow this story about this American journalist in Iraq.

But let's move on now.

You're about to hear from a man who once led a super secret agency. Israel's Mosad is similar to America's CIA. Both countries have experienced some shocking intelligence setbacks, both have looked desperately for answers. And this ex-spy chief says he doesn't want the United States to make the same mistake Israel made.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): 2001, terrorists launch a coordinated surprise attack on the United States. Americans are caught woefully unprepared, and suffer a devastating blow. Some 3,000 people die in the 9/11 attacks and the nation is shaken to its core.

UNIDENTIFIED MALE: The truth, whole truth, nothing but the truth.

BLITZER: A high level commission conducts an exhaustive investigation and calls for urgent reform. An overhaul of U.S. intelligence and the appointment of a U.S. intelligence director.

1973, Egypt and Syria launch a coordinated surprise attack on Israel, quickly overrunning positions along the Suez Canal and the Golan Heights. Israel is caught unprepared and suffers a devastating blow. More than 2,500 Israeli solderers die in the Yom Kippur war, a huge number given the country's small population.

The nation is shaken to its core. A high level commission conducts an exhaustive investigation and calls for urgent reforms, including the appointment of a special intelligence adviser to the prime minister. According to Efraim Halevy, a former head of Israel's spy agency, the Mosad, only two people ever filled this slot, both briefly. Both, he says, left in frustration. The idea of a so-called intelligence czar, he says, is a huge mistake.

(END VIDEOTAPE)

BLITZER: And writing in "The Economist" magazine, Efraim Halevy he pulls absolutely no punches, arguing proposed intelligence reforms could make the United States less secure.

The former Mosad chief now heads the Center for Strategic and Policy Studies at the Hebrew University of Jerusalem. Efraim Halevy is joining us now live from Tel Aviv.

Mr. Halevy, thanks very much for joining us.

Why would it be such a big mistake in your opinion for the United States now to go ahead and create a national intelligence director or so-called intelligence czar?

EFRAIM HALEVY, FORMER MOSSAD DIRECTOR: I believe that in intelligence accountability and responsibility are indivisible. And person who must give the political level in the case of the United States is, the president of the United States, in the case of Israel, the prime minister, who has to give each one of them the real intelligence estimate is the person who has his hands on the intelligence service in the case of the United States, the CIA, in the case of Israel, the intelligence community.

BLITZER: But the systems, as you well know -- the systems in the United States and Israel are very different. You worked closely when you ran the Mossad, with the CIA.

Is there a parallel in your opinion now to what Israel went through and rejecting the notion of an intelligence czar, and what the U.S. may go through from the president goes forward with this after Congress approves it?

HALEVY: I think the systems are different, but on one basic issue I think the problem is the same. There has to be a direct contact, a direct relationship, a direct dialogue between the head of the agency, whether it's in Israel or the United States, and the political level, the president of the United States or in the case of Israel, the prime minister. The responsibility, the accountability is indivisible.

He who actually runs the agency, he who actually runs the Mossad or runs the security service in Israel, he is the person who is ultimately responsible for the estimate. It's he who has to tell the president, in the case of the United States or in the case of Israel, the prime minister, what the official estimate is. This is not a case of a debating society. Here the responsibility is a very clear one.

And he who has the responsibility on the agency is the person who has to hire people and fire people and he is the person who has to see the president every morning or every week, whatever the case may be. He must give the president or in the case of Israel, the prime minister, the picture, as it is. He must state what the caveats are, what the reservations are, so forth. In the end he has the responsibility. He's formally responsible for the estimate.

The president is not the intelligence officer or the chief estimating officer of the United States. The chief estimating officer, the chief evaluating officer is the head of the agency. This is indivisible. This responsibility cannot be carved up, in my opinion. And as you stated previously, I also said it in my article in "The Economist," our experience has been that when such a person was appointed such a middleman, it didn't work.

BLITZER: Efraim Halevy, the former head of the Mossad, now with the Hebrew University in Jerusalem, thanks very much for sharing your thoughts with us. Deeply appreciate it.

In just a moment, a breaking political story. Is the battleground state of Ohio favoring one presidential candidate right now?

We'll have brand new results, a brand new CNN/"USA Today"/Gallup poll taken in Ohio. We'll have details on that, that's coming up.

Also, repositioning U.S. Troops around the world. John Kerry, tackles the president's position. The president's national security adviser, Condoleezza rice, is ready to strike back.

And imagine coming home to this -- as residents return in the aftermath of Hurricane Charley, the nightmare becomes reality for parts of Florida's Gulf Coast.

Plus, fast and furious, the aftermath from flooding. You saw it here on this program yesterday, enormous flooding in Britain.

(COMMERCIAL BREAK)

BLITZER: Cleaning up after Hurricane Charley is turning out to be a slow-going proposition. Some residents are just now get back to their own property.

Our national correspondent Bob Franken, made it over to Sanibel Island earlier today.

He's joining us now live from there. Bob, what's happening?

BOB FRANKEN, NATIONAL CORRESPONDENT: Well, the people of Sanibel Island, after almost six days, this morning at 7:00, were allowed to come back. Of course, we've heard a lot about people who are getting more and more frustrated because they can't get to their homes. Well, this is what the people of Sanibel came back to. Trees everywhere. The reason they had been kept off is that the trees had to be removed from streets, fallen power lines had to be removed.

And the people here are probably more fortunate than they are elsewhere. This is a wealthy enclave, and many of these homes are extremely well-constructed. And it means, comparatively speaking, they stood up to the storm quite well. As a matter of fact, in total, probably better than the ones at a nearby barrier island, Captiva, where because of the variety of factors, including the direction of the wind and all that kind of stuff, there was more damage. So people were coming back to this. Everybody here recognizes that they are more fortunate than some others in some areas that were even more heavily hit -- Wolf.

BLITZER: Good luck to all of those people there, not only in Sanibel, but throughout Florida. Appreciate it, Bob, very much.

John Kerry stand: The Senator blasts President Bush while courting the veteran vote. The White House responds.

(BEGIN VIDEO CLIP)

RICE: We have been in such close contact with our allies.

(END VIDEO CLIP)

BLITZER: My entire interview with the president's national security adviser, Dr. Condoleezza Rice. That's coming up.

Plus, a John Kerry supporter will weigh in as well. I'll speak live with the General Dan Cristman.

Showdown delay: why star witness Amber Frey is not facing defense attorney Mark Geragos today.

Denouncing a link to al Qaeda: Saudi Arabia takes issue with Michael Moore's movie "Fahrenheit 9/11." Wait until you hear what that country is now hoping to do and how it's reaching out to you.

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

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Six people are dead and another two are missing from the Japanese coast because of a typhoon. Most of the victims were swept away by floodwaters. Torrential rainfall is expected to continue until tomorrow.

There's violent weather in New Zealand as well. High winds, heavy rains and big seas have virtually cut off the nation's capital, Wellington. There has also damage to a number of buildings. And several roads have been closed.

And there's cleanup in Boscastle, England after Monday's powerful floods. But that may have to wait, as even more rain is predicted. Prince Charles is touring the damaged village today.

And that's our look "Around the World."

(COMMERCIAL BREAK)

BLITZER: Welcome back. Coming up, brand new results of a new poll in a key battleground state, that would be Ohio. It could decide the presidential election. It's a story you'll see first here. That's coming up. First, though, a quick check of some other stories now in the news.

Military sources say an Army report recommends disciplinary action for about two dozen military intelligence personnel linked to the Abu Ghraib prisoner abuse scandal in Iraq. That significantly expands the number of people who could be held accountable. The report is also said to find that the abuse was not ordered by senior commanders.

The former lover of Scott Peterson will not return to the witness stand in his double murder trial until at least Monday. Cross- examination by Amber Frey by the defense was scheduled to begin today. But, citing a potential development that needed to be checked out, the judge has postponed her testimony.

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

More now on our top story, the battle over the plan announced by the president to withdraw 70,000 U.S. troops from Europe and Asia over the next decade. Earlier we heard John Kerry blast the plan as vague, drawn-out and potentially dangerous. Just a short while ago, I spoke with the president's national security adviser, Dr. Condoleezza Rice and got her reaction to John Kerry's criticism.

(BEGIN VIDEOTAPE)

BLITZER: Dr. Rice, thanks very much for joining us. Let's get some reaction, formal reaction, to what John Kerry said. He was pretty hard hitting in his speech before the Veteran of Foreign Wars. First of all, on the issue of the troop redeployment, he says this is a bad time to do it, it confuses the allies just when the United States needs them to fight in this war on terror.

RICE: Well, Wolf, this has been a textbook example of coordination and consultation with our allies on plans that were drawn up by our combatant commanders to try and move the American force posture from what clearly was a Cold War force posture to one that is appropriate now to the challenges that we have in the 21st century.

We have been in such close contact with our allies, as a matter of fact, the NATO spokesman said today that this is fully in line with what NATO has talking about, which is transforming our forces, making them more mobile, more agile. Everybody is trying to move from a force posture that, frankly, was for a day when there was a inner- German board that no longer exists, a Warsaw Pact that, of course, dissolved and whose members are now mostly members of NATO and a soviet army that no longer exists. So we had to make these changes.

BLITZER: But what do you say to his concern, also expressed by John McCain, the Republican senator from Arizona, that if you're Kim Jong-Il sitting in North Korea and you see the U.S. start pulling out 12,000 troops from South Korea, you say to yourself, "Hey, this is a good time to hold firm and not negotiate seriously on a nuclear bomb program."

RICE: Well, I would assume that Kim Jong-Il is able to assess capabilities, not numbers. And the numbers have nothing to do with our capability there. The fact is that, in the 50 years since the end of the Korean War, a lot has changed. The South Korean forces are stronger, our forces are more capable technologically, our air and sea power contribute more to the deterrent. This is a very powerful deterrent against Kim Jong-Il. And he would make a terrible mistake in reading anything into it. And we have no reason to believe that somebody who understands capability, and he does understand capability, is going to read anything into this.

BLITZER: So John McCain and John Kerry simply wrong on this specific issue?

RICE: Well, you know, I've talked to people about this, and I have even talked to Senator McCain about it. We are sending the right messages in diplomatic channels to the South Koreans, to the other players on the Korean peninsula, to Japan and to others. Everybody understands that we're standing firm on the North Korean nuclear program. But it was high time that we find a way to consolidate some of our facilities in South Korea to move our forces away from Seoul and, therefore, less of an irritant for the Korean people and to strengthen our alliance with capabilities that draw on our considerable technological sophistication and the strength of the South Korean forces. There is no diminution of capability on the Korean peninsula. As a matter of fact, I think we've strengthened the capability once we achieve these changes.

BLITZER: Let's talk a little bit about what's happening in Iraq right now, specifically Najaf. There is a lot of concern that the Iraqi interim government of Prime Minister Ayad Allawi is about to blink and let Muqtada al-Sadr go free. How serious of a blunder, if you believe that would be a blunder, would that be?

RICE: Well, Wolf, I'm not going to speculate on what the Iraqi government has done. They've shown very good common sense about how to deal with the very severe and difficult problems that they have faced. They understand the situation there. The Iraqi government has been very clear with Sadr that he has to do some things, leave the shrine, that he's got to disband his militia.

We'll let this play out, because the Iraqis are sovereign and they need to resolve their own problems. But nobody is taking Sadr at his word. He's someone from whom you are to see action. He's said lots of words before. He's never followed through on them. And I don't think you're going to see an Iraqi government that's going to take his word.

BLITZER: But, as you well remember, it wasn't that long ago -- a few months ago -- when a top U.S. military commander in Iraq flatly said of Muqtada al-Sadr he should be captured or killed. Is that still the U.S. position?

RICE: Well, Muqtada al-Sadr must not try and be a law unto himself down in Najaf. And what that means for his future, we will see. But he can't have a militia running the streets there. He can't occupy the holiest shrine in Shiadom (ph). He has to be dealt with, and I'm quite certain he will be.

BLITZER: So what is your bottom-line assessment? What's going to happen in Najaf right now?

RICE: Well, I'm not going to try to predict, Wolf. It's a fairly unpredictable situation. But I will tell you this, in the many conversations that we've had with the Iraqi government, they are very clear-headed about what has to be done there. They're very clear- headed that he cannot be allowed to be a law unto himself. They've been very clear-headed that his militia has got to disband. And I have no reason to believe they don't continue to believe that.

BLITZER: Can you clarify once and for all what the president's position is on the creation of this new national intelligence director? Because Donald Rumsfeld, the secretary of defense, he has serious misgivings about it, as you well know. Should this NID, this national intelligence director, have control over the budget and personnel in the entire U.S. intelligence community?

RICE: Well, the president has said that he wants an NID who has sufficient authority to carry out the very important job of fully integrating the American intelligence effort. And that means domestic effort, the foreign intelligence effort, the military effort. And everything is on the table in our discussions currently about exactly what authorities those will be. But the president has been absolutely clear that he believes that person has to have the authority that he needs to really integrate the intelligence budget, to integrate intelligence programs and to make sure that we have a coherent program. So everything is on the table, Wolf.

BLITZER: But you're not ready to flatly accept the recommendation of the 9/11 Commission and give this national intelligence director all that authority, at least not yet?

RICE: Well the president believes that these are serious matters that deserve deliberation. It's not the sort of thing where you accept the report without having read it or accept the report without having discussed it. The president came out in favor of almost all of the recommendations of the 9/11 Commission. But, of course, the devil is in the details. And we're now engaged in very intensive discussions internally about those details.

But I want to be very clear. The reports and the misconceptions out there that the president has ruled out somehow certain kinds of authority for this NID are simply erroneous. The only thing that the president has ruled out is that he does not believe that the NID should be located in the executive office of the president's.

BLITZER: Dr. Rice, thanks very much for joining us.

RICE: Thank you.

(END VIDEOTAPE)

BLITZER: For the other side, I'm joined by retired U.S. Army Lieutenant General Dan Christman who now supports John Kerry. This whole notion -- let's talk about Europe for a second.

DAN CHRISTMAN, U.S. ARMY LIEUTENANT GENERAL: Sure.

BLITZER: Those troops in Germany, as you well know, were built for a totally different era. What's wrong, after three years of negotiations with the Germans, the other NATO allies, bringing them home? CHRISTMAN: Well, for sure, Wolf, we're not fighting in the Fulda Gap anymore. But by the same token, we're not fighting Kansas, either. We're fighting a war against global terror. And we ought not to overlook the fact that the most important structural challenge the Army faces is not where it's stationed, but how big it is. And that's my biggest concern, and Senator Kerry's as well. We're going to be distracted by moving these pawns around the chessboard. What we need to do is increase the size of the Army by 20,000 to 40,000.

BLITZER: But in an emergency, moving troops is not the hard part, it's moving heavy equipment, armor and tanks. It doesn't make any difference if you keep them really in Germany or you move them to Kansas, for that matter. You can airlift them very, very quickly. Why let those bases exist in Germany at a time when we're about to shut down more bases in the United States?

CHRISTMAN: There are some things in the proposal that make some sense. And that's forward operating basis, thinly-manned in Eastern Europe. But there's a very important intangible here, and that's this day-to-day working with our NATO partners, day-to-day, week-to-week interactions on doctrine and training that build cohesive alliances. We're going to defeat the war on terror by being an alliance force, by combining those assets of our all of our NATO partners and others. And we need to do that by being with them on a day-to-day basis. So that's my biggest concern.

BLITZER: Now she says the South Korean government, the Japanese, they're all on board in this troop redeployment from Asia right now. And Kim Jong-Il in North Korea should be under no illusions whatsoever. Are your concerns eased when you heard her say that?

CHRISTMAN: Not in the least. I think there are some elements of this proposal, for example, moving our Army south from the DMZ out of Seoul, further south in South Korea, makes enormous sense. However, taking two-thirds of our division, the 2nd division, out of South Korea at the time we're negotiating with Pyongyang makes no sense. The argument is we can substitute for air and naval air and cruise missiles. But we saw in Baghdad, Wolf, what shock and awe did. There is a substitution belief that we can put missiles on the ground in place of boots on the ground. And in this particular case, I'd argue, it's hugely important to keep those troops in South Korea until there's a resolution on the nuke issue in Pyongyang.

BLITZER: All right. General Dan Christman, thanks very much for joining us.

When your brand is under fire, go on the offensive. That's good public relations advice. And the same rules can apply to countries, as well. That's why the Saudi Arabian government is now spending some huge dollars on a new ad campaign right here in the United States. Our State Department correspondent Andrea Koppel reports.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Speculation, innuendo, accusations. Americans have questioned Saudi Arabia's allegiance since the 9/11 attacks.

ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT: Funded by the Saudi government, the radio ads are about setting the record straight. Using the recent findings of the bipartisan 9/11 Commission, the ads address specific allegations head on, including some singled out in Michael Moore's blockbuster film "Fahrenheit 9/11."

MICHAEL MOORE, "FAHRENHEIT 9/11": All commercial and airline traffic was grounded.

U.S. SENATOR BYRON DORGAN (D-ND): Then we had some airplanes authorized at the highest levels of our government to pick up Osama bin Laden's family members and transport them out of this country.

KOPPEL: But the 9/11 Commission reached a different conclusion, as the Saudi ad points out, quoting directly from the report.

UNIDENTIFIED MALE: "We found no evidence that any flights of Saudi nationals took place before the reopening of national airspace."

MOORE: How much money do the Saudis have invested in America roughly?

KOPPEL: Although the 9/11 report did not explore other allegations that the house of Saud has over the years spent hundreds of millions to forge close ties to the Bush family, it did close the door on charges the Saudi government knowingly gave money to Al Qaeda terrorists, another point highlighted in the Saudi ads, again, quoting the report.

UNIDENTIFIED MALE: "We have found no evidence that the Saudi government as an institution or senior Saudi officials individually funded the organization."

KOPPEL: With 15 of 19 of the 9/11 hijackers from Saudi Arabia, the Saudi government has spent much of the last three years on the defensive, responding to criticism in the United States. While back in the kingdom, Saudi officials say, they had been waging their own battle against Islamic extremism.

NAIL AL-JUBEIR, SAUDI EMBASSY SPOKESMAN: There's not a day passes by when we don't report attacks or killings of extremists. This is an all-out war against extremism.

KOPPEL: But far from giving the Saudis a free pass, the 9/11 report does cite, quote, "significant problems in the U.S.-Saudi relationship," calling the kingdom a, quote, "problematic ally."

(END VIDEOTAPE)

KOPPEL: Produced by an American public relations company, the Saudi government will be spending about $1 million over the next several weeks to run these ads in 19 American cities across the American heartland -- Wolf?

BLITZER: All right, Andrea Koppel at the State Department. Thanks very much for that.

War wounded, a special day in the life of one seriously injured soldier. How today's technology is giving this double amputee a new sense of freedom.

Undecided voters in the heartland: which way will Ohio go? Our Paula Zahn joins us live with brand new poll results you'll want to see.

Team effort, can the U.S. women accomplish what the U.S. men did in the freestyle relay? A complete update of today's events. All that coming up.

(COMMERCIAL BREAK)

BLITZER: Now one soldier's story, a soldier who hasn't lost hope, even though his time in Iraq would forever change his life. Our Pentagon correspondent, Barbara Starr, reports.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Army specialist Kevin Pannell was on foot patrol in Baghdad June 13th when his unit was hit with three grenades.

SPC. KEVIN PANNELL, U.S. ARMY: One of them landed at my heels. It went off. That's how I lost both of these.

STARR: Now a double amputee, this is an extraordinary day. With his wife looking on, Pannell is getting his first prosthetic leg.

DENNIS CLARK, PROSTHETIC TECHNICIAN: This is day one, appointment one, minute one.

STARR: But more than just an artificial limb.

CLARK: Any sensitive areas, problem areas?

PANNELL: Not really. Not at all.

STARR: Pannell is being fitted with a $48,000 limb driven by an internal microprocessor. Today, he will stand for the first time since the attack.

CLARK: I'm going to slide you right in here.

STARR: More adjustments.

PANNELL: I'm not locked, though.

CLARK: No, you're not locked. But we may not get locked until...

(CROSSTALK)

PANNELL: You want me to stand? CLARK: We're just going to stand up. You all locked in? Nice and slow. Nice and slow.

STARR: A remarkable piece of technology. The leg will be hooked up to a laptop computer and specifically programmed for Pannell.

DENNIS: That's a great first step right there. He'll be able to go up and down steps, get in and out of a car, go up and down ramps.

STARR: The knee will adjust 50 times per second.

CLARK: We can actually program a second mode for bicycle riding, for rowing, for whatever it is that he wants to do, for golf.

STARR: Panel's wife, Amanda.

AMANDA PANNELL, SOLDIER'S WIFE: In the years ahead, what I foresee is just maybe everything just getting back to normal.

STARR: The emerging generation of Iraq war soldiers are so young they face another 50 or 60 years of challenges and a commitment from the Army to help them.

PAUL PASQUINA, WALTER REED ARMY MEDICAL CENTER: As advances in rehabilitation or advances in medical or surgical techniques come on, we need to be able to identify them. And we need to be trying to set some treatment plans now that may have a long-term impact, a positive impact, on their eventual outcome.

PANNELL: I don't see, other than, you know, playing in the NBA, I don't see anything that I won't be able to do.

STARR: Barbara Starr, CNN, Walter Reed Army Medical Center.

(END VIDEOTAPE)

BLITZER: Just amazing. Amazing what they can do now.

So how are President Bush and Senator John Kerry faring in the key battleground state of Ohio? Our Paula Zahn is taking the pulse of the people in the Buckeye State. She's joining us up next with brand new poll results you'll want to know about.

Plus a wrap of all of the action in Athens today, including two upsets for the United States in tennis.

(COMMERCIAL BREAK)

BLITZER: Now a breaking political story. We have new numbers, brand new numbers, a new poll on President Bush and Senator Kerry in the key battleground state of Ohio. My colleague Paula Zahn has scheduled a town hall meeting for 8 p.m. eastern in the Buckeye State. She's joining us now live with the results -- Paula.

PAULA ZAHN, CNN ANCHOR: Well, Wolf, you're a very special man, because we're only breaking this embargo for your show this evening. Let me share with the audience what we found. We commissioned a poll, CNN along with the Gallup poll, and here are the numbers that both campaigns are looking at very seriously tonight. The poll found John Kerry leading President George Bush 52 percent to 42 percent among registered voters in Ohio. And when the Gallup organization attempted to calculate which of those voters would actually end up casting ballots if the election were held today, it is a different set of number. The results narrowed to Kerry to 48 percent and Bush to 46 percent, a two-point lead for Kerry along likely voters.

So, Wolf, no matter how you cut it, it is a very tight race. And there's a very good reason why both candidates are spending a lot of money here. In fact, John Kerry spending more money on advertising here in Ohio than any other state in the country. And we're going to bring together tonight a pretty equal representation of Republicans, Democrats and undecided voters to take Bush and Kerry campaign officials to task tonight on a whole range of issues. It should be great. I wish I could give you a sense of the excitement. But we haven't allowed the audience members to come in here yet this evening.

BLITZER: And Paula, I'm sure you know, and all of our viewers who follow this know, no Republican has ever been elected president of the United States without carrying Ohio. That's why what you're doing tonight is potentially so significant.

ZAHN: And another fact to remember, which the Buckeye State residents are so proud of, is they have accurately sided with the president, picked the president, since 1892 and have only been wrong twice. So when you look at the national statistics once again, and that undecided vote, which the national polls comes out to 10 percent, it is critical that both of these campaigns try get these undecided voters on their team.

It will be interesting to hear the strategy of both campaigns tonight. The number one issue here, the economy, some 200,000 jobs lost in the state since the year 2000, 12,000 of them right in and around this community of Canton, Ohio. So a lot at stake here this evening for both campaigns.

BLITZER: Well, we will all, Paula, be watching, must watch TV tonight. "Paula Zahn's Town Hall Meeting, The Undecided Vote" tonight 8 p.m. eastern live from Canton, Ohio. Paula, thanks very much.

Our Olympic update, that's coming up right after this.

(COMMERCIAL BREAK)

BLITZER: Here are the results of today's Olympic action.

(BEGIN VIDEOTAPE)

BLITZER: A strong day in the pool for team USA. The women took the gold in the 800-meter freestyle, matching the men who won their competition yesterday by just 13 one-hundredths of a second. That race, another victory for Michael Phelps. Earlier, he won the 200- meter butterfly, leaving him with four gold medals, more than any other athlete in Athens. Also today, American Brendan Hansen capturing the bronze in the men's 200-meter breaststroke. In other action, the games returned to ancient Olympia for the first time in 1,600 years with shot-put competition. American Adam Nelson took the silver for the second, repeating his performance in Sydney four years ago.

A rough day for American tennis with both Andy Roddick and Venus Williams failing to advance. Meanwhile, an embarrassing climax to a week-long scandal. Greece's top two sprinters pulled out of the games amid ongoing controversy over missed doping tests. Costas Kenteris took gold in Sydney. Katerina Thanou won silver that year. Both say they're innocent.

COSTAS KENTERIS, GREEK SPRINTER (through translator): The last four years I underwent 30 doping tests that have not caused any problems. I am withdrawing my participation from the Olympic Games as a sense of responsibility.

(END VIDEOTAPE)

BLITZER: And "LOU DOBBS TONIGHT" starts right now.

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


Aired August 18, 2004 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: Happening now: The Saudis take on Michael Moore and "Fahrenheit 9/11" with a new ad campaign, insisting the bin Laden family got no special treatment from the Bush White house in the days after the terror attacks.
And the former head of Israel's super-secret spy agency, the Mossad, has a message for America: Don't repeat Israel's mistake. He'll explain in a live television interview with me. That's coming up, from Tel Aviv.

Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): On the offensive...

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Nobody wants to bring troops home more than those of us who have fought in foreign wars, but it needs to be done at the right time and in a sensible way.

BLITZER: Kerry attacks Bush on national security. We'll get a counterattack from Condoleezza Rice.

Al Sadr's last stand: Is a renegade cleric calling it quits? If not, Iraqi troops are ready to call his bluff.

Bionic man: High-tech help for the war wounded.

SPEC. KEVIN PANNELL, U.S. ARMY: Other than, you know, playing in the NBA, I don't see anything that I won't be able to do.

BLITZER: Homecoming: Residents are finally allowed back to a battered barrier island.

(END VIDEOTAPE)

ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, August 18th, 2004.

BLITZER (on camera): It's the latest battle in the heated contest for the White House. This one a war of words over the Bush plan for a massive withdrawal of U.S. troops from strategic locations. And the battleground couldn't be more fitting.

(BEGIN VIDEOTAPE) (voice-over): Almost exactly 48 hours after President Bush addressed the Veterans of Foreign Wars at their meeting in Cincinnati, Democratic Presidential Nominee John Kerry showed up and directly took aim at the president's plan to bring home 70,000 U.S. troops from Europe and Asia.

KERRY: Nobody wants to bring troops home more than those of us who have fought in foreign wars. But it needs to be done at the right time and in a sensible way. This is not that time or that way.

BLITZER: Kerry charged the president's plan undermines the U.S. war on terror by raising doubts about U.S. intentions and commitments around the world.

KERRY: With al Qaeda operating in 60 countries, we need closer alliances in every part of the world to fight and win the war on terrorism.

BLITZER: Kerry specifically questioned the timing of withdrawing 12,000 troops from South Korea, just when the U.S. is negotiating with North Korea over its nuclear bomb program. And he pointedly cited the view of a key Republican supporter of the president.

KERRY: As Senator John McCain said, quote, I'm concerned -- "I'm particularly concerned about moving troops out of South Korea when North Korea has probably never been more dangerous at any time since the end of the Korean War. This is clearly the wrong signal to send at the wrong time."

BLITZER: The White House quickly shot right back, insisting the redeployment has been in the works for three years and South Korea is on board.

SEAN MCCORMACK, NATL. SEC. COUNCIL SPOKESMAN: Our commitment to South Korea and our defense commitments, not only to South Korea as well as our other treaty allies in northeast Asia, are unshakable. And nobody should mistake the fact that we are committed to them.

BLITZER: And as far as removing troops from western Europe, McCormack noted that Germany has been reunited, the Cold War is over, and the Soviet Union has collapsed.

MCCORMACK: Many of those units were placed where they are right now in order to defend a border that no longer exists, to fight an army that no longer is there, and to fight a war that was contested and won 10 years ago.

UNIDENTIFIED MALE: Ladies and gentlemen, the president of the United States.

BLITZER: The president, while campaigning in Wisconsin, didn't respond directly to Kerry, but did announce a new $10 million plan to help activated National Guard and Reserve personnel pay for their education.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: These brave Americans put their jobs on hold and leave their family behind when we called.

(END VIDEOTAPE)

BLITZER (on camera): And we'll get more reaction from the Bush administration when I speak with the National Security Advisor Condoleezza Rice. That's coming up later this hour.

Here's your chance to weigh in on this important story. Our Web question of the day is this: Whose military policy do you agree with more? President Bush's or Senator John Kerry's? You can vote -- go to cnn.com/wolf. We'll have results for you later in this broadcast.

After weeks of bloody fighting, the renegade Shiite cleric Muqtada al-Sadr has agreed to disarm his militia and withdraw from a revered shrine in Najaf, that's at least what says. But if the agreement holds, it would be a significant victory for the government in Baghdad.

CNN's John Vause reports from the Iraqi capital.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT: The standoff in Najaf may have ended not with a bang, but a letter.

UNIDENTIFIED FEMALE (through translator): We have news from martyr's office, the approval of Sayed Muqtada al-Sadr for the conditions that the National Conference has suggested.

VAUSE: In a statement from his Baghdad office to the Iraqi National Conference, al-Sadr said he was ready to leave the Imam Ali Mosque, dissolve his Mehdi Militia, and join the political process.

Demands made by a peace delegation, which never met with al-Sadr face-to-face.

JALIL SHAMARI, SHIITE DAWN PARTY (through translator): Our duty is to deliver peace. And in my opinion, although the delegation's task did not reach a conclusive stage, it was successful because it paved the way for a decisive conclusion.

VAUSE: In return, the Shiite cleric gets safe passage from the mosque and will not be arrested. But he wants a complete cease-fire and U.S. and Iraqi forces to pull back before he orders his militia to stand down. With 2,000 U.S. Marines and more than 1,000 Iraqi forces encircling the Imam Ali Mosque, Iraq's defense minister had earlier warned the clock was ticking. A military strike could have been just hours away.

HUSSEIN AL-SADR, IRAQI PEACE DELEGATION (through translator): We will teach these people a lesson in their lives which they will never forget.

VAUSE: If this peace deal holds, it will be a major success for the Iraqi National Conference, a meeting of more than 1,000 delegates in Baghdad. For three days, they did little else but work on a negotiated end to the fighting in Najaf. They scheduled an extra day and chose an interim assembly of 100 people to oversee the Iraqi government.

HAZIM SHA'ALAN, IRAQI INTERIM DEFENSE MINISTER (through translator): Let Iraq live freely in democracy and in a federal and in prosperity, and may peace be upon you.

VAUSE: The first delicate steps of democracy, they called it -- shaky steps down an uncertain road.

(on camera): In the end, the interim council was more appointed than elected. Delegates voted either yes or no for just one list of 100 names. And delegates from Basra, Mosul, Tikrit, and Anbar complained that left them underrepresented. The whole process, they said, was stacked by the major parties.

Given these tensions, it seems it will be a long time between now and elections in January.

John Vause, CNN, Baghdad.

(END VIDEOTAPE)

BLITZER: If Muqtada al-Sadr backs out of this agreement, an elite, new Iraqi force is ready to move in.

CNN's Matthew Chance joins us now live from Najaf with an exclusive look at what al Sadr's militia may be up against -- Matthew.

MATTHEW CHANCE, CNN CORRESPONDENT: Wolf, thanks.

And skirmishing is continuing inside Najaf as the confusion reigns over what the status of these peace talks and this peace agreement that seems to be on the table.

The Iraqi interim government is continuing to focus on the military options that are available to it. It said, though U.S. forces would be involved in any assault on Najaf and on the Mehdi Army of Muqtada al-Sadr, whenever any holy shrines are involved, then they'd make sure that Iraqi forces would be leading the way in any such assault.

Iraqi forces that we've had exclusive access to as they train in the deserts of southern Iraq.

(BEGIN VIDEOTAPE)

(voice-over): These are the shock troops of the new Iraq. We gained exclusive access to their desert training grounds to see them prepare for battle.

Here, their targets are pictures of Osama bin Laden. Soon, fighters of the Mehdi Army holed up in shrines of Najaf could be in their sights.

This Iraqi force is ethnically mixed -- mostly Kurds, but with Sunnis and Shiites, as well, fighting together. Few would be identified on camera, too frightened, they said, their families would be attacked. Fehemi (ph) said he'd speak only if we hid his face.

"I joined up because I believe it's right that we fight terrorists," he said.

I asked him what he felt about fighting other Iraqis. If he were ordered to do that, he said, he'd leave.

The battle for Najaf, it seems, even with these troops, could be tough.

(on camera): We're told there's no plan to attack just yet. But when there is, these men will have to be ready. Iraqi government says stakes a great deal of its credibility on ending the Najaf standoff either with Iraqi diplomacy or Iraqi troops. And these are the best they've got.

UNIDENTIFIED MALE: They'll only move with an adviser behind them.

CHANCE (voice-over): U.S. military advisers are training Iraqis. We couldn't show their faces either, but they told us they're confident this is a reliable force. It's Iraqi commander insists ordinary Iraqis have confidence in them, too.

LT. COL. YARAB AL-HISHAMI, IRAQI SECURITY FORCE: See, we see Iraqis dealing with us totally in a different way, sometimes they even cooperate in very friendly ways when they see Iraqis operating on the street. And they supply with information and help and directions in a way. Because they see that, it gives them independence.

CHANCE: But with so much at stake in Najaf: holy shrines, civilians, even the course of this war, much depends on how well this Iraqi force, however independent, will perform.

(END VIDEOTAPE)

CHANCE: We know the numbers of this Iraqi force have been strengthened by the day reinforcements are brought in from various areas around the country to bolster the troops actually on the ground here. Even so, they face a difficult battle with the Mehdi Army over the past few weeks or so, since May -- August 5, when the latest crisis broke out.

The Mehdi Army demonstrated themselves, to be at the very least, resilient fighter. Many observers here still believe if there's a large-scale assault on the Mehdi Army inside Najaf, U.S. forces will be playing a significant role -- Wolf.

BLITZER: Matthew Chance with that exclusive report for us. Thank you, Matthew, very much. Matthew reporting from Najaf.

Elsewhere in the Middle East, Israeli helicopter gun ships tonight fired missiles into buildings in Gaza City. The Israeli military describes the targets as weapons workshops. Palestinians say one of the targets belonged to a family of a suicide bomber. No injuries were reported. But earlier, 5 people were killed in an explosion at a home in Gaza. Israel says it targeted a top Hamas activist.

In Britain, 8 terror suspects made their first appearance in a London court. They're charged with conspiracy to murder, and conspiracy to use radioactive materials, toxic gases or explosives. One of the suspects is described by U.S. officials as a senior al Qaeda operative linked to the alleged surveillance of financial centers in New York, New Jersey and Washington.

Moving U.S. troops, is it the right plan?

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: It was high time that we find a way to consolidate some of our facilities in South Korea, to move our forces away from Seoul and, therefore, less of an irritant for the Korean people.

(END VIDEO CLIP)

BLITZER: I'll speak with the national security adviser to the president, Condoleezza Rice, and General Dan Christman. He's a supporter of John Kerry's.

Is the U.S. making a critical mistake in the aftermath of 9/11? In a rare television interview, the former head of the super secret Mosad in Israel speaks out. You'll want to hear what he has to say.

Plus this:

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: One of them landed at my heels. So it went off. That's how I lost both of these.

(END VIDEO CLIP)

BLITZER: Loss of limbs but not loss of spirit. An amazing story of how an American soldier wounded in Iraq will stand tall again. You'll see it that's coming up.

And this just in to CNN, a breaking political story on how President Bush and Senator Kerry are faring in Ohio. You'll see it for the first time here on this program. We'll go live to Ohio.

And CNN's Paula Zahn, all of that coming up.

(COMMERCIAL BREAK)

BLITZER: We're just getting this story in to CNN. The Reuters news service says the Arab language network al Jazeera is reporting that Iraqi militants are threatening to kill an American hostage unless U.S. troops leave Najaf. That's where they have been engaged, as you know, in a long-running battle with forces loyal to the radical Shia Cleric Muqtada al Sadr.

Reuters says the al Jazeera report identified the hostage as a Micah Garen. He's a French journalist with an American citizenship. CNN has not yet confirmed the information and we have not seen the al Jazeera report.

Once again, Reuters reporting that Iraqi militants are threatening to kill an American hostage unless U.S. forces pull out of Najaf.

Micah Garen was on assignment for the New York Times. The New York Times reported this the other day, "taken at gun point, U.S. journalist and his interpreter are missing in Iraq."

We'll continue to follow this story about this American journalist in Iraq.

But let's move on now.

You're about to hear from a man who once led a super secret agency. Israel's Mosad is similar to America's CIA. Both countries have experienced some shocking intelligence setbacks, both have looked desperately for answers. And this ex-spy chief says he doesn't want the United States to make the same mistake Israel made.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): 2001, terrorists launch a coordinated surprise attack on the United States. Americans are caught woefully unprepared, and suffer a devastating blow. Some 3,000 people die in the 9/11 attacks and the nation is shaken to its core.

UNIDENTIFIED MALE: The truth, whole truth, nothing but the truth.

BLITZER: A high level commission conducts an exhaustive investigation and calls for urgent reform. An overhaul of U.S. intelligence and the appointment of a U.S. intelligence director.

1973, Egypt and Syria launch a coordinated surprise attack on Israel, quickly overrunning positions along the Suez Canal and the Golan Heights. Israel is caught unprepared and suffers a devastating blow. More than 2,500 Israeli solderers die in the Yom Kippur war, a huge number given the country's small population.

The nation is shaken to its core. A high level commission conducts an exhaustive investigation and calls for urgent reforms, including the appointment of a special intelligence adviser to the prime minister. According to Efraim Halevy, a former head of Israel's spy agency, the Mosad, only two people ever filled this slot, both briefly. Both, he says, left in frustration. The idea of a so-called intelligence czar, he says, is a huge mistake.

(END VIDEOTAPE)

BLITZER: And writing in "The Economist" magazine, Efraim Halevy he pulls absolutely no punches, arguing proposed intelligence reforms could make the United States less secure.

The former Mosad chief now heads the Center for Strategic and Policy Studies at the Hebrew University of Jerusalem. Efraim Halevy is joining us now live from Tel Aviv.

Mr. Halevy, thanks very much for joining us.

Why would it be such a big mistake in your opinion for the United States now to go ahead and create a national intelligence director or so-called intelligence czar?

EFRAIM HALEVY, FORMER MOSSAD DIRECTOR: I believe that in intelligence accountability and responsibility are indivisible. And person who must give the political level in the case of the United States is, the president of the United States, in the case of Israel, the prime minister, who has to give each one of them the real intelligence estimate is the person who has his hands on the intelligence service in the case of the United States, the CIA, in the case of Israel, the intelligence community.

BLITZER: But the systems, as you well know -- the systems in the United States and Israel are very different. You worked closely when you ran the Mossad, with the CIA.

Is there a parallel in your opinion now to what Israel went through and rejecting the notion of an intelligence czar, and what the U.S. may go through from the president goes forward with this after Congress approves it?

HALEVY: I think the systems are different, but on one basic issue I think the problem is the same. There has to be a direct contact, a direct relationship, a direct dialogue between the head of the agency, whether it's in Israel or the United States, and the political level, the president of the United States or in the case of Israel, the prime minister. The responsibility, the accountability is indivisible.

He who actually runs the agency, he who actually runs the Mossad or runs the security service in Israel, he is the person who is ultimately responsible for the estimate. It's he who has to tell the president, in the case of the United States or in the case of Israel, the prime minister, what the official estimate is. This is not a case of a debating society. Here the responsibility is a very clear one.

And he who has the responsibility on the agency is the person who has to hire people and fire people and he is the person who has to see the president every morning or every week, whatever the case may be. He must give the president or in the case of Israel, the prime minister, the picture, as it is. He must state what the caveats are, what the reservations are, so forth. In the end he has the responsibility. He's formally responsible for the estimate.

The president is not the intelligence officer or the chief estimating officer of the United States. The chief estimating officer, the chief evaluating officer is the head of the agency. This is indivisible. This responsibility cannot be carved up, in my opinion. And as you stated previously, I also said it in my article in "The Economist," our experience has been that when such a person was appointed such a middleman, it didn't work.

BLITZER: Efraim Halevy, the former head of the Mossad, now with the Hebrew University in Jerusalem, thanks very much for sharing your thoughts with us. Deeply appreciate it.

In just a moment, a breaking political story. Is the battleground state of Ohio favoring one presidential candidate right now?

We'll have brand new results, a brand new CNN/"USA Today"/Gallup poll taken in Ohio. We'll have details on that, that's coming up.

Also, repositioning U.S. Troops around the world. John Kerry, tackles the president's position. The president's national security adviser, Condoleezza rice, is ready to strike back.

And imagine coming home to this -- as residents return in the aftermath of Hurricane Charley, the nightmare becomes reality for parts of Florida's Gulf Coast.

Plus, fast and furious, the aftermath from flooding. You saw it here on this program yesterday, enormous flooding in Britain.

(COMMERCIAL BREAK)

BLITZER: Cleaning up after Hurricane Charley is turning out to be a slow-going proposition. Some residents are just now get back to their own property.

Our national correspondent Bob Franken, made it over to Sanibel Island earlier today.

He's joining us now live from there. Bob, what's happening?

BOB FRANKEN, NATIONAL CORRESPONDENT: Well, the people of Sanibel Island, after almost six days, this morning at 7:00, were allowed to come back. Of course, we've heard a lot about people who are getting more and more frustrated because they can't get to their homes. Well, this is what the people of Sanibel came back to. Trees everywhere. The reason they had been kept off is that the trees had to be removed from streets, fallen power lines had to be removed.

And the people here are probably more fortunate than they are elsewhere. This is a wealthy enclave, and many of these homes are extremely well-constructed. And it means, comparatively speaking, they stood up to the storm quite well. As a matter of fact, in total, probably better than the ones at a nearby barrier island, Captiva, where because of the variety of factors, including the direction of the wind and all that kind of stuff, there was more damage. So people were coming back to this. Everybody here recognizes that they are more fortunate than some others in some areas that were even more heavily hit -- Wolf.

BLITZER: Good luck to all of those people there, not only in Sanibel, but throughout Florida. Appreciate it, Bob, very much.

John Kerry stand: The Senator blasts President Bush while courting the veteran vote. The White House responds.

(BEGIN VIDEO CLIP)

RICE: We have been in such close contact with our allies.

(END VIDEO CLIP)

BLITZER: My entire interview with the president's national security adviser, Dr. Condoleezza Rice. That's coming up.

Plus, a John Kerry supporter will weigh in as well. I'll speak live with the General Dan Cristman.

Showdown delay: why star witness Amber Frey is not facing defense attorney Mark Geragos today.

Denouncing a link to al Qaeda: Saudi Arabia takes issue with Michael Moore's movie "Fahrenheit 9/11." Wait until you hear what that country is now hoping to do and how it's reaching out to you.

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

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Six people are dead and another two are missing from the Japanese coast because of a typhoon. Most of the victims were swept away by floodwaters. Torrential rainfall is expected to continue until tomorrow.

There's violent weather in New Zealand as well. High winds, heavy rains and big seas have virtually cut off the nation's capital, Wellington. There has also damage to a number of buildings. And several roads have been closed.

And there's cleanup in Boscastle, England after Monday's powerful floods. But that may have to wait, as even more rain is predicted. Prince Charles is touring the damaged village today.

And that's our look "Around the World."

(COMMERCIAL BREAK)

BLITZER: Welcome back. Coming up, brand new results of a new poll in a key battleground state, that would be Ohio. It could decide the presidential election. It's a story you'll see first here. That's coming up. First, though, a quick check of some other stories now in the news.

Military sources say an Army report recommends disciplinary action for about two dozen military intelligence personnel linked to the Abu Ghraib prisoner abuse scandal in Iraq. That significantly expands the number of people who could be held accountable. The report is also said to find that the abuse was not ordered by senior commanders.

The former lover of Scott Peterson will not return to the witness stand in his double murder trial until at least Monday. Cross- examination by Amber Frey by the defense was scheduled to begin today. But, citing a potential development that needed to be checked out, the judge has postponed her testimony.

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

More now on our top story, the battle over the plan announced by the president to withdraw 70,000 U.S. troops from Europe and Asia over the next decade. Earlier we heard John Kerry blast the plan as vague, drawn-out and potentially dangerous. Just a short while ago, I spoke with the president's national security adviser, Dr. Condoleezza Rice and got her reaction to John Kerry's criticism.

(BEGIN VIDEOTAPE)

BLITZER: Dr. Rice, thanks very much for joining us. Let's get some reaction, formal reaction, to what John Kerry said. He was pretty hard hitting in his speech before the Veteran of Foreign Wars. First of all, on the issue of the troop redeployment, he says this is a bad time to do it, it confuses the allies just when the United States needs them to fight in this war on terror.

RICE: Well, Wolf, this has been a textbook example of coordination and consultation with our allies on plans that were drawn up by our combatant commanders to try and move the American force posture from what clearly was a Cold War force posture to one that is appropriate now to the challenges that we have in the 21st century.

We have been in such close contact with our allies, as a matter of fact, the NATO spokesman said today that this is fully in line with what NATO has talking about, which is transforming our forces, making them more mobile, more agile. Everybody is trying to move from a force posture that, frankly, was for a day when there was a inner- German board that no longer exists, a Warsaw Pact that, of course, dissolved and whose members are now mostly members of NATO and a soviet army that no longer exists. So we had to make these changes.

BLITZER: But what do you say to his concern, also expressed by John McCain, the Republican senator from Arizona, that if you're Kim Jong-Il sitting in North Korea and you see the U.S. start pulling out 12,000 troops from South Korea, you say to yourself, "Hey, this is a good time to hold firm and not negotiate seriously on a nuclear bomb program."

RICE: Well, I would assume that Kim Jong-Il is able to assess capabilities, not numbers. And the numbers have nothing to do with our capability there. The fact is that, in the 50 years since the end of the Korean War, a lot has changed. The South Korean forces are stronger, our forces are more capable technologically, our air and sea power contribute more to the deterrent. This is a very powerful deterrent against Kim Jong-Il. And he would make a terrible mistake in reading anything into it. And we have no reason to believe that somebody who understands capability, and he does understand capability, is going to read anything into this.

BLITZER: So John McCain and John Kerry simply wrong on this specific issue?

RICE: Well, you know, I've talked to people about this, and I have even talked to Senator McCain about it. We are sending the right messages in diplomatic channels to the South Koreans, to the other players on the Korean peninsula, to Japan and to others. Everybody understands that we're standing firm on the North Korean nuclear program. But it was high time that we find a way to consolidate some of our facilities in South Korea to move our forces away from Seoul and, therefore, less of an irritant for the Korean people and to strengthen our alliance with capabilities that draw on our considerable technological sophistication and the strength of the South Korean forces. There is no diminution of capability on the Korean peninsula. As a matter of fact, I think we've strengthened the capability once we achieve these changes.

BLITZER: Let's talk a little bit about what's happening in Iraq right now, specifically Najaf. There is a lot of concern that the Iraqi interim government of Prime Minister Ayad Allawi is about to blink and let Muqtada al-Sadr go free. How serious of a blunder, if you believe that would be a blunder, would that be?

RICE: Well, Wolf, I'm not going to speculate on what the Iraqi government has done. They've shown very good common sense about how to deal with the very severe and difficult problems that they have faced. They understand the situation there. The Iraqi government has been very clear with Sadr that he has to do some things, leave the shrine, that he's got to disband his militia.

We'll let this play out, because the Iraqis are sovereign and they need to resolve their own problems. But nobody is taking Sadr at his word. He's someone from whom you are to see action. He's said lots of words before. He's never followed through on them. And I don't think you're going to see an Iraqi government that's going to take his word.

BLITZER: But, as you well remember, it wasn't that long ago -- a few months ago -- when a top U.S. military commander in Iraq flatly said of Muqtada al-Sadr he should be captured or killed. Is that still the U.S. position?

RICE: Well, Muqtada al-Sadr must not try and be a law unto himself down in Najaf. And what that means for his future, we will see. But he can't have a militia running the streets there. He can't occupy the holiest shrine in Shiadom (ph). He has to be dealt with, and I'm quite certain he will be.

BLITZER: So what is your bottom-line assessment? What's going to happen in Najaf right now?

RICE: Well, I'm not going to try to predict, Wolf. It's a fairly unpredictable situation. But I will tell you this, in the many conversations that we've had with the Iraqi government, they are very clear-headed about what has to be done there. They're very clear- headed that he cannot be allowed to be a law unto himself. They've been very clear-headed that his militia has got to disband. And I have no reason to believe they don't continue to believe that.

BLITZER: Can you clarify once and for all what the president's position is on the creation of this new national intelligence director? Because Donald Rumsfeld, the secretary of defense, he has serious misgivings about it, as you well know. Should this NID, this national intelligence director, have control over the budget and personnel in the entire U.S. intelligence community?

RICE: Well, the president has said that he wants an NID who has sufficient authority to carry out the very important job of fully integrating the American intelligence effort. And that means domestic effort, the foreign intelligence effort, the military effort. And everything is on the table in our discussions currently about exactly what authorities those will be. But the president has been absolutely clear that he believes that person has to have the authority that he needs to really integrate the intelligence budget, to integrate intelligence programs and to make sure that we have a coherent program. So everything is on the table, Wolf.

BLITZER: But you're not ready to flatly accept the recommendation of the 9/11 Commission and give this national intelligence director all that authority, at least not yet?

RICE: Well the president believes that these are serious matters that deserve deliberation. It's not the sort of thing where you accept the report without having read it or accept the report without having discussed it. The president came out in favor of almost all of the recommendations of the 9/11 Commission. But, of course, the devil is in the details. And we're now engaged in very intensive discussions internally about those details.

But I want to be very clear. The reports and the misconceptions out there that the president has ruled out somehow certain kinds of authority for this NID are simply erroneous. The only thing that the president has ruled out is that he does not believe that the NID should be located in the executive office of the president's.

BLITZER: Dr. Rice, thanks very much for joining us.

RICE: Thank you.

(END VIDEOTAPE)

BLITZER: For the other side, I'm joined by retired U.S. Army Lieutenant General Dan Christman who now supports John Kerry. This whole notion -- let's talk about Europe for a second.

DAN CHRISTMAN, U.S. ARMY LIEUTENANT GENERAL: Sure.

BLITZER: Those troops in Germany, as you well know, were built for a totally different era. What's wrong, after three years of negotiations with the Germans, the other NATO allies, bringing them home? CHRISTMAN: Well, for sure, Wolf, we're not fighting in the Fulda Gap anymore. But by the same token, we're not fighting Kansas, either. We're fighting a war against global terror. And we ought not to overlook the fact that the most important structural challenge the Army faces is not where it's stationed, but how big it is. And that's my biggest concern, and Senator Kerry's as well. We're going to be distracted by moving these pawns around the chessboard. What we need to do is increase the size of the Army by 20,000 to 40,000.

BLITZER: But in an emergency, moving troops is not the hard part, it's moving heavy equipment, armor and tanks. It doesn't make any difference if you keep them really in Germany or you move them to Kansas, for that matter. You can airlift them very, very quickly. Why let those bases exist in Germany at a time when we're about to shut down more bases in the United States?

CHRISTMAN: There are some things in the proposal that make some sense. And that's forward operating basis, thinly-manned in Eastern Europe. But there's a very important intangible here, and that's this day-to-day working with our NATO partners, day-to-day, week-to-week interactions on doctrine and training that build cohesive alliances. We're going to defeat the war on terror by being an alliance force, by combining those assets of our all of our NATO partners and others. And we need to do that by being with them on a day-to-day basis. So that's my biggest concern.

BLITZER: Now she says the South Korean government, the Japanese, they're all on board in this troop redeployment from Asia right now. And Kim Jong-Il in North Korea should be under no illusions whatsoever. Are your concerns eased when you heard her say that?

CHRISTMAN: Not in the least. I think there are some elements of this proposal, for example, moving our Army south from the DMZ out of Seoul, further south in South Korea, makes enormous sense. However, taking two-thirds of our division, the 2nd division, out of South Korea at the time we're negotiating with Pyongyang makes no sense. The argument is we can substitute for air and naval air and cruise missiles. But we saw in Baghdad, Wolf, what shock and awe did. There is a substitution belief that we can put missiles on the ground in place of boots on the ground. And in this particular case, I'd argue, it's hugely important to keep those troops in South Korea until there's a resolution on the nuke issue in Pyongyang.

BLITZER: All right. General Dan Christman, thanks very much for joining us.

When your brand is under fire, go on the offensive. That's good public relations advice. And the same rules can apply to countries, as well. That's why the Saudi Arabian government is now spending some huge dollars on a new ad campaign right here in the United States. Our State Department correspondent Andrea Koppel reports.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Speculation, innuendo, accusations. Americans have questioned Saudi Arabia's allegiance since the 9/11 attacks.

ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT: Funded by the Saudi government, the radio ads are about setting the record straight. Using the recent findings of the bipartisan 9/11 Commission, the ads address specific allegations head on, including some singled out in Michael Moore's blockbuster film "Fahrenheit 9/11."

MICHAEL MOORE, "FAHRENHEIT 9/11": All commercial and airline traffic was grounded.

U.S. SENATOR BYRON DORGAN (D-ND): Then we had some airplanes authorized at the highest levels of our government to pick up Osama bin Laden's family members and transport them out of this country.

KOPPEL: But the 9/11 Commission reached a different conclusion, as the Saudi ad points out, quoting directly from the report.

UNIDENTIFIED MALE: "We found no evidence that any flights of Saudi nationals took place before the reopening of national airspace."

MOORE: How much money do the Saudis have invested in America roughly?

KOPPEL: Although the 9/11 report did not explore other allegations that the house of Saud has over the years spent hundreds of millions to forge close ties to the Bush family, it did close the door on charges the Saudi government knowingly gave money to Al Qaeda terrorists, another point highlighted in the Saudi ads, again, quoting the report.

UNIDENTIFIED MALE: "We have found no evidence that the Saudi government as an institution or senior Saudi officials individually funded the organization."

KOPPEL: With 15 of 19 of the 9/11 hijackers from Saudi Arabia, the Saudi government has spent much of the last three years on the defensive, responding to criticism in the United States. While back in the kingdom, Saudi officials say, they had been waging their own battle against Islamic extremism.

NAIL AL-JUBEIR, SAUDI EMBASSY SPOKESMAN: There's not a day passes by when we don't report attacks or killings of extremists. This is an all-out war against extremism.

KOPPEL: But far from giving the Saudis a free pass, the 9/11 report does cite, quote, "significant problems in the U.S.-Saudi relationship," calling the kingdom a, quote, "problematic ally."

(END VIDEOTAPE)

KOPPEL: Produced by an American public relations company, the Saudi government will be spending about $1 million over the next several weeks to run these ads in 19 American cities across the American heartland -- Wolf?

BLITZER: All right, Andrea Koppel at the State Department. Thanks very much for that.

War wounded, a special day in the life of one seriously injured soldier. How today's technology is giving this double amputee a new sense of freedom.

Undecided voters in the heartland: which way will Ohio go? Our Paula Zahn joins us live with brand new poll results you'll want to see.

Team effort, can the U.S. women accomplish what the U.S. men did in the freestyle relay? A complete update of today's events. All that coming up.

(COMMERCIAL BREAK)

BLITZER: Now one soldier's story, a soldier who hasn't lost hope, even though his time in Iraq would forever change his life. Our Pentagon correspondent, Barbara Starr, reports.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Army specialist Kevin Pannell was on foot patrol in Baghdad June 13th when his unit was hit with three grenades.

SPC. KEVIN PANNELL, U.S. ARMY: One of them landed at my heels. It went off. That's how I lost both of these.

STARR: Now a double amputee, this is an extraordinary day. With his wife looking on, Pannell is getting his first prosthetic leg.

DENNIS CLARK, PROSTHETIC TECHNICIAN: This is day one, appointment one, minute one.

STARR: But more than just an artificial limb.

CLARK: Any sensitive areas, problem areas?

PANNELL: Not really. Not at all.

STARR: Pannell is being fitted with a $48,000 limb driven by an internal microprocessor. Today, he will stand for the first time since the attack.

CLARK: I'm going to slide you right in here.

STARR: More adjustments.

PANNELL: I'm not locked, though.

CLARK: No, you're not locked. But we may not get locked until...

(CROSSTALK)

PANNELL: You want me to stand? CLARK: We're just going to stand up. You all locked in? Nice and slow. Nice and slow.

STARR: A remarkable piece of technology. The leg will be hooked up to a laptop computer and specifically programmed for Pannell.

DENNIS: That's a great first step right there. He'll be able to go up and down steps, get in and out of a car, go up and down ramps.

STARR: The knee will adjust 50 times per second.

CLARK: We can actually program a second mode for bicycle riding, for rowing, for whatever it is that he wants to do, for golf.

STARR: Panel's wife, Amanda.

AMANDA PANNELL, SOLDIER'S WIFE: In the years ahead, what I foresee is just maybe everything just getting back to normal.

STARR: The emerging generation of Iraq war soldiers are so young they face another 50 or 60 years of challenges and a commitment from the Army to help them.

PAUL PASQUINA, WALTER REED ARMY MEDICAL CENTER: As advances in rehabilitation or advances in medical or surgical techniques come on, we need to be able to identify them. And we need to be trying to set some treatment plans now that may have a long-term impact, a positive impact, on their eventual outcome.

PANNELL: I don't see, other than, you know, playing in the NBA, I don't see anything that I won't be able to do.

STARR: Barbara Starr, CNN, Walter Reed Army Medical Center.

(END VIDEOTAPE)

BLITZER: Just amazing. Amazing what they can do now.

So how are President Bush and Senator John Kerry faring in the key battleground state of Ohio? Our Paula Zahn is taking the pulse of the people in the Buckeye State. She's joining us up next with brand new poll results you'll want to know about.

Plus a wrap of all of the action in Athens today, including two upsets for the United States in tennis.

(COMMERCIAL BREAK)

BLITZER: Now a breaking political story. We have new numbers, brand new numbers, a new poll on President Bush and Senator Kerry in the key battleground state of Ohio. My colleague Paula Zahn has scheduled a town hall meeting for 8 p.m. eastern in the Buckeye State. She's joining us now live with the results -- Paula.

PAULA ZAHN, CNN ANCHOR: Well, Wolf, you're a very special man, because we're only breaking this embargo for your show this evening. Let me share with the audience what we found. We commissioned a poll, CNN along with the Gallup poll, and here are the numbers that both campaigns are looking at very seriously tonight. The poll found John Kerry leading President George Bush 52 percent to 42 percent among registered voters in Ohio. And when the Gallup organization attempted to calculate which of those voters would actually end up casting ballots if the election were held today, it is a different set of number. The results narrowed to Kerry to 48 percent and Bush to 46 percent, a two-point lead for Kerry along likely voters.

So, Wolf, no matter how you cut it, it is a very tight race. And there's a very good reason why both candidates are spending a lot of money here. In fact, John Kerry spending more money on advertising here in Ohio than any other state in the country. And we're going to bring together tonight a pretty equal representation of Republicans, Democrats and undecided voters to take Bush and Kerry campaign officials to task tonight on a whole range of issues. It should be great. I wish I could give you a sense of the excitement. But we haven't allowed the audience members to come in here yet this evening.

BLITZER: And Paula, I'm sure you know, and all of our viewers who follow this know, no Republican has ever been elected president of the United States without carrying Ohio. That's why what you're doing tonight is potentially so significant.

ZAHN: And another fact to remember, which the Buckeye State residents are so proud of, is they have accurately sided with the president, picked the president, since 1892 and have only been wrong twice. So when you look at the national statistics once again, and that undecided vote, which the national polls comes out to 10 percent, it is critical that both of these campaigns try get these undecided voters on their team.

It will be interesting to hear the strategy of both campaigns tonight. The number one issue here, the economy, some 200,000 jobs lost in the state since the year 2000, 12,000 of them right in and around this community of Canton, Ohio. So a lot at stake here this evening for both campaigns.

BLITZER: Well, we will all, Paula, be watching, must watch TV tonight. "Paula Zahn's Town Hall Meeting, The Undecided Vote" tonight 8 p.m. eastern live from Canton, Ohio. Paula, thanks very much.

Our Olympic update, that's coming up right after this.

(COMMERCIAL BREAK)

BLITZER: Here are the results of today's Olympic action.

(BEGIN VIDEOTAPE)

BLITZER: A strong day in the pool for team USA. The women took the gold in the 800-meter freestyle, matching the men who won their competition yesterday by just 13 one-hundredths of a second. That race, another victory for Michael Phelps. Earlier, he won the 200- meter butterfly, leaving him with four gold medals, more than any other athlete in Athens. Also today, American Brendan Hansen capturing the bronze in the men's 200-meter breaststroke. In other action, the games returned to ancient Olympia for the first time in 1,600 years with shot-put competition. American Adam Nelson took the silver for the second, repeating his performance in Sydney four years ago.

A rough day for American tennis with both Andy Roddick and Venus Williams failing to advance. Meanwhile, an embarrassing climax to a week-long scandal. Greece's top two sprinters pulled out of the games amid ongoing controversy over missed doping tests. Costas Kenteris took gold in Sydney. Katerina Thanou won silver that year. Both say they're innocent.

COSTAS KENTERIS, GREEK SPRINTER (through translator): The last four years I underwent 30 doping tests that have not caused any problems. I am withdrawing my participation from the Olympic Games as a sense of responsibility.

(END VIDEOTAPE)

BLITZER: And "LOU DOBBS TONIGHT" starts right now.

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