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American Morning

Arafat's Health Crisis; Interview with Aaron David Miller; Karl Rove Factor

Aired November 05, 2004 - 8:59   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: It is a postcard picture day here in New York City.
KELLY WALLACE, CNN ANCHOR: Beautiful fall day.

HEMMER: Really nice.

WALLACE: Looking at the park.

HEMMER: Good morning, everyone. Bill Hemmer, along with Kelly Wallace. Soledad is out today. Good to have you with us here today.

WALLACE: Great to be here in the homestretch.

HEMMER: Winding down after your campaign swing on the Kerry side.

WALLACE: I'm going through, like you are, some withdrawal. You know?

HEMMER: Yes, because it's so pumped up for so long.

WALLACE: Yes, so many months, go, go, go, the polls, the candidates, the travel. We're going to have to do some post-campaign depression counseling.

HEMMER: Listen, relaxation's not a bad thing, OK?

WALLACE: Yes, I guess so.

HEMMER: Now that the election is over, one of the most talked about subjects in D.C. is the potential changes in the cabinet. David Gergen has worked for a number of presidents. He knows the pressures involved there and the decisions to be made. Some ideas from him about who will be among the first to go and who may fill in afterwards.

WALLACE: Also, Bill, as Yasser Arafat's health deteriorates even further, some huge questions about the future of the Middle East are now staring the world squarely in the face. We will talk about what happens next with the former Mideast negotiator who worked under six secretaries of state.

HEMMER: All right. Jack is off again today. Toure is taking your e-mail. So we'll get back up to Toure, who is fired up today. A lot of energy. WALLACE: He sure is.

HEMMER: Want to get to Daryn Kagan straight away at the CNN Center watching the headlines.

Hey, Daryn. Good morning.

DARYN KAGAN, CNN ANCHOR: Good morning, Bill and Kelly.

"Now in the News," U.S. troops are hunkering down in the Iraqi city of Falluja. They're apparently gearing up for a full-scale offensive there. Rebel targets were pounded in the insurgent-held city overnight. The aim the offensive would be to pacify the region ahead of January elections.

Here in the U.S., jury deliberations in the Scott Peterson double murder trial set to resume in just about two hours. The judge issued rulings while the jury met yesterday. He banned live cameras from the courtroom for final proceedings out of respect for the families involved. The verdict will be recorded on audiotape.

And in two hours, another closed hearing is set to begin in the child molestation case against Michael Jackson. At issue are more than a dozen pieces of evidence seized from Jackson's personal assistant. The judge yesterday rejected a defense effort to remove district attorney Tom Sneddon from the case on grounds that he had a personal vendetta against Jackson. Jackson is not expected to be in court today.

The wife of the former vice presidential candidate John Edwards is set to undergo more medical testing. A family spokesperson revealing yesterday that Elizabeth Edwards has been diagnosed with a common form of invasive breast cancer. Edwards discovered a lump last week but put off seeing a doctor until the presidential campaign wrapped up. We're going to hear from an oncologist later on in the show.

For now, back to you in New York City.

HEMMER: All right, Daryn. Thanks.

We continue to follow the latest on the health reports of Palestinian leader Yasser Arafat today. Top U.S. officials say he's being kept alive by life-support machines. This is just one of the many international challenges facing the president as he starts his second term. Suzanne Malveaux broke the story yesterday. Let's begin there at the White House.

Good morning.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, good morning, Bill.

U.S. officials continue to get constant updates from French officials about Arafat's condition. We are told negotiations are taking place between the French, Israelis, Egyptians, as well as Arafat's inner circle about where he should be buried.

Now, all of this, of course, putting the spotlight again back on the Middle East peace process. There has been some criticism that the Bush administration has not been engaged enough. But yesterday, President Bush addressed that criticism at his press conference.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think it's very important for our friends, the Israelis, to have a peaceful Palestinian state living on their border. It's very important for the Palestinian people to have a peaceful hopeful future.

That's why I articulated a two-state vision in that Rose Garden speech. I meant it when I said it, and I mean it now.

(END VIDEO CLIP)

MALVEAUX: And the president yesterday also highlighting his domestic agenda, talking about the need to reform Social Security, allow young people to invest part of their withholdings in the stock market. Also to overhaul the intelligence community, to reform the tax code, to simplify it. Also, of course, to try to cut the deficit in half, that $413 billion deficit.

And Bill, of course, President Bush spending a long weekend at Camp David to work on his second-term agenda and, of course, to think ahead of perhaps new members of his cabinet -- Bill.

HEMMER: Suzanne Malveaux from the White House. Suzanne Malveaux, thanks for that.

Across the room now and more with Kelly.

WALLACE: Thanks, Bill.

What would Yasser Arafat's death mean to the Mideast peace process? I am joined now by former Mideast peace negotiator Aaron David Miller.

Aaron Miller, thanks for being here.

AARON DAVID MILLER, FMR. MIDEAST PEACE NEGOTIATOR: Thank you, Kelly.

WALLACE: First of all, Suzanne was just talking with Bill. Negotiations under way in terms of a burial for Yasser Arafat. You know the Israelis are saying absolutely no way for him to be buried in Jerusalem. How do you see this playing out?

MILLER: Everything that is done now is going to be politicized, and everything is going to reflect, frankly, on an Israeli-Palestinian future. I expect the chairman's wish would have been to be buried on the Temple Mount, the Haram Shareef. The Israelis have said no.

I would guess in the end that Gaza would be the most appropriate. It's easiest. His family, at least his father and sister are buried there. And he spent time there, a lot of time as I young man. So I suspect Gaza will be the place.

WALLACE: And you saw him in October, just about 10 days before his condition deteriorated. You've seen him before that in August. How was his health? What was he talking about his future? What was your sense?

MILLER: I had seen Arafat in August, and he was the old Arafat, argumentative, focused, eager to do battle. And we did do battle.

And then I saw him October 20, and he was transformed individual. Severe weight loss. Tough to focus. We had spent hundreds of hours with him in the negotiations; I'm not sure he even recognized me.

WALLACE: Let's talk about the impact, because a European diplomat was quoted of saying if Arafat dies, that the argument of the United States and Israel, that there's no partner for them to talk to is obviously not valid anymore. So what impact could Arafat's death have on the U.S. getting more involved in the peace process?

MILLER: Well, it's clearly an interesting notion. You never pray for nothing you really don't want. And the Israelis have basically said they can't deal with him. And the administration has said the same thing.

Now the reality is he's either going to be incapacitated in the long term or he's going to pass from the scene. Now, there will be a succession. Abu Allah (ph), Abu Mazen have already begun to fill the vacuum.

I think the prospect and potential for a serious opening between Israelis and Palestinians is clearly there in the months ahead. It's not going to be quick, and it will be very messy.

It's going to depend on a re-engaged Bush administration. It's going to depend on an Israeli prime minister who is willing to convert a unilateral process in Gaza to a bilateral one. And it will depend on the Palestinian capacity to fight the forces of terror and violence. But I really believe that 2005 is going to be a moment of opportunity.

WALLACE: A question for you on the Palestinian leadership, the vacuum. As you were talking about, Palestinian Prime Minister Qorei, the former prime minister, Mahmoud Abbas, who really fills the vacuum, and do -- would they have the people unless they are elected by the Palestinian people?

MILLER: It's a critical point. And some have called for elections, both municipal elections and national elections and legislative elections.

The issue is less the formal succession. And as you described, who is going to have the authority legitimacy to make these decisions?

Here's a guy who dominated the Palestinian national mood for 50 years. More money, more guns, more political authority, more international weight than any Palestinian leader has now or is likely to have for the foreseeable future. That's why whoever succeeds him, even if it's a group, they're going to require an enormous amount of people from the Israelis and the Americans.

WALLACE: Aaron David Miller, we have to leave it there. We'll definitely be talking to you in the days ahead.

MILLER: Thanks, Kelly.

WALLACE: Thanks for being with us.

MILLER: Thank you.

WALLACE: Bill.

HEMMER: All right, Kelly.

Back to election 2004. The president now beginning to formulate a second-term game plan. The message unspoken but surely felt by his senior strategist, is mission accomplished? That strategist is Karl Rove, the driving force behind the reelection campaign. Today the legend of Karl Rove continues to grow.

(BEGIN VIDEOTAPE)

BUSH: The architect, Karl Rove.

(APPLAUSE)

HEMMER (voice-over): Political watchers say the Bush victory is vindication for his chief political adviser whose master plan was getting the president reelected by bonding with his conservative base.

KARL ROVE, SR. PRESIDENTIAL ADVISER: Nothing stays a gridlock or deadlock in American politics. Things move one direction or the other. And to some degree we have evidence that they're beginning to move in one direction.

HEMMER: The campaign strategy four years in the making turned out to be, many would say, a stroke of genius.

ROVE: We're going to win. We will win Florida and Ohio.

HEMMER: Rural and evangelical voters poured to the polls, giving President Bush a record 59 million votes. The link between Rove and the Bush family goes back to the early 1970s, when Rove worked for the president's father, Bush 41, then chairman of the Republican National Committee.

Rove later planned George W. Bush's winning races for governor in Texas, and, of course, his first run of the presidency four years ago. When it comes to the president's inner circle, no one has his ear quite like Karl Rove.

BILL MILLER, GOP CONSULTANT: If you look at the circle of people who sit down and make big decisions in that administration, the seats at that table are few and far between, and Karl has the first seat.

(END VIDEOTAPE)

HEMMER: Now we wonder how Karl Rove will help shape the second term for President Bush. And yesterday the president confirming that there would be changes in his cabinet. Listen here.

(BEGIN VIDEO CLIP)

BUSH: There will be some changes. I don't know who it will be. It is inevitable there will be changes. It happens in every administration to a person.

I am proud of the work they have done. And I fully understand we are about to head into the period of intense speculation as to who's going to stay and who's not going to stay. And I assured them that -- today I warned them of the speculative period. It's great Washington sport.

(END VIDEO CLIP)

HEMMER: Let's continue that conversation with former presidential adviser, current Harvard professor, David Gergen, up there in Massachusetts.

David, good morning.

DAVID GERGEN, FMR. PRESIDENTIAL ADVISER: Good morning.

HEMMER: Welcome back. I want to talk about what you believe could be the first person to defect, John Ashcroft. Why do you believe that with the attorney general?

GERGEN: Well, the speculation has centered so heavily on John Ashcroft's departure partly because of his health, and partly because he's given indications in the past he would leave probably leave. And some unfortunately at the White House are seeming to suggest that would be a good thing.

I should -- we should remember that his aides were saying in the last couple of days that he feels very energized by the election returns. And, you know, I think -- I think if they want him to leave they're going to have to do it in a very graceful way. It would be a terrible idea, I think, to try to "push him out" after this election.

HEMMER: What about Tom Ridge, Tommy Thompson, Health and Human Services secretary? I believe Tommy Thompson's already told the president he will not stay for a second term. Who replaces these men do you believe?

GERGEN: Well, I think that, for starters, you have to understand -- or we should all understand that the president this time around has a lot of latitude. He can go in almost any direction he wants because, first of all, he has 55 votes in the Senate. That greatly strengthens his hand and makes it easier to get more controversial or very conservative appointments. Secondly, doesn't have to run again. So he doesn't owe anything to anybody.

And third, this does give an opportunity to reach across the aisles if that's what he chooses to do.

I think he's more likely to be bipartisan in his appointments than his agenda. I think he's going to stick to this very conservative, bold agenda. But he may reach out to get some Democrats in on the -- more Democrats than he's had.

At the attorney general's job there is great deal of speculation about Larry Thompson, the former deputy attorney general for John Ashcroft. An African-American, would be the first African-American to take the post. But he's recently gone to PepsiCo, has a major job there, and it's maybe hard to pry him away.

There's also speculation about Rudy Giuliani and Marc Racicot possibly coming in.

If I had to bet on it right now, I thought -- I think there may be a strong chance that the real winner will be the White House council today, Mr. Gonzalez, who had been on the list, short list for a president to possibly go to the Supreme Court. But I think he may have more confirmation problems if he went to the Supreme Court directly because of his engagement or involvement with Abu Ghraib and the policymaking of that.

I think, if you're the White House, the way you would think about this is we put Gonzalez over at Justice for a couple of years. We can probably get him confirmed for Justice, put him over there for a couple of years.

He does a good job, and then he can go to the court late in our first term, because he'll be -- he'll be coming out of the AG's (ph) job. And that will give you a Hispanic on the court, and that's really big in terms of Karl Rove's ultimate political game plan for the GOP.

HEMMER: Interesting strategy there. Donald Rumsfeld, Colin Powell, I understand you believe they will leave eventually but maybe not right away. What gives you that thinking?

GERGEN: Well, I think both of them will have an interest in staying through the elections in Iraq. And those come in probably late January. They want to make sure that Iraq is a bit more tidy than it is today and that they can leave their heads up on that question.

There have also been fairly widespread rumors now in Washington over the last few weeks among the intimates of Colin Powell saying, "You know, we all thought he was going to leave instantly. The only question was whether he was going to leave five minutes after the inauguration or 15 minutes after the inauguration."

But there's some indication recently that he might want to stay on, even for a year or more. Because he's -- you know, the truth of the matter, I think he feels somewhat bruised, that he has been -- he's gotten a fair number of knocks in the press and elsewhere, and he may want to stay on to -- he's a very proud man who has an illustrious career, as you know.

So he may want to stay on to put American foreign policy in a stronger place. And he may also be a little worried about what may happen if he leaves.

HEMMER: Yes. Let's talk about Condoleezza Rice. There was one report last night that indicated she might be the first to go. Maybe going off to another university and being president. If she stays on however, where would she go?

GERGEN: Well, I do think she wants to leave the NSC. And in the past she has said she really does not want to be a university president.

She had a very good chance of being president of Stanford when she was out there, as chancellor, and she basically turned that down in order to go work for George Bush on the campaign. I'm not sure she really envisions or likes being a university president.

So I don't think she wants to go to the State Department. Friends of hers have been saying now for a year and a half she does find the -- all of the diplomatic functions, the social functions that you have to do and the pomp and circumstance that goes with that job, she finds that somewhat tedious. And she really likes the Defense Department.

So I think -- I think there's a growing possibility that Condoleezza Rice is going to stay in Washington as kind of the first woman, and, of course, to become secretary of defense. And that would be a major, major challenge for her. And, you know, she spent a year over at the joint chiefs sometime ago earlier in her career as a White House fellow, and she loved it over there.

HEMMER: You've given us something to think about, David. Thanks for that.

GERGEN: OK. There's a lot going on. The president has a lot of -- there's a lot of depth here. But anybody who thinks this president is going to tack (ph) to the middle now, you know, right after this election, I think is misreading the tea leaves. There's no indication of that whatsoever.

HEMMER: Thank you, David. It's good to see you.

GERGEN: Thank you.

HEMMER: David Gergen in Massachusetts -- Kelly.

WALLACE: Thanks, Bill.

We'll get another check of the weather right now. Chad Myers at the CNN Center with the latest forecast. Chad, it is beautiful here in New York City.

CHAD MYERS, CNN METEOROLOGIST: It is. The sun is out.

(WEATHER REPORT)

WALLACE: Thanks so much, Chad. We'll be checking in with you again.

Still to come here on AMERICAN MORNING, the remarkable story a good samaritan shot when he ran to help a woman who was being mugged. They'll meet for the first time this morning on our show. You don't want to miss that.

HEMMER: Also in a moment here, more on the diagnoses for Elizabeth Edwards with breast cancer. She found out on Wednesday, the story broke yesterday. We'll ask a pioneer in breast cancer research about some of the myths surrounding the disease.

WALLACE: And Bill, what does it mean if the Peterson reaches a quick verdict? We'll talk with legal analyst Dean Johnson.

That's all ahead right here on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Jurors deciding whether or not Scott Peterson is guilty of double murder return for a third day of deliberations today. Dean Johnson, former San Mateo County prosecutor, back with us from Redwood City, California.

Dean, good to have you back. Nice sunrise behind you, too, by the way. Beautiful morning.

DEAN JOHNSON, FMR. SAN MATEO COUNTY PROSECUTOR: Good morning. Isn't it beautiful?

HEMMER: Yes, it is.

The last thing you told me yesterday at this time is that this will be a quick verdict, you believe. Do you still believe that?

JOHNSON: Oh, I still believe that. The jurors got here early yesterday. They started deliberations right away. And by the afternoon, they were reportedly asking the bailiffs to bring certain evidence.

We don't know what evidence they wanted to look at, but they are requesting to see certain exhibits. We also have heard from very reliable sources around the courthouse that juror number five, the doctor-lawyer, may very well be the foreperson, which is what we expected.

HEMMER: Why is that significant, if at all?

JOHNSON: I think it could be very significant for both sides. He is a doctor, a medical doctor, and an attorney.

Remember, Mark Geragos has characterized this case as a case of emotion versus evidence. Certainly doctors and lawyers are used to making important decisions, dispassionately and objectively, and putting their emotions aside.

On the other hand, a doctor-lawyer can certainly understand complexed propositions of law, understand the notion of theory construction, and understand that, as the prosecution has argued, if there is one fact that doesn't if the a theory, you throw that theory out. And that's what prosecution is saying, that they have that one fact, the location of the bodies that doesn't fit any defense theory.

HEMMER: Dean, there's a little bit of a hubbub being made, perhaps it's just within the media circles, about the judge giving a ruling that there will be no cameras allowed in the courtroom but there will be an audio feed. What are you to make of that decision from the bench?

JOHNSON: Well, Judge Delucchi has been very restrictive, as you know, about cameras, even audio feeds, even still photographs in the courtroom. From my standpoint, I have an enormous respect for Judge Delucchi. He's a very fine judge.

I think he made an error here. The arguments that keeping cameras out of the courtroom protects the defendant's right to a fair trial tend to dissipate once the trial is over and the jury's deliberating in private.

He does show great deference, as he should, to the family's rights to privacy. But, of course, the families in this case have been out in the public all through this trial, all through even the investigation of Laci Peterson.

So I think the first amendment should have prevailed here. I think cameras in the courtroom is very good. It's very educational to potential jurors and to citizens. I would have ruled differently.

HEMMER: So we're going to hear but we will not see it then?

JOHNSON: That's correct.

HEMMER: Back to this quick verdict theory of yours. Do you believe in Friday verdicts?

JOHNSON: That's current house wisdom. You know, people think that beginnings of holidays, beginnings of weekends, the jurors wants to get home. I don't think that holds in a capital murder case. I think this jury's going to do whatever it takes to make sure that they have made the right decision.

HEMMER: Thanks, Dean. Dean Johnson in Redwood City, California, this morning.

JOHNSON: Thank you, Bill.

HEMMER: All right -- Kelly.

WALLACE: Thanks, Bill.

A fire at a firework's factory in Denmark sets off a series of explosions. Look at this video. Thousands were evacuated as it took firefighters nearly a day to contain the blaze.

One firefighter was killed and at least 17 people injured. Authorities believe the fire started when containers of fireworks were loaded onto a truck. Police say there may have been 2,000 tons of fireworks at that site.

HEMMER: About 22 minutes now past the hour here. We're watching this story out of Falluja.

A full-out assault on that town appear to be imminent. Ayad Allawi just a few moments ago making more comments, saying that the window of opportunity is closing for the insurgents.

In the meantime, officials say there's a fundamental challenge facing the U.S. when it comes to the Iraqi insurgency. And we'll get to that from the Pentagon and Barbara Starr in a moment as we continue right after this.

(COMMERCIAL BREAK)

WALLACE: And welcome back. Let's check in with Toure and the "Question of the Day."

TOURE, "ROLLING STONE": You had to get that rhyme in there.

WALLACE: And on the presidential election.

TOURE: Yes. Well, Tuesday's election was shocking for many Americans who are now struggling to quickly recalibrate their understanding of the country. It appears that values contributed to the sharp division.

Well, what do you think? Has the year of the values voter made you struggle to wrap your head where we are as a country? Or do you think the rest of the country has finally fallen in live with your moral compass?

Did the election change your view of America? Some interesting e-mails.

Heather from Lafayette, Indiana, "Never have I been more shocked, scared or embarrassed to be an American. For decades we have looked down on countries that mix religion and politics, i.e., countries in the Middle East, and now we have become one."

Helen from Deep Run, North Carolina -- I love the name of that town -- "Doesn't the Democratic leadership get it yet? The majority of the people do not blame the president for our ills, but we are sick and tired of our representatives playing the blame game. Stop the negative and complaining and start working together." And Ernie from Los Angeles, "My view of America is the same. It's best -- it is the best country on Earth, where every American has the right to disagree with whoever is in the White House."

Lots of back and forth.

WALLACE: I like Helen from Deep Run, North Carolina, "Stop complaining and start working together."

Can't we all just get along?

TOURE: Yes, Rodney, we have to get along.

HEMMER: What country are you looking at?

WALLACE: Oh, I don't know. Just trying to be optimistic.

HEMMER: "90-Second Pop" on a Friday coming up here in a moment.

(MUSIC)

(BEGIN VIDEOTAPE)

HEMMER (voice-over): Viewers fell in love with the "OC" last season, but are they ready for more this year?

Plus, "The Incredibles" duke it out and with "Alfie." Who's got more power at the box office? That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

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Aired November 5, 2004 - 8:59   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: It is a postcard picture day here in New York City.
KELLY WALLACE, CNN ANCHOR: Beautiful fall day.

HEMMER: Really nice.

WALLACE: Looking at the park.

HEMMER: Good morning, everyone. Bill Hemmer, along with Kelly Wallace. Soledad is out today. Good to have you with us here today.

WALLACE: Great to be here in the homestretch.

HEMMER: Winding down after your campaign swing on the Kerry side.

WALLACE: I'm going through, like you are, some withdrawal. You know?

HEMMER: Yes, because it's so pumped up for so long.

WALLACE: Yes, so many months, go, go, go, the polls, the candidates, the travel. We're going to have to do some post-campaign depression counseling.

HEMMER: Listen, relaxation's not a bad thing, OK?

WALLACE: Yes, I guess so.

HEMMER: Now that the election is over, one of the most talked about subjects in D.C. is the potential changes in the cabinet. David Gergen has worked for a number of presidents. He knows the pressures involved there and the decisions to be made. Some ideas from him about who will be among the first to go and who may fill in afterwards.

WALLACE: Also, Bill, as Yasser Arafat's health deteriorates even further, some huge questions about the future of the Middle East are now staring the world squarely in the face. We will talk about what happens next with the former Mideast negotiator who worked under six secretaries of state.

HEMMER: All right. Jack is off again today. Toure is taking your e-mail. So we'll get back up to Toure, who is fired up today. A lot of energy. WALLACE: He sure is.

HEMMER: Want to get to Daryn Kagan straight away at the CNN Center watching the headlines.

Hey, Daryn. Good morning.

DARYN KAGAN, CNN ANCHOR: Good morning, Bill and Kelly.

"Now in the News," U.S. troops are hunkering down in the Iraqi city of Falluja. They're apparently gearing up for a full-scale offensive there. Rebel targets were pounded in the insurgent-held city overnight. The aim the offensive would be to pacify the region ahead of January elections.

Here in the U.S., jury deliberations in the Scott Peterson double murder trial set to resume in just about two hours. The judge issued rulings while the jury met yesterday. He banned live cameras from the courtroom for final proceedings out of respect for the families involved. The verdict will be recorded on audiotape.

And in two hours, another closed hearing is set to begin in the child molestation case against Michael Jackson. At issue are more than a dozen pieces of evidence seized from Jackson's personal assistant. The judge yesterday rejected a defense effort to remove district attorney Tom Sneddon from the case on grounds that he had a personal vendetta against Jackson. Jackson is not expected to be in court today.

The wife of the former vice presidential candidate John Edwards is set to undergo more medical testing. A family spokesperson revealing yesterday that Elizabeth Edwards has been diagnosed with a common form of invasive breast cancer. Edwards discovered a lump last week but put off seeing a doctor until the presidential campaign wrapped up. We're going to hear from an oncologist later on in the show.

For now, back to you in New York City.

HEMMER: All right, Daryn. Thanks.

We continue to follow the latest on the health reports of Palestinian leader Yasser Arafat today. Top U.S. officials say he's being kept alive by life-support machines. This is just one of the many international challenges facing the president as he starts his second term. Suzanne Malveaux broke the story yesterday. Let's begin there at the White House.

Good morning.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, good morning, Bill.

U.S. officials continue to get constant updates from French officials about Arafat's condition. We are told negotiations are taking place between the French, Israelis, Egyptians, as well as Arafat's inner circle about where he should be buried.

Now, all of this, of course, putting the spotlight again back on the Middle East peace process. There has been some criticism that the Bush administration has not been engaged enough. But yesterday, President Bush addressed that criticism at his press conference.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think it's very important for our friends, the Israelis, to have a peaceful Palestinian state living on their border. It's very important for the Palestinian people to have a peaceful hopeful future.

That's why I articulated a two-state vision in that Rose Garden speech. I meant it when I said it, and I mean it now.

(END VIDEO CLIP)

MALVEAUX: And the president yesterday also highlighting his domestic agenda, talking about the need to reform Social Security, allow young people to invest part of their withholdings in the stock market. Also to overhaul the intelligence community, to reform the tax code, to simplify it. Also, of course, to try to cut the deficit in half, that $413 billion deficit.

And Bill, of course, President Bush spending a long weekend at Camp David to work on his second-term agenda and, of course, to think ahead of perhaps new members of his cabinet -- Bill.

HEMMER: Suzanne Malveaux from the White House. Suzanne Malveaux, thanks for that.

Across the room now and more with Kelly.

WALLACE: Thanks, Bill.

What would Yasser Arafat's death mean to the Mideast peace process? I am joined now by former Mideast peace negotiator Aaron David Miller.

Aaron Miller, thanks for being here.

AARON DAVID MILLER, FMR. MIDEAST PEACE NEGOTIATOR: Thank you, Kelly.

WALLACE: First of all, Suzanne was just talking with Bill. Negotiations under way in terms of a burial for Yasser Arafat. You know the Israelis are saying absolutely no way for him to be buried in Jerusalem. How do you see this playing out?

MILLER: Everything that is done now is going to be politicized, and everything is going to reflect, frankly, on an Israeli-Palestinian future. I expect the chairman's wish would have been to be buried on the Temple Mount, the Haram Shareef. The Israelis have said no.

I would guess in the end that Gaza would be the most appropriate. It's easiest. His family, at least his father and sister are buried there. And he spent time there, a lot of time as I young man. So I suspect Gaza will be the place.

WALLACE: And you saw him in October, just about 10 days before his condition deteriorated. You've seen him before that in August. How was his health? What was he talking about his future? What was your sense?

MILLER: I had seen Arafat in August, and he was the old Arafat, argumentative, focused, eager to do battle. And we did do battle.

And then I saw him October 20, and he was transformed individual. Severe weight loss. Tough to focus. We had spent hundreds of hours with him in the negotiations; I'm not sure he even recognized me.

WALLACE: Let's talk about the impact, because a European diplomat was quoted of saying if Arafat dies, that the argument of the United States and Israel, that there's no partner for them to talk to is obviously not valid anymore. So what impact could Arafat's death have on the U.S. getting more involved in the peace process?

MILLER: Well, it's clearly an interesting notion. You never pray for nothing you really don't want. And the Israelis have basically said they can't deal with him. And the administration has said the same thing.

Now the reality is he's either going to be incapacitated in the long term or he's going to pass from the scene. Now, there will be a succession. Abu Allah (ph), Abu Mazen have already begun to fill the vacuum.

I think the prospect and potential for a serious opening between Israelis and Palestinians is clearly there in the months ahead. It's not going to be quick, and it will be very messy.

It's going to depend on a re-engaged Bush administration. It's going to depend on an Israeli prime minister who is willing to convert a unilateral process in Gaza to a bilateral one. And it will depend on the Palestinian capacity to fight the forces of terror and violence. But I really believe that 2005 is going to be a moment of opportunity.

WALLACE: A question for you on the Palestinian leadership, the vacuum. As you were talking about, Palestinian Prime Minister Qorei, the former prime minister, Mahmoud Abbas, who really fills the vacuum, and do -- would they have the people unless they are elected by the Palestinian people?

MILLER: It's a critical point. And some have called for elections, both municipal elections and national elections and legislative elections.

The issue is less the formal succession. And as you described, who is going to have the authority legitimacy to make these decisions?

Here's a guy who dominated the Palestinian national mood for 50 years. More money, more guns, more political authority, more international weight than any Palestinian leader has now or is likely to have for the foreseeable future. That's why whoever succeeds him, even if it's a group, they're going to require an enormous amount of people from the Israelis and the Americans.

WALLACE: Aaron David Miller, we have to leave it there. We'll definitely be talking to you in the days ahead.

MILLER: Thanks, Kelly.

WALLACE: Thanks for being with us.

MILLER: Thank you.

WALLACE: Bill.

HEMMER: All right, Kelly.

Back to election 2004. The president now beginning to formulate a second-term game plan. The message unspoken but surely felt by his senior strategist, is mission accomplished? That strategist is Karl Rove, the driving force behind the reelection campaign. Today the legend of Karl Rove continues to grow.

(BEGIN VIDEOTAPE)

BUSH: The architect, Karl Rove.

(APPLAUSE)

HEMMER (voice-over): Political watchers say the Bush victory is vindication for his chief political adviser whose master plan was getting the president reelected by bonding with his conservative base.

KARL ROVE, SR. PRESIDENTIAL ADVISER: Nothing stays a gridlock or deadlock in American politics. Things move one direction or the other. And to some degree we have evidence that they're beginning to move in one direction.

HEMMER: The campaign strategy four years in the making turned out to be, many would say, a stroke of genius.

ROVE: We're going to win. We will win Florida and Ohio.

HEMMER: Rural and evangelical voters poured to the polls, giving President Bush a record 59 million votes. The link between Rove and the Bush family goes back to the early 1970s, when Rove worked for the president's father, Bush 41, then chairman of the Republican National Committee.

Rove later planned George W. Bush's winning races for governor in Texas, and, of course, his first run of the presidency four years ago. When it comes to the president's inner circle, no one has his ear quite like Karl Rove.

BILL MILLER, GOP CONSULTANT: If you look at the circle of people who sit down and make big decisions in that administration, the seats at that table are few and far between, and Karl has the first seat.

(END VIDEOTAPE)

HEMMER: Now we wonder how Karl Rove will help shape the second term for President Bush. And yesterday the president confirming that there would be changes in his cabinet. Listen here.

(BEGIN VIDEO CLIP)

BUSH: There will be some changes. I don't know who it will be. It is inevitable there will be changes. It happens in every administration to a person.

I am proud of the work they have done. And I fully understand we are about to head into the period of intense speculation as to who's going to stay and who's not going to stay. And I assured them that -- today I warned them of the speculative period. It's great Washington sport.

(END VIDEO CLIP)

HEMMER: Let's continue that conversation with former presidential adviser, current Harvard professor, David Gergen, up there in Massachusetts.

David, good morning.

DAVID GERGEN, FMR. PRESIDENTIAL ADVISER: Good morning.

HEMMER: Welcome back. I want to talk about what you believe could be the first person to defect, John Ashcroft. Why do you believe that with the attorney general?

GERGEN: Well, the speculation has centered so heavily on John Ashcroft's departure partly because of his health, and partly because he's given indications in the past he would leave probably leave. And some unfortunately at the White House are seeming to suggest that would be a good thing.

I should -- we should remember that his aides were saying in the last couple of days that he feels very energized by the election returns. And, you know, I think -- I think if they want him to leave they're going to have to do it in a very graceful way. It would be a terrible idea, I think, to try to "push him out" after this election.

HEMMER: What about Tom Ridge, Tommy Thompson, Health and Human Services secretary? I believe Tommy Thompson's already told the president he will not stay for a second term. Who replaces these men do you believe?

GERGEN: Well, I think that, for starters, you have to understand -- or we should all understand that the president this time around has a lot of latitude. He can go in almost any direction he wants because, first of all, he has 55 votes in the Senate. That greatly strengthens his hand and makes it easier to get more controversial or very conservative appointments. Secondly, doesn't have to run again. So he doesn't owe anything to anybody.

And third, this does give an opportunity to reach across the aisles if that's what he chooses to do.

I think he's more likely to be bipartisan in his appointments than his agenda. I think he's going to stick to this very conservative, bold agenda. But he may reach out to get some Democrats in on the -- more Democrats than he's had.

At the attorney general's job there is great deal of speculation about Larry Thompson, the former deputy attorney general for John Ashcroft. An African-American, would be the first African-American to take the post. But he's recently gone to PepsiCo, has a major job there, and it's maybe hard to pry him away.

There's also speculation about Rudy Giuliani and Marc Racicot possibly coming in.

If I had to bet on it right now, I thought -- I think there may be a strong chance that the real winner will be the White House council today, Mr. Gonzalez, who had been on the list, short list for a president to possibly go to the Supreme Court. But I think he may have more confirmation problems if he went to the Supreme Court directly because of his engagement or involvement with Abu Ghraib and the policymaking of that.

I think, if you're the White House, the way you would think about this is we put Gonzalez over at Justice for a couple of years. We can probably get him confirmed for Justice, put him over there for a couple of years.

He does a good job, and then he can go to the court late in our first term, because he'll be -- he'll be coming out of the AG's (ph) job. And that will give you a Hispanic on the court, and that's really big in terms of Karl Rove's ultimate political game plan for the GOP.

HEMMER: Interesting strategy there. Donald Rumsfeld, Colin Powell, I understand you believe they will leave eventually but maybe not right away. What gives you that thinking?

GERGEN: Well, I think both of them will have an interest in staying through the elections in Iraq. And those come in probably late January. They want to make sure that Iraq is a bit more tidy than it is today and that they can leave their heads up on that question.

There have also been fairly widespread rumors now in Washington over the last few weeks among the intimates of Colin Powell saying, "You know, we all thought he was going to leave instantly. The only question was whether he was going to leave five minutes after the inauguration or 15 minutes after the inauguration."

But there's some indication recently that he might want to stay on, even for a year or more. Because he's -- you know, the truth of the matter, I think he feels somewhat bruised, that he has been -- he's gotten a fair number of knocks in the press and elsewhere, and he may want to stay on to -- he's a very proud man who has an illustrious career, as you know.

So he may want to stay on to put American foreign policy in a stronger place. And he may also be a little worried about what may happen if he leaves.

HEMMER: Yes. Let's talk about Condoleezza Rice. There was one report last night that indicated she might be the first to go. Maybe going off to another university and being president. If she stays on however, where would she go?

GERGEN: Well, I do think she wants to leave the NSC. And in the past she has said she really does not want to be a university president.

She had a very good chance of being president of Stanford when she was out there, as chancellor, and she basically turned that down in order to go work for George Bush on the campaign. I'm not sure she really envisions or likes being a university president.

So I don't think she wants to go to the State Department. Friends of hers have been saying now for a year and a half she does find the -- all of the diplomatic functions, the social functions that you have to do and the pomp and circumstance that goes with that job, she finds that somewhat tedious. And she really likes the Defense Department.

So I think -- I think there's a growing possibility that Condoleezza Rice is going to stay in Washington as kind of the first woman, and, of course, to become secretary of defense. And that would be a major, major challenge for her. And, you know, she spent a year over at the joint chiefs sometime ago earlier in her career as a White House fellow, and she loved it over there.

HEMMER: You've given us something to think about, David. Thanks for that.

GERGEN: OK. There's a lot going on. The president has a lot of -- there's a lot of depth here. But anybody who thinks this president is going to tack (ph) to the middle now, you know, right after this election, I think is misreading the tea leaves. There's no indication of that whatsoever.

HEMMER: Thank you, David. It's good to see you.

GERGEN: Thank you.

HEMMER: David Gergen in Massachusetts -- Kelly.

WALLACE: Thanks, Bill.

We'll get another check of the weather right now. Chad Myers at the CNN Center with the latest forecast. Chad, it is beautiful here in New York City.

CHAD MYERS, CNN METEOROLOGIST: It is. The sun is out.

(WEATHER REPORT)

WALLACE: Thanks so much, Chad. We'll be checking in with you again.

Still to come here on AMERICAN MORNING, the remarkable story a good samaritan shot when he ran to help a woman who was being mugged. They'll meet for the first time this morning on our show. You don't want to miss that.

HEMMER: Also in a moment here, more on the diagnoses for Elizabeth Edwards with breast cancer. She found out on Wednesday, the story broke yesterday. We'll ask a pioneer in breast cancer research about some of the myths surrounding the disease.

WALLACE: And Bill, what does it mean if the Peterson reaches a quick verdict? We'll talk with legal analyst Dean Johnson.

That's all ahead right here on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Jurors deciding whether or not Scott Peterson is guilty of double murder return for a third day of deliberations today. Dean Johnson, former San Mateo County prosecutor, back with us from Redwood City, California.

Dean, good to have you back. Nice sunrise behind you, too, by the way. Beautiful morning.

DEAN JOHNSON, FMR. SAN MATEO COUNTY PROSECUTOR: Good morning. Isn't it beautiful?

HEMMER: Yes, it is.

The last thing you told me yesterday at this time is that this will be a quick verdict, you believe. Do you still believe that?

JOHNSON: Oh, I still believe that. The jurors got here early yesterday. They started deliberations right away. And by the afternoon, they were reportedly asking the bailiffs to bring certain evidence.

We don't know what evidence they wanted to look at, but they are requesting to see certain exhibits. We also have heard from very reliable sources around the courthouse that juror number five, the doctor-lawyer, may very well be the foreperson, which is what we expected.

HEMMER: Why is that significant, if at all?

JOHNSON: I think it could be very significant for both sides. He is a doctor, a medical doctor, and an attorney.

Remember, Mark Geragos has characterized this case as a case of emotion versus evidence. Certainly doctors and lawyers are used to making important decisions, dispassionately and objectively, and putting their emotions aside.

On the other hand, a doctor-lawyer can certainly understand complexed propositions of law, understand the notion of theory construction, and understand that, as the prosecution has argued, if there is one fact that doesn't if the a theory, you throw that theory out. And that's what prosecution is saying, that they have that one fact, the location of the bodies that doesn't fit any defense theory.

HEMMER: Dean, there's a little bit of a hubbub being made, perhaps it's just within the media circles, about the judge giving a ruling that there will be no cameras allowed in the courtroom but there will be an audio feed. What are you to make of that decision from the bench?

JOHNSON: Well, Judge Delucchi has been very restrictive, as you know, about cameras, even audio feeds, even still photographs in the courtroom. From my standpoint, I have an enormous respect for Judge Delucchi. He's a very fine judge.

I think he made an error here. The arguments that keeping cameras out of the courtroom protects the defendant's right to a fair trial tend to dissipate once the trial is over and the jury's deliberating in private.

He does show great deference, as he should, to the family's rights to privacy. But, of course, the families in this case have been out in the public all through this trial, all through even the investigation of Laci Peterson.

So I think the first amendment should have prevailed here. I think cameras in the courtroom is very good. It's very educational to potential jurors and to citizens. I would have ruled differently.

HEMMER: So we're going to hear but we will not see it then?

JOHNSON: That's correct.

HEMMER: Back to this quick verdict theory of yours. Do you believe in Friday verdicts?

JOHNSON: That's current house wisdom. You know, people think that beginnings of holidays, beginnings of weekends, the jurors wants to get home. I don't think that holds in a capital murder case. I think this jury's going to do whatever it takes to make sure that they have made the right decision.

HEMMER: Thanks, Dean. Dean Johnson in Redwood City, California, this morning.

JOHNSON: Thank you, Bill.

HEMMER: All right -- Kelly.

WALLACE: Thanks, Bill.

A fire at a firework's factory in Denmark sets off a series of explosions. Look at this video. Thousands were evacuated as it took firefighters nearly a day to contain the blaze.

One firefighter was killed and at least 17 people injured. Authorities believe the fire started when containers of fireworks were loaded onto a truck. Police say there may have been 2,000 tons of fireworks at that site.

HEMMER: About 22 minutes now past the hour here. We're watching this story out of Falluja.

A full-out assault on that town appear to be imminent. Ayad Allawi just a few moments ago making more comments, saying that the window of opportunity is closing for the insurgents.

In the meantime, officials say there's a fundamental challenge facing the U.S. when it comes to the Iraqi insurgency. And we'll get to that from the Pentagon and Barbara Starr in a moment as we continue right after this.

(COMMERCIAL BREAK)

WALLACE: And welcome back. Let's check in with Toure and the "Question of the Day."

TOURE, "ROLLING STONE": You had to get that rhyme in there.

WALLACE: And on the presidential election.

TOURE: Yes. Well, Tuesday's election was shocking for many Americans who are now struggling to quickly recalibrate their understanding of the country. It appears that values contributed to the sharp division.

Well, what do you think? Has the year of the values voter made you struggle to wrap your head where we are as a country? Or do you think the rest of the country has finally fallen in live with your moral compass?

Did the election change your view of America? Some interesting e-mails.

Heather from Lafayette, Indiana, "Never have I been more shocked, scared or embarrassed to be an American. For decades we have looked down on countries that mix religion and politics, i.e., countries in the Middle East, and now we have become one."

Helen from Deep Run, North Carolina -- I love the name of that town -- "Doesn't the Democratic leadership get it yet? The majority of the people do not blame the president for our ills, but we are sick and tired of our representatives playing the blame game. Stop the negative and complaining and start working together." And Ernie from Los Angeles, "My view of America is the same. It's best -- it is the best country on Earth, where every American has the right to disagree with whoever is in the White House."

Lots of back and forth.

WALLACE: I like Helen from Deep Run, North Carolina, "Stop complaining and start working together."

Can't we all just get along?

TOURE: Yes, Rodney, we have to get along.

HEMMER: What country are you looking at?

WALLACE: Oh, I don't know. Just trying to be optimistic.

HEMMER: "90-Second Pop" on a Friday coming up here in a moment.

(MUSIC)

(BEGIN VIDEOTAPE)

HEMMER (voice-over): Viewers fell in love with the "OC" last season, but are they ready for more this year?

Plus, "The Incredibles" duke it out and with "Alfie." Who's got more power at the box office? That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

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