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CNN Wolf Blitzer Reports

CIA Releases New Intelligence Assessment; FBI Computer Overhaul

Aired January 13, 2005 - 17:00 ET

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

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

WOLF BLITZER, CNN ANCHOR: Happening now. A new intelligence assessment just released from the CIA. The bottom line, dramatic changes in our world are in store. How vulnerable are we to terror?
Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Back to the drawing board. A new FBI computer overall, designed to help agents track terrorists, may have to be scrapped.

An aide to the top Shiite cleric, gunned down outside a mosque. With the continuing violence, can Iraq really hold free elections?

UNIDENTIFIED MALE: We'll do whatever is necessary.

BLITZER: The Pentagon's plan for Iraq's election day.

Weather at its worst. An apparent tornado hits Arkansas, houses slide into rivers in Utah, cars pile up in Denver, one after another.

They're organized, they're growing, and they're more dangerous than ever.

UNIDENTIFIED MALE: They're arming themselves with better (UNINTELLIGIBLE). In fact, in many case they're arming themselves better than the police.

BLITZER: The FBI's new plan to fight gang violence.

And what was Britain's Prince Harry thinking?

UNIDENTIFIED MALE: You can't strip him of his title or anything like that, obviously, but, you know, he should be well-disciplined, I think.

ANNOUNCER: This is WOLF BLITZER REPORTS for Thursday, January 13, 2005.

(END VIDEOTAPE)

BLITZER: Thanks very much for joining us. We'll get to all of that, but we begin with breaking news out of the Middle East. An act of violence, the first major attack since Israeli Prime Minister Ariel Sharon and the newly elected Palestinian President Mahmoud Abbas started talking about making peace.

There was an explosion just moments ago at an Israeli military checkpoint in northern Gaza. CNN's Ben Wedeman is joining us now live on the phone with details.

Ben, what do we know?

BEN WEDEMAN, CNN CORRESPONDENT (voice-over): Yes, Wolf, apparently, according to the Israeli army, two suicide bombers entered the Carni (ph) Crossing, which is the main commercial crossing between Gaza And Israel. They blew themselves up. And according to Palestinian sources, at least four Israeli soldiers were killed and another 10 Israeli soldiers wounded.

Immediately afterwards, there was a shootout between Palestinian militants and Israeli soldiers. And according to Palestinian sources, two of those Palestinian militants were killed in that incident.

Now according to Al Jazeera Arabic satellite news channel, there were also rockets fired during this incident which has been claimed by the Al Aqsa Martyrs Brigade and the armed wing of the Hamas militant Islamic group -- Wolf.

BLITZER: Is there any sense, Ben, that this act is an act more designed to throw a wrench in any possible talks between Mahmoud Abbas and Ariel Sharon, or is it simply a continuation of the policy of these Palestinian militants as it's been all along?

WEDEMAN: Well, Wolf, it's highly significant because we had been hearing that there were tensions between the Palestinian militant organizations and the Palestinian Authority now led by Mahmoud Abbas.

There had been suggestions that they would somehow cease fire or engage in some sort of truce with Israel, just as a honeymoon period for the new Palestinian leader, but clearly this is not the case.

This clearly is going to be quite a troublesome event, not only for the Israelis but for Mahmoud Abbas as well, who needs some sort of peaceful period to try to put the Palestinian house in order. So this is going to be a huge problem for the new Palestinian leader -- Wolf.

BLITZER: We're going to watch this very closely. Ben Wedeman, reporting for us from Gaza, thank you very much.

Predicting the future of the United States and its position in the world, U.S. security experts have just released their predictions for the year 2020, and it's in our "Security Watch." Joining us now with details, our national security correspondent, David Ensor, who's just come from a briefing -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Wolf, the National Intelligence Council report predicts that the United States will still have the largest economy on Earth in 2020 and be the greatest power, but there will be a close competitor.

(BEGIN VIDEOTAPE) ENSOR (voice-over): The headline from the U.S. intelligence community's report about the world in 2020, the rise of Asia, especially China. The likely emergence of China and India, as well as others as new major global players says the report, will transform the geopolitical landscape, with impacts potentially as dramatic as those in the previous two centuries.

JOHN GANNON, FMR. CHAIR, NATL. INTEL. COUNCIL: They are moving from, you know, a century of the United States domination to one where it is going to have to share the stage with some very powerful actors, and China being the principal one.

ENSOR: The key to who thrives and who suffers, says the report, could be how well each nation's people use new technologies, nanotechnologies, genetically modified organisms and the like. The report warns in 2020, the world will still be grappling with terrorism, though maybe not al Qaeda.

ELLEN LAIPSON, FMR. VICE CHAIR, NATL. INTEL. COUNCIL: It does say that al Qaeda in its current form may not exist 15 years from now, but there will be some kind of a loose network of terrorist groups that are very spread geographically, they will be tied in part by Islamic ideology.

ENSOR: The greatest new terrorist danger in 2020, the report says, could be bioterror attacks that could kill millions.

GANNON: Because it is relatively easy again for a terrorist group to get access to the capabilities to build bioweapons, and the catastrophic consequences of a bioattack in our country or against our interests in the world is so severe.

ENSOR: While the report says globalization should mean greater prosperity in 2020 worldwide and in the U.S., it warns that two developments could prevent that: a global pandemic or epidemic of major disease; or what it calls a cycle of fear caused by multiple, large-scale terrorist attacks that could lead government to clamp down on personal liberties, travel and trade to a degree unimaginable today.

(END VIDEOTAPE)

ENSOR: The authors were careful not to predict the future of Iraq. At a briefing at the CIA, they said that Iraq is too political a topic and there just are too many variables in play. It could go either way -- Wolf.

BLITZER: David Ensor, thanks very much for that report.

President Bush today vowed to keep up the pressure on terrorists around the world and said a key to winning the conflict is for both the U.S. government, all of its agencies and America's allies to work together.

(BEGIN VIDEO CLIP) GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We're constantly reviewing our strategy as to how to defeat the enemy. We fully recognize that the war on terror will require a coordinated effort within our own government, as well as a coordinated effort with the countries around the world which understand the stakes of this war.

I am pleased with the response from around the world. I appreciate so many nations understanding that we must work together to defeat these killers. I am mindful of the fact that we have -- constantly have got to review our plans and never lose our will.

(END VIDEO CLIP)

BLITZER: The president spoke to reporters after receiving a briefing over at the Pentagon on the war on terror and U.S. relief efforts in South Asia.

A major player in the war on terror, the FBI, is facing a very, very serious problem right now with a costly new computer program designed to help agents share information to prevent terrorist attacks. Our justice correspondence Kelli Arena joining us now live with the latest -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, a top FBI official acknowledged today that there is a good possibility the software that the bureau was developing for agents to quickly share information simply will not work. The project has cost the FBI $170 million in development costs. And get this, the FBI is now saying that it can probably buy a suitable replacement right off the shelf. Now that's if Congress gives it more money.

Instead of agents being able to pass along intelligence and criminal information in real time, the program requires FBI personnel to digitally enter printouts, sign, and then manually scan their information.

Director Robert Mueller was asked about this problem during a news conference in Birmingham today.

(BEGIN VIDEO CLIP)

ROBERT MUELLER, FBI DIRECTOR: I'm frustrated by the delays. I'm frustrated that we do not have on every agent's desk the capability of a modern case management system. At the same time we have made substantial changes in the way we handle information technology within the FBI.

(END VIDEO CLIP)

ARENA: The FBI insists the problems are not affecting the war on terror. Officials say that counterterrorism information gets top priority and is entered into the system within 24 hours. Now of course, Wolf, the big question is why? Officials cite a wide range of reasons, including the fact that the system did not allow for the FBI's changing responsibility. Now the FBI is still waiting for a final report from an independent consultant. In the meantime, a three-month pilot project has been launched in New Orleans to determine if any part of this program can be salvaged.

BLITZER: So it's possible, Kelli, half a billion dollars simply going to go down the drain?

ARENA: Well, $170 million, half a billion is what the FBI spent on its entire IT system, and much of that remains in place.

BLITZER: Kelli Arena, thanks very much.

And to our viewers, please stay tuned to CNN day and night for the most reliable news about your security.

Iraqi insurgents have carried out more deadly attacks in their campaign to try to derail the scheduled national elections. This recent surge in violence is drawing focus on issues of whether the elections in fact will be national and if Iraqis will feel safe enough to even vote. CNN's Jeff Koinange reports from Baghdad.

(BEGIN VIDEOTAPE)

JEFF KOINANGE, CNN CORRESPONDENT (voice-over): In a wave of violence that seems neverending, more and more the target is the Shiite majority likely to dominate after the January 30 elections. An aide to Iraq's highest Shiite authority the Grand Ayatollah Ali Al Sistani and a key supporter of the elections was killed Wednesday night as he leaving a mosque. The aide's son and their bodyguards were also killed in the attack.

In Baghdad, gunmen kidnapped a Turkish businessman in the streets of the capital killing his six Iraq bodyguards. And for the second time in two weeks, there's been two assassination attempts on Iraqi presidential candidate Mithal al Aluci (ph). The insurgency threatens to overshadow the first democratic election in more than four decades. Even as the Bush administration downplays expectations and admits the search for weapons of mass destruction is over with no weapons found.

How can I not feel angry about this? says Ahmed (ph), a pharmaceutical student.

My message to the Americans is, get out, we will manage our affairs with our own hands says Muhammad (ph), a store clerk.

But as election day approaches, the U.S. presence will grow, not shrink, with more than 150,000 troops available to back up Iraqi forces securing some 5,000 polling areas on election day. There will be more than 100,000 Iraqi forces available to protect the 13 million eligible voters in Iraq, of which the electoral commission expects more than half to vote.

FAREED AYAR, ELECTORAL SPOKESMAN: We expect 8 million that will come to the election centers. KOINANGE: Four provinces making up about a quarter of the population are still considered unsafe due to continuing insurgent activity. Al Anbar, Ninawa, Salaheddin, as well as parts of Baghdad province. An additional 1 million eligible Iraqi voters are spread out across the world. The interim prime minister admits the elections won't be perfect, but insists they go on as planned.

AYAD ALLAWI, INTERIM IRAQI PRIME MINISTER (through translator): Certainly there are pockets who will not take part in these elections but there are not many pockets.

KOINANGE: One group not participating, the Political Front for the Unity of Iraq, a loose coalition of mixed tribes but dominated by the minority Sunnis. They say the country is simply too insecure for elections. As the election draws near, the beleaguered interim government finds itself battling to unite a divided electorate, looking to convince them just to show up and vote. Jeff Koinange, CNN, Baghdad.

(END VIDEOTAPE)

BLITZER: Teetering on the brink of disaster...

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Just amazing how Mother Nature can ruin life in an instant.

(END VIDEO CLIP)

BLITZER: One by one they go, homes collapsing into this raging river. Homeowners desperately trying to save that their most treasured belongings.

Coalition course, cars out of control on an icy road as a powerful winter storm moves east. Later.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It demonstrates incredible poor taste, a lack of keen sense of history, given what Holocaust survivors lived through.

(END VIDEO CLIP)

BLITZER: Outrage around the world after Britain's Prince Harry shows up at a costume party wearing a Nazi uniform.

(COMMERCIAL BREAK)

BLITZER: There's a developing story we're watching right now out of Atlanta, specifically at Hartsfield International Airport. Mike Brooks is standing by with details. What is going on?

MIKE BROOKS, CNN CORRESPONDENT: Well, Wolf, apparently Delta flight 782, which is a Boeing 737 just a short time ago was supposed to take off from Atlanta's Hartsfield-Jackson Airport en route to St. Louis. It did take off, experienced some kind of engine problem, declared an emergency, did an air return, as it was landing, either skidded off the runway or overshot the runway. Right now there are no reported injuries of any of the passengers on board. It had approximately 100 passengers on board and a crew of five. No injuries right now. We're waiting for buses to come unload the people off the aircraft before they get a tug out there to attempt to pull it out of the grass.

BLITZER: Is that fog that we're seeing? What's the weather like in Atlanta right now, Mike?

BROOKS: It was a little foggy and there was some rain coming down, Wolf, but we don't know if that was a cause for the aircraft to run off the end of the runway. They're waiting to find out exactly what happened. There will be an investigation. The important thing is there are no reported injuries.

BLITZER: That was Delta Airlines flight 782 to St. Louis from Atlanta. We'll continue to monitor this situation for our viewers. Mike Brooks, thanks very much.

There is severe weather across much of the country. It's taking very different forms but causing huge problems wherever it hits. Our Mary Snow has been keeping track. She's joining us from New York.

MARY SNOW, CNN CORRESPONDENT: Wolf, to give you an idea of how unusual some of these weather patterns are, here in New York at a time when it would be brutally cold, it hit about 60 degrees. It's so warm you don't even need a jacket. This before a cold snap is set to move in. Now, in other parts of the country, severe weather caused storms that turned deadly in some parts.

(BEGIN VIDEOTAPE)

(voice-over): Mother Nature is unleashing her wrath in a line of storms across the country. In Arkansas, an apparent tornado tore through Union County. Authorities say two people were killed and at least 20 others injured. The storm slammed into homes in the darkness.

UNIDENTIFIED MALE: We started to get up. About that time, the end of the house blew off.

SNOW: Lightning storms added to the difficulty of cleaning up. In Ohio, rising waters are threatening floods in several areas including Columbus where a reservoir is open to contain a spillover. In Michigan, fog turned deadly on an interstate. Police say two people were killed and more than three dozen others were injured when 200 cars slammed into each other. In Denver, slush and snow left roads so slick, this woman had to jump out of her car as it slid out of control. This woman was dragged as one car slammed into the other.

UNIDENTIFIED MALE: It's just like a chain reaction.

UNIDENTIFIED FEMALE: I just started sliding and just couldn't stop.

SNOW: Fortunately no one was injured in this 28-car chain reaction.

(END VIDEOTAPE)

SNOW: Here on the East Coast, one immediate concern is Ohio. They expect the Ohio River to crest above flood stage in certain parts of the state tomorrow.

BLITZER: Mary, thank you very much.

Meanwhile, floods in southern Utah caused millions of dollars in damage. More than a dozen homes were destroyed in a single neighborhood, one after another. CNN's Brian Todd has that.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): The man who shot this videotape tells CNN, normally this river is like a stream, you can jump across it, he says, it's mellow. But not on Tuesday afternoon. He says this nightmare in the Green Valley neighborhood of St. George, Utah, unfolded in the course of about two hours. House after house falls, sometimes whole buildings at a time. With one, a piece of siding gives way, then the erosion is just too much. Flooding from overflowed reservoirs so drastically overwhelmed the Santa Clara River that it actually took the water in a new direction right towards these homes. Amateur photographer Dusty Thompson stood on the opposite bank and held steady as part of his parents' neighborhood fell.

DUSTY THOMPSON, AMATEUR PHOTOGRAPHER: Houses across we witnessed that as a horrific sight, a surreal experience to see this happen in your own backyard.

TODD: Thompson says his parents' house was spared, but at least 20 homes from this neighborhood were washed away, homes valued at between $500,000 and $1 million. Authorities tell us many more will have received some damage from these floods.

UNIDENTIFIED FEMALE: Just amazing how Mother Nature can ruin life in an instant.

UNIDENTIFIED MALE: People underestimate the power of nature, I guess.

THOMPSON: The Washington County sheriff says this river has receded down to what he calls manageable stream flows, but he also says, quote, "we're a desert, we've never seen anything like this." Brian Todd, Washington, D.C.

(END VIDEOTAPE)

BLITZER: In La Conchita, California, the rescue and recovery effort is over. Authorities say they've accounted for everyone who was missing after Monday's mudslide. They say ten people were killed, the last survivor was pulled out of the mud three days ago.

Now, let's take a look at some other weather problems in the headlines around the world.

Britain is battling its worst storm in years. Heavy rains and winds up to 120 miles an hour battered Scotland, northern England and northern Ireland, closing roads and bridges, disrupting train and ferry service.

Mexican mudslide. Heavy rains is blamed for landslides that have killed three children and damaged 140 homes in Tijuana, Mexico. 2,500 people have been evacuated. Tijuana is just across the U.S./Mexican border from California which has been hit by the same storms.

Panama floods. A state of emergency has been declared in northern Panama where floods have killed at least four people and forced 6,400 evacuations. Rain is expected to continue for several days.

Dry spell. In Venice, Italy, the problem is a lack of water because of especially sunny weather and unusually low tides. Canal docks are drying up. The city's famous water buses are being rerouted. Often during this time of year the city faces flooding. That's our look around the world.

The world's largest retailer goes on the offensive. How Wal-Mart is trying to improve its image. There's a new strategy.

Security watch, the FBI's new plan to combat gang violence in cities across the United States.

Royal scandal, sending shockwaves around the world, Prince Harry wearing a Nazi uniform to a costume party. Is his apology enough to quiet the controversy?

(COMMERCIAL BREAK)

BLITZER: Critics say Wal-Mart's low prices come at a high cost. In some places, critics have blocked attempts to open new stores. Now the discount retail chain is fighting right back. Here's CNN's Susan Lisovicz.

(BEGIN VIDEOTAPE)

SUSAN LISOVICZ, CNN CORRESPONDENT (voice-over): Wal-Mart's critics are vocal. But the world's biggest retailer has largely been silent. Whether it concerns protests about plans for its sprawling super-sized centers, the huge percentage of its goods made overseas or the way it treats its more than 1.2 million workers. But now the retailer known for cutting costs is spending money on repairing its image. In full-page ads across the country and rare on-camera interviews, Wal-Mart's chief executive says Wal-Mart is good for the economic. The company expects to create more than 100,000 new jobs in the U.S. this year. And Lee Scott says Wal-Mart is good to the people it hires. LEE SCOTT, WAL-MART PRESIDENT & CEO: If you don't want us in your community, let's be honest about why you don't want us. Don't say it's because of our wages, because the facts are wages are good. So don't say it's about our benefits, because the fact is we have benefits. Don't say they're dead-end jobs. The truth is we promoted 9,000 people out of hourly positions to management.

LISOVICZ: Wal-Mart's aggressive new push coincides with organized labor's own plans to launch a media campaign that tells a different story about America's largest private employer.

MARK LEVINSON, DIRECTOR, UNITE HERE: Wal-Mart says they offer health benefits. They do offer health benefits but most of the employees can't afford them. They do pay more than minimum wage, but they still pay less than would keep a family of three or four out of poverty. So it's a public relations attempt to cover up a very disturbing reality.

LISOVICZ: Wal-Mart has been bulletproof to the criticism for years, because of its shoppers who find the savings irresistible. Sales in 2003 were nearly $245 billion, nearly three times the amount of Target and Costco combined, but Wal-Mart stumbled briefly in the holiday season when it was beaten at its own game by its competitors which slashed prices more aggressively. Management says it won't make that mistake again.

SCOTT: It's time for us to be more aggressive when it comes to taking care of our customers, merchandising, pricing, all of those things. I think we have an opportunity this year and this is one part of it.

(END VIDEOTAPE)

LISOVICZ: Wal-Mart wants the world to see its softer side when it comes to its employees, but, Wolf, Wal-Mart says it will remain fierce when it comes to the competition.

BLITZER: Susan Lisovicz, thanks very much for that report.

Security concerns surrounding the election in Iraq. What role will U.S. troops play on the day Iraqis head to the polls? We have new information coming to us. Our Barbara Starr is on the case over at the Pentagon.

Martha Stewart's prison term. Could new federal sentencing guidelines lead to an early release for the domestic diva?

And a royal mess, international outrage over a Nazi swastika worn by the British prince.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Keeping the peace as Iraq's election nears. What role specifically will U.S. troops play on Election Day? An update from the Pentagon. Our correspondent Barbara Starr is standing by.

First, though, a quick check of some other stories now in the news.

Attorneys for Martha Stewart say they're studying yesterday's U.S. Supreme Court ruling on federal sentencing guidelines to see if it could lead to her early release from prison. The court ruled that mandatory guidelines are unconstitutional. At the time of her sentencing, the judge in Stewart's case refused a defense request to disregard the guidelines.

Major League Baseball commissioner Bud Selig has unveiled a new steroid policy for the sport. Under the plan, every Major League player will be tested at least once a year. A positive test will bring a suspension of 10 days, up to one year. Selig says the policy will -- quote -- "help restore the confidence of our fans."

A federal judge has ruled that a suburban Atlanta school's district attempt to label evolution as theory rather than fact is unconstitutional. The judge says the language used on a sticker applied to textbooks covering evolution violations the separation of church and state. Her says the sticker creates the impression the school board agrees with the religious groups questioning evolution.

The NFL has fined Minnesota wide receiver Randy Moss $10,000 for what some say was an unsportsmanlike celebration during a game in Green Bay last Sunday. After scoring a touchdown, Moss mimicked the act of pulling his pants down and mooning the crowd. Moss' agent says the fine is unnecessary.

With Iraqis set to go to the polls in national elections at the end of this month, there's one thing they can count on. American troops will be out in force along with Iraqi troops. As for just who will take the lead in that mission, we turn to our Pentagon correspondent Barbara Starr -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, on Election Day in Iraq, the U.S. troops that you may not see may be the troops that matter the most.

(BEGIN VIDEOTAPE)

STARR (voice-over): Iraq's 125,000 security forces will face their biggest challenge ever on January 30, keeping the country calm enough for just one day, so that Iraqis feel safe enough to go to the polls. If it all goes well, the one thing that you won't see, U.S. troops anywhere near a ballot box.

The 150,000 U.S. troops in Iraq will be on duty, but the U.S. military strategy, keep the troops behind the scenes and let Iraqis guard more than 5,000 polling places.

BRIG. GEN. MARK KIMMITT, U.S. DEPUTY CHIEF OF OPERATIONS: This is an Iraqi election and the Iraqi people need to see their security forces protecting those silts.

STARR: Top commanders are extraordinarily cautious.

LT. GENERAL THOMAS METZ, MULTINATIONAL FORCE COMMANDER: I can't guarantee every person in Iraq that wants to vote goes to a polling booth and can do that safety.

STARR: U.S. military commanders know they may indeed have to back up Iraqi units that still have an uncertain track record in fighting the insurgents. The U.S. military role remains helping Iraqis plan election security, continuing to conduct missions against insurgents, providing nearby Election Day firepower if Iraqis request help.

LARRY DIAMOND, FORMER ADVISER TO COALITION PROVISIONAL AUTHORITY: It will be somewhat awkward for American soldiers and Marines to be right in the polling booth. Many Iraqis will feel that that will be intimidating and unacceptable.

STARR: The U.S. has beefed up troops in the four key provinces of the Sunni Triangle, including parts of Baghdad that are most likely to see violence. This is 42 percent of Iraq's population. Any voting by Sunni minorities here would be critical.

(END VIDEOTAPE)

STARR: Wolf, one additional plan is to possibly consolidate polling places, so there are less targets on Election Day -- Wolf.

BLITZER: Barbara Starr at the Pentagon, thanks very much.

Britain's Prince Harry is in royal trouble. Find out why many are so outraged and why the prince has apologized. What could he have been thinking?

Fighting gang violence, new concerns that gang activity is on the rise in America. Our Kelli Arena has investigating.

And later, why one elephant's tsunami relief efforts are paying off in a big way. We'll update a story we brought you last week.

(COMMERCIAL BREAK)

BLITZER: There's increasing concern among law enforcement officials about gang-related violence. In the past four years, gang- related murders have shot up. And the FBI is preparing to announce new strategies to try to combat the problem.

As part of our CNN "Security Watch" segment, CNN justice correspondence Kelli Arena has a rare inside look at an anti-gang task force in suburban Washington.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): It's early evening in Northern Virginia. And these members of the gang task force are getting ready to head out into the streets. Their targets are young, at times, as young as 7 or 8, and dangerous. Earlier in the week, an alleged gang member wielding a machete cut three fingers off his victim's left hand. This night could bring similar violence.

UNIDENTIFIED MALE: They'll throw some signs for -- flesh hand signs to see whether they're friend or foe, and, if they're foe, that's where you get your assaults.

ARENA: Both men, who work undercover and wanted their faces hidden, give extra scrutiny to young Latinos. That's because they are primarily on the hunt for members of the Latin street gang known as MS-13.

The ATF, which has been fighting gangs for decades, says the increased use of violence by MS-13 and others is alarming.

MIKE BOUCHARD, ATF: They're arming themselves much better than before. In fact, in many cases, they're arming themselves better than the police.

ARENA: The Justice Department estimates there are more than 21,000 gangs nationwide.

(on camera): And the FBI says juvenile gang murders have shot up 25 percent since 2000. CNN has learned, as a result, the FBI is preparing a new gang offensive.

(voice-over): Among the changes, to reclassify gangs as criminal organization, just like traditional organized crime families.

SGT. RON HAUGSDAHL, GANG TASK FORCE: They are organized. They do keep notes in their meetings. They do collect dues. They do have bank accounts, where they're paying canteen funds for members that are locked up.

ARENA: Part of the gang offensive includes outreach. Many task force members work with organizations like the Boys & Girls Clubs of America. This Aberdeen, Maryland, chapter sponsored a roundtable discussion after an alleged gang-related murder in the area.

JEFF HAIRSTON, BOYS AND GIRLS CLUB: When gangs present themselves before you, tell them, I don't want to be a loser. I want to be a winner, because a loser took my best friend's life.

ARENA: Some of the young people in this room have been asked to join gangs.

DAYRON WINCHESTER, STUDENT: They still cuss at me a little bit, flip me off, trying to hurt my feelings, you know, because I didn't join them.

ARENA: These kids are well aware of the problem. Often their parents are not.

UNIDENTIFIED MALE: A lot of these parents say they have no idea or they say they have no idea that their child is involved in that stuff. And that's what shocks me.

ARENA: Both gang task force members are parents, too, fathers of young children, making their battle a very personal one.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE)

BLITZER: And, once again, please stay tuned to CNN day and night for the most reliable news about your security.

A prince in deep trouble, outrage around the world after Britain's Prince Harry shows up at a costume party wearing a very controversial uniform. I'll speak live with Rabbi Marvin Hier of the Simon Wiesenthal Center and royal expert Richard Fitzwilliams.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: People around the world and lawmakers in Britain are lashing out at Prince Harry for wearing a Nazi uniform to a costume party. The prince was quick to issue an apology, but it isn't the first time actions by the younger son of Prince Charles and the late Princess Diana have triggered controversy.

CNN's Diana Muriel reports from London.

(BEGIN VIDEOTAPE)

DIANA MURIEL, CNN CORRESPONDENT (voice-over): British headline writers had a field day Thursday. Prince Harry's choice of outfit at a private party earlier this month, the desert uniform of Nazi Germany's Africa Corps, has met with outrage and surprise he wasn't prevented from wearing it.

ARTHUR EDWARDS, "THE SUN": Prince Charles employs hundreds of people working for him. Why couldn't one of them just say, Harry, you dressed wrong for this party; this is not the way the third in line to the throne goes to a fancy dress party or any party?

MURIEL: Indeed, it is not the image of the scandal-prone prince the royal family is keen to project. The impact of carefully orchestrated photo opportunities of the prince playing rugby football with underprivileged children in Africa was quickly undermined last year when the young prince was snapped scuffling with press photographers outside a London nightclub just a few weeks later.

Only a few days ago, the prince and his elder brother were filmed packing Red Cross parcels for the victims of the tsunami disaster. But now many are questioning the sensitivity of a prince who chooses to party in a Nazi uniform. Harry has been dogged by scandal since his school days, discovered smoking cannabis while still attending Britain's elite Eton College, the young prince was also accused of cheating in his final art examination, an allegation that was never followed up by a formal investigation.

Harry is due to take up his place at Sandhurst Military Academy in May this year as an officer cadet in the British army. That might just bring the rebel prince into line, according to some royal insiders.

DICKIE ARBITER, FORMER ROYAL PRESS SECRETARY: That is the one thing that is probably going to make a man of him. He needs to go in there. He needs the discipline. He needs the discipline from people who can control him and who will not take any lip from him. And then perhaps he will grow up.

MURIEL (on camera): Age 20, the young Harry Windsor has still not officially come of age, but it's not clear just how much longer his princely pranks can simply be put down to the foolishness of youth.

Diana Muriel, CNN, London.

(END VIDEOTAPE)

BLITZER: Prince Harry's apology for wearing a Nazi uniform apparently has done little to soothe the anger of Jewish groups in Britain. And the Israeli foreign minister, Silvan Shalom, says the use of Nazi symbols shouldn't be tolerated at all.

Rabbi Marvin Hier of the Simon Wiesenthal Center in Los Angeles denounced the incident as a shameful act. He's joining us now live from our Los Angeles studio. Also joining us in London, royal watcher Richard Fitzwilliams.

Rabbi Hier, first to you. He's a 20-year-old kid, in effect. He made a mistake. What's so shameful about it?

RABBI MARVIN HIER, FOUNDER, SIMON WIESENTHAL CENTER: Well, what's shameful is, it's two weeks before the 60th anniversary of the liberation of Auschwitz. His grandmother is about to receive Holocaust survivors at Buckingham Palace and he obviously knows nothing about these events.

I wonder what -- it's either he learned nothing at Eton or they didn't teach him much, because this is an insult to the world. And issuing a press release as an apology and hoping that, you know, he'll put it behind him is really ridiculous.

(CROSSTALK)

BLITZER: So Rabbi Hier, what do you want him to do?

HIER: Well, he should do something proactive. He should visit Auschwitz to be part of the British delegation to show the world that he can be serious, that he understands the great atrocity that occurred there.

He could be at his grandmother's side when she greets the Holocaust survivors at Buckingham Palace, rather remove himself from the scene and expect the world to forgive him because he's a kid. He's 20 years old and he's a member of the royal family.

Richard Fitzwilliams, what do you make of that? RICHARD FITZWILLIAMS, ROYAL WATCHER: Well, I think that there's absolutely no question that he's made a ghastly mistake, a frightful error. He's been adolescent and he's been insensitive.

But I do not believe that it would necessarily be helpful for him to do more penance. He has apologized. I don't think, myself, the wording of his apology was what it might have been, but I do feel that, if he didn't understand fully about the atrocities in Auschwitz and during the Holocaust, he certainly does now because of the outrage, which quite rightly has been provoked by what he did.

BLITZER: Why not, Richard Fitzwilliams, why not have him go with his grandmother and meet these Holocaust survivors, go on the delegation to Auschwitz? What would be wrong with that?

FITZWILLIAMS: I would suggest that, in his own time, he might very well do things which would involve remembering what happened during the Holocaust and take a great deal more interest in the subject.

I do feel, however, that when you're talking about penance -- remember, he's made a ghastly mistake. He must realize it now. It should never have happened. It was absolutely incredible that it did happen. But, equally, why rub his nose in it even more? I think that it's abundantly clear what's happened, that it was a very stupid idea of his.

But, on the other hand, what we're looking at is changing someone's attitude, making him more mature, and trying to make somebody who is third in line with the throne, he is a significant figure, and will also become somebody who will be more reliable. Sandhurst will do that. I think there's absolutely no question that...

(CROSSTALK)

BLITZER: Yes, I was going to bring the rabbi back and say, Rabbi, earlier today, I spoke with another royal watcher in London, who suggested -- there's a hit play on Broadway in London right now, "The Producers," which makes fun of Hitler. They have a song "Springtime For Hitler." You may have seen this Mel Brooks' production. It was a movie.

The young prince was going to a costume party. He was having fun. What's the difference between what Mel Brooks' was doing, showing the swastika during that Broadway play and the film, as opposed to what Prince Harry has been doing?

HIER: Well, Prince Harry is not an entertainer. If he wants to be an entertainer, he can go to Broadway or Hollywood. He's a member of the royal family.

And in addition to that, the BBC in early December just published a poll saying that, from the age of 35 below, 60 percent of those Britons interviewed never heard of Auschwitz. So I would think that he has a greater responsibility than poking fun and doing something so horrible that outrages his own countries and people who are victims of Nazism all over the world.

BLITZER: Are you outraged, Rabbi Hier, by the play by the Mel Brooks play "The Producers"?

HIER: Personally, I think that he has also crossed the line. There's a place for entertainment and there's a place when your entertainment basically becomes an insult to the memory of the Holocaust and to Hitler and to what Hitler did.

I would say that there's a role for entertainment, but I would not use Nazi symbols and go overboard on that. And, as I said before, Mel Brooks is one thing, but that is not Prince Harry. He's the third in line to the throne and should act much more responsibly.

(CROSSTALK)

BLITZER: Mr. Fitzwilliams, what does this scandal do now to the royal family?

FITZWILLIAMS: Well, it gravely embarrasses the royal family. This is one of the worst royal scandals.

And, certainly, it's something that Prince Harry will have to live with for a very long time. His rehabilitation, because he was known as the tearaway prince, has received a pretty fatal setback, at least in the short term. His good work for AIDS victims in Lesotho or with the rugby football union or for victims of the tsunami, that will be forgotten.

BLITZER: All right.

FITZWILLIAMS: This image will never be forgotten.

But I do feel -- the Rabbi was mentioning "The Producers" and the fact that he found that offensive. "The Producers" in fact of course sends up Nazi Germany. And I most strongly believe that the prince has learned his lesson.

BLITZER: Let's hope he has.

Richard Fitzwilliams, Rabbi Marvin Hier, to both of you, thanks very much for joining us.

And to our viewers, here's your chance to weigh in this story. Our Web question of the day is this: Do you find Prince Harry's wearing of the Nazi uniform offensive? You can vote right now. Go to CNN.com/Wolf. And we'll have the results when we come back.

(COMMERCIAL BREAK)

BLITZER: Updating you now on a developing story we're watching, Palestinian sources say Israeli helicopters fired missiles into a Gaza refugee camp just a short while ago in retaliation for an earlier Palestinian suicide bombing. Witnesses say the missiles hit a medical center run by a group with links to Hamas, the Islamic militant group that claimed responsibility for the earlier attack in which four Israeli troops were killed. The two Palestinian suicide bombers died as well.

Here's your chance to weigh in on our Web question of the day. Remember -- let's take a look at the numbers. Here they are. There they are, 67-33. That's the results of our Web question of the day.

That's all the time we have. "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 January 13, 2005 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Happening now. A new intelligence assessment just released from the CIA. The bottom line, dramatic changes in our world are in store. How vulnerable are we to terror?
Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Back to the drawing board. A new FBI computer overall, designed to help agents track terrorists, may have to be scrapped.

An aide to the top Shiite cleric, gunned down outside a mosque. With the continuing violence, can Iraq really hold free elections?

UNIDENTIFIED MALE: We'll do whatever is necessary.

BLITZER: The Pentagon's plan for Iraq's election day.

Weather at its worst. An apparent tornado hits Arkansas, houses slide into rivers in Utah, cars pile up in Denver, one after another.

They're organized, they're growing, and they're more dangerous than ever.

UNIDENTIFIED MALE: They're arming themselves with better (UNINTELLIGIBLE). In fact, in many case they're arming themselves better than the police.

BLITZER: The FBI's new plan to fight gang violence.

And what was Britain's Prince Harry thinking?

UNIDENTIFIED MALE: You can't strip him of his title or anything like that, obviously, but, you know, he should be well-disciplined, I think.

ANNOUNCER: This is WOLF BLITZER REPORTS for Thursday, January 13, 2005.

(END VIDEOTAPE)

BLITZER: Thanks very much for joining us. We'll get to all of that, but we begin with breaking news out of the Middle East. An act of violence, the first major attack since Israeli Prime Minister Ariel Sharon and the newly elected Palestinian President Mahmoud Abbas started talking about making peace.

There was an explosion just moments ago at an Israeli military checkpoint in northern Gaza. CNN's Ben Wedeman is joining us now live on the phone with details.

Ben, what do we know?

BEN WEDEMAN, CNN CORRESPONDENT (voice-over): Yes, Wolf, apparently, according to the Israeli army, two suicide bombers entered the Carni (ph) Crossing, which is the main commercial crossing between Gaza And Israel. They blew themselves up. And according to Palestinian sources, at least four Israeli soldiers were killed and another 10 Israeli soldiers wounded.

Immediately afterwards, there was a shootout between Palestinian militants and Israeli soldiers. And according to Palestinian sources, two of those Palestinian militants were killed in that incident.

Now according to Al Jazeera Arabic satellite news channel, there were also rockets fired during this incident which has been claimed by the Al Aqsa Martyrs Brigade and the armed wing of the Hamas militant Islamic group -- Wolf.

BLITZER: Is there any sense, Ben, that this act is an act more designed to throw a wrench in any possible talks between Mahmoud Abbas and Ariel Sharon, or is it simply a continuation of the policy of these Palestinian militants as it's been all along?

WEDEMAN: Well, Wolf, it's highly significant because we had been hearing that there were tensions between the Palestinian militant organizations and the Palestinian Authority now led by Mahmoud Abbas.

There had been suggestions that they would somehow cease fire or engage in some sort of truce with Israel, just as a honeymoon period for the new Palestinian leader, but clearly this is not the case.

This clearly is going to be quite a troublesome event, not only for the Israelis but for Mahmoud Abbas as well, who needs some sort of peaceful period to try to put the Palestinian house in order. So this is going to be a huge problem for the new Palestinian leader -- Wolf.

BLITZER: We're going to watch this very closely. Ben Wedeman, reporting for us from Gaza, thank you very much.

Predicting the future of the United States and its position in the world, U.S. security experts have just released their predictions for the year 2020, and it's in our "Security Watch." Joining us now with details, our national security correspondent, David Ensor, who's just come from a briefing -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Wolf, the National Intelligence Council report predicts that the United States will still have the largest economy on Earth in 2020 and be the greatest power, but there will be a close competitor.

(BEGIN VIDEOTAPE) ENSOR (voice-over): The headline from the U.S. intelligence community's report about the world in 2020, the rise of Asia, especially China. The likely emergence of China and India, as well as others as new major global players says the report, will transform the geopolitical landscape, with impacts potentially as dramatic as those in the previous two centuries.

JOHN GANNON, FMR. CHAIR, NATL. INTEL. COUNCIL: They are moving from, you know, a century of the United States domination to one where it is going to have to share the stage with some very powerful actors, and China being the principal one.

ENSOR: The key to who thrives and who suffers, says the report, could be how well each nation's people use new technologies, nanotechnologies, genetically modified organisms and the like. The report warns in 2020, the world will still be grappling with terrorism, though maybe not al Qaeda.

ELLEN LAIPSON, FMR. VICE CHAIR, NATL. INTEL. COUNCIL: It does say that al Qaeda in its current form may not exist 15 years from now, but there will be some kind of a loose network of terrorist groups that are very spread geographically, they will be tied in part by Islamic ideology.

ENSOR: The greatest new terrorist danger in 2020, the report says, could be bioterror attacks that could kill millions.

GANNON: Because it is relatively easy again for a terrorist group to get access to the capabilities to build bioweapons, and the catastrophic consequences of a bioattack in our country or against our interests in the world is so severe.

ENSOR: While the report says globalization should mean greater prosperity in 2020 worldwide and in the U.S., it warns that two developments could prevent that: a global pandemic or epidemic of major disease; or what it calls a cycle of fear caused by multiple, large-scale terrorist attacks that could lead government to clamp down on personal liberties, travel and trade to a degree unimaginable today.

(END VIDEOTAPE)

ENSOR: The authors were careful not to predict the future of Iraq. At a briefing at the CIA, they said that Iraq is too political a topic and there just are too many variables in play. It could go either way -- Wolf.

BLITZER: David Ensor, thanks very much for that report.

President Bush today vowed to keep up the pressure on terrorists around the world and said a key to winning the conflict is for both the U.S. government, all of its agencies and America's allies to work together.

(BEGIN VIDEO CLIP) GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We're constantly reviewing our strategy as to how to defeat the enemy. We fully recognize that the war on terror will require a coordinated effort within our own government, as well as a coordinated effort with the countries around the world which understand the stakes of this war.

I am pleased with the response from around the world. I appreciate so many nations understanding that we must work together to defeat these killers. I am mindful of the fact that we have -- constantly have got to review our plans and never lose our will.

(END VIDEO CLIP)

BLITZER: The president spoke to reporters after receiving a briefing over at the Pentagon on the war on terror and U.S. relief efforts in South Asia.

A major player in the war on terror, the FBI, is facing a very, very serious problem right now with a costly new computer program designed to help agents share information to prevent terrorist attacks. Our justice correspondence Kelli Arena joining us now live with the latest -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, a top FBI official acknowledged today that there is a good possibility the software that the bureau was developing for agents to quickly share information simply will not work. The project has cost the FBI $170 million in development costs. And get this, the FBI is now saying that it can probably buy a suitable replacement right off the shelf. Now that's if Congress gives it more money.

Instead of agents being able to pass along intelligence and criminal information in real time, the program requires FBI personnel to digitally enter printouts, sign, and then manually scan their information.

Director Robert Mueller was asked about this problem during a news conference in Birmingham today.

(BEGIN VIDEO CLIP)

ROBERT MUELLER, FBI DIRECTOR: I'm frustrated by the delays. I'm frustrated that we do not have on every agent's desk the capability of a modern case management system. At the same time we have made substantial changes in the way we handle information technology within the FBI.

(END VIDEO CLIP)

ARENA: The FBI insists the problems are not affecting the war on terror. Officials say that counterterrorism information gets top priority and is entered into the system within 24 hours. Now of course, Wolf, the big question is why? Officials cite a wide range of reasons, including the fact that the system did not allow for the FBI's changing responsibility. Now the FBI is still waiting for a final report from an independent consultant. In the meantime, a three-month pilot project has been launched in New Orleans to determine if any part of this program can be salvaged.

BLITZER: So it's possible, Kelli, half a billion dollars simply going to go down the drain?

ARENA: Well, $170 million, half a billion is what the FBI spent on its entire IT system, and much of that remains in place.

BLITZER: Kelli Arena, thanks very much.

And to our viewers, please stay tuned to CNN day and night for the most reliable news about your security.

Iraqi insurgents have carried out more deadly attacks in their campaign to try to derail the scheduled national elections. This recent surge in violence is drawing focus on issues of whether the elections in fact will be national and if Iraqis will feel safe enough to even vote. CNN's Jeff Koinange reports from Baghdad.

(BEGIN VIDEOTAPE)

JEFF KOINANGE, CNN CORRESPONDENT (voice-over): In a wave of violence that seems neverending, more and more the target is the Shiite majority likely to dominate after the January 30 elections. An aide to Iraq's highest Shiite authority the Grand Ayatollah Ali Al Sistani and a key supporter of the elections was killed Wednesday night as he leaving a mosque. The aide's son and their bodyguards were also killed in the attack.

In Baghdad, gunmen kidnapped a Turkish businessman in the streets of the capital killing his six Iraq bodyguards. And for the second time in two weeks, there's been two assassination attempts on Iraqi presidential candidate Mithal al Aluci (ph). The insurgency threatens to overshadow the first democratic election in more than four decades. Even as the Bush administration downplays expectations and admits the search for weapons of mass destruction is over with no weapons found.

How can I not feel angry about this? says Ahmed (ph), a pharmaceutical student.

My message to the Americans is, get out, we will manage our affairs with our own hands says Muhammad (ph), a store clerk.

But as election day approaches, the U.S. presence will grow, not shrink, with more than 150,000 troops available to back up Iraqi forces securing some 5,000 polling areas on election day. There will be more than 100,000 Iraqi forces available to protect the 13 million eligible voters in Iraq, of which the electoral commission expects more than half to vote.

FAREED AYAR, ELECTORAL SPOKESMAN: We expect 8 million that will come to the election centers. KOINANGE: Four provinces making up about a quarter of the population are still considered unsafe due to continuing insurgent activity. Al Anbar, Ninawa, Salaheddin, as well as parts of Baghdad province. An additional 1 million eligible Iraqi voters are spread out across the world. The interim prime minister admits the elections won't be perfect, but insists they go on as planned.

AYAD ALLAWI, INTERIM IRAQI PRIME MINISTER (through translator): Certainly there are pockets who will not take part in these elections but there are not many pockets.

KOINANGE: One group not participating, the Political Front for the Unity of Iraq, a loose coalition of mixed tribes but dominated by the minority Sunnis. They say the country is simply too insecure for elections. As the election draws near, the beleaguered interim government finds itself battling to unite a divided electorate, looking to convince them just to show up and vote. Jeff Koinange, CNN, Baghdad.

(END VIDEOTAPE)

BLITZER: Teetering on the brink of disaster...

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Just amazing how Mother Nature can ruin life in an instant.

(END VIDEO CLIP)

BLITZER: One by one they go, homes collapsing into this raging river. Homeowners desperately trying to save that their most treasured belongings.

Coalition course, cars out of control on an icy road as a powerful winter storm moves east. Later.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It demonstrates incredible poor taste, a lack of keen sense of history, given what Holocaust survivors lived through.

(END VIDEO CLIP)

BLITZER: Outrage around the world after Britain's Prince Harry shows up at a costume party wearing a Nazi uniform.

(COMMERCIAL BREAK)

BLITZER: There's a developing story we're watching right now out of Atlanta, specifically at Hartsfield International Airport. Mike Brooks is standing by with details. What is going on?

MIKE BROOKS, CNN CORRESPONDENT: Well, Wolf, apparently Delta flight 782, which is a Boeing 737 just a short time ago was supposed to take off from Atlanta's Hartsfield-Jackson Airport en route to St. Louis. It did take off, experienced some kind of engine problem, declared an emergency, did an air return, as it was landing, either skidded off the runway or overshot the runway. Right now there are no reported injuries of any of the passengers on board. It had approximately 100 passengers on board and a crew of five. No injuries right now. We're waiting for buses to come unload the people off the aircraft before they get a tug out there to attempt to pull it out of the grass.

BLITZER: Is that fog that we're seeing? What's the weather like in Atlanta right now, Mike?

BROOKS: It was a little foggy and there was some rain coming down, Wolf, but we don't know if that was a cause for the aircraft to run off the end of the runway. They're waiting to find out exactly what happened. There will be an investigation. The important thing is there are no reported injuries.

BLITZER: That was Delta Airlines flight 782 to St. Louis from Atlanta. We'll continue to monitor this situation for our viewers. Mike Brooks, thanks very much.

There is severe weather across much of the country. It's taking very different forms but causing huge problems wherever it hits. Our Mary Snow has been keeping track. She's joining us from New York.

MARY SNOW, CNN CORRESPONDENT: Wolf, to give you an idea of how unusual some of these weather patterns are, here in New York at a time when it would be brutally cold, it hit about 60 degrees. It's so warm you don't even need a jacket. This before a cold snap is set to move in. Now, in other parts of the country, severe weather caused storms that turned deadly in some parts.

(BEGIN VIDEOTAPE)

(voice-over): Mother Nature is unleashing her wrath in a line of storms across the country. In Arkansas, an apparent tornado tore through Union County. Authorities say two people were killed and at least 20 others injured. The storm slammed into homes in the darkness.

UNIDENTIFIED MALE: We started to get up. About that time, the end of the house blew off.

SNOW: Lightning storms added to the difficulty of cleaning up. In Ohio, rising waters are threatening floods in several areas including Columbus where a reservoir is open to contain a spillover. In Michigan, fog turned deadly on an interstate. Police say two people were killed and more than three dozen others were injured when 200 cars slammed into each other. In Denver, slush and snow left roads so slick, this woman had to jump out of her car as it slid out of control. This woman was dragged as one car slammed into the other.

UNIDENTIFIED MALE: It's just like a chain reaction.

UNIDENTIFIED FEMALE: I just started sliding and just couldn't stop.

SNOW: Fortunately no one was injured in this 28-car chain reaction.

(END VIDEOTAPE)

SNOW: Here on the East Coast, one immediate concern is Ohio. They expect the Ohio River to crest above flood stage in certain parts of the state tomorrow.

BLITZER: Mary, thank you very much.

Meanwhile, floods in southern Utah caused millions of dollars in damage. More than a dozen homes were destroyed in a single neighborhood, one after another. CNN's Brian Todd has that.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): The man who shot this videotape tells CNN, normally this river is like a stream, you can jump across it, he says, it's mellow. But not on Tuesday afternoon. He says this nightmare in the Green Valley neighborhood of St. George, Utah, unfolded in the course of about two hours. House after house falls, sometimes whole buildings at a time. With one, a piece of siding gives way, then the erosion is just too much. Flooding from overflowed reservoirs so drastically overwhelmed the Santa Clara River that it actually took the water in a new direction right towards these homes. Amateur photographer Dusty Thompson stood on the opposite bank and held steady as part of his parents' neighborhood fell.

DUSTY THOMPSON, AMATEUR PHOTOGRAPHER: Houses across we witnessed that as a horrific sight, a surreal experience to see this happen in your own backyard.

TODD: Thompson says his parents' house was spared, but at least 20 homes from this neighborhood were washed away, homes valued at between $500,000 and $1 million. Authorities tell us many more will have received some damage from these floods.

UNIDENTIFIED FEMALE: Just amazing how Mother Nature can ruin life in an instant.

UNIDENTIFIED MALE: People underestimate the power of nature, I guess.

THOMPSON: The Washington County sheriff says this river has receded down to what he calls manageable stream flows, but he also says, quote, "we're a desert, we've never seen anything like this." Brian Todd, Washington, D.C.

(END VIDEOTAPE)

BLITZER: In La Conchita, California, the rescue and recovery effort is over. Authorities say they've accounted for everyone who was missing after Monday's mudslide. They say ten people were killed, the last survivor was pulled out of the mud three days ago.

Now, let's take a look at some other weather problems in the headlines around the world.

Britain is battling its worst storm in years. Heavy rains and winds up to 120 miles an hour battered Scotland, northern England and northern Ireland, closing roads and bridges, disrupting train and ferry service.

Mexican mudslide. Heavy rains is blamed for landslides that have killed three children and damaged 140 homes in Tijuana, Mexico. 2,500 people have been evacuated. Tijuana is just across the U.S./Mexican border from California which has been hit by the same storms.

Panama floods. A state of emergency has been declared in northern Panama where floods have killed at least four people and forced 6,400 evacuations. Rain is expected to continue for several days.

Dry spell. In Venice, Italy, the problem is a lack of water because of especially sunny weather and unusually low tides. Canal docks are drying up. The city's famous water buses are being rerouted. Often during this time of year the city faces flooding. That's our look around the world.

The world's largest retailer goes on the offensive. How Wal-Mart is trying to improve its image. There's a new strategy.

Security watch, the FBI's new plan to combat gang violence in cities across the United States.

Royal scandal, sending shockwaves around the world, Prince Harry wearing a Nazi uniform to a costume party. Is his apology enough to quiet the controversy?

(COMMERCIAL BREAK)

BLITZER: Critics say Wal-Mart's low prices come at a high cost. In some places, critics have blocked attempts to open new stores. Now the discount retail chain is fighting right back. Here's CNN's Susan Lisovicz.

(BEGIN VIDEOTAPE)

SUSAN LISOVICZ, CNN CORRESPONDENT (voice-over): Wal-Mart's critics are vocal. But the world's biggest retailer has largely been silent. Whether it concerns protests about plans for its sprawling super-sized centers, the huge percentage of its goods made overseas or the way it treats its more than 1.2 million workers. But now the retailer known for cutting costs is spending money on repairing its image. In full-page ads across the country and rare on-camera interviews, Wal-Mart's chief executive says Wal-Mart is good for the economic. The company expects to create more than 100,000 new jobs in the U.S. this year. And Lee Scott says Wal-Mart is good to the people it hires. LEE SCOTT, WAL-MART PRESIDENT & CEO: If you don't want us in your community, let's be honest about why you don't want us. Don't say it's because of our wages, because the facts are wages are good. So don't say it's about our benefits, because the fact is we have benefits. Don't say they're dead-end jobs. The truth is we promoted 9,000 people out of hourly positions to management.

LISOVICZ: Wal-Mart's aggressive new push coincides with organized labor's own plans to launch a media campaign that tells a different story about America's largest private employer.

MARK LEVINSON, DIRECTOR, UNITE HERE: Wal-Mart says they offer health benefits. They do offer health benefits but most of the employees can't afford them. They do pay more than minimum wage, but they still pay less than would keep a family of three or four out of poverty. So it's a public relations attempt to cover up a very disturbing reality.

LISOVICZ: Wal-Mart has been bulletproof to the criticism for years, because of its shoppers who find the savings irresistible. Sales in 2003 were nearly $245 billion, nearly three times the amount of Target and Costco combined, but Wal-Mart stumbled briefly in the holiday season when it was beaten at its own game by its competitors which slashed prices more aggressively. Management says it won't make that mistake again.

SCOTT: It's time for us to be more aggressive when it comes to taking care of our customers, merchandising, pricing, all of those things. I think we have an opportunity this year and this is one part of it.

(END VIDEOTAPE)

LISOVICZ: Wal-Mart wants the world to see its softer side when it comes to its employees, but, Wolf, Wal-Mart says it will remain fierce when it comes to the competition.

BLITZER: Susan Lisovicz, thanks very much for that report.

Security concerns surrounding the election in Iraq. What role will U.S. troops play on the day Iraqis head to the polls? We have new information coming to us. Our Barbara Starr is on the case over at the Pentagon.

Martha Stewart's prison term. Could new federal sentencing guidelines lead to an early release for the domestic diva?

And a royal mess, international outrage over a Nazi swastika worn by the British prince.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Keeping the peace as Iraq's election nears. What role specifically will U.S. troops play on Election Day? An update from the Pentagon. Our correspondent Barbara Starr is standing by.

First, though, a quick check of some other stories now in the news.

Attorneys for Martha Stewart say they're studying yesterday's U.S. Supreme Court ruling on federal sentencing guidelines to see if it could lead to her early release from prison. The court ruled that mandatory guidelines are unconstitutional. At the time of her sentencing, the judge in Stewart's case refused a defense request to disregard the guidelines.

Major League Baseball commissioner Bud Selig has unveiled a new steroid policy for the sport. Under the plan, every Major League player will be tested at least once a year. A positive test will bring a suspension of 10 days, up to one year. Selig says the policy will -- quote -- "help restore the confidence of our fans."

A federal judge has ruled that a suburban Atlanta school's district attempt to label evolution as theory rather than fact is unconstitutional. The judge says the language used on a sticker applied to textbooks covering evolution violations the separation of church and state. Her says the sticker creates the impression the school board agrees with the religious groups questioning evolution.

The NFL has fined Minnesota wide receiver Randy Moss $10,000 for what some say was an unsportsmanlike celebration during a game in Green Bay last Sunday. After scoring a touchdown, Moss mimicked the act of pulling his pants down and mooning the crowd. Moss' agent says the fine is unnecessary.

With Iraqis set to go to the polls in national elections at the end of this month, there's one thing they can count on. American troops will be out in force along with Iraqi troops. As for just who will take the lead in that mission, we turn to our Pentagon correspondent Barbara Starr -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, on Election Day in Iraq, the U.S. troops that you may not see may be the troops that matter the most.

(BEGIN VIDEOTAPE)

STARR (voice-over): Iraq's 125,000 security forces will face their biggest challenge ever on January 30, keeping the country calm enough for just one day, so that Iraqis feel safe enough to go to the polls. If it all goes well, the one thing that you won't see, U.S. troops anywhere near a ballot box.

The 150,000 U.S. troops in Iraq will be on duty, but the U.S. military strategy, keep the troops behind the scenes and let Iraqis guard more than 5,000 polling places.

BRIG. GEN. MARK KIMMITT, U.S. DEPUTY CHIEF OF OPERATIONS: This is an Iraqi election and the Iraqi people need to see their security forces protecting those silts.

STARR: Top commanders are extraordinarily cautious.

LT. GENERAL THOMAS METZ, MULTINATIONAL FORCE COMMANDER: I can't guarantee every person in Iraq that wants to vote goes to a polling booth and can do that safety.

STARR: U.S. military commanders know they may indeed have to back up Iraqi units that still have an uncertain track record in fighting the insurgents. The U.S. military role remains helping Iraqis plan election security, continuing to conduct missions against insurgents, providing nearby Election Day firepower if Iraqis request help.

LARRY DIAMOND, FORMER ADVISER TO COALITION PROVISIONAL AUTHORITY: It will be somewhat awkward for American soldiers and Marines to be right in the polling booth. Many Iraqis will feel that that will be intimidating and unacceptable.

STARR: The U.S. has beefed up troops in the four key provinces of the Sunni Triangle, including parts of Baghdad that are most likely to see violence. This is 42 percent of Iraq's population. Any voting by Sunni minorities here would be critical.

(END VIDEOTAPE)

STARR: Wolf, one additional plan is to possibly consolidate polling places, so there are less targets on Election Day -- Wolf.

BLITZER: Barbara Starr at the Pentagon, thanks very much.

Britain's Prince Harry is in royal trouble. Find out why many are so outraged and why the prince has apologized. What could he have been thinking?

Fighting gang violence, new concerns that gang activity is on the rise in America. Our Kelli Arena has investigating.

And later, why one elephant's tsunami relief efforts are paying off in a big way. We'll update a story we brought you last week.

(COMMERCIAL BREAK)

BLITZER: There's increasing concern among law enforcement officials about gang-related violence. In the past four years, gang- related murders have shot up. And the FBI is preparing to announce new strategies to try to combat the problem.

As part of our CNN "Security Watch" segment, CNN justice correspondence Kelli Arena has a rare inside look at an anti-gang task force in suburban Washington.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): It's early evening in Northern Virginia. And these members of the gang task force are getting ready to head out into the streets. Their targets are young, at times, as young as 7 or 8, and dangerous. Earlier in the week, an alleged gang member wielding a machete cut three fingers off his victim's left hand. This night could bring similar violence.

UNIDENTIFIED MALE: They'll throw some signs for -- flesh hand signs to see whether they're friend or foe, and, if they're foe, that's where you get your assaults.

ARENA: Both men, who work undercover and wanted their faces hidden, give extra scrutiny to young Latinos. That's because they are primarily on the hunt for members of the Latin street gang known as MS-13.

The ATF, which has been fighting gangs for decades, says the increased use of violence by MS-13 and others is alarming.

MIKE BOUCHARD, ATF: They're arming themselves much better than before. In fact, in many cases, they're arming themselves better than the police.

ARENA: The Justice Department estimates there are more than 21,000 gangs nationwide.

(on camera): And the FBI says juvenile gang murders have shot up 25 percent since 2000. CNN has learned, as a result, the FBI is preparing a new gang offensive.

(voice-over): Among the changes, to reclassify gangs as criminal organization, just like traditional organized crime families.

SGT. RON HAUGSDAHL, GANG TASK FORCE: They are organized. They do keep notes in their meetings. They do collect dues. They do have bank accounts, where they're paying canteen funds for members that are locked up.

ARENA: Part of the gang offensive includes outreach. Many task force members work with organizations like the Boys & Girls Clubs of America. This Aberdeen, Maryland, chapter sponsored a roundtable discussion after an alleged gang-related murder in the area.

JEFF HAIRSTON, BOYS AND GIRLS CLUB: When gangs present themselves before you, tell them, I don't want to be a loser. I want to be a winner, because a loser took my best friend's life.

ARENA: Some of the young people in this room have been asked to join gangs.

DAYRON WINCHESTER, STUDENT: They still cuss at me a little bit, flip me off, trying to hurt my feelings, you know, because I didn't join them.

ARENA: These kids are well aware of the problem. Often their parents are not.

UNIDENTIFIED MALE: A lot of these parents say they have no idea or they say they have no idea that their child is involved in that stuff. And that's what shocks me.

ARENA: Both gang task force members are parents, too, fathers of young children, making their battle a very personal one.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE)

BLITZER: And, once again, please stay tuned to CNN day and night for the most reliable news about your security.

A prince in deep trouble, outrage around the world after Britain's Prince Harry shows up at a costume party wearing a very controversial uniform. I'll speak live with Rabbi Marvin Hier of the Simon Wiesenthal Center and royal expert Richard Fitzwilliams.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: People around the world and lawmakers in Britain are lashing out at Prince Harry for wearing a Nazi uniform to a costume party. The prince was quick to issue an apology, but it isn't the first time actions by the younger son of Prince Charles and the late Princess Diana have triggered controversy.

CNN's Diana Muriel reports from London.

(BEGIN VIDEOTAPE)

DIANA MURIEL, CNN CORRESPONDENT (voice-over): British headline writers had a field day Thursday. Prince Harry's choice of outfit at a private party earlier this month, the desert uniform of Nazi Germany's Africa Corps, has met with outrage and surprise he wasn't prevented from wearing it.

ARTHUR EDWARDS, "THE SUN": Prince Charles employs hundreds of people working for him. Why couldn't one of them just say, Harry, you dressed wrong for this party; this is not the way the third in line to the throne goes to a fancy dress party or any party?

MURIEL: Indeed, it is not the image of the scandal-prone prince the royal family is keen to project. The impact of carefully orchestrated photo opportunities of the prince playing rugby football with underprivileged children in Africa was quickly undermined last year when the young prince was snapped scuffling with press photographers outside a London nightclub just a few weeks later.

Only a few days ago, the prince and his elder brother were filmed packing Red Cross parcels for the victims of the tsunami disaster. But now many are questioning the sensitivity of a prince who chooses to party in a Nazi uniform. Harry has been dogged by scandal since his school days, discovered smoking cannabis while still attending Britain's elite Eton College, the young prince was also accused of cheating in his final art examination, an allegation that was never followed up by a formal investigation.

Harry is due to take up his place at Sandhurst Military Academy in May this year as an officer cadet in the British army. That might just bring the rebel prince into line, according to some royal insiders.

DICKIE ARBITER, FORMER ROYAL PRESS SECRETARY: That is the one thing that is probably going to make a man of him. He needs to go in there. He needs the discipline. He needs the discipline from people who can control him and who will not take any lip from him. And then perhaps he will grow up.

MURIEL (on camera): Age 20, the young Harry Windsor has still not officially come of age, but it's not clear just how much longer his princely pranks can simply be put down to the foolishness of youth.

Diana Muriel, CNN, London.

(END VIDEOTAPE)

BLITZER: Prince Harry's apology for wearing a Nazi uniform apparently has done little to soothe the anger of Jewish groups in Britain. And the Israeli foreign minister, Silvan Shalom, says the use of Nazi symbols shouldn't be tolerated at all.

Rabbi Marvin Hier of the Simon Wiesenthal Center in Los Angeles denounced the incident as a shameful act. He's joining us now live from our Los Angeles studio. Also joining us in London, royal watcher Richard Fitzwilliams.

Rabbi Hier, first to you. He's a 20-year-old kid, in effect. He made a mistake. What's so shameful about it?

RABBI MARVIN HIER, FOUNDER, SIMON WIESENTHAL CENTER: Well, what's shameful is, it's two weeks before the 60th anniversary of the liberation of Auschwitz. His grandmother is about to receive Holocaust survivors at Buckingham Palace and he obviously knows nothing about these events.

I wonder what -- it's either he learned nothing at Eton or they didn't teach him much, because this is an insult to the world. And issuing a press release as an apology and hoping that, you know, he'll put it behind him is really ridiculous.

(CROSSTALK)

BLITZER: So Rabbi Hier, what do you want him to do?

HIER: Well, he should do something proactive. He should visit Auschwitz to be part of the British delegation to show the world that he can be serious, that he understands the great atrocity that occurred there.

He could be at his grandmother's side when she greets the Holocaust survivors at Buckingham Palace, rather remove himself from the scene and expect the world to forgive him because he's a kid. He's 20 years old and he's a member of the royal family.

Richard Fitzwilliams, what do you make of that? RICHARD FITZWILLIAMS, ROYAL WATCHER: Well, I think that there's absolutely no question that he's made a ghastly mistake, a frightful error. He's been adolescent and he's been insensitive.

But I do not believe that it would necessarily be helpful for him to do more penance. He has apologized. I don't think, myself, the wording of his apology was what it might have been, but I do feel that, if he didn't understand fully about the atrocities in Auschwitz and during the Holocaust, he certainly does now because of the outrage, which quite rightly has been provoked by what he did.

BLITZER: Why not, Richard Fitzwilliams, why not have him go with his grandmother and meet these Holocaust survivors, go on the delegation to Auschwitz? What would be wrong with that?

FITZWILLIAMS: I would suggest that, in his own time, he might very well do things which would involve remembering what happened during the Holocaust and take a great deal more interest in the subject.

I do feel, however, that when you're talking about penance -- remember, he's made a ghastly mistake. He must realize it now. It should never have happened. It was absolutely incredible that it did happen. But, equally, why rub his nose in it even more? I think that it's abundantly clear what's happened, that it was a very stupid idea of his.

But, on the other hand, what we're looking at is changing someone's attitude, making him more mature, and trying to make somebody who is third in line with the throne, he is a significant figure, and will also become somebody who will be more reliable. Sandhurst will do that. I think there's absolutely no question that...

(CROSSTALK)

BLITZER: Yes, I was going to bring the rabbi back and say, Rabbi, earlier today, I spoke with another royal watcher in London, who suggested -- there's a hit play on Broadway in London right now, "The Producers," which makes fun of Hitler. They have a song "Springtime For Hitler." You may have seen this Mel Brooks' production. It was a movie.

The young prince was going to a costume party. He was having fun. What's the difference between what Mel Brooks' was doing, showing the swastika during that Broadway play and the film, as opposed to what Prince Harry has been doing?

HIER: Well, Prince Harry is not an entertainer. If he wants to be an entertainer, he can go to Broadway or Hollywood. He's a member of the royal family.

And in addition to that, the BBC in early December just published a poll saying that, from the age of 35 below, 60 percent of those Britons interviewed never heard of Auschwitz. So I would think that he has a greater responsibility than poking fun and doing something so horrible that outrages his own countries and people who are victims of Nazism all over the world.

BLITZER: Are you outraged, Rabbi Hier, by the play by the Mel Brooks play "The Producers"?

HIER: Personally, I think that he has also crossed the line. There's a place for entertainment and there's a place when your entertainment basically becomes an insult to the memory of the Holocaust and to Hitler and to what Hitler did.

I would say that there's a role for entertainment, but I would not use Nazi symbols and go overboard on that. And, as I said before, Mel Brooks is one thing, but that is not Prince Harry. He's the third in line to the throne and should act much more responsibly.

(CROSSTALK)

BLITZER: Mr. Fitzwilliams, what does this scandal do now to the royal family?

FITZWILLIAMS: Well, it gravely embarrasses the royal family. This is one of the worst royal scandals.

And, certainly, it's something that Prince Harry will have to live with for a very long time. His rehabilitation, because he was known as the tearaway prince, has received a pretty fatal setback, at least in the short term. His good work for AIDS victims in Lesotho or with the rugby football union or for victims of the tsunami, that will be forgotten.

BLITZER: All right.

FITZWILLIAMS: This image will never be forgotten.

But I do feel -- the Rabbi was mentioning "The Producers" and the fact that he found that offensive. "The Producers" in fact of course sends up Nazi Germany. And I most strongly believe that the prince has learned his lesson.

BLITZER: Let's hope he has.

Richard Fitzwilliams, Rabbi Marvin Hier, to both of you, thanks very much for joining us.

And to our viewers, here's your chance to weigh in this story. Our Web question of the day is this: Do you find Prince Harry's wearing of the Nazi uniform offensive? You can vote right now. Go to CNN.com/Wolf. And we'll have the results when we come back.

(COMMERCIAL BREAK)

BLITZER: Updating you now on a developing story we're watching, Palestinian sources say Israeli helicopters fired missiles into a Gaza refugee camp just a short while ago in retaliation for an earlier Palestinian suicide bombing. Witnesses say the missiles hit a medical center run by a group with links to Hamas, the Islamic militant group that claimed responsibility for the earlier attack in which four Israeli troops were killed. The two Palestinian suicide bombers died as well.

Here's your chance to weigh in on our Web question of the day. Remember -- let's take a look at the numbers. Here they are. There they are, 67-33. That's the results of our Web question of the day.

That's all the time we have. "LOU DOBBS TONIGHT" starts right now.

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