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CNN LATE EDITION WITH WOLF BLITZER

Interview With Mohammed Sharaf; Interview With Pervez Musharraf; Interview With Adnan Pachachi

Aired March 5, 2006 - 11:00   ET

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


WOLF BLITZER, HOST: It's 11 p.m. -- it's 8 p.m. here in Dubai, 11 a.m. back in Washington, 8 a.m. in Los Angeles, 7 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for this special "Late Edition" live from Dubai. We'll get to my interview with the CEO of Dubai Ports, an exclusive interview. We'll get to that in just a moment. First, though, let's get a quick check of what's in the news right now.
(NEWSBREAK)

BLITZER: Thanks very much, Fred, for that. The United Arab Emirates is a federation of seven independent states, including Dubai. It's been a longstanding ally of the United States in this part of the world. But there has been an uproar in recent weeks over a proposed deal that would allow Dubai Ports World to purchase a British company and run six major port operations in the United States.

Earlier today, I went to the headquarters of Dubai Ports World here in Dubai and spoke with the CEO, the chief executive officer, Mohammed Sharaf. We have this exclusive interview, an interview you will see only here on CNN.

(BEGIN VIDEOTAPE)

BLITZER: Mohammed Sharaf, thanks very much for joining us. Good to be here in Dubai. You realize now you're in the middle of a firestorm back in the United States. Our most recent CNN/USA Today/Gallup poll asked the American public if they support this deal. Sixty-six percent said they oppose it. Only 17 percent thought it was a good idea. Do you understand why people in the U.S. don't like this deal?

MOHAMMED SHARAF, DUBAI PORTS WORLD CEO: Well, Wolf, thank you very much for having me on your show here. We are an international terminal operator. We operate in five continents of the world. We are recognized as the best in the industry.

Obviously, the American people have an issue. We would like to know that and rectify if there are any security measures that we need to take and we have not taken it yet. But we are very confident that we have met and will meet all the requirements.

BLITZER: Well, let's talk about some of the criticisms that have been leveled, and I'm anxious to get your explanation. One of the criticisms that has been leveled is that security is not good. Duncan Hunter, the chairman of the house armed services committee, said, "Dubai can't be trusted. The people who will sell or allow a transshipment of anything to anyone, those people shouldn't be in charge of our ports."

SHARAF: Well, again, we are operating everywhere in the world, and transshipment is one of the core businesses that we handle, whether it is in Dubai or it's in Romania or it's in (inaudible) the Dominican Republic. And all the authorities are comfortable with the security measures that we take.

Plus, the security measures are not only the responsibility of the port operator. It is also the authorities, whether they are the custom authorities or the coast guard, whether it's in the U.S. or it's in the Middle East or it's in Africa or it's in Europe.

BLITZER: Now, how can you assure the American public that if this deal goes through the ports of Baltimore and Miami, New York, New Jersey, New Orleans -- these are some of the major ports in the United States -- that terrorists won't come in, infiltrate through you, DP World, and create havoc at these ports?

SHARAF: I would say number one, we are ISPS-approved terminal operator.

BLITZER: What does that mean?

SHARAF: That means International Standards for the Port Security. So we are approved by the international organization. We are approved by the U.S. authority to come into the U.S. I would say, look at our credentials in different ports around the world, whether it's in Korea, it's in China, it's in Europe.

We are dealing with each and every authority in each and every country. And we abide by countries' law and the international terminal operator security measures we take. What better way to have a terminal operator who export your goods from China to U.S.? We are in China. Goods are being exported from China to U.S.

Goods are being operated from Korea to U.S. And goods are being exported from Europe to U.S., and we are in all those facilities. So I would say that we meet all those requirements as far as the security is concerned.

BLITZER: There was a former maritime head under the first President Bush, the first George Bush, who said this the other day, referring to what's going on here in Dubai. And we're at this facility right now, and we've had an extensive tour of what you guys are doing.

But Warren Leback says, "The security in the ports is very lax, as we all know. In an ordinary container, you could put a dirty bomb with a GPS or a cell phone and set it off in the middle of a city. If the United Arab Emirates decides they are clandestinely supporting terrorists, they could put pressure on personnel to look the other way on the containers." SHARAF: I would say that it's easier to say than done. Any container which is loaded on a ship, the ship owner must know what's inside that box. They would not load it until they are satisfied what's inside it, because they have an obligation toward the terminals or the ports they're calling at.

They need to advise the authorities what's inside that. If they don't know what's inside that, they will not take it. Simple as that. Now, for us to say that OK, United Arab Emirates, that's a sovereign issue. We as a terminal operator, we don't get involved in loading boxes.

BLITZER: What percentage of the containers here in Dubai are actually physically inspected?

SHARAF: That, I don't have the real figure. I think the customs people would be the right people...

BLITZER: The UAE customs people.

SHARAF: UAE customs, yes. They would be the right people to tell you what percentage.

BLITZER: You do have, one of your customers here is the United States Navy.

SHARAF: Yes, we do.

BLITZER: In fact, right behind me, not that far away. And they're a regular customer of yours.

SHARAF: Yes. They're not our customers only here, they are our customers in Djibouti, where we have built a purpose-built tank farm for them. They are customers in Germany. They use our facilities in Germersheim. So we treat them as a commercial customer of ours, and we take all the measures with them, the security measures that they require.

BLITZER: Joseph King, who is former head of U.S. customs involved in terrorism issues in New York, said this. He said, "Once this company," referring to DP World, "gets control of ports, they will be able to get a certain number of employees into the U.S. legally on work visas. Once people are in the country, it is much easier to establish sleeper cells. The people who pulled off 9/11 and who made the first attack on the World Trade Center in 1993 also had legitimate visas."

What kind of controls would there be on workers coming into the United States representing DP World in terms of background checks, in terms of making sure that these are not al Qaida operatives?

SHARAF: Well, I would say that number one, there's a misconception about port operators. Port operators don't control the security of the port. Any personnel coming in to work in U.S. will have to go through U.S. immigration, will have to go through U.S. security authorities, and then only they can come in and work. BLITZER: But if you recommend them and you're operating these ports, they would have a tremendous advantage in getting in.

SHARAF: We are an international company. We have all nationalities. We have Americans working with us, we have British people working for us, we have Rumanian people working for us. And yes, we have UAE nationals working with us.

So as an international company we have all nationalities, and all of them have to go through security measures, whether they're working here or anywhere else.

BLITZER: The White House press secretary, Scott McClellan, says that you've made some concessions, you've made some agreements to bolster security. He says, "One thing that is key is that this company agree to additional security measures that they will take beyond what some others do in transactions like this."

SHARAF: Yes we do.

BLITZER: Do you know what he's referring to?

SHARAF: Yes, yes...

BLITZER: What is he referring to?

SHARAF: What we have said is basically that within the 45 days we will not interfere in the running of the terminals in the U.S....

BLITZER: This 45-day investigation...

SHARAF: Yes.

BLITZER: ... that is about to begin?

SHARAF: Yes. And within that 45 days and later on if they would require, we would also go through all the security measures as far as personnel are concerned.

Meanwhile, we keep the personnel who are there today, who have been operating in the U.S. satisfactorily. They're mainly U.S. citizens and British citizens.

BLITZER: So you'd be willing to cooperate with the U.S. Government...

SHARAF: Definitely.

BLITZER: ... whatever they want, you'd be willing to say, DP World, from your perspective as a businessman, you'd be willing to cooperate?

SHARAF: Of course, because you see, it's unlikely for us to comfortably operate in an environment where the authorities don't have confidence in you. So first thing, we have to create that confidence, make them understand that what sort of operation we run around the world and what sort of operation we're going to be running in U.S.

BLITZER: There's been some suggestion that perhaps you should bring in some American subsidiaries or some American partners to work with you in Miami or Baltimore or New York and these six ports that you want to take over, at least the operations. Is that something you're considering doing?

SHARAF: We already have American partners there. As part of the P&O acquisition, they already have U.S. Partners. So the question of bringing more U.S. partners does not arise.

BLITZER: You don't need any more American partners?

SHARAF: No, we do have. And again, as partners we have them -- we consider the port authority as our partner because we need to work very closely with them because their security is our security. Our security is theirs.

BLITZER: Another argument that has been made against this deal is that the United Arab Emirates participates, supports the economic boycott of Israel, which is a close ally of the United States. What do you say about that, because you're owned by the United Arab Emirates?

SHARAF: I'm a commercial arm of the government-owned company. I don't get into that issues of boycott. But what I can say is that those issues are today a minor issue. Today we are dealing with Israeli companies here, like you know yourself, Zim. They call at our ports.

BLITZER: That's the major Israeli shipping company?

SHARAF: Yes, and they're the largest.

BLITZER: Are they allowed to come here to Dubai?

SHARAF: Yes, they call here in Dubai regularly, and they have the services coming into Dubai. They call at our other ports.

BLITZER: Are these having the name Zim or are they subsidiaries of Zim?

SHARAF: Some combination of all. We had Zim ships here with Zim boxes. We have the Gold Star Shipping Line call here regularly...

BLITZER: Which is a subsidiary of Zim.

SHARAF: Yes, yes. So on commercial basis as a commercial operator we don't get into those issues. Those are more of the politicians. They have to decide on the bigger picture, basically, they want to lift that boycott or not.

BLITZER: So as far as you're concerned you would be happy to deal with Israelis and deal with Israeli companies?

SHARAF: I'm doing that today, around the world.

BLITZER: No problem?

SHARAF: No problem.

BLITZER: And the government doesn't have a complaint about that?

SHARAF: No.

BLITZER: What about this other issue that has come up, that the opposition is the result of anti-Arab discrimination? Do you feel that?

SHARAF: I would say that we need to clarify to the American people, I think, again, it's a misunderstanding or misconception of us as DP World, what sort of an operator we are. We need to clarify that.

We need to educate the people in America that we are truly a global company, and it is not in our best interest to get into those areas where we feel or our customer feels that security is an issue.

We have customers whose vessels call at our terminals, which cost hundreds of millions. Not only the vessel, the goods on them cost hundreds of millions of dollars. If they don't have any confidence in our operation, they would not bring their ship to our terminals.

Each ship has up to 9,000, 10,000 containers on that. Can you imagine, each container costs -- the value of each container is around $100,000. What's the value of the total ship? Would they bring their ship to our terminals if they don't feel secured or safe? Never.

BLITZER: This is a really important deal for DP World, almost $7 billion. If it doesn't go through, what are the ramifications?

SHARAF: Well, as far as we are concerned, the deal is going to go through, and the British -- the government has approved it. We're just waiting for next week to conclude the deal.

There are big consequences for the British market if it doesn't go through because investors are waiting for the money. The deal has been made. The management, the board of the port, the company has approved the deal. The government has approved the deal. The matter is basically waiting for the money to be transferred to the investors. If they don't, big losses are going to be there for the investors.

BLITZER: We have to leave it there. Thanks very much for joining us.

SHARAF: Thank you very much. Thank you.

BLITZER: Mohammed Sharaf, a 1985 graduate of the University of Arizona in Tucson, now the CEO of Dubai Ports World. He gave us an exclusive tour of the facility earlier today. Much more of that coming up here on "Late Edition," as well as tomorrow in "The Situation Room," we'll be reporting live from Dubai.

Just ahead on this special "Late Edition," is international oversight of U.S. port operations a problem? Is it a risk for the United States? We'll hear from one outspoken critic, a very different perspective. Democratic Senator Chuck Schumer of New York. He's standing by live.

And later, more from Dubai. My conversation with a top minister, the minister of economy and planning, Shaikha Lubna al-Qasimi.

And later gauging the war on terror from Afghanistan to Iraq. We'll talk with Nato supreme allied commander, General James Jones.

Our special "Late Edition" from Dubai continues right after this.

(COMMERCIAL BREAK)

BLITZER: Our web question of the week asks this: "How much of a threat would the sale of ports to Dubai really pose to U.S. security? A major threat, a minor threat, or not a threat at all?" Cast your vote, go to cnn.com/lateedition. We'll have the results at the end of this program.

Straight ahead: a critical view of this entire Dubai Ports World deal. New York Senator Chuck Schumer standing by live. You're watching a special "Late Edition" live from Dubai.

(COMMERCIAL BREAK)

BLITZER: Welcome back to our special "Late Edition."

I'm live in Dubai in the United Arab Emirates. Many lawmakers, Democrats and Republicans, in the Senate and the House of Representatives, strongly concerned about this proposed deal that would allow Dubai Ports World to take control of operations at 6 major ports in the United States.

One of them, leading the opposition, is Democratic Senator Chuck Schumer of New York. He's joining us now live from New York. Senator Schumer, thanks for joining us on "Late Edition."

You just heard the CEO of Dubai Ports World make the case that this is one of the most reputable port operators in the world, a strong commitment to security. Did he reassure you that this deal should now go forward?

SEN. CHARLES SCHUMER (D), NEW YORK: No, not at all. In fact, I was a little bit disturbed by some of the interview. Obviously, he's a businessman. He knows the economics of his business.

But when it came to security, he knew virtually little. He didn't know the percentage of containers that are inspected in Dubai. Even though that might be the Dubai government's responsibility, you'd think the CEO of the company would know it.

He had very little idea of what kind of security checks were done in Dubai for potential employees who would get visas and come to the United States or, for that matter, security checks of people who worked at Dubai Ports World facilities in Dubai itself.

And I think it shows you that this deal was an economic deal. It was structured economically. It was approved by the CFIUS committee here in the United States, more or less on an economic basis.

And security concerns, which ought to be paramount, seem to take a back seat. No, I was disturbed by the interview.

BLITZER: (OFF-MIKE) customs, U.S. law enforcement. The port operators, basically -- they take these containers, they put them on the ships, they take them off the ships, and that's their major responsibility.

SCHUMER: Well, wolf, that's a far cry from what we're told by experts, some of the experts that you quoted.

But I've talked, for instance, to the Port Authority of New York and New Jersey, which is the government entity that runs our ports.

They say the terminal operators have a lot of say in security. They're responsible for controlling the perimeters. They're responsible for the employees. They're responsible for the cargo manifests going to the Coast Guard.

So, for instance, if you were to -- if you were a terrorist and you were to infiltrate one of these organizations, you could do untold damage.

Furthermore, many of the containers are not completely locked and tamperproof by a GPS system, which is something that ought to occur.

It is just poppycock that the port terminal operator has nothing to do with security. I know some pundits have latched on to that. Talk to anyone who knows about ports. They have a lot to do with security.

Are they the only people in charge of security? Absolutely not. And United States local authorities and federal authorities have real say and haven't been doing enough, frankly, particularly at the federal level.

But the port terminal operator has a great deal to do with security. And anyone who says otherwise doesn't know the business, hasn't talked to on-the-ground people.

BLITZER: Dubai Ports World now says they're willing to go through this 45-day review process to make sure that, from the U.S. national security perspective, this deal is worthwhile.

The Bush administration has begun that process, or will begin it within the next few days.

Do you believe this is going to be a real national security review, or is it simply going through the motions? SCHUMER: Well, there's a real worry that this review will be a rubber stamp. After all, it's the same people who went through it before. They are being required, under the 45-day review, to talk to many more people.

I was just shocked to learn, in their preliminary 30-day review, they didn't talk to any port operator, like the Port Authority of New York and New Jersey, when they went through that review.

Now they'll talk to them. So that's good.

But I have to tell you, wolf, there is a great deal of dubiousness about how thorough this review will be, how careful it will be, and, most of all, how independent it will be.

And that's why a group, bipartisan, ten senators, five Democrats, five Republicans, just sent a letter on Friday to both Senator Frist and Senator Reid saying, it's great to have the 45-day review, but we need a few other things: first, to make sure that the review is independent and thorough; second, to have the report, the full report, sent to the Congress so that we can review it, and then a redacted report, non-classified, to be made public; and, finally, to give the Congress the opportunity to disapprove the deal because the president, in sort of an Alice-like Wonderland way has said, well, he's for this.

It's sort of first the verdict, then the trial. We need an independent -- both review and affirmation or disapproval that this is going to keep us safe.

BLITZER: Are you suggesting, Senator Schumer, that you have not yet made up your mind, that you're willing to go into this 45-day period with an open mind and that, under certain circumstances, you would support Dubai Ports World taking over operational control of these six ports of the United States?

SCHUMER: I'm very dubious of Ports Dubai World taking this over given the country's nexus with terrorism.

I've been made more dubious today by the interview where, you know, Mr. Sharif, the head of Dubai Ports World, didn't know basic security criteria that his company should use, the fact that he said, for instance, that if the deal didn't go through, British investors would be disappointed.

Well, I would say, to him and to everybody else, keeping the United States secure is a far greater concern.

So I'm very dubious of this deal and I want to see the review, but the strong burden of proof is on those who want the deal to go forward, given the country Dubai's nexus with terrorism in the past, not on those of us who say the deal shouldn't.

BLITZER: These six ports were being operated not by a U.S. firm over these years but by a British firm, P&O, which is now being bought by Dubai Ports World. Earlier in the week, I spoke with the Coast Guard admiral who's in charge of port security and I had this exchange. Listen to what he said.

(BEGIN VIDEO CLIP)

BLITZER; Can you assure the American public that the threat level will not increase as a result of this Dubai firm taking over the British firm's operations?

REAR ADM. CRAIG BONE: Yes. I can tell you that the measures that we put into place will assure that.

(END VIDEO CLIP)

BLITZER: Admiral Craig Bone.

You don't necessarily consider that to be the final word, his assurance to the American public?

SCHUMER: No, I don't, Wolf. And the reason is very simple, and that is that we don't know how thoroughly the Coast Guard explored this.

The initial report that the Coast Guard made in the CFIUS committee said, we have no way of knowing whether they're secure or not. And then it was overruled by the higher-ups. And no one knows why. No one knows who influenced that.

We've asked that. And I think that's one of the things I want to know, in terms of this 45-day review, why initial people who said, either don't do it or we don't have enough knowledge to approve or disapprove were overruled so quickly and so quietly.

If you go ahead and take a look at this deal down the road, Senator, are you among those who are suggesting now that only Americans should be operating ports in the United States?

Because you know, the American port operators basically went out of this business some 20, 30 years ago, and about 80 percent of all port operations right now are handled by foreign firms.

You know, we've sort of backed into this situation where ports are operated by foreign companies. And I suppose, before 9/11, it didn't make much of a difference.

One of the great problems is that this administration did no review after 9/11 to determine whether that should stay. After all, Wolf, we do not allow foreign companies or foreign countries to operate our airports, mainly for security reasons.

Why, then, do we allow them to operate our ports? I don't know if the answer -- if there's a definitive answer to that question yet, but it's certainly something that ought to be explored and asked.

So I think we need a whole review as to who should be operating our ports. And, having said that, the United States government, Washington, the administration, hasn't done enough on port security in general, no matter who operates our ports.

It's a disgrace that five percent of the containers are inspected, no more. It's a disgrace that we don't have nuclear detection devices at every port.

I've been talking about this since a few months after 9/11. And the only good thing that will come out of this sorry episode, however it comes out, is that there probably will be a lot more focus on the ports, as there should be, and secondly, there will be a whole change in the CFIUS process.

The CFIUS process, this secretive committee that approved this, was set up in the late 70s to, almost, provide, if you will, "security cover" to OK economic deals.

And, again, in the post-9/11 world, that doesn't work.

So we need to change the CFIUS process, to overhaul it, to make it more open, to make it more thorough, and to put a greater emphasis on national security. The CFIUS committee in the past has let economic or diplomatic considerations trump security considerations. That's not good enough post-9/11.

BLITZER: CFIUS stands for the Committee on Foreign Investments in the United States. Senator Schumer, thanks very much for joining us. We'll continue this conversation down the road. Still ahead, we'll shift gears, talk a little bit about what's going on Iraq right now. The former foreign minister Adnan Pachachi, a key Sunni leader, joins us from Baghdad.

And later, we'll have more on the port controversy. I'm here in Dubai. I toured Dubai Ports World earlier today. Stay with "Late Edition." Our special report coming up.

(COMMERCIAL BREAK)

(NEWSBREAK)

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." We're reporting live from Dubai today. A bustling economic center in the Middle East now in the middle of a controversy over a port deal back in the United States. Major developments also in Iraq this week, more than 500 Iraqis have died since an attack on a key Shiite mosque on February 22.

Just a short while ago, I spoke with a key Sunni leader in Baghdad, the former Iraqi foreign minister Adnan Pachachi.

(BEGIN VIDEOTAPE)

BLITZER: Adnan Pachachi, thanks very much for joining us here on "Late Edition." Let me get right to the crunch of the matter. Is there a civil war already under way in Iraq?

ADNAN PACHACHI, IRAQI PARLIAMENT MEMBER: No, there is no civil war. There are a lot of tensions and differences, but no civil war. I don't think we'll ever have a civil war in the sense that you had a civil war in Northern Ireland or in Bosnia. I don't think this will happen in Iraq.

BLITZER: Why not? Because the tensions between the Sunnis and the Shia, they seem, at least the images that we're getting on a nearly daily basis, they seem so intense, they seem so ugly. Why don't you think your country could have a civil war?

PACHACHI: Wolf, the tensions are not between the Shia population and the Sunni population. It's really the militias, the armed militias, and certain fanatic groups that are really engaged in most of the acts of violence. But the idea that all the Shias will fight all the Sunnis in Iraq, no, this is not -- it's not a possibility at all.

And anyway, certain measures have already been taken. All the leaders from all sides have taken measures and they have undertaken, really, to defuse the crisis, and not to let this get out of hand.

I think this situation has greatly improved, but not sufficiently. But I think the idea of a civil war is getting further from possibility. But it's very important that we should form a national unity government very soon. I think that will help a great deal in diffusing the crisis, because a national unity government will include all the political groups represented in the parliament which has just been elected.

And I think this will hopefully improve the security situation.

But efforts are being made to do that, and certain measures have been taken to protect mosques and other places, and to prevent as much as possible the confrontation between the various armed groups.

BLITZER: It seems that many of the Sunni leaders and the Kurdish leaders have lost confidence in the man designated by the dominant Shia political party, Ibrahim Al-Jaafari, to be the prime minister. He has been the prime minister in the interim government. Do you have confidence in Ibrahim Al-Jaafari?

PACHACHI: No, our group, the National Iraqi List, has also sent a letter to the coalition, asking them to review or to reconsider the selection of Dr. Jaafari for the premiership.

And we indicated this is not a personal matter, but we feel that in order to have a government of national unity, the prime minister has to be acceptable to all the components of this government, and he should not be a controversial figure, which unfortunately Dr. Jaafari is.

And we believe that perhaps, somebody else, who will be able to unite people, should be considered for this premiership. BLITZER: We quote from Tareq Al-Hashimi, one of the Iraqi parliament members, who says: "What happened last Wednesday and afterward led us to the conclusion that we cannot tolerate Jaafari for the next four years."

Who would you like? What Shia political leader would you like to see emerge as the next prime minister of Iraq?

PACHACHI: Well, you know, Wolf, I am not going to mention names, obviously, but we have not received a reply yet from the coalition to our request that they should reconsider the selection of Dr. Jaafari.

But of course, awaiting their reply, we'll consult among ourselves the four lists -- the Kurdish Alliance, the Accord List, which you call the Sunni list, ourselves and the (inaudible), which is the Dialogue Council. I think awaiting the reply of the coalition, then we'll be able to decide what to do, and who to support.

BLITZER: But this could...

PACHACHI: We are still waiting...

BLITZER: ... this could take some time...

PACHACHI: ... because I think there are...

BLITZER: ... and clearly, there's no government in the interim. This clearly could take -- let me read to you what Lieutenant General Michael Maples, the director of the U.S. military's Defense Intelligence Agency told a Senate committee this past week. He said: "Sunni Arab elites have little cause to support the rebuilding of Iraq. Many Sunni Arab leaders view the current political solutions as predicated on perpetual minority status in a Shia-Kurd-dominated government." Do you accept that gloomy assessment as far as your fellow Sunnis are concerned?

PACHACHI: No, I -- this is an over simplification. I wouldn't agree with this simplified kind of opinion, really.

We are waiting now -- we hope that the parliament will be convened before the end of this week, and this by itself will be a sign that we are proceeding to implement the constitution and build a democratic system.

It's not a question of Shia and Sunni anymore, really, because, for example, our list has more Shias than Sunnis. And some of them are religious figures. This is also true of the coalition itself. There are of course mostly Shias, but also there are personalities in that -- in that list who have secular tendencies.

So it's not sort of a black-and-white situation where you have Shias and Sunnis on one side, and then Kurds on the other side, or something like that, no.

BLITZER: As far as U.S. troops in Iraq are concerned, there are about 130,000, 135,000 U.S. troops right now. Is that enough? Is it too much? What is your bottom line assessment of the U.S. military presence right now?

PACHACHI: Well, you know, it's interesting that when this situation flared up after the explosions in Samarra, the holy shrines, there were demands from all sides that the coalition -- or rather, the multi-national force -- should play a more active role in the maintenance of law and order, and I think this is the view of most political leaders, even those who have been demanding an early withdrawal of the multi-national force.

They believe that until the Iraqi forces are in a position to undertake the -- to defend the security of the country, there must be some role for the multi-national force. And this is the situation.

And of course, one of the first things that a new government has to do, really, is to disband or to disarm at least the militias, and to reorganize the armed forces in such a way that they will not have any divided loyalties, but they will be a professional force under the sole and only authority of the government, and with no loyalty except that to the state. I think when this happens, then of course the multi-national forces...

BLITZER: As you know, Mr. Pachachi, the Kurdish groups are very loyal to their Peshmerga militia; the Shiites have their own Mehdi militia, among others. Do you see any signs at all, realistically, that anytime in the near future, these militias are going to be disbanded?

PACHACHI: Well, you know, you cannot have a state in which military militias roam around, and then you are going to have a situation similar to that of Afghanistan, warlords in various parts of the country, fighting for authority and for territory.

We have to try to really form a national force, with loyalty only to the state of Iraq, and eventually and gradually, we hope to disarm the militias and to disband them. Because this is what the constitution says. The constitution is very clear that it prohibits armed militias outside the armed forces of the state.

BLITZER: Adnan Pachachi, we have to leave it right there. Thanks very much for joining us on "Late Edition." Good luck to you. Good luck to all the people of Iraq.

PACHACHI: Thank you. It's always a -- always a pleasure to talk to you. Thank you very much.

BLITZER: And coming up, much more on the port controversy. Dubai Ports World seeking to take over port operations at six major ports in the United States. Is this just business as usual for this booming economy here in Dubai, or is something else going on? My special interview with the top cabinet minister in the United Arab Emirates, the economic and planning minister, Shaikha Lubna al-Qasimi.

We'll take a quick break. More from Dubai right after this.

(COMMERCIAL BREAK) BLITZER: CNN reporters will be "On the Story" coming up after "Late Edition." That begins at 1 p.m. Eastern, 10 a.m. Pacific. And don't forget our web question of the week, How much of a threat would the sale of ports to Dubai be to U.S. security? Major threat, a minor threat, or not a threat. Cast your vote. Go to cnn.com/lateedition. We'll have the results later in our program.

Stay with us. We're live in Dubai. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: I'm Wolf Blitzer in Dubai. We're reporting on the ports controversy back in the United States. Coming up, I'll have a special interview with a top cabinet minister here in the United Arab Emirates. That's coming up. Let's get a quick check of your e-mail on this subject right now.

Mary from Dover writes this, Dover, Delaware: "Once again, the Bush administration proves its disregard for separation of powers by allowing the UAE deal without the proper oversight and without involving Congress."

Alan from Virginia Beach, Virginia, has a different perspective: "This sale to the UAE is for container 'terminals' and not ports. The COO of the company is an American. We already have many foreign companies that own U.S. terminals. The port ownership remains with the city or state. Security will remain with the Coast Guard and U.S. Customs."

We always welcome your comments. Our e-mail address, lateedition@cnn.com. And there's much more coming up from Dubai, more on this port deal, plus my exclusive interview with the president of Pakistan, General Pervez Musharraf, on this the day after his summit with the president of the United States.

My conversation with President Musharraf, that's coming up. And later, the hunt for Osama bin Laden. What will it take to capture the al Qaida leader? We'll speak with the supreme allied commander of NATO, General James Jones. "Late Edition" live from Dubai continues right at the top of the hour.

(COMMERCIAL BREAK)

BLITZER: This is a special "Late Edition," live from Dubai, an exclusive on the ports controversy.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If there was any doubt in my mind or people in my administration's mind that our ports would be less secure and the American people in danger, this deal wouldn't go forward.

(END VIDEO CLIP)

BLITZER: A controversial deal on U.S. ports puts the spotlight on Dubai. We took an exclusive tour inside the port, and we'll take a closer look at the controversy in a special interview with the United Arab Emirates' minister of economy, Sheikha Lubna al Qasimi.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition."

I'm Wolf Blitzer. We're reporting right now from Dubai. Earlier today, I spent time over at Dubai Ports World, had an exclusive tour of the port facility. My interview, coming up, with the economic minister of the United Arab Emirates, an exclusive.

That's coming up, as well as our exclusive with the president of Pakistan, President Musharraf on this day after his summit with President Bush.

First, though, let's get a quick check of what's in the news right now.

(NEWSBREAK)

BLITZER: Thanks very much, Fred. And we'll have much more on the ports controversy here in Dubai, what it means for U.S. ports as a result of a proposed takeover of port operations in six major ports in the United States. That's coming up.

But on this day after the president of the United States met with the president of Pakistan, I had an opportunity earlier today to speak exclusively with President Pervez Musharraf of Pakistan.

(BEGIN VIDEOTAPE)

BLITZER: President Musharraf, thanks very much for joining us. Welcome back to "Late Edition." I know you've been incredibly busy these past few days, receiving the president of the United States.

Were you satisfied with the outcome of your talks with President Bush?

PRES. PERVEZ MUSHARRAF, PAKISTAN: Yes, indeed. I think I'm very satisfied. We developed very close understanding and there was a lot of substance in the interaction.

BLITZER: What about the double standard that seems to be taking place, one standard for India, another standard for Pakistan as far as nuclear weapons are concerned?

You must be somewhat disappointed. Listen to what the president said in Pakistan. Listen to this.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We discussed the civilian nuclear program and I explained that Pakistan and India are different countries with different needs and different histories.

So as we proceed forward, our strategy will take in effect those well-known differences.

(END VIDEO CLIP)

BLITZER: What about that, Mr. President?

MUSHARRAF: I would tend to agree with him. When we are dealing with two countries, the interstate relations have different compunctions (ph); they have different nuances.

The relationship with India, who doesn't know which side it is directed, and the relationship with Pakistan has a totally different nuance.

So, therefore, one really, in interstate relations, countries have to look at each other's interests, the mutuality of interests.

Now, as far as the nuclear side is concerned, Pakistan really does not need much from United States at all.

What we need is nuclear energy. And we discussed that with him. And there was a very positive response from his side. So, our need, vis a vis, with the United States is totally different between -- as far as Indian needs with the United States is concerned.

And I'm a very strong believer that this tendency of being Indocentric in all relations doesn't have a rationale. And I wouldn't like to do that at all.

Pakistan has its interests and United States has its interests in Pakistan. We need to see that and we need to move forward on that track. And I think both of us move forward on the track, wherever there is mutual interest. And we don't have to bother what they are doing with India.

BLITZER: Mr. President, did the issue of A.Q. Khan, your nuclear scientist, whom the United States would like to question, did that come up during your talks with President Bush?

MUSHARRAF: No, it didn't come up during this talk. We already had spoken about it in the past, that we need to have some kind of an interrogation with him, which is mutually in a methodology which satisfied mutual concerns, and we are going forward on that, so there was no need of discussing it.

BLITZER: Let me read to you from an editorial that appeared in "The Washington Post" this past week.

It says this: "General Musharraf has been promising to restore democracy since his coup, yet throughout his years in power, he has sought to suppress Pakistan's secular democratic parties while striking deals with Muslim extremists."

The editorial goes on to say: "His refusal to restore democracy in his country has only made it more unstable."

I wonder if you'd want to respond to that editorial in "The Washington Post."

MUSHARRAF: Yes, I would like to respond very strongly against it. I think "Washington Post" doesn't know what he's -- what they are writing. I don't think they even know what our environment is.

When they are talking of restoring democracy, we have restored sustainable democracy in Pakistan.

What is democracy? I wonder whether "Washington Post" knows it. Democracy is really empowerment of people. We have empowered the people of Pakistan through the local government system, which was nonexistent in the past.

BLITZER: Mr. President, will there be free and fair democratic elections in Pakistan next year?

MUSHARRAF: Yes, surely. I think -- may I be allowed to go back to the question that you asked regarding -- this was regarding "Washington Post" about democracy in Pakistan?

BLITZER: Go ahead.

MUSHARRAF: And I was saying that we have introduced sustainable democracy in Pakistan. We have empowered democracy -- really mean the empowerment of people; we have empowered the people of Pakistan through a local democracy system, local government system, which was nonexistent in Pakistan.

It also means the empowerment of the women of Pakistan, and we have done that for the first time in the history of Pakistan. We have empowered the minorities of Pakistan, and we again, this is the first time that we've given them a joint electorate system, and they have been mainstreamed in the political milieu of Pakistan.

We have liberated the press and media. That is what is democracy, the freedom of speech and expression. Today, the electronic and press media in Pakistan are totally free, and there are dozens of private channels operating, whereas as there was only one in the past.

Then I myself have been elected, allowed to be a (INAUDIBLE) president in uniform through a two-thirds majority in the national assembly.

I hope "Washington Post" knows that that really is democracy. And I am here, holding this post through a very democratic and constitutional method.

I've been allowed, in the constitution of Pakistan, and I'm in the -- I hold two positions through a democratic process of being elected by two-thirds majority.

And ultimately, as far as my uniform issue is concerned, there will be elections in 2007, and I will abide by the constitution. "Washington Post" must know that this is democracy, unless they have some different kind of a version of democracy, which is their own, and I don't understand...

(CROSSTALK)

BLITZER: Mr. President, you will seek reelection, you will seek election next year, you will run. Is that right?

MUSHARRAF: Well, let next year come, and I'll look into that. With so much happening, let's see if the nation needs me. I'll serve the nation, certainly.

BLITZER: What about the hunt for Osama bin Laden? Only this weekend, we've heard from his deputy, Ayman Al-Zawahiri, once again. Are you any closer to having a better sense where these Al Qaida leaders are hiding out?

MUSHARRAF: Well, frankly, I wouldn't be able to say whether we are closer or farther. We don't know where they are.

We are launching our operations on all al Qaeda positions that we come to know, Al Qaeda or Taliban. And in the process, if we can get them, we'll get them.

But we don't exactly know where they are. I presume they're somewhere in the border area, on the Pakistan side or Afghan side. So I wouldn't be able to comment whether we've got any closer to them.

BLITZER: There was this story in the Associated Press the other day. Let me read a headline from it. "President Hamid Karzai of Afghanistan has handed intelligence to Pakistan that indicates Mullah Mohammed Omar, the supreme leader of the Taliban regime ousted by U.S.-led forces and key associates, are hiding in Pakistan. Afghanistan also provided information about the locations of alleged terrorist training camps along the border and in Pakistani cities.

Is that correct? Is that accurate?

MUSHARRAF: That is -- they have given us a list, and I am really surprised and shocked why they have disclosed this to the media.

They have given a list. Now that they have done that, let me answer very frankly. We've already gone through it, this list. Two- thirds of it is months old, and it is outdated, and there is nothing. What there, the telephone numbers that they are talking of, two-thirds of them are dead numbers, and even the CIA knows about it because we are sharing all this information with them.

The location that they are talking of Mullah Omar is nonsense. There's nobody there. We've gone there exactly and seen that there are families living there and there's no sign of Mullah Omar. This also seems to be very, very old information.

And lastly, let me say, why were they waiting for a presidential visit to hand me over this list? What was stopping them from giving this list or sharing these numbers immediately on occurrence? Is that the way intelligence functions? I am totally disappointed with their intelligence, and I feel there is a very, very deliberate attempt to malign Pakistan by some agents, and President Karzai is totally oblivious of what is happening in his own country.

So therefore, I will say he should pull up his intelligence, he should pull up his ministry of defense, he should coordinate with our intelligence, and intelligence coordination means pass the numbers, pass the intelligence immediately, on occurrence. Don't wait for months for a presidential visit to hand over these things.

In any case, now that he has raised this accusation against Pakistan, let me tell you that I passed on a lot of information to him, his own information, what is the conspiracy going on against Pakistan in his ministry of defense and his intelligence setup. He better set that in order before accusing Pakistan on any issue.

BLITZER: It sounds as if, Mr. President, you have a serious problem right now with President Hamid Karzai of Afghanistan. It certainly sounds like there's some tension in this relationship.

MUSHARRAF: Well, unfortunately, it is developing in the last one or two months. There was no tension. It was going on excellent, in an excellent way. Because he knows how he got elected, he knows how much we helped in the election process. If it was not for Pakistan, maybe he and his election would not have taken place smoothly. He knows that, because he's told me personally this.

Now, I know that there is a problem on the border area. There is a problem on the Pakistan side; there is a problem in Afghanistan also. Now, if anybody in the Afghan government throws the entire blame on Pakistan as if nothing is happening in Afghanistan, everyone is here, Mullah Omar is living in Quetta -- I keep going to Quetta so many times. Who is saying that he's living there? This is absolutely nonsense.

So whatever -- if at all he was there, he came in the past, then he should have said, told us exactly when he came so that we would have nabbed him. So this kind of nonsensical accusations are not acceptable.

Now, we know that how these are happening, and I have given this information entirely to him -- the intelligence, not information -- the intelligence, I pass -- when he gave me these numbers, I passed him intelligence on what is happening in his intelligence organization and in the ministry of defense.

He better set that right, because I feel now I am further confirmed that having passed this -- the intelligence that he want (ph), the information that he passed on to us, they leaked it out to the press. There was no need of doing that, because that certainly alerts whatever enemies we are operating against.

There is no need of releasing such sensitive information to the press. And he did that. His government people did that, and therefore the response, the harsh response that I am now giving against that.

BLITZER: President Musharraf, we have to leave it there, unfortunately. We're out of time, but thank you so much for joining us here on "Late Edition."

MUSHARRAF: Thank you very much.

(END VIDEOTAPE)

BLITZER: And coming up, more on the very tense situation in Afghanistan and Pakistan. We'll speak with NATO's supreme allied commander, a four-star general, General James Jones. He's standing by in Washington for NATO's role in this entire operation.

And after that, more on the port controversy back in the United States. My special interview with the economic minister of the United Arab Emirates, Sheikha Lubna al Qasimi.

All that coming up. We're live in Dubai. Stay with us.

(COMMERCIAL BREAK)

BLITZER: There's still time for you to weigh in on our Web Question of the Week: "How much of a threat would the sale of ports to Dubai be to U.S. security?" You can cast your vote, go to cnn.com/lateedition. We'll have the results later this hour.

Straight ahead, President Bush traveled to Afghanistan this week. Where does the military situation in that country stand right now? We'll get a assessment from NATO supreme allied commander, General James Jones. He's standing by.

We're standing by in Dubai. More on the port controversy coming up as well.

You're watching a special "Late Edition" live from Dubai.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: I hope the people of Afghanistan understand democracy takes hold. You're inspiring others.

(END VIDEO CLIP)

BLITZER: President Bush earlier in the week make a surprise stop-over in Afghanistan on his way to India and Pakistan.

Welcome back to our special "Late Edition." We're live in Dubai.

More on the ports controversy coming up, but let's speak to NATO supreme allied commander, General James Jones. He's joining us now live from Washington.

General Jones, as usual, thanks very much for joining us. I assume you just heard that criticism leveled by President Musharraf of Pakistan against the president of Afghanistan, Hamid Karzai. He was not diplomatic; he was very blunt in suggesting that President Karzai is not appreciative active of what Pakistan has been doing for Afghanistan.

I wonder if you'd want to comment since NATO plays such a key role right now in trying to bring some sort of stability to Afghanistan.

GEN. JAMES JONES, NATO SUPREME ALLIED COMMANDER: Well, I wouldn't want to comment on the relationship between two heads of state, but it is certainly a part of the region of the country where we have to find the accommodation of working together. And that has been something I know that General Abizaid and General Eikenberry from the coalition force, the U.S.-led coalition force have been working on, and it's something that NATO will take an increasing interest in as we expand the mission later on this year.

BLITZER: There was an editorial in January in The Washington Post that said this, referring to NATO. Let me read it to you. It said, "NATO has been irrelevant in Iraq and has moved with imperfect unity and uncertain commitment into Afghanistan." Has the situation as far as NATO and Afghanistan improved since that editorial was written on January 9?

JONES: Well, I wouldn't agree with either part of that editorial. Where Afghanistan is concerned, I think NATO has, in fact, since 2003, moved with surprising agility, given the fact that there are 26 nations that have to agree on everything we do. And it's getting poised to take over the majority of the mission this calendar year in Afghanistan. And that's a real progress.

BLITZER: Afghanistan has been a very, very important part of the U.S. war on terrorism since 9/11. And shortly thereafter, the U.S. went in with its coalition partners and overthrew the Taliban regime there, went after al Qaida.

Take a look at the number of troops, though, killed in Afghanistan: 2003, 57 coalition troops were killed, 2004, 58, but last year, 129 were killed. That doesn't necessarily show the numbers moving in the right direction from the U.S. and coalition perspective. Is the situation in Afghanistan getting more dangerous now for U.S. forces?

JONES: Well, I think you can explain these numbers a couple of ways. One would be to say that as the Afghan national army develops more capacity, it's able to go into more places than ever before. And that's -- the same holds true for the coalition force as well. So, there are fewer hiding places for those who wish us ill in Afghanistan.

And I think, obviously, if you're going to go to more places, and the hiding places are being taken away, then you're going to have a little more of an uptick in violence. I think that the uptick in violence is fairly disparate. I think it's apportioned over the criminal element, the remnants of al Qaida and the Taliban and the narcotic industry, which is very much a part of the economy, unfortunately, of Afghanistan, but it's still fairly disparate.

But I do think we're going to see an uptick in violence in the spring, which is normal. But I don't think that means we have a resurgence or an insurgency that's returning.

BLITZER: There's been some suggestion that the insurgents in the Afghanistan are learning from the insurgents in Iraq in trying to follow that course. Listen to what Lieutenant General Michael Maples, the director of the DIA, the Defense Intelligence Agency, offered in his assessment earlier in the week. Listen to this.

(BEGIN VIDEO CLIP)

LT. GEN. MICHAEL MAPLES, DIRECTOR, DIA: The Taliban-dominated insurgency remains capable and resilient. In 2005, Taliban and other anti-coalition movement groups increased attacks by 20 percent. Insurgents also increased suicide attacks and more than doubled improvised explosive device attacks. We judge that the insurgency appears emboldened by perceived tactical successes and will be active this spring.

(END VIDEO CLIP)

BLITZER: Is it a situation where the insurgents in Afghanistan are copying what the insurgents in Iraq are doing?

JONES: Well, Wolf, I think certainly there's going to be a certain amount of copycat techniques. I would only add to that statement that the percentage increase has to be judged against a baseline that's pretty low. In other words, if you've only had 20 or 25 attacks, and it goes up 20 percent, that's not statistically very revealing.

And that's really what we're -- that's the baseline we're working against in Afghanistan. There clearly are going to be instances of duplication and imitation. They're going to try everything that they can, because the tide and the times are moving out.

And the Afghan national army is now approaching 30,000 strong. They're a capable army. They're admired by the people. They're out there mixing it up and doing the things that they need to do. The coalition is getting stronger. NATO is going to add about 11,000 troops by the time we're finished building up.

The United States is going to get -- and its coalition friends are going to get a strong, helping hand. I think this is a turning moment for the -- for what's left of the insurgency and also for the criminal element, the narcotic traffickers and all the others who are working on their own, in their own way to destabilize the growth of the Karzai government.

BLITZER: One of the most frustrating parts of this whole operation in Afghanistan is the failure to find Osama bin Laden, his number two, Ayman al Zawahiri, who just released another audio, videotape this weekend. Listen to what the president said when he stopped off in Afghanistan earlier in the week as far as Osama bin Laden is concerned. Listen to this.

(BEGIN VIDEO CLIP)

BUSH: I am confident he will be brought to justice. What's happening is that we got U.S. forces on the hunt for not only bin Laden, but anybody who plots and plans with bin Laden. There are Afghan forces on the hunt for not only bin Laden, but those who plot and plan with him. We've got Pakistan forces on the hunt.

(END VIDEO CLIP)

BLITZER: Without revealing any sensitive or classified information, is there any information that you have that suggests that the president's use of the word confident, that he's confident that Osama bin Laden will be found, is there any new information that's come forward recently to justify that confidence?

JONES: If there is, I'm not sure that I'm aware of it. My NATO mission is obviously to expand our presence in Afghanistan. And it's not in, shall I say, the offensive counter-terrorism mission to participate actively in that hunt.

But I do agree that -- with the president in that ultimately if he's still alive, there's reason to believe that we'll eventually be successful, particularly if we get good working relationships across both sides of the border, which would be, in my view, very important.

BLITZER: Is there a NATO role in dealing with this enormous problem with the poppies, the opium, the drugs that have become so critical to the economic well-being of Afghanistan and causing so much damage outside of Afghanistan?

JONES: Wolf, we all have to be very, very cognizant of the fact that this may be the most important problem the Karzai government faces in terms of restoring the economy and moving it in a positive direction. NATO does not have an active role in the sense that you won't see NATO troops out participating in eradication projects and the like.

But NATO will adopt a more passive role, that is to say, information watching, overwatch, security, and needs to be aware of what's going on in the counter-narcotics campaign. My judgment is that this is really, perhaps, job one starting this year in Afghanistan in order to help the Karzai government and the people of Afghanistan achieve the progress that they both want to achieve in the reconstruction of that country.

BLITZER: General Jones, we're almost out of time. But I wonder if you'd want to comment -- you're a four-star general -- on this U.S. Army investigation that has opened up. At least we learned word of it this weekend thanks to our Pentagon correspondent, Barbara Starr, that Pat Tillman, who left a million-dollar contract, multi-million dollar contract as a professional football player to serve his country and go join the U.S. Army as a ranger and fight in Afghanistan, that there's now an investigation for negligent homicide regarding his friendly- fire death in 2004 in Afghanistan. I wonder if you'd want to offer some perspective on this investigation.

JONES: Well, Wolf, I have no personal knowledge of the circumstances because I work in another part of the world. But simply as a man in uniform, I would say that the most important thing that has to happen in any investigation is that the truth has to come out, and it has to come out emphatically. And I'm quite sure that my colleagues who are working on this are dedicated to finding truth and getting to the bottom of whatever remains to be found out.

BLITZER: General Jones, thanks so much for joining us. Good luck to you. Good luck to all the men and women under your command.

BLITZER: We appreciate your joining us here on "Late Edition."

JONES: Thanks, Wolf.

BLITZER: And a reminder that, coming up right after "Late Edition," CNN presents "On the Story," including senior Pentagon correspondent Jamie McIntyre, who is just back from Afghanistan with the story of General Jones's operation there. More on that coming up.

We're here in Dubai. And we're going to have the latest on the ports controversy, including a special interview with the United Arab Emirates economics minister right after this.

(COMMERCIAL BREAK)

BLITZER: Dubai, here in the United Arab Emirates, considered a model in this part of the world for economic progress. In fact, you drive around Dubai and see the construction that's going on, it is simply amazing. Much more on that coming up tomorrow in "The Situation Room" on CNN.

But joining us now to talk about the economic impact of this country and the ports controversy back in the United States is the economics minister here in the United Arab Emirates, Sheikha Lubna al- Qasimi.

She's also the country's first female cabinet minister.

Sheikha, thank you very much for joining us on "Late Edition."

Let's talk about the port controversy first. You know very well -- you studied in the United States, you go there quite often -- the opposition that has developed over these past few weeks to this Dubai Ports World, a company you used to work for, taking over port operations in six major ports in the United States.

Do you understand the extent of the opposition back in the U.S.?

SHEIKHA LUBNA AL-QASIMI, UAE'S ECONOMICS MINISTER: Yes. I think, in my opinion, this is all about a business deal. This is about global trade. And, when you look at the Dubai Ports World operation within the U.S. as part of a global deal, basically, that has six operating ports in the U.S., there's a perception in the states that it's not correct. When you deal with ports handling of containers, that's ports management. It is not owning the ports. So, it's not about taking over.

BLITZER: But it is taking over -- excuse me for interrupting -- it is taking over the terminals in the United States for this British company, P&O, which had been operating them?

AL-QASIMI: Yes. But what you're doing is you're handling containers. You're not taking over the acquisition of the port itself. And the security impact of this is really more related to security jurisdiction, which is not really the core competence or the work of a port operation.

BLITZER: Well, we did hear Senator Schumer, one of the vocal critics on this program, within the last hour, say that either company, whether it's P&O, the British company that has been operating these ports or Dubai Ports World, which will if this deal goes through, they still will play a significant role in making sure that these ports are secure.

AL-QASIMI: Well, the security of a port operation is basically leaving it in the hands of the right people.

When you have segregation of responsibilities, i.e., basically, security organization that deals with it, there is no impact, because you're talking about a port operation in terms of handling the boxes as they come in.

But most boxes go through certain routines with a procedure there. So, to me, it reflects a lack of understanding about how a port operates.

BLITZER: The American public was asked about this proposed deal. Sixty-six percent opposed it in our CNN-USA Today Gallup poll. Only 17 percent in favor of it.

What do you know that you would like to share with the American public right now to try to reassure them that if this company that's based here in the United Arab Emirates, is owned by the government of Dubai, what would you like them to know that would, perhaps, reassure them if this deal goes through? Because the opposition is Republicans and Democrats, liberals and conservatives. It cuts across partisan lines.

AL-QASIMI: Well, first of all, let's understand this whole issue about Dubai Ports World is really a business deal. In a business deal you reflect foreign investment money that's coming to be invested in the states in various aspects, one of them is the port operation.

Now when you talk about certain developments of investment in the states, always remember that there is an impact on employment to people. The port is not replacing people. The people are actually maintaining the contracts that they had.

But in any foreign investment, for example, when -- for example, if you purchase or you buy American equipment, $1 billion worth of equipment, you're actually generating 10,000 jobs in the U.S. So when you start differentiating a particular business deal and look at it in a political environment and saying this is a deal and this is not, you're implicating environments that has to do with business. And therefore, benefits to the society in totality.

The port itself -- and I want to assure this -- this is not the first ports that they are actually managing. They manage over 20 ports worldwide in all different countries. And it's a world class operation. They are the top -- they are one of the top six so far.

BLITZER: Here is the criticism of the government, and you represent the government of the United Arab Emirates. As you well know, before 9/11, this government, United Arab Emirates, had relations, one of three countries, with the Taliban in Afghanistan, two of the 19 hijackers were from the United Arab Emirates. There were shipments of nuclear material that went through this port to Libya and Iran, and the financial operation that resulted in 9/11, at least a lot of it, went through the UAE, went through Dubai as well. You've heard these criticisms...

AL-QASIMI: Yes, I've heard. Yes, yeah.

BLITZER: ... What's the response?

AL-QASIMI: OK, let's look first in terms of the relationship with the Taliban. Remember the time, at that time, this was under the environment when the U.S. was actually fighting with the Russians and the acceptance of several countries being in a close relationship with the Taliban at the time was actually in an environment where the states was aware of it. As the country was notified about it, I think the relationship immediately discontinued.

If you look at the...

BLITZER: Well, they did have relations until almost the bitter end. Saudi Arabia and the United Arab Emirates were two of the three countries that did have relations.

AL-QASIMI: No, but you see, we were actually -- we don't even share the same theology. This is a country that actually has participation of women. I'm a woman minister. If you were part of the Taliban or we actually their ideology, I would not be sitting here as a minister.

But let's look at the -- if we look at in terms of the -- when you're talking about the hijacking, you're talking about two. Now look at all the different terrorists that actually had played a role in all of this global organization worldwide. They actually are multi-national. They are not all the UAE. And you can't actually accuse a country because of two. Two do not make a nation.

So, to me, the terrorism and -- is really borderless, and it has no geography as part of it.

However, I think I need to make sure to emphasize that the UAE has been a global player in terms of war against terror in collaboration with the U.S., in all different aspects, from intelligence reporting -- even some of the people from Al Qaida, in terms of securing dialogue on an international level, not only with the U.S. but worldwide.

So that in itself reflects actually the initiative that's being taken by the Emirates. When we talk about the shipments of...

BLITZER: Nuclear...

AL-QASIMI: That actually -- when you look at any port operation, you have to distinguish between products coming in and being re- exported and from products sitting in transshipment mode. Transshipment means that you don't inspect the box.

However, I think the states have taken initiative in acting about this by creating the container security acts, and UAE was the first one to actually deal with this.

On the money laundering again, money laundering was a global problem that took place I think in 96 countries. So UAE is not one, but we've taken certain measures, and these are actually part of the...

BLITZER: Have you tightened up since 9/11...

AL-QASIMI: Absolutely.

BLITZER: ... because The 9/11 Commission was pretty critical of the United Arab Emirates.

AL-QASIMI: Well, if you look at what had taken place then, we worked very closely with the treasury in the States. There has been clearance, absolutely, from the IMF and World Bank in relation to clearing the UAE as being a site for money laundering. Definitely there has been a lot of tightening in terms of process of hawala (ph) and others and being on a network where there is dialogue worldwide to actually to combat in a money laundering.

BLITZER: The other argument that many members of Congress have made, and you've heard this, is that this is a country, the United Arab Emirates and you're the economics minister, that supports an economic boycott against Israel.

AL-QASIMI: Well, first of all, let's differentiate this. We actually had diminished the secondary and treasury boycotts to Israel. So this actually does not exist. That means these are the product that are actually part of American companies coming in here.

On the boycott at the primary level, in the framework of the FTA at the moment, basically part of the process is actually lifting the ban...

BLITZER: If you had a free trade agreement with the United States, what would you do? Would you eliminate that boycott of Israel? AL-QASIMI: Absolutely, yes. And we actually have our fifth round coming up next week. The whole team USCR team will be coming here on the 13th of March.

BLITZER: So why not just eliminate it right now? In practical terms, at least what we heard earlier today from Dubai Ports World's Mohammed Sharaf, that he trades with Israel, he lets Zim come into the ports here. Why not just say that you're going to cancel this boycott?

AL-QASIMI: It's a process that we have to go through, and we have to actually reflect in terms of which of these parts are coming in.

The issue right now is really more about perception about port handling. So when you talk about the perception in the states, it's all about handling boxes coming from Israel. Well, this is a world trade organization, and therefore, the handling of boxes takes place irrelevant where it's coming from.

BLITZER: Are you confident this deal is going to go through based on what you know, or do you think it will be stopped?

AL-QASIMI: I am very confident it will go through because in my belief this is purely a business deal. It has nothing to do with any other aspects of it.

But the concern I have in my mind in case something like this doesn't go, it will reflect on foreign investment worldwide because part of this is you have a business deal that got politicized, and what you do is you've increased entry barriers into the U.S. in terms foreign investments. The U.S. demands about $1 trillion per year in terms of foreign investments coming in.

The minute you put new legislation in, the minute you create other aspects that snaps core business...

BLITZER: We're almost out of time, but what you're suggesting is that if the deal were canceled, it would have economic ramifications for the U.S. and political ramifications in the Arab world or this part world?

AL-QASIMI: Well, and all -- because it's not about the Arab world. It's about competition for foreign investments, and at the moment you've got China, India, you've got Europe. And the environment there actually is pro for an investment. So you are competing worldwide, actually driving foreign money coming in for investment.

BLITZER: Sheikha, thank you very much for joining us. And you've got a beautiful country here in Dubai, and we're going to be spending a lot of time in the next few days looking around and getting a first-hand assessment. And we're going to be putting you into the "Situation Room" on CNN.

AL-QASIMI: Thank you. And I do hope that we have more Americans coming in to see what this place is all about. It's a beautiful country.

BLITZER: Appreciate it very much.

AL-QASIMI: Thank you.

BLITZER: We'll take a quick break. When we come back, we'll check our CNN poll. We'll get results of that. More of "Late Edition" from Dubai right after this.

(COMMERCIAL BREAK)

BLITZER: And now, in case you missed it, some of the highlights from the other Sunday morning talk shows back in the United States.

On Fox News Sunday, the chairman of the U.S. Joint Chiefs of Staff General Peter Pace talked about the U.S. Army's decision to launch a criminal investigation into whether former NFL player Pat Tillman's friendly fire death, as it's called in Afghanistan, was the result of negligent homicide.

(BEGIN VIDEO CLIP)

GEN. PETER PACE, CHMN., JOINT CHIEFS OF STAFF: I think it's important to chase every single possibility. And the inspector generals have decided that there's one more step to take.

And they're going to do that to make sure that the entire picture is painted clearly and accurately so the family can have as much information as possible.

(END VIDEO CLIP)

BLITZER: On CBS's "Face the Nation," Republican Senator Richard Lugar and Democratic Congressman John Murtha talked about Iraq and the potential impact on the mid-term elections.

(BEGIN VIDEO CLIP)

SEN. RICHARD LUGAR (R), INDIANA: I would say that, very clearly, everybody reads polls. They have not been going well for Republicans for the administration, for the Congress.

But I think, likewise, most people who are in that sort of a game would say, in the event that Iraq does actually form a democracy, in the event our economy strengthens, for example, in the event several things happen...

REP. JOHN MURTHA (D), PENNSYLVANIA: When you have the public against it, when you have the troops against what we're doing, when you have the people in Iraq against it, when you have the periphery against what we're doing, you have to understand that it's going to have a dramatic impact on the outcome of the election.

I think, right now, I would predict there is going to be a big turnover in Congress because people are so dissatisfied with a lot of things. (END VIDEO CLIP)

BLITZER: On ABC's "This Week," former Democratic presidential candidate, retired U.S. Army General Wesley Clark sidestepped questions about whether he will run for the presidency again in 2008.

(BEGIN VIDEO CLIP)

WESLEY CLARK, FORMER DEMOCRATIC PRESIDENTIAL CANDIDATE: What I'm trying to do is help the right Democrats get elected in 2006. That's the most important thing.

And I'm very proud we've got something like 55 U.S. military veterans who are running for Congress as Democrats. I want to help each and every one of them. I think they can make a huge difference in the future of this country.

I think having one-party domination of government is very dangerous for American democracy. And, frankly, that's where all of my energies and activities are focused.

(END VIDEO CLIP)

BLITZER: Highlights from the other Sunday morning talk shows here on "Late Edition, the last word in Sunday talk. We'll be right back.

(BEGIN VIDEOTAPE)

(voice-over): Hillary Rodham Clinton: What's her story? The junior senator from New York is among those leading the effort to block a deal that would allow a Dubai company to operate several U.S. port terminals.

Clinton is planning to introduce legislation that would ban companies owned by foreign governments from controlling American port operations.

The former first lady is also in the middle of a reelection campaign for the Senate. While she hasn't publicly stated any political ambitions beyond 2006, Clinton is widely expected to seek the Democratic presidential nomination in 2008.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Here are the results of the Web question of the week. Take a look at these numbers. Remember, though, this is not -- repeat, not -- a scientific poll.

I'll be back here tomorrow in "The Situation Room." We're live in Dubai. I'm Wolf Blitzer. See you next week on "Late Edition" as well. Thanks very much for joining us.

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

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