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THE SITUATION ROOM

Interview with Jimmy Carter; Uproar Over U.S. Ports Deal; Cheney's Low Job Approval Rating; Randy Cunningham Could Face Serious Prison Time

Aired February 20, 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, guys. To our viewers, you're now in THE SITUATION ROOM, where new pictures and information from around the world are arriving all the time.
Happening now, ports in the storm outrage is growing over an Arab firm's deal to manage six major ports here in the United States. It's 4:00 p.m. here in Washington. We'll have live reports on security fears and whether they're justified.

President Bush is on the road and trying to get back on message. But can he succeed with port security questions among other issues in the spotlight? Is the Cheney hunting accident still a P.R. problem for the White House? This hour, the president's travels and travails.

And should the United States and Israel give Hamas a chance? As the Islamic militant group moves closer to forming a new Palestinian government, I'll speak at length with the pioneer in the Middle East peace process, the former president, Jimmy Carter. That exclusive interview coming up this hour. I'm Wolf Blitzer, you're in THE SITUATION ROOM.

First this hour, port security on the line and the Bush administration under fire. More questions today about the deal to give a company based in the United Arab Emirates management of six major ports here in the United States. They are in New York, New Jersey, Philadelphia, Baltimore, Miami, and New Orleans. The Bush administration is defending the deal, saying it was thoroughly vetted and that the UAE is a key ally in the war on terror. But some members of Congress and other Americans fear homeland security will be compromised. Our White House correspondent Dana Bash is standing by. But let's go to Capitol Hill, Ed Henry is up first with the latest. Ed?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Wolf, that's right. That security fear coming from Republicans as well as Democrats who charged this company, Dubai Ports World, cannot be trusted because it's a state-owned company in the United Arab Emirates, which is an operational and financial base for some of the 9/11 hijackers.

(BEGIN VIDEOTAPE)

HENRY (voice-over): More political pressure on President Bush to block the port deal from the Republican chairman of the House Homeland Security Panel. REP. PETER KING (R-NY), HOMELAND SECURITY CHAIRMAN: I would urge the president to freeze this contract, to hold this contract until a full and thorough and complete investigation can be conducted.

HENRY: Congressman Peter King, who has been briefed on the transaction, flatly reject claims by Homeland Security Secretary Michael Chertoff.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: We were building conditions or requirements that for extra security that have to be met in order to make sure that there isn't a compromise to national security.

KING: I've been told what those safeguards are. And quite frankly, those safeguards would only help if we could have absolute faith in the company itself. And we can't, because there was never a thorough investigation done of Dubai Ports.

HENRY: Democrats like Robert Menendez have pounced on Chertoff, already under fire for his response to Hurricane Katrina.

SEN. ROBERT MENENDEZ (D), NEW JERSEY: You can't just simply tell us, trust us. We trusted the government in its response to Hurricane Katrina and the people of the Gulf region were left out there, largely on their own.

HENRY: Menendez has proposed a new law prohibiting the sale of operations at U.S. ports to companies owned by foreign governments, noting 95 percent of the cargo reaching U.S. ports are not inspected.

MENENDEZ: We already feel that this is one of the major gaps in our security blanket. So to give the operational ability of the ports of the nation, the major ports of the nation, to a foreign government -- in this case the government of Dubai, is, I think, not good policy.

HENRY: Republican Tom Ridge, Chertoff's predecessor told CNN there needs to be more transparency about the deal, but said he has confidence in his former Bush colleagues.

TOM RIDGE, FORMER HOMELAND SECURITY SECRETARY: I do think that at some point in time you have to say to yourself, would Secretary Rumsfeld and Snow and Chertoff and Rice compromise America's security? I don't think so.

(END VIDEOTAPE)

HENRY: Maritime security expert Kim Petersen told CNN this notion that Dubai is going to control or set standards for U.S. ports is a canard based on anti-Arab hysteria. Petersen notes Dubai Ports World will still have to follow all maritime laws enforced right here by the U.S. Coast Guard -- Wolf.

BLITZER: Ed Henry on Capitol Hill -- Ed, thank you very much. Now to the White House and its handling of this new fire storm. Our White House correspondent Dana Bash is joining us now live from there. Dana, how does the process of approving this kind of sensitive deal move forward?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Wolf, now's a chance to show you how the sausage is made, as we say here in Washington. But this is important to explain in the story, that process that you talk about.

First of all there's a panel that is called the Committee on Foreign Investment in the United States. It is made up of about 12 agencies including the Treasury Department, which essentially chairs it, State, Defense, Commerce and others. And their mission is really to determine one thing, whether the transaction threatens U.S. national security.

Now they have a 30 day review process. In this case that was over last week. It can go an extra 45 days. But in this case the committee determined that wasn't necessary. That is part of the controversy here.

Now what is the White House involvement? It only goes to the president if there's a recommendation to block the transaction. That obviously didn't happen here because the committee approved it. As a matter of fact, I'm told that President Bush didn't even know about this until members of Congress started publicly expressing their dismay about it, then Mr. Bush asked his staff whether or not the process was followed and he was told yes.

BLITZER: What about, Dana, the charge -- I heard Lindsey Graham, Senator Lindsey Graham, Republican of South Carolina, make yesterday that despite the merits, irrespective of the merits, politically the administration and the White House is tone deaf in letting this go forward.

BASH: Well despite the fact, as you said, it's not just Democrats making this charge, it is Republicans. The White House, they are pushing back on this. Officials are even suggesting it's a dangerous path that the critics are going on when singling out countries from the Middle East, saying that perhaps they can't do jobs like this.

Now I talked to Dan Bartlett, the counsel to the president and he said this. He said, "The process was done by the book. If you start deciding these issues in a guilt-by-association method, you will have a situation which has deep and harmful ramifications to the economic interests of this country."

Now Wolf, Congressman Peter King, who you saw in Ed's piece, who is maybe the lead Republican critic of this -- he's saying that one of the big problems is that you have mid-level or undersecretaries who are on this committee deciding this and that the White House simply gets into this process too late.

Well today the White House is saying that that's actually a political plus. Dan Bartlett also told us, quote, "it should be a comforting fact that politics were not interjected into the decisions made by counterterrorism specialists. That is who you want to make these decisions." Now officials here are noting what you heard Ed talk about, which is the bottom line is they say regardless of who gets this contract, who is in charge in terms of a commercial company, it is always DHS, the Department of Homeland Security that is in charge of security. One official saying that the whole idea that port security is being outsourced is absurd on its face.

BLITZER: Dana Bash, thanks very much. And as we heard, the homeland security secretary, Michael Chertoff, is now front and center in trying to defend this port deal. I asked him about the controversy on CNN's "LATE EDITION" yesterday.

(BEGIN VIDEO CLIP)

CHERTOFF: The discussions are classified. I can't get into the specifics here. But what I can tell you in general is this: We examine the transaction; we look at what the nature of the threat is. If necessary, we build in conditions or requirements that, for extra security, would have to be met in order to make sure that there isn't a compromise to national security.

As far as my agency is concerned, port security really rests principally with the Coast Guard and Customs and Border Protection. And you can be sure that any transaction that goes forward is going to be carefully reviewed, and is also going to be carefully subject to the expertise of Coast Guard and Customs and Border Protection.

BLITZER: So you're on board?

CHERTOFF: Well, this -- again, I don't want to talk about classified process, but the general process that has to work before this occurs requires a very thorough review, and, where appropriate, necessary conditions or safeguards have to be put into place.

BLITZER: So is it a done deal? Has it cleared?

CHERTOFF: Since I said it's classified, Wolf, I'm not going to go beyond my general description of the process. And certainly, Congress is welcome to look at this and can get classified briefings. You know, we have to balance the paramount urgency of security against the fact that we still want to have a robust global trading system.

(END VIDEO CLIP)

BLITZER: Chertoff also says this kind of issue comes up periodically when a foreign-owned company wants to take over an asset that has a national security significance. The British-based firm that now manages those six U.S. ports is defending its sale to Dubai Ports World.

Peninsular and Oriental Steam Navigation Company known as P&O, issued this statement. Let me read it to you. "P&O is itself a foreign-owned terminal operator that has long worked with U.S. government officials in charge of security at the ports to meet all U.S. government standards, as do other foreign companies that currently operate ports in the United States. We are confident that the D.P. World purchase will ensure that our operations will continue to meet all relevant standards in the U.S. through ongoing collaborations between DPW, P&O, and port security officials throughout the world, including the United Kingdom and Australia." That statement just coming in.

For more now on the foreign companies operating these U.S. ports, let's turn to our Internet reporter Jacki Schechner. As she has been doing some digging online. Jacki?

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, ownership of foreign -- ports, U.S. ports by foreign companies, is nothing new in the United States. It goes back 20 years, actually, and P&O Ports is a U.K.-based company. They currently operate these ports in the United States, as you can see here. They have 100 operations in 19 countries worldwide. Some of the countries they operate in Russia, China, South America, for example. Some of the places that they are, Buenos Aires.

Now, they are going to be handing this over to Dubai Ports World that we were talking about. They operate worldwide as well. They don't have any assets in North America right now. But they are going to be picking up those ports of P&O World. You can see here they operate in Germany and Romania. They operate in Dominican Republic, Venezuela, as far away as Australia.

Now P&O is currently under homeland security regulations, in terms of security. And DP World is going to be under those same regulations. So just a transfer in terms of foreign-owned companies. But still, Wolf, it's the same thing.

BLITZER: Thanks, Jacki, very much.

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

Let's go up to Jack Cafferty in New York. He's standing by with "The Cafferty File."

Hi Jack.

JACK CAFFERTY, CNN CORRESPONDENT: You know, we first raised the question about the sale of these ports to the foreign companies last Friday on "The Cafferty File," on this program. And we asked the viewers if they thought it was a good idea.

And I got hundreds and hundreds of letters from people. And nobody, not a single soul, who bothered to write in said, yes, that's good. Let's sell six of our ports to some company that is controlled out of the United Arab Emirates.

The stupidity involved with this kind of thinking is mind boggling. And we are going to revisit this on "The Cafferty File" during the seven o'clock hour.

In other news, if it's Monday, President Bush must be flying somewhere to make a speech. And he is. Actually the president is in Michigan right now. It is part of a two-day swing promoting one of the subjects that he stressed in his State of the Union address.

In fact, you are looking at a live picture inside the solar panel manufacturing plant where the president is going on a tour momentarily.

Earlier today in Wisconsin, the president repeated his call for America to cut its dependence on foreign oil.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Some of the nations we rely on for oil have unstable governments or fundamental differences with the United States. These countries know we need their oil and that reduces influence. It creates a national security issue when we are held hostage for energy by foreign nations that may not like us.

(END VIDEO CLIP)

CAFFERTY: President Bush is calling for advances in solar, wind and nuclear energy. So the question is this, do you suppose President Bush is really serious about getting this country off Middle East oil? E-mail your thoughts to caffertyfile@CNN.com--Wolf.

BLITZER: Thanks Jack, very much.

Jack Cafferty with "The Cafferty File."

Coming up, he monitored the Palestinian elections, and now he's closely following the fall-out from the Hamas victory. I'll speak at length and live with the former President Jimmy Carter about his new warning against punishing the Palestinians.

Also ahead, has Dick Cheney put his hunting accident behind him? There are new poll numbers out. And we'll get a handle on the vice president's post-shooting standing with the American public.

Plus, the U.S. Marines to the rescue. We'll get an update on the situation in the Philippines three days after those devastating mudslides. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Good news for all of us. Zain Verjee is back. She's back at the CNN global headquarters in Atlanta with a closer look at other stories making news.

After two weeks in New York getting up at some God-knows hour filling in on "American Morning," Zain, good to have you back.

ZAIN VERJEE, CNN CORRESPONDENT: It's good to be back, Wolf.

They found bodies, but not yet a single survivor in that devastating mudslide in the southern Philippines three days ago. International rescue teams, including some 200 U.S. Marines, are searching for signs of life. Today crews pulled five bodies from under a school buried under the mud. The village's population was just over 1,800. So far about 1,000 of them are still missing.

Another rescue effort under way. This one in Mexico, southwest of the U.S. border Eagle Pass in Texas. Sixty-five Mexican coal miners are trapped about a mile and a half underground after a gas explosion yesterday. Searchers are using picks, shovels, even their bare hands. But the oxygen tanks the miners were wearing had only six hours worth of air and many of their loved ones are worried.

And in Iraq, 12 people are dead after a suicide bomber blew up a bus in Baghdad. It's just one of a few scenes of violence today that left 17 Iraqis dead.

Meanwhile, a U.S. soldier on patrol in Karbala was killed after his vehicle was hit by a roadside bomb. The current U.S. death toll is now 2,276 -- Wolf.

BLITZER: Zain, thanks very much.

Vice President Dick Cheney is in Wyoming keeping a low profile on this President's Day. That's no doubt just the way he wants it after days and days of heat over his hunting accident. Did the shooting though leave the vice president with any political scars?

Let's bring in our senior political analyst Bill Schneider -- Bill.

BILL SCHNEIDER, SENIOR POLITICAL ANALYST: Wolf, after a week of controversy, how does Vice President Cheney come out? Well, "Time Magazine" has just released a new poll.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice over): It's been a week of damage control for Vice President Cheney. So, what's the damage? Dick Cheney's job approval rating is down to 29 percent. That's down from 51 percent just before the 2004 election.

Cheney's disapproval numbers have not changed much. More and more people say they don't know what kind of job Cheney is doing. The vice president is more and more of a mystery to the American public.

Fifty-eight percent say Cheney is too secretive. The White House Press Corps seemed to suspect a cover-up. A former Bush press secretary says the vice president should have gotten the news out faster.

ARI FLEISCHER, FMR. W.H. PRESS SECRETARY: It could have, should have, gone away much quicker. And so I do differ with the vice president about how it was handled.

SCHNEIDER: Does the public suspect Cheney was trying to hide something? No. But nearly two-thirds say he should have immediately taken public responsibility instead of waiting four days. FLEISCHER: People now say with the Internet and with the cables and the competitive nature of the media, two hours is a cover-up.

SCHNEIDER: The incident was damaging, but not discrediting.

UNIDENTIFIED FEMALE: Is it proper for the vice president to offer his resignation or has he offered his resignation?

SCOTT MCCLELLAN, WHITE HOUSE SPOKESMAN: That's an absurd question.

SCHNEIDER: The public agrees. Only 10 percent think the vice president ought to resign over his handling of the incident.

(END VIDEOTAPE)

SCHNEIDER: But the damage is there. "The Time" poll asked Americans, quote, "do you think Vice President Cheney has the country's best interest at heart?" The somewhat startling answer, 46 percent, yes, and 45 percent, no.

The public is suspicious of secretive public figures. Could it also be that he's an oil man--Wolf.

BLITZER: Bill Schneider thanks very much.

Coming up, a major political battle in the Middle East. Jimmy Carter was on hand for the Palestinian elections, and now he says, don't push Hamas, don't push the Palestinians for a major victory that the polls. The former president is my live guest. That's coming up next.

Plus, much more on our top story. An Arab company takes over port security at six top American harbors. I'll ask the former president if port security is now in jeopardy. Jimmy Carter on this President's Day, standing by. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. New moves forward today for Hamas as the Islamic militant group prepares to take the helm of the Palestinian government. Hamas announced its choice for prime minister. That would be Ismail Haniya. Palestinian Authority president Mahmoud Abbas is expected to present Haniya with an official letter of appointment tomorrow. I'll speak with former president Jimmy Carter about the Hamas takeover. The ramification for the United States shortly. But first CNN's John Vause reports from Jerusalem with more. John?

JOHN VAUSE, CNN CORRESPONDENT: Wolf, the president of the Palestinian Authority has met with the man who will most likely be his next prime minister. Hamas Gaza leader Ismail Haniya. Abbas has asked Haniya to choose a cabinet and form the next government.

This comes after Hamas won a landslide victory in parliamentary elections last month which was supervised by former president Jimmy Carter and a team of observers. President Carter personally certified that the election results were both free and fair and in his words, by the book. The new cabinet must be formed within the next five weeks. And when it happens, the Islamic militants will face a choice. Disarm and recognize Israel's right to exist, or face the prospect of losing hundreds of millions of dollars in foreign aid from both the United States and The European Union.

Hamas for now is saying no deal. In the past, branding U.S. aid satanic money. So Hamas leaders have been touring the Islamic world, asking for financial support today meeting with the Iranian president in Teheran.

Already Israel has put a freeze on hundreds of millions of dollars in taxes collected by Israel on behalf of the Palestinians. As far as Israel is concerned, the moment lawmakers were sworn into the parliament over the weekend, Hamas effectively took over the Palestinian authority. Wolf?

BLITZER: John Vause reporting. John, thank you very much.

Former President Jimmy Carter is warning that the United States and Israel should not punish the Palestinian people for electing Hamas. The former president makes the appeal in an important article he wrote today in "The Washington Post."

Former President Jimmy Carter is joining us now from Plains, Georgia, with this exclusive interview.

Mr. President, thanks for joining us, especially on this President's Day.

JIMMY CARTER, FMR. PRESIDENT OF THE UNITED STATES: Thank you, Wolf, very much.

BLITZER: The article that you wrote suggests that the United States has to find a way to make sure that money continues to go to the Palestinians. But how do you do that if the government of the Palestinians is controlled by a group that the U.S. government, the State Department, identifies as a terrorist organization?

CARTER: Well, there are several ways to do it. One -- the first thing I'd like to say is that the money that the Israelis are withholding is actually Palestinian money. It doesn't belong to the Israelis, it belongs to the Palestinians.

And this money was destined to be used by the government, whoever is in control of it, for teacher's salaries, for health care, for welfare workers and so forth, and also to pay policemen. And to withhold the Palestinian's money, I think, is going to be a very damaging thing as far as the entire population of Palestine is concerned. They're going to resent it very...

BLITZER: These aren't taxes...

CARTER: ... deeply.

BLITZER: Excuse me for interrupting. Just to explain to our viewers, these are taxes that the Israelis have collected on the Palestinians, which since the Oslo Accords, have gone back to the Palestinian Authority.

CARTER: Well, the Israelis have withheld it briefly on occasion just to just punish the Palestinians for something they didn't like. But these are customs, funds and tax moneys that are collected by the Israelis, but they legally belong to the Palestinians. And to withhold it is just withholding Palestinian money. And as I said, this money would be used of necessity to pay the people who are employed by the government, no matter who is there.

President Abbas explained this to me very thoroughly two days after the election, when he realized that Hamas would be taking over some reigns of the government.

Secondly, you know, the United States could very well make it clear, along with Israel and others, that although we are not going to channel U.S. money through the Hamas government, we will channel I would hope the same amount of money for humanitarian purposes through the United Nations agencies. Over half the people that live in Gaza, for instance, are refugees. So the refugee fund, UNICEF, education funds and others can be given to the Palestinian people.

My concern is that in order to try, on behalf of the United States and Israel, to punish Hamas, we'll actually going to be punishing the Palestinian people who are already living in deprivation. And it's going to turn the Palestinian people even more against the West and against Israel, against us and make Hamas seem to be, you know, their only friend. So this will strengthen Hamas and weaken the Palestinian people. I think it's a counterproductive ploy to try to punish Hamas.

BLITZER: Here is the U.S. law of the land, which we looked up, in terms of direct and even indirect funding of a group the U.S. regards as a terrorist organization.

The law currently states this, and I'll read it to you, Mr. President: "It is unlawful for a person in the United States or a subject to the jurisdiction of the United States to knowingly provide 'material support or resources' to a designated foreign terrorist organization," an FTO. And Hamas is listed as an FTO, a foreign terrorist organization.

So how do you work around the law in the United States right now, which is that the U.S. tax payer dollars cannot go to Hamas?

CARTER: Well that's what I think I just said. That we don't have to give it to the Hamas government or even the Palestinian Authority. What we have to do, if we want to, is to give it to the United Nations, with it designated for health, education, the relief of refugees and other matters of that kind. So we can bypass the Hamas government completely if the United States decides to give humanitarian aid.

BLITZER: So let me just be precise...

CARTER: I don't have any doubt...

BLITZER: Let me be precise on this. What you're recommending is that U.S. tax payer money go to some United Nations organization or a non-governmental organization and they could then give it directly to Palestinians, but not through the Palestinian Authority?

CARTER: Exactly, yes. Exactly. That's what I've been recommending. And I think that's a very feasible thing and a reasonable thing to do. Otherwise, we're going to have -- indirectly or directly, there are about a million people in the West Bank and Gaza who are dependent on salaries from the government. And these include schoolteachers and so forth, as I've described.

And I think that the Palestinian Authority, as a government, could then go to other sources, to the rich Arab countries, Egypt and others, to make up for what the United States withholds. But I don't think we ought to punish the Palestinian people.

BLITZER: Here is what the vice president, Dick Cheney, said the other day on this issue. He said, "Their" -- referring to Hamas -- "Their objective, part of their platform, is the destruction of Israel. They are a terrorist organization. They need to give up their objective of the destruction of Israel. They need to foreswear violence, and I think close down their military wing before anybody is going to treat them seriously as a legitimate interlocutor."

Basically, the European Union, the United Nations, the so-called quartet, they have a similar stance right now as the United States does. How do you get around this, though, in terms of -- this is the new Palestinian authority. There will be a prime minister, Mr. Haniyeh, who is a top member of Hamas. How does the United States or these European countries deal with the Palestinians now?

CARTER: Well, first of all, you have to remember that Mahmoud Abbas, who they call Abu Mazen, is still the president. He is the one that represents the Palestinian Liberation Organization. That's the only organization that has ever negotiated peace agreements or tentative peace agreements with Israelis.

And he's there. He's not associated with the Palestinian government under Hamas. And if the Israelis want to have direct peace talks still of any kind, exploratory or seek a definitive answer, which would be unlikely, then Abbas is available for that purpose without involving Hamas at all. That's one thing.

I don't have any doubt that Hamas has, in the past and maybe even now, still pledges itself to resort to violence. When I was there recently talking to the prime minister of Israel and to his aides, they told me that Hamas was a very disciplined group.

Since August of 2004, Hamas has participated in a cease fire, which I think in Arab is called a hadna (ph). And they have not violated this cease fire all. There have been no terrorist activities attributed to Hamas for the last year and a half, 18 months.

When I met with one of the Hamas leaders after the election, whom I had also met with ten years ago and hadn't seen him since, he told me what the Hamas people want is a peaceful unity government. Whether he's telling the truth, I have no way of knowing.

But my belief is that Hamas now wants a stable, domestically oriented policies in their government to deal with the problems of the Palestinian people. And in my belief is if they're treated fairly, they might very well be less likely to resort to violence than if a Palestinian people are mistreated.

BLITZER: I interviewed...

CARTER: By the way, let me add that eventually, Wolf, they are going to have to acknowledge Israel's right to exist and resolve to their problems with Israel in a peaceful way. There's no doubt about that. They cannot escape that international mandate which they have to fulfill.

BLITZER: So far they've indicated they're going to resist that. In fact, I spoke with Mahmoud al-Zahar, one of the co-founders of Hamas, a few weeks ago right after the election on January 29th. And I asked him what kind of Palestinian state he would like to see emerge, whether there should be a secular state. And he was very firm. Listen to his response.

(BEGIN VIDEO CLIP)

MAHMOUD AL-ZAHAR, HAMAS CO-FOUNDER: Do you think the secular system is serving any nation? Secular system allows homosexuality, allows corruption, allows the spread of -- the loss of natural immunity like AIDS. We are here living under Islamic control. Nothing will change. Islam is our constitution.

(END VIDEO CLIP)

BLITZER: He's very firm. "Islam is our constitution." He wants an Islamic state in Palestine, beginning with the West Bank and Gaza, but then, of course, including all of Israel. Is there any reason that you have to doubt that's what he wants?

CARTER: I don't have any doubt that's what he wants. I do doubt that that's what the Palestinian people want. It was very interesting in the election, Wolf. There is a small state in the West Bank north of Jerusalem -- I've forgotten the name right now -- where the Hamas had tried to discourage dancing and singing as part of their Islamic restrictions.

And Hamas actually did very poorly in that area, although they did much better in the rest of the country. So I know the Palestinian people very well. They're not going to permit the imposition of shirreal (ph) law on themselves.

And of course, the dream of some ridiculous Hamas leaders and other countries to take over Israel is obviously fallacious and incomprehensible. So I think what's going to happen now is that the more pragmatic leaders of Hamas, including Haniyeh, who is the new prime minister, I think will prevail and the Palestinian people will prevail.

There's no doubt that they expressed their will clearly in the election. And I don't have any desire to speak for Hamas, which I think has been horrible in the past in terrorist activities. But I think we ought to give a chance to the Palestinian people to establish a kind of government that can be constructive and peaceful if the Palestinian people's rights are honored.

BLITZER: Mr. President, I'm going to ask you, if you don't mind, to stand by. I want to take a quick commercial break. There are so many more questions I want to go through with you on this President's Day. More of my interview with former President Jimmy Carter coming up.

Among other things, I'll also ask him what the United States can or should be doing to try to prevent Iran from building a nuclear weapon. Much more of this interview coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We want to get back to my exclusive interview now with the former President Jimmy carter joining us from Plains, Georgia.

Mr. President, do you believe that Iran is secretly trying to build a nuclear bomb?

CARTER: I don't think they are yet, but I believe that Iran has that in mind, yes. I think that's their intention. Wolf, can I make one other comment about the Palestinian issue?

BLITZER: Please.

CARTER: Well, I've been involved with the Palestinians and with Israel for 30 years. And I've seen dramatic and unanticipated changes take place in that region. When I became president, every Arab nation, led by Egypt, was determined to destroy Israel completely, and to do this with the strongest military violence that they could possibly muster.

When I took the Begin and Sadat to Camp David, Egypt changed its mind. And they have a peace treaty that's now been effective for more than 27 years, not a word of which has been violated. Later, when the PLO was the preeminent spokes-organization for the Palestinians, it was determined and publicly committed to destroy Israel and to resort to violence.

When Arafat was given a chance to negotiate with Rabin and with Perez under the auspices of the Norwegians, as you know, a peace agreement was worked out, of course, the Oslo agreement. So the PLO changed. And now Mahmoud Abbas, who is admired by the West, is the head of the PLO.

So it's not an impossibility that the fair treatment of the Palestinians, their prospect of peace and justice, along with Israel's prospect for peace, I think, can lead to improvements in the situation and perhaps to another peace agreement. That's my hope.

But I think it's a mistake to give up and to turn the people of Palestine against the West, against Israel, and make violence much more prevalent. So in the past, we've had good history, maybe in the future.

BLITZER: So your basic point is that you're still leaving out the hope that Hamas will change, will accept the conditions, renounce terrorism, accept Israel's right to exist. Is that right?

CARTER: That's my hope. I can't say that's my expectation, yet. But it's certainly a possibility. I've seen it happen in the past.

BLITZER: All right. Let's get to Iran, another hot issue right now. What should the U.S. and its allies be doing right now to try to stop Iran from building a bomb?

CARTER: Well obviously, Iran doesn't have a bomb yet. And they have not yet started processing nuclear-spent fuel to any substantial degree. Although that's what their intentions are, in my opinion. And I don't think there's much doubt that eventually, Iran would like to have nuclear weapons, which would be a devastating threat to peace in the Middle East and perhaps in a much broader area.

So I think the United States, working with Europeans and working with Russia, of course, ought to make sure we do everything we can with a carrot and a stick. I would say that the stick ought to be the threat of definitive economic boycotts and pressure on Iran, even though we have to lose the source of Iranian oil for the world's markets.

And second, to encourage Russia to induce the Iranians -- and there's some talks still going on about that -- to let Russia be the one to reprocess that spent nuclear fuel. That would be my own advice, although I have to say quickly that I don't have any secret briefings or anything about the latest developments.

BLITZER: We don't have a lot of time, but I want to go through a couple of issues with you before I let you go, Mr. President. The Guantanamo Bay prison. The U.N. is now suggesting, a report at the U.N., the U.S. should shut it down as quickly as possible. Do you agree?

CARTER: I've agreed with that since we first found out that torture and oppression was being perpetrated against the prisons at Guantanamo Bay. These are people that have been arrested, taken on the battlefield. I understand most of them in Afghanistan.

They've never been given a right to hear the charges against them. They've never had legal counsel. They have not been permitted to meet with their families. They have been held incommunicado. And all the evidence is that many of them have been psychologically and physically tortured.

So the best thing that the United States can do for our own reputation and for justice in the world and for the honoring of human rights is to shut down Guantanamo Bay prison, as was recommended by the United Nations.

BLITZER: Are you concerned at one of our top stories today about this Dubai-based company taking control of security at six major ports here in the United States?

CARTER: Well, I've been to Dubai, and I've seen the remarkable port facilities they have there, perhaps the best in the world. I'm not knocking the ones in the United States, of course. My presumption is, and my belief is, that the president and his secretary of state and the Defense Department and others have adequately cleared the Dubai government organization to manage these ports. I don't think there's any particular threat to our security.

Obviously, the Homeland Security would have to be involved directly with, and in a partnership with, the Dubai people as they clear folks to work in their ports, particularly in sensitive areas. So the overall threat to the United States and security, I don't think it exists. I'm sure the president's done a good job with his subordinates to make sure this is not a threat.

BLITZER: How do you think the vice president -- the White House did last week with the Cheney hunting accident?

CARTER: I think -- obviously now everybody in the White House, maybe not in the vice president's office, agrees that they would have been much better had the information about the hunting accident been revealed immediately. Because that's a main concern, I think. Hunting accidents happen all over the world.

I regret very much that this one did happen. But to conceal it for almost a full day, obviously -- and then, at first, to blame Mr. Whittington for the accident, I think were two mistakes that were made. And I'm sure almost everyone agrees that it could have been done better.

BLITZER: One final...

CARTER: I think it's time -- I think it's time to move on to other things.

BLITZER: I think you're probably right. One final reflective question on this President's Day. You know, you've written a lot of books since you've left office. You've studied your own presidency. You've studied other presidencies. You've looked at a lot of important issues. I wonder if you want to give us a preliminary assessment of this current president on this President's Day. How will he be rated by historians?

CARTER: Well, I think it's too early to say how Mr. Bush -- President Bush will be rated by historians. You know he's still has three years to serve, and a lot of good things can happen in his three years. We could have complete success in Iraq. We could have major moves toward environmental quality. We could have good harmony between the Democrats and Republicans in the Congress.

We could heal the blue and red state divide in the United States. We could reveal everything that goes on in the government that people need to know. So a lot of things can happen in the future that could very well change the rating of this president in historical time. So I'm willing to give the president every chance to build up a legacy that will make all Americans proud now and for a hundred years in the future.

BLITZER: On this president's day, let me thank you very much, Mr. President, for joining us.

CARTER: It's a pleasure, Wolf, to be with you.

BLITZER: Thank you very much. Jimmy Carter, former president of the United States, joining us from Plains, Georgia.

Coming up, more on port security and political strategy. With an Arab firm set to manage some U.S. ports, is the Bush administration supposedly too, quote, "tone deaf" to the fallout? James Carville and J.C. Watts, they'll be in our strategy session in the next hour.

And we'll also have an update on the latest breeding ground for bird flu. What's been doing to try to stop the deadly disease in its tracks? You're in THE SITUATION ROOM.

BLITZER: Let's check back with Zain once again at the CNN global headquarters in Atlanta with a closer look at other stories making news -- Zain?

VERJEE: Wolf, efforts are under way in western India to kill some 700,000 birds after three confirmed cases of bird flu in the region. Health officials are going door to door looking for possible human victims. Meanwhile, in France, poultry sales are down by as much as 50 percent after that country's first confirmed case of bird flu. The virus was found in a wild duck near Lyon.

The Birmingham, Alabama church firebombed by white supremacists back in 1963 is now a national landmark. Four young African American girls were killed in the attack on 16th Street Baptist church. It was one of the most notorious incidents of the Civil Rights Movement. The dedication comes amid a series of unsolved arson attacks on churches in rural Alabama -- Wolf?

BLITZER: Thanks, Zain, very much.

Up next, 64-year-old ex-congressman Randy "Duke" Cunningham preparing to pay a price for accepting bribes. And prosecutors are making their case. We'll tell you how much time he may get.

And the president sounds energetic about easing America's oil dependency. Jack Cafferty wants to know if you think Mr. Bush is serious. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Disgraced former congressman Randy "Duke" Cunningham could be facing serious prison time for accepting nearly $2.5 million in defense contract bribes. In the penalty phase of the trial, prosecutors are seeking a ten-year sentence, and the details are now online. Let's go to our Internet reporter, Abbi Tatton -- Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, yachts, cars, houses, those are all bribes detailed by prosecutors in this 35-page memo here. Also in it, look at this. This is congressional stationary here from Randy "Duke" Cunningham which prosecutors call a bribe menu.

The left-hand column here, Cunningham's list of awards or contracts he'd be willing to give out, say prosecutors, and what he wanted in return. $16 million there. He wanted a boat, which is worth $140,000. That boat is also in the memo, as well as Cunningham with a Rolls Royce they say he also took as a bribe. Plus many, many antiques.

Now, lawyers for Cunningham have submitted their own pre- sentencing memo asking for a lighter term of sentence due to Cunningham's ill health -- Wolf?

BLITZER: Abbi, thank you very much.

Still to come, President Bush keeps saying the U.S. is addicted to oil. But is he serious about kicking the habit? Jack Cafferty is going through your e-mail.

Plus, port insecurity. A company controlled by the United Arab Emirates is taking over control of six of America's largest harbors. Is this a threat to U.S. security? In our 7:00 p.m. Eastern hour, we'll go live to Miami, one of those ports. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Let's go back to Jack in New York with "The Cafferty File" -- Jack?

CAFFERTY: Thanks, Wolf. The president was in Michigan and Wisconsin today, part of a two-day swing promoting energy independence, one of the subject he talked about in the State of the Union address. Our question is, do you think President Bush is really serious about getting this country off Middle East oil?

Francis in Newark, Ohio writes, "No. If he were, he'd be doing his share by keeping Air Force One and his big string of SUVs parked more often instead of taking a trip every day of the week to make a speech."

Monty in Denver writes, "Not a bit. Otherwise, he'd be funding programs like the Apollo Energy Program, giving incentives to car manufacturers to produce more hybrid vehicles, and building out more public transportation, not just more highways. It's more of the same from this guy. Puts out a nice sound byte for the base, but then falls short on delivery and funding."

J.H. in Moody, Texas: "I think the president is serious about getting away from foreign oil, but sadly, I don't think the general public is serious. We should make the technological effort to make us 100 percent self-sufficient in energy and replace oil as an energy requirement beyond what we can support ourselves. Once we do that, the Middle East is irrelevant, and they can sort out their own messes once and for all."

Ali writes, "Since part of the Bush plan that hardly anybody talks about anymore -- going to Iraq for their oil -- that's backfired, do you think he finally gets it?"

And Dan in Tennessee writes, "In a word, Jack, no. I don't think President Bush is serious about anything that would be good for the country and its people. I think he lies through his teeth about really everything, and unfortunately, too many Americans accept his words at face value." Harsh words.

BLITZER: Very harsh words indeed. We'll get back to you very soon, Jack. Thanks very much.

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