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THE SITUATION ROOM

Analysis Of New Bin Laden Tape; Jill Carroll's Mother Pleads For Release; Grassfire Spreads in Oklahoma City; Hillary Clinton accuses White House Of "Downplaying" Iran Threat; Discussion Of The Bush Wiretapping Controversy; John Kerry, From Baghdad, Discusses War In Iraq; Jill Carroll Kidnapping; Political Solution Between Sunnis, Shia

Aired January 19, 2006 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Thanks very much, Ali. To our viewers, you're in THE SITUATION ROOM, where new pictures and information from around the world are arriving all the time.
Happening now, it's early morning along the Afghan/Pakistani border, the presumed hiding place of Osama bin Laden. Suddenly, after a year of silence, the al Qaeda leader warns of new attacks against America.

It's 4:00 p.m. here in Washington where security officials are scrambling to assess the al Qaeda threat. Should the homeland be placed on higher alert?

And it's midnight in Baghdad, where a deadline looms for an American hostage. Senator John Kerry is in Iraq getting a firsthand look at the war on terror. I'll have an exclusive interview with Senator Kerry.

I'm Wolf Blitzer, you're in THE SITUATION ROOM.

It's been just over a year since we've heard from Osama bin Laden. Now, just days after a U.S. missile attack on a suspected terrorist gathering in Pakistan, the al Qaeda leader is out with a new audiotape and a chilling message. He warns that planning is now underway for new attacks in this country.

(BEGIN AUDIO CLIP)

OSAMA BIN LADEN (through translator): I would also like to say that the war against America and its allies will not be confined to Iraq. Iraq has become a magnet for attracting and training talented fighters. Our mujahedeen was able to overcome all security measures in European countries, and you saw their operation in major European capitals.

As for similar operations taking place in America, it's only a matter of time. They're in the planning stages and you'll see them in the heart of your land as soon as the planning is complete.

(END AUDIO CLIP)

BLITZER: The voice on the tape, which the CIA now believes is indeed that of Osama bin Laden, goes on to offer what some are describing as a carrot of sorts.

(BEGIN AUDIO CLIP)

BIN LADEN (through translator): We do not mind offering a long- term truce based on just conditions that we will stick to. We are a nation that got banned from lying and stabbing others in the back, hence, both parties of the truce will enjoy stability and security to rebuild Iraq and Afghanistan, which were destroyed by war.

There is no shame in this solution, but it will prevent hundreds of billions from going to influential people and warlords in America -- those who supported Bush's electoral campaign. And from this, we can understand Bush and his gang's insistence on continuing the war.

(END AUDIO CLIP)

BLITZER: We have correspondents covering every aspect of this story. Our National security correspondent, David Ensor, is standing by; our justice correspondence, Kelli Arena; our White House correspondent, Elaine Quijano.

Let's begin though with our senior international correspondent, Nic Robertson, who is all over this audio tape. Nic, tell our viewers what we know about it.

NIC ROBERTSON, CNN SENIOR INTL. CORRESPONDENT: Well, there's a threat contained, Wolf. There's an offer of a truce. It appears bin Laden is trying to divide, if you will, the people of the United States to whom he says this is addressed.

The timing of this very interesting, coming in the same week that there were attacks on targeting his deputy, Ayman al-Zawahiri, and other key al Qaeda figures, but perhaps the threat contained in here certainly cannot be ignored at this time. There have been threats from bin Laden before; they've been acted upon.

We also here see the offer of a truce. There have been offers of truces before to European nations made in April 2004. If they got out of Iraq, if they pulled their troops out, then bin Laden wouldn't strike them.

Well, a year-and-a-half later, more or less, he made good on that threat, attacking in London, blowing up tube stations there. British troops, of course, were still in Iraq at the time, Wolf.

BLITZER: Nic, when he makes a threat -- a direct threat against the U.S. homeland as he does in this audiotape, how seriously should that threat be taken?

ROBERTSON: I think it should be taken seriously, that they certainly have the intent. He implies that they have the capability. He implies that they're able to get around the security measures that are in place. He implies that they've been successful before in Europe, therefore they'll be successful in the United States. So the intent's there. He says the capability is there. Is the capability really there? That's what we don't know. And that's the big question for intelligence officials, are there these sort of sleeper cells, if you will, that essentially is what he's referring to here in the U.S.

BLITZER: Nic Robertson, thank you very much.

David Ensor is our national security correspondent. David, you've been checking with all of your sources -- your national security sources, your intelligence sources. What are you hearing?

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, first of all, that this really is the voice of Osama bin Laden, Wolf. A Central Intelligence Agency official told me this afternoon that after a technical analysis of the tape, they're satisfied it's the real thing, it's Osama bin Laden talking.

Other counterterrorism officials say that they believe the tape was recorded in the month of December, so that puts it recently, though not just in the last week or two when, of course, al Qaeda has been under missile attack in Pakistan from the Central Intelligence Agency.

Now, as to how serious the threat is, obviously that will be a question mostly for law enforcement and homeland security people, but the view here is that bin Laden is more of an ideologue, an icon, someone who can inspire others to attack, that he may not be in a position anymore to specifically order attacks and make them happen.

But that is, of course, the big question. And they cannot make the assumption that he can't order up attacks. They have to assume that is a possibility.

BLITZER: David, normally the CIA, it takes them a few days to authenticate an audiotape like this. Today they did it within a matter of a few hours. Am I wrong? Is this -- do they have some new techniques they're using?

ENSOR: No, it -- sometimes they, in the past, have identified them within the day, and this is of course the most famous voice that all the translators at the CIA ever listen to and they have got plenty of tapes to compare it with, Wolf.

BLITZER: All right, David. Thank you very much.

Let's go to Kelli Arena, our justice correspondent. Kelli, what about law enforcement? What are you hearing? Are they gearing up for a real attack?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, U.S. officials say that the tape obviously serves as a reminder that al Qaeda remains intent on attacking on U.S. soil, but there's nothing in what bin Laden said to indicate when or how he'll do that.

FBI officials say that the tape won't be viewed in isolation, but put in context in terms of other intelligence that's coming in about any possible threat. We heard from the FBI spokesman today, here is what we had to say.

(BEGIN VIDEO CLIP)

JOHN MILLER, ASSISTANT FBI DIRECTOR: It comes from bin Laden himself. That always bears examination. It does contain what is close to a specific threat, though it gives no place and time. It is a threat to launch an attack on the United States on U.S. soil. We have seen that threat before, so we neither put undue weight on it nor discount it.

(END VIDEO CLIP)

ARENA: U.S. officials say that there's no specific or credible intelligence suggesting that a plan is underway. And they also say that the level of intelligence, chatter, or intercepted communications between suspected terrorists has not increased in recent weeks and has remained relatively stable, Wolf.

Officials say that operationally, nothing will change for them. They continue to conduct counterterrorism operations across the United States. And as far as they're concerned, it's pretty much business as usual, Wolf.

BLITZER: All right, Kelly, thanks very much. Let's go over to the White House. Elaine Quijano is standing by with a reaction from there. What are they saying, Elaine?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, the White House insists that al Qaeda leaders, including Osama bin Laden, are on the run, they are under a lot of pressure. And today, White House spokesman Scott McClellan flatly rejected any notion of a truce between the United States and the terrorist organization.

McClellan told reporters, quote, "we do not negotiate with terrorists, we put them out of the business," end quote. He went on to say the "president will end the war on terror at a time and place of America's choosing," and he reiterated that the United States is on the hunt for terrorist suspects and that the United States has already brought some top al Qaeda leaders to justice -- Wolf.

BLITZER: Elaine Quijano at the White House with reaction from there. Elaine, thank you very much. Thanks for all of our reporters.

Let's go up to New York right now. Jack Cafferty is standing by with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: This latest audiotape is the first time we've heard from Osama bin Laden since right before the 2004 presidential election. In light of last week's airstrikes along the Pakistan-Afghanistan border that may have killed several high-ranking members of al Qaeda, it comes as no surprise that they would want to get the word out to the faithful that the bearded creep is alive and still running the show. It's good for morale, you know.

The Department of Homeland Security says there are no plans to raise the nation's threat level, but the thought of this mutant hanging out in a cave somewhere and sending taped threats to the American people makes me angry. Why wasn't this guy taken care of before we went wandering off into Iraq? Here's the question. How important is the new Osama bin Laden tape? E-mail us at caffertyfile@cnn.com, or you can go to CNN.com/CaffertyFile.

BLITZER: Jack, thanks very much. Jack Cafferty with "The Cafferty File."

Coming up, you're in THE SITUATION ROOM. As the deadline looms for an American hostage, Senator John Kerry is in Iraq for a closer look at the war that's ongoing there. My interview with Senator Kerry from Baghdad. That's coming up.

And guess who is talking tough about Iran's nuclear program? Senator Hillary Clinton accusing the White House of being soft on Tehran?

And in our 7:00 p.m. Eastern hour, here in THE SITUATION ROOM, I'll discuss the latest threat from Osama bin Laden with FBI assistant director John Miller. He's actually met with Osama bin Laden when we worked for ABC News. Much more coming up. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: More coming up on the Osama bin Laden audiotape, much more coming up here in THE SITUATION ROOM, but there's other important news happening, including in Iraq. Fifteen people are dead, dozens are hurt after nearly simultaneous attacks in a busy commercial district in central Baghdad. Officials say a car bomb targeted an Iraqi police patrol and immediately after, a suicide bomber blew himself up in a crowded coffee shop.

Meanwhile, many around the world are appealing for the release of a female American journalist being held hostage in Iraq. Let's bring in our Zain Verjee at the CNN Center in Atlanta with more on that part of the story. Zain?

ZAIN VERJEE, CNN ANCHOR: Wolf, Jill Carroll's mother says that she spoke to CNN because she wants her message to be seen around the world. Her most important goal, winning freedom for her daughter. Earlier today Mary Beth Carroll talked about Jill with CNN's Soledad O'Brien.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): It's a heartfelt message addressed directly to those who have kidnapped her daughter.

MARY BETH CARROLL, MOTHER OF HOSTAGE: Jill's father, sister and I ask and encourage the persons holding our daughter to work with Jill to find a way to contact us with the honorable intent of discussing her release.

VERJEE: Mary Beth Carroll spoke exclusively to CNN about her daughter, Jill Carroll, the first female American journalist kidnapped in Iraq.

CARROLL: A video just released gives us hope that Jill is alive, but has also shaken us about her fate.

VERJEE: In the video, released on Tuesday by the Arabic language network Al-Jazeera, Carroll's captors threatened to kill her unless the United States releases all female Iraqi prisoners within 72 hours. That deadline will run out on Friday morning. Carroll's mother says her daughter is the wrong target.

CARROLL: They've picked the wrong person. If they're looking for somebody who is an enemy of Iraq, Jill is just the opposite.

VERJEE: That thought is echoed by her bosses at the "Christian Science Monitor," where Carroll has been working as a freelance reporter.

DAVID COOK, THE CHRISTIAN SCIENCE MONITOR: She's an innocent journalist and that we'd ask that she be returned to her family, unharmed. It would be wrong to murder someone who devoted much of her young life to explaining the problems that Iraq faces.

VERJEE: The 28-year-old was kidnapped on the 7th of January in Baghdad. Carroll's Iraqi interpreter was killed, her driver escaped. That day, she was supposed to interview Sunni politician Adnan Dulaimi. He's now calling for Carroll's release.

Others have also joined the effort. The U.S. Muslim group the Council on American Islamic Relations is sending a team to Iraq to help secure Carroll's release. Carroll's mother says her daughter is passionate about reporting from the region and well aware of the risk.

CARROLL: We talked about even the eventuality of her even being kidnapped. And that gives me some comfort now to know some of the things that she knew and had talked with about other people.

(END VIDEOTAPE)

VERJEE: Wolf, there are some 14,000 people currently detained by the U.S. military and only eight of them are women. Iraq's justice ministry says six women are set to be freed, but they add that it's not related to the demands of Carroll's kidnappers. Meanwhile the U.S. military says that they are not aware of any plans to release female detainees in Iraq. Wolf?

BLITZER: Zain, thanks very much. Still ahead here in THE SITUATION ROOM. One first lady has already done it. Could another also make the move from first lady to senator? Curious question posed to President Bush today about his wife. We'll tell you what the president had to say.

And Senator Hillary Clinton is talking about Iran by blasting the Bush administration for its handling of the nuclear showdown. We'll tell you what she had to say as well. Stay with us.

(COMMERCIAL BREAK) BLITZER: That fire is out in Oklahoma that we're watching right now. CNN's Tom Foreman is here in THE SITUATION ROOM monitoring this situation. What's going on, Tom?

TOM FOREMAN, CNN CORRESPONDENT: We've got fires again in Oklahoma today. I was flying out west just earlier today visiting out there. It's really dry over much of the West. Let's take a look at Oklahoma. That's the fire we're talking about right there.

We're going to fly in and take a look at it here. Oklahoma City is the area we're talking about. They had fires there a few weeks ago, big deal, went in and had a lot of trouble with that.

Now they've got this fire burning just off the interstate there. If we move in a little bit -- they've had to evacuate an R.V. park in the area to get people out of there. That's where this fire is burning. Yesterday they had the same problem, though, just south of town they had part of the interstate closed because they had a fire down here at another little town.

And if look at the West right now, with the dryness out there in the entire area, that's where you get the big picture of it. Even though nationwide they've managed to keep the fire danger relatively low in winter, where it normally would be, the National Fire Center is saying look at what's happening in the West. They've had fires in Texas, fires in Oklahoma, fires all the way up in Nebraska, and some over in Missouri. So they're watching the West right now, very dry conditions and they've had a lot of gusty weather.

So a lot of people out there continue to say it's like summer in terms of fire conditions, and they're trying to get it put out. But for right now, that's what you've got. Big fires burning -- this one burning to a landfill area where they had tires and other things, that's why you see those gray plumes of black smoke. But as it was yesterday, that smoke covered a highway. They had to shut down the highway for seven miles in both directions, so a lot to deal with out West.

BLITZER: All right, we'll keep watching those fires, thanks very much, Tom Foreman here in THE SITUATION ROOM. Other news we're following, Senator Hillary Clinton is not mincing any words in her criticism of the Bush administration's handling of the growing threat posed by Iran. CNN's Mary Snow is standing by in New York. She's joining us now with more on what Senator Clinton is saying now. Mary?

MARY SNOW, CNN CORRESPONDENT: Wolf, Senator Hillary Rodham Clinton is talking tough on Iran and is taking aim at the White House for the way it's been dealing with Iran's nuclear programs. At a speech Wednesday night in Princeton, New Jersey, Senator Clinton suggested the White House is in her words, standing on the sidelines by following European countries to lead the way in negotiations with Iran.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: I believe that we lost critical time in dealing with Iran, because the White House chose to downplay the threats and to outsource the negotiations.

(END VIDEO CLIP)

SNOW: That is in reference to the fact that Britain, France and Germany had been leading the effort to prevent Iran from developing nuclear weapons. Now Senator Clinton said the U.S. has to take a firm stand and she did not rule out using military force, but backed the need for sanctions.

(BEGIN VIDEO CLIP)

CLINTON: We must move quickly as feasible for sanctions in the United Nations and we cannot take any option off the table in sending a clear message to the current leadership of Iran, that they will not be permitted to acquire nuclear weapons.

(END VIDEO CLIP)

SNOW: Now, the Bush administration has also backed U.N. sanctions. Now while Senator Clinton was critical of the White House, she did not mention President Bush by name in her speech. And that speech came just two days after tough jabs at the White House when she said that this administration would go down as the worst in history. Wolf?

BLITZER: Mary Snow in New York, thank you, Mary, very much.

Senator Clinton, by the way, made history by becoming the first first lady to go on to become a United States senator. Could we see it happen again? President Bush was asked that very question today about Mrs. Bush.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I was just wondering, when will we see our lovely first lady run for Senate in the great state of Texas?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Never.

UNIDENTIFIED FEMALE: Come on, ask her, will you?

BUSH: No, I'm not going to ask her. She's -- never. She's -- you know, I think -- I'm pretty certain when I married her she didn't like politics or politicians.

(END VIDEO CLIP)

BLITZER: Strong words from the president of the United States speaking on behalf of his wife.

Up next, an exclusive interview with Senator John Kerry of Massachusetts. He's in Iraq right now seeing up close the current state of the war. John Kerry joins us from Baghdad to give us his take on what's going on right now.

And he's the former housing secretary who was under investigation for possible tax violations, but one official says he couldn't fully investigate, because Henry Cisneros had some very powerful friends. We'll update you on what's going on. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Today in our "Strategy Session," what will be the political impact of the new Osama bin Laden audiotape? Will this strengthen the president's hand in arguing domestic eavesdropping without a warrant as necessary? Joining us now, radio talk show host Bill Press, Republican strategist Rich Galen. Thanks guys, for joining us. I'll start with you, Rich. What do you make of the political fallout, from all of a sudden after more than a year, we hear from Osama bin Laden?

RICH GALEN, REPUBLICAN STRATEGIST: I think for most people, not people in Washington, D.C., but people in the world, in the U.S. -- they will see this as a reason to need to do -- it's not domestic eavesdropping, it is being able to intercept communications between people on U.S. soil and people not on U.S. soil.

BLITZER: So this strengthens the president's...

GALEN: ... I think without question people -- it helps people understand why this is necessary. They may not like it, but we're at war and they understand why sometimes when you're at war, you have to do things that otherwise you'd be opposed to.

BLITZER: Do you agree?

BILL PRESS, RADIO TALK SHOW HOST: No. First of all, I think this is -- I've lost count of how many tapes we've had for bin Laden or al-Zawahiri.

BLITZER: Haven't had one from bin Laden in more than a year.

PRESS: Yes, but it's not just...

BLITZER: ... Just before the election was the last time we heard from bin Laden.

PRESS: And we just had an al-Zawahiri tape not that long ago. I think it reminds people -- and it should, that we're still vulnerable and that we're still a target. I also think it reminds people about the fact that four year later, this guy is still out there. I mean, he's over six-foot tall, he's on dialysis. The dialysis man can find him, the sound man can find him, the video man can find him, the makeup man can find him, and we can't find him? I mean, like, what's going on?

BLITZER: The question of dialysis is an open question. There's a lot of dispute right now whether or not he has kidney problems or is on dialysis. I want you to listen to what the vice president, Dick Cheney said in a speech earlier today.

(BEGIN VIDEO CLIP) DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Another absolutely vital requirement in the war on terror is that we use whatever means are appropriate to try to find out the intentions of the enemy. To this end in the days following 9/11, the president authorized the National Security Agency to intercept a certain category of terrorist-linked international communications.

(END VIDEO CLIP)

BLITZER: You've got to admit, Bill, a lot of Americans are going to say, "If after 9/11, if this guy is making a direct threat right now to attack the United States, once again potentially kill a lot of Americans, they're going to say, you know what, connect the dots, do whatever you have to do, make sure it doesn't happen."

PRESS: A majority of Americans may say that. They said it during the Civil War, maybe, they said it during World War II. I think they're wrong. I think the president and the vice president are wrong today.

There is this war against Islamic extremists. It is wrong. They are definitely out to get us. We also have the law, we have the Constitution, that war is not an excuse for the president to break the law.

BLITZER: It does -- the appearance of Osama bin Laden does remind a lot of Americans and say, "Why all these years after 9/11 is this guy still at large? Why can't the United States, this great super-power, find this guy?"

GALEN: Well, it's a big world. I mean, we couldn't find the Atlanta bomber, and we knew what state he was in. We couldn't find him for like, three years. So, I mean, it's a big world and it's hard to find people that don't want to be found like that, especially when the Pakistanis, probably -- you know, there's a segment of that population that are hiding him. I mean, you know, that's why we go in and bomb these places, because we find out about it and we're not getting much help in some of these areas.

But more to the point, if we have this kind of intercepts that are going on and we know that if in fact this is a legitimate threat -- and we don't know if it is or not, but certainly now the National Security Agency and the people that listen for this stuff, they can find out if there's increased, as they call it, chatter, that's connected to this tape, or not. And I think that's important for America's security.

PRESS: Yes, but the basic point is there is a law that gives the president full authority to do that, to tap anybody's phones he wants. He just has to go to the court and get the warrant. This president chose not to. There is no excuse, no threat big enough to say -- even Samuel Alito said it in his hearings, I hope he believes it, that the president isn't above the law.

BLITZER: And the Congressional Research Service, this nonpartisan research arm of the arm of Congress did come out with an assessment that it probably wasn't the right thing to do.

GALEN: No, but they -- they didn't say it. That's wrong. That's not what they said. They said the president probably need to brief the entire intelligence committee -- they didn't say it was wrong -- instead of just the leadership.

To your point, Bill, let me remind everybody. And this is something that my friends on the other side of the aisle insist on forgetting. And that is that both Republican leaders and Democratic leaders have been briefed on this program since its inception, and it's only after the "New York Times" publicized it that the Democrats have said, well, I was always opposed to it.

PRESS: I'm sorry. Read the law, the law does not say tell the public, the law does not say, brief six members of the entire Congress. The law says to go the FISA, Foreign Intelligence Security Agency court.

GALEN: Are you a lawyer?

PRESS: I know the law, I read it.

GALEN: Are you a lawyer?

PRESS: No, I'm not a lawyer.

GALEN: Well, that ...

PRESS: Wait a minute. Let me finish my point.

GALEN: The U.S. Justice Department is full of lawyers, and they think it's OK.

(CROSSTALK)

PRESS: And the Ashcroft Justice Department said it was probably illegal, and the Gonzalez Justice Department, run by the man who used to be, of course, the White House counsel now says it's probably OK. The law says you go to the FISA court. The FISA court is basically a rubber stamp court, there's no reason for ignoring the law.

(CROSSTALK)

GALEN: That's very good. The next time a plane fly it is into the Pentagon we can have this discussion.

PRESS: Oh, come on. Is the president above the law?

GALEN: The fact is we're at war and you have to do thing when you're at war that you wouldn't otherwise be comfortable with.

PRESS: The president cannot break the law, even during war.

GALEN: He hasn't broken the law. Congress knew about it.

BLITZER: We have to leave it there. PRESS: But that's not the law.

BLITZER: Rich Galen, Bill Press, thank you both very much.

Coming up, Google, subpoenaed, the Justice Department demands a look-see who's Googling what in its probe of online porn. But the search engine stands its ground. We'll tell you what's going on.

And it's boots on the ground for Senator John Kerry who's touring anti-terror battle grounds. My exclusive interview request Senator Kerry from Baghdad, that's coming up next.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Turning to my exclusive interview with Senator John Kerry, the Massachusetts Democrat has been making the rounds of battle grounds in the war on terror. He's moved from Pakistan to Israel, now he's in Iraq, where a hostage drama is reaching a critical point. I spoke with Senator Kerry from Baghdad earlier today.

(BEGIN VIDEOTAPE)

BLITZER: Senator Kerry, thanks very much for joining us. Welcome back to THE SITUATION ROOM, part two of our interview, this one from Baghdad.

It's a heart-wrenching story, this 28-year-old American journalist who was kidnapped where you are. You're in Baghdad right now. What are you hearing? I'm sure the subject has come up in your briefings there.

SEN. JOHN KERRY (D), MASSACHUSETTS: Well, Wolf, it's more than come up in my briefings. I've raised the subject in every single meeting that I've had. I've talked to President Talabani about it, I've talked to the prime minister about it, I've obviously had conversations with the ambassador and with our folks here in the embassy.

Without going into details, let me just say that every single effort possible that can be made is being made to try to locate her, to try to find out what's going on, to try to deal with this issue. And, you know, I would join with everybody else, anybody who is listening who has any influence that can reach these people.

This young reporter, by all reputation over here in Baghdad, is somebody who has the interests of the Iraqi people at heart, and if they're concerned about women being released from prison, the worst thing in the world to do is take a young reporter, a woman herself, and put her in this kind of a situation.

Our hearts, our prayers, my thoughts have been with her every single minute that I've been here. And it's hard to be here and know that this is going on. Obviously, we hope the outcome will be a small moment of grace in the midst of a lot of violence and a lot of turmoil. BLITZER: Is it ever appropriate, Senator, to negotiate with these hostage holders, to make concessions to these terrorists?

KERRY: You just can't do it. You know, I remember thinking about that when I was a prosecutor and you face the prospect of people in prison doing things or taking people hostage and so forth. You can't negotiate with terrorists. You just can't do it, because once there's a beginning, there's no end at all.

And so, we have to take the hardest line possible, but there are lots of avenues, lots of channels, that different people with different connections are going to pursue and are pursuing. But the United States of America -- I agree with the policy -- cannot negotiate with terrorists, period.

BLITZER: Let's move on and talk about the situation in Iraq today. You're there, you're getting an eyewitness account. More suicide bombings, more deaths today -- is the situation, from your brief stay there now, is it getting better or is it getting worse?

KERRY: Wolf, the answer isn't that simple. This is, you know, a very dangerous and complicated situation, where the outcome will be more determined in the course of the next days and few months than at any other time.

In the meetings that I had with all of the officials I met with, and last night I met with people from various different factions and parties, the message is very simple. You know, the efforts of the American military are not capable, and will not resolve the crisis of Iraq.

It has to be resolved by Iraqis, and it has to be resolved by the Shia and the Sunni fundamentally coming to an agreement, together with the Kurds and other factions in the next days, to put together a unity government that is not playing to any sectarian interest, but is really trying to address the larger concerns of the country.

This is the moment of decision for Iraq. If that happens, there's a chance, and I say again only a chance, that then you can pull the pieces together. We have a lot of extraordinary young men and women, a lot of people, putting their energy and their lives on the line to try to do that, but in the end, it is up to the Iraqis to make this decision, and this is the moment of choice.

BLITZER: Is there a possibility that there can be this unity government, as you call it, involving the Kurds, the Shia, and the Sunnis, that they can work together and forge this new Iraq?

KERRY: Absolutely. There is no question in my mind that it's not just a possibility, but if President Talabani and the prime minister and others are going to follow through on what they've said to me, and to others, that's what they're going to work for.

There are three or four critical ministries, starting with the Ministry of Defense and the Ministry of Interior, and then going on to finance and down the line, where it is critical that you have people in those positions who aren't acting out sectarian interests.

If they are there with the confidence of all parties that they are capable, that they are going to be administering with a neutrality that is critical to bringing Iraq together, then I think it's possible. I absolutely do think it's possible.

But a lot of different pieces have to come together, and some of them are not in Iraq. What Iran is doing right now can have a profound long-term impact. What Iran is doing within Iraq, which is not unconnected to these other questions; what is happening with respect to the Saudi commitment to this effort and Jordanian and Egyptian -- all of the Sunni world has an interest in this outcome, but not all of the Sunni world has committed to that outcome.

And so there is a lot of diplomacy, and a lot of effort that has to be expended to try to make this work.

BLITZER: Let me read to you what U.S. Army Lieutenant General John Vines, who's been the commanding general in the multi-national forces in the Baghdad area, said on January 13th -- he said this.

He said, "There are a fair number of indicators that tell us, currently, al Qaeda in Iraq is in disarray. Does it have the capability to regenerate? Unfortunately, it could, but we must keep the pressure on." Which suggests that he needs, and the U.S. military wants, to keep that pressure on by maintaining a robust military presence in Iraq. A, do you support that? B, are there enough troops there now to get the job done?

KERRY: Well, I don't think that that's the appropriate interpretation of what he said at all. And the alternative choice is not necessarily to not have pressure on jihadists, on al Qaeda or anybody else because you are drawing down the number of troops as the Iraqis stand up and take on greater capacity. I don't think one is automatically is the result of the other.

The fact is that al Qaeda is not the principle problem of Iraq. The principle problem of Iraq is a larger group of people who reject the current direction because of the shape of the constitution, because of a history of cultural confrontation, and because of their current fears that they are not going to be protected.

That's why the Shia-Sunni outcome is so critical to this. If you get a sufficient resolution of those fears, and of their participation in the government and a sufficient level of inclusivity, the largest part of the insurgency can be reduced.

The jihadists -- frankly, Wolf, the jihadists are the least of the concern of, I think, the Iraqi people and a lot of others here, because if you get a united government and if you get the Iraqi people united around this effort and reduce the insurgency, ultimately they are going to kick the jihadists out of Iraq.

They don't want them here. There are parties here currently using them for other purposes, but in the long run that is not Iraq's or America's threat here in this region. (END VIDEOTAPE)

BLITZER: More on my interview with Senator John Kerry in Baghdad coming up.

Decorated Vietnam war veteran Congressman John Murtha says he wouldn't join the U.S. military today if he had to serve in Iraq. What would fellow veteran and lawmaker Senator John Kerry do? He's in Iraq, I'm going to ask him.

Still ahead in THE SITUATION ROOM, I'll discuss the latest threat from Osama bin Laden and the overall situation, with President Bush's Deputy National Security Advisor J.D. Crouch. He'll join us live from the White House, that's coming up in the next hour here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: More on my exclusive interview with John Kerry. He's in Baghdad right now getting a firsthand look at the war on terror, but he can't leave behind the controversy over the war.

(BEGIN VIDEOTAPE)

BLITZER: John Murtha, Democratic congressman from Pennsylvania -- a strong supporter of the military -- had this exchange on "Nightline" the other night.

The interviewer asked him, "Would you join the military today?"

Murtha replied, "No."

The question: "I think you're saying that the average guy out there who's considering recruitment is justified in saying I don't want to serve?"

Murtha: "Well, exactly right."

He said that because of what's going on in Iraq, because of the war in Iraq he wouldn't join the military today which raises this question for you, would you join -- volunteer -- for the military today as you did during the Vietnam war?

KERRY: Absolutely and proudly I would do that, but I would hope, obviously, that I wouldn't have to deal with a policy in Iraq that is not getting the kind of guidance and direction that it ought to have.

You know, when I joined back in 1965, and went into the service in '66, many of us had questions at the time and didn't agree with everything but I felt that it was important to serve my country. I think the military today -- and I've said this to people here -- is really the most well-trained and capable military that we've perhaps ever, ever had.

And our young soldiers are engaging in activities way beyond their training in many ways. They're being asked up and the down the ranks to be diplomats, to be humanitarians, to provide statesman-like decisions at times, to resolve conflicts. And they're doing just an amazing job of it.

For a young person it's an exciting time to be in the military, but, again, I say this. I made it very clear. I think we can be withdrawing and reducing our numbers in Iraq.

I think we can be doing a better job of standing up the Iraqi military. I think there is, above all, a political mission here that if it is accomplished, will change the entire atmosphere within which young people are now making that kind of a choice.

BLITZER: So your bottom line -- we're almost out of time, Senator. Your bottom line right now is to get the job done, don't set a timetable for withdrawal, but just work with the Iraqis, and see if you can stabilize the situation.

KERRY: I've made it very clear in a number of statements that I've made and a speech I gave at Georgetown about -- I don't know -- a couple of months ago, that I believe we can be drawing down the numbers of troops that we have here now. They are greater in number, as General Casey indicated in his own comments -- that the large number of troops is contributing to the sense of occupation, and it is in fact delaying the willingness of Iraqis to stand up.

I think it is critical to make it clear that this is the year of decision, and if we do what is necessary politically and we do what's necessary economically and diplomatically, I am convinced that a huge number of our troops can return over the course of this year.

Now, President Talabani said the exact same thing to me. He believes that if they move forward in the way that he hopes to, that will be possible. So I think that these next days are the critical decision days for Iraq, but I am convinced that slowly and appropriately, on a results-oriented basis, drawing down our numbers of troops is the way that we are going to push Iraqis to assume the responsibilities.

They are increasingly doing it. And let me make it clear, there already is a redeployment of forces taking place here in Iraq, a withdrawing from some of the major urban centers, already a pushing of greater responsibility. And I think we need to continue down that road. The main thing: no number of troops is going to deal with what we have to deal with. It is a political solution that is needed, and it is critical to get that in the next days.

BLITZER: Have a safe journey home, Senator. Thanks, once again, for joining us.

KERRY: Thank you, sir.

(END VIDEOTAPE)

BLITZER: And still to come here in THE SITUATION ROOM, we'll get the perspective from the White House on Iraq as well and on a so- called truce with Osama bin Laden. I'll speak live with the president's deputy national security adviser. That's coming up here in THE SITUATION ROOM.

And the U.S. government wants to know what porn sites you might be Googling, and it's ordering Google to tell them. We'll tell you what Google plans to do. Your in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's go right to New York. Jack Cafferty is standing by with "The Cafferty File." Jack?

CAFFERTY: Thank you, Wolf.

The last time we got a tape from Osama bin Laden was right before the 2004 presidential election. Now here we are, four days away from hearings starting in Washington into the wire tapping of America's telephones without bothering to get a court order or a warrant. And up pops another tape from Osama bin Laden. Coincidence? Who knows.

The question this hour is, how important is the new Osama bin Laden tape? Rex in Toronto writes: "Sounds to me like he's got an attack in the can and is only making an offer of a truce to placate fellow Muslims who criticize him for not giving fair warning to Americans before the 9/11 attacks. I'd say this tape is definitely a precursor to another attack on American soil"

Jon in Westchester writes: "Osama's new tape is extremely important. Bush is desperate to justify illegal spying. You can't suspend the Constitution without screaming, "terrorist threat!" Besides the Republicans need a major distraction from the Abramoff mess. Bush couldn't stay in office without bin Laden."

John in Lexington, South Carolina, "It's more important to this country than any other issue because it proves that President Bush is losing the war on terror. Going on five years later and our children will worry about Osama tonight. It makes me sick."

Peter in Barnstable, Massachusetts: "Seems we're playing into the hands of bin Laden, by making the tape the news item of the day. I believe exposure like we give him is exactly what this maniac wants. And that it would frost him more if the only press he got was a brief mention of the tape on the last page of the local paper in Squeedunk, Iowa."

Mike writes: "I don't think the new tape is important at all. Osama is trying to put something out to make himself still look important. He's not really the Al Qaeda leader anymore. He is a lot like the Queen of England, just a figurehead.

They actually look a little alike, too.

Dianne in Tampa, Florida, "It seems suspicious. Every time the Republicans get into trouble bin Laden sends a tape. Is it possible bin Laden is working out of the White House?"

BLITZER: Dianne, in Tampa, Florida. Thank you very much for that, Jack. We'll get back to you very, very soon. Zain Verjee is joining us from the CNN Global Headquarters in Atlanta with a closer look at some other stories making news.

Hi, Zain.

VERJEE: Hi, Wolf.

A spokeswoman for former President Gerald Ford says he's responding to treatment and showing improvement daily. The 92-year- old Ford was hospitalized for pneumonia at California's Eisenhower Medical Center on Saturday. His spokeswoman says that he's well enough down to sit in a chair and read a newspaper.

The independent counsel who investigated former Housing Secretary Henry Cisneros for possible tax violations, has issued a stinging final report. David Barrett says the Clinton administration hampered his work on the lengthy probe. He says powerful Clinton officials blunted any effort from a full examination of charges against Cisneros, who eventually pleaded guilty to a misdemeanor. President Clinton later pardoned him.

Democrats on the Senate Judiciary Committee are apparently falling in line for next Tuesday's vote on Judge Samuel Alito's Supreme Court nomination. Ranking Judiciary Democrat Senator Patrick Leahy announced today that he will not vote in favor of Alito. Committee members Richard Durbin of Illinois and Ted Kennedy of Massachusetts have also indicated they will vote against Alito's confirmation -- Wolf.

BLITZER: Zain, thanks very much.

Justice Department lawyers are demanding the search engine Google hand over more than a million web pages. The government is arguing it needs the information to help craft a law to protect children from online pornography. But Google is refusing to comply. Our Internet reporter Abbi Tatton is standing by with more -- Jacki.

JACKI SCHECHNER, INTERNET REPORTER: It's actually me, Jacki.

BLITZER: Jacki Schechner, I'm sorry.

SCHECHNER: That's OK. That's all right, Wolf.

Basically, never before has the Department of Justice ever asked for so much information. When it requests information on a search it is usually a person or a person and particular searches. Here they want to know all the web sites visited over a particular week. And they want to know all the search strings that got you there.

Take a look, something like this. If you search for something on Google, like breast cancer, they kind of want to know what are the chances your actually going to get sites that turn up information about breast cancer and not something that's actually accidentally turn up something that's pornography. They're looking to protect kids in this. Here's the general idea. Now, the attorney general says that Google's competitors have complied and there is no reason that Google shouldn't as well. The idea is to provide this thing, called the Child Online Protection Act. And this was struck down in 2004 as being unconstitutional and a violation of First Amendment rights, that it was too broad, that it would exclude too many things, that it would catch adults and that it was really just not a freedom thing, that it should be.

So the idea from Google is this: They say they are not a party to this lawsuit and their demand for information overreaches. "We had lengthy discussions with them to try to resolve this -- talking about the DOJ -- "but we're not able to and we intend to resist their motion vigorously."

So that's the word from Google, Wolf. They are not going to give over this information.

BLITZER: Jacki, thanks very much. Jacki Schechner reporting.

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