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CNN LATE EDITION WITH WOLF BLITZER

Interview With Ehud Olmert; Interview With Zalmay Khalilzad

Aired May 21, 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 11:00 a.m. here in New York and in Washington, 8:00 a.m. in Los Angeles, 4:00 p.m. in London, and 7:00 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for "Late Edition."
We'll get to my interview with the Israeli prime minister, Ehud Olmert, in just a moment. First, though, let's get a quick check of what's in the news right now. CNN's Brianna Keilar joining us from the CNN center.

(NEWSBREAK)

BLITZER: Israel's newly elected prime minister, Ehud Olmert, makes his first official visit to Washington this week for talks with President Bush and other top U.S. officials.

He addresses a joint meeting of the United States Congress on Wednesday. The Israeli-Palestinian conflict will lead the agenda, but Iran's nuclear program and recent threatening comments from President Mahmoud Ahmadinejad will certainly come up.

I spoke with the prime minister as he prepared for his trip.

(BEGIN VIDEOTAPE)

BLITZER: Prime Minister Olmert, congratulations. Thanks very much for joining us. Welcome back to "Late Edition."

We have lots to discuss. I want to start, though, with the situation involving Iran and its nuclear ambitions. What's Israel's estimate? How much longer before Iran has a nuclear bomb?

EHUD OLMERT, ISRAELI PRIME MINISTER: First of all, thank you very much, Wolf, for inviting me to this program, which I was very proud to take part in many times in the past in different capacities.

The issue of Iran is a very serious one. And the question is not when, technically, they will be in possession of nuclear bomb. The question is when will they cross the technological line that will allow them at any given time, within six or eight months, to have nuclear bomb?

And this technological threshold is nearer than we anticipated before. This is because they are already engaged very seriously in enrichment. So in other words, we are close enough to the possible possession of a nuclear weapon by the most extreme fundamentalist government, which talks openly and publicly about the wiping out of the state of Israel. That's where we are.

BLITZER: Well, what does that mean in terms of the time line? Do you believe it's months away, years away from crossing that technological threshold, as you say?

OLMERT: The technological threshold is very close. It can be measured by months rather than years.

BLITZER: So what does that mean from Israel's perspective? A lot of us remember the Israeli action in 1981 against the Iraqi nuclear reactor, the facility at Osirak. You remember that Israeli strike. Is Israel planning a preemptive strike against Iran's nuclear facilities?

OLMERT: At that time, Wolf, you'll remember that most of the international community, including your country, were entirely unaware of the danger of Iraq and of the possible nuclear weapons possessed by Iraq. And therefore, at that time, when we sensed that the international community is not aware, we were left with no other option but to attack Iraq ourselves.

Now there is an entirely different situation. America and Europe are leading this international effort. It is now on the agenda of the United Nations Security Council, and many countries are involved in trying to stop this, and I hope that they will succeed.

We will certainly try to convince other countries how urgent it is and why it is so important that, at this time before they cross the technological threshold, that the measures will be taken to stop them.

But thank God now it's widely recognized by the international community, and therefore, Israel doesn't have to act on its own.

BLITZER: Do you really believe that the president of Iran would stop its nuclear enrichment program under these political pressures from the U.S., the U.N., the Europeans?

OLMERT: I prefer to take the necessary measures to stop it, rather than to find out later that my indifference was so dangerous.

You know, Wolf, in modern times, we have to remember what happened when the world did not listen to dictators threatening other nations of annihilation. We had one experience in history of the Jewish people that we definitely don't want to be repeated.

And when I hear a president of a nation openly and officially declaring on every possible network in the world that he intends to wipe out another nation, my nation, and at the same time, he's working so hard to possess nuclear weapons, I have all the legitimacy to be concerned and to motivate other nations to take the necessary measures to stop him.

BLITZER: Here's what Mahmoud Ahmadinejad, the president of Iran, said last October. He said, "Israel must be wiped off the map of the world. And, God willing, with the force of God behind it, we shall soon experience a world without the United States and Zionists." And this is what he said only on April 14th, last month. He said, "I would like to say that, whether you like it or not, the Zionist regime is approaching its end. The Zionist regime is a dying tree, that soon its branches will be broken down."

Is this, from your perspective, simply rhetoric on his part, or do you think he really means it?

OLMERT: I certainly think that this is a lot more than just rhetoric. And as I said before, when such words are spelled out with such clarity by a leader of a nation, it can't be left unanswered. It is totally inconceivable that, having the experience that the Western civilization has with such leaders, that we will hear these words and we will not respond. It has to be answered.

And when such a leader is trying to build up nuclear weapons that can destroy major parts of the entire civilization of ours, then we have to act. And is incumbent upon the responsible forces in the Western world to take the necessary measures.

And as I said before, no one can say that he is not aware of what he says and what he claims. And therefore, I trust that the necessary measures will, indeed, be taken.

BLITZER: So what I hear you saying, Mr. Prime Minister, is that if diplomacy fails, Israel might, in the end, have to take unilateral military action.

OLMERT: Wolf, I think you hear too much on this particular one. What you can say is that I hope diplomacy will not fail, and I hope that the responsible forces will take the necessary measures.

And knowing President Bush, the depth of his commitment and the extent of his understanding of world affairs and of the need to fight extremists and terrorists, I am confident that he will lead other nations in taking the necessary measures to stop Iran from becoming a nuclear power.

BLITZER: But you're not -- and I'm going to move on to the other issues after this, but I just want to press you on this point. You're not ruling out an Israeli preemptive strike, when all is said and done?

OLMERT: I don't think that we have come close to even considering it.

BLITZER: That sounds like a pretty hard and fast statement, but I suspect there are planning operations in the Israeli military, as there are at the Pentagon, just in case.

OLMERT: Wolf, again, I understand your need of coming out with a big statement out of this program, and I'd love to give you one. But it will not be on this issue.

There is a Western world. There is America. There is Great Britain and Germany and France and Russia and China and other nations. I doubt that there is one country amongst those I mentioned which has a desire to see Iran, with its fundamentalist, Islamic, extremist government, possessing nuclear weapons. So I trust that they will take the necessary measures. I think it would be inappropriate and out of place for me to make any further statements about the other options.

(END VIDEOTAPE)

BLITZER: And just ahead, more of my interview with the Israeli prime minister. Prime Minister Olmert discusses the Hamas-led Palestinian government and whether he thinks it can become a partner for peace with Israel. Then, is Iran just months rather than years away from developing a nuclear weapon? We'll get some insight from two key members of the U.S. Senate intelligence committee.

And later, Iraq moves one step closer to a democratic government. We'll assess the progress as well as the challenges ahead with the U.S. ambassador, Zalmay Khalilzad, and Iraq's deputy U.N. ambassador, Feisal al-Istrabadi. "Late Edition" continues right after this.

(COMMERCIAL BREAK)

BLITZER: Our "Late Edition" web question of the week asks this: When will Iraqi security forces take full control of their country? In six months, one year, two years, five years? Cast your vote. Go to cnn.com/lateedition. We'll have the results at the end of the program. Straight ahead, more of my interview with the Israeli prime minister, Ehud Olmert. He offers his view about whether Palestinian President Mahmoud Abbas is really in control of the Palestinian government. You're watching "Late Edition," the last word in Sunday talk.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." We're reporting today from New York. And we return to my interview with the new Israeli prime minister, Ehud Olmert, who will be making his first official visit to Washington this week.

(BEGIN VIDEOTAPE)

BLITZER: Let's talk about the Israeli-Palestinian issues on the agenda right now. That will be a big chunk of your conversations here in Washington. Do you believe that the Hamas-led Palestinian Authority will accept Israel's right to exist, accept the Oslo agreements, renounce terrorism? Is that at all possible, from based on what you know?

OLMERT: I certainly hope that they will, but if you ask me what chance do I give to it, very low. After the last suicidal attack in Tel Aviv, when 11 people were assassinated -- amongst them a young American boy, Daniel Woods, from Florida, 16 years old, who was brutally killed, and died just a few days ago -- the prime minister of the Palestinian Authority, of the Palestinian government, and the minister of foreign affairs both said that they can't denounce this killing because this is, indeed, the realization of the ultimate dream of the Palestinians. And to hear the leader of Hamas talks about the dream of killing innocent children in the streets of a city is very disturbing. This is not a signal for moderation. This is a warning for further killing and terrorism.

BLITZER: They applauded that action. They supported it. But it was an action undertaken by Islamic Jihad, not by Hamas. What, if anything, do you make of the fact that Hamas itself has abided by avoiding terror attacks for the last year or so? It hasn't undertaken any suicide bombings or attacks directly.

OLMERT: Wolf, what difference does it make? When the head of Hamas openly and publicly declares that he embraces the suicidal attackers, that he supports them, that he been able to, he wouldn't have stopped them from doing what they do because they are fulfilling the dream of the Palestinians, its practically like taking part in the act itself. Because this is the most important inspiration for these suicidal attackers to carry on, and many more from them.

So I don't see any difference between the Hamas, which motivates and inspires the suicidal attackers, and the Islamic Jihad, which actually takes part in these actions. Both share the same values. Both share the same policy. Both share the same kind of responsibility.

BLITZER: The president of the Palestinian Authority, Mahmoud Abbas, said this earlier in the week. He said, "I reiterate that, based on the constitutional power granted to me by our basic law, which entrusts negotiation responsibility in the hands of the PLO executive committee, its chairman and its negotiation affairs department, we remain fully committed to return immediately to the negotiating table to reach an agreement that ends this long conflict."

You've negotiated with President Abbas in the past. Is it possible to resume peace negotiations with the Palestinian Authority president, as opposed to the prime minister and the Hamas-led government?

OLMERT: I'd certainly love to think that Mahmoud Abbas is capable of handling negotiations for the Palestinian people. In fact, I respect Chairman Mahmoud Abbas. He's a genuine person, and I know that he's opposed to terror and, had it depended on him, he would have accepted all the basic principles that are the guidelines for future negotiations between us and the Palestinians.

But as it turns out, I'm afraid that President Mahmoud Abbas doesn't have even the power to take charge of his own government. So how can he represent that government in the most crucial, complex and sensitive negotiations, about which there are so many divisions within the Palestinian community? This is not a personal issue.

Of course, Mahmoud Abbas himself is a very decent human being, unlike his predecessor. So we don't take anything for granted. Yasser Arafat was a murderer. And Mahmoud Abbas is a decent representative of the Palestinian community which elected him chairman a few years ago. But since he was elected, there was a new government elected. And this government is a terrorist government. And Mahmoud Abbas was deprived of all his powers. He is powerless. He is helpless. He is unable to even stop the minimal terror activities amongst the Palestinians, so how can he seriously negotiate with Israel and assume responsibility for the most major, fundamental issues that are in controversy between us and them?

BLITZER: You and your coalition government have supported a plan over the next several years to begin a unilateral disengagement or withdrawal from parts of the West Bank, just as Israel withdrew from Gaza, as you know.

Many, including President Abbas, many in Europe, even here in the United States, are condemning this. The French foreign minister said on Wednesday, "It's unacceptable that a border declared unilaterally would be accepted by the world."

How committed are you to this unilateral disengagement from the West Bank, sort of along the lines of the wall that Israel has been and is constructing?

OLMERT: Well, I met yesterday afternoon with the French foreign minister. He's a very pleasant gentleman, and I don't remember him saying the same things about these ideas that you just now quoted. But I understand, and this is very natural, that there are many who prefer negotiations.

I'll share with you my desire. I also prefer negotiations. There is nothing that I'd love to do more than negotiate with Palestinians. This is my desire. This is my dream. This is my mission.

I was elected prime minister of Israel on that sole agenda, that I'm prepared to negotiate with the Palestinians in order to advance further agreements that will lead Israel into a new phase of understanding with the Palestinians, that I will help Israel ultimately have borders that we don't have for so many years, and I will separate us from the Palestinians so that we will live our lives and they will live their lives alongside the state of Israel in their own independent state.

There is nothing that I want more. There is nothing that I will devote my time and energies more than to try and establish the basis for negotiations between us and the Palestinians.

What we said, which was taken and blown out of any proportion, is that if, unfortunately, Palestinians would not mature to the point where they can negotiate with us, largely because their government is a terrorist government and they are unwilling and unable to accept the basic, fundamental principles that were set by the Quartet, by the U.S. president, by the Europeans, and therefore, we may not be able to conduct negotiations, then the question will be, what are we going to do?

Wait until the Palestinians will change? How long? One year, two years, three years, five years, 10 years? And in the meantime, what? More terror, more innocent people killed, more victims, more blood, more suffering, more pain?

Or shall we try to do something, certainly not unilaterally, but through negotiations with our friends, with the most important powers of the world, with the U.S. president, with the Europeans, with Egypt, with Jordan? And we'll try to establish a basis upon which an understanding of our future borders can be reached.

BLITZER: The former president...

OLMERT: And that's what I will be trying to do.

BLITZER: The former president of the United States, Jimmy Carter, wrote an article in the newspaper USA Today on Tuesday in which he said this. He said, "It is inconceivable that any Palestinian Arab leader or any objective member of the international community could accept this illegal action as a permanent solution to the continuing altercation in the Middle East. This confiscation of land is to be carried out without resorting to peace talks with the Palestinians and in direct contravention of the road map for peace, which President Bush helped to initiate and has strongly supported."

Jimmy Carter strongly condemning any unilateral Israeli drawing of lines on the West Bank.

OLMERT: Well, I have enormous respect for President Carter, who come to visit me every now and then. When he's in Israel, I think some of his statements are different than the ones that he writes when he's far away.

But I think that the basic point is this: Shall we negotiate with a terrorist government? I don't know that there is one serious American representative that will advise Israel to sit with a terrorist government and negotiate with them.

I'm proud of your president, President George W. Bush, who has the courage and the determination to lead the world into the fight against terrorists across the world.

BLITZER: Can you...

OLMERT: I share with him entirely this position. And I'm not certain that I share the position, the implicit position, of President Carter that we should negotiate with a terrorist government.

BLITZER: Can you work out with President Bush and with others a way to avoid, clearly, negotiating -- you don't want to negotiate with the Palestinian government -- but at the same time allow the Palestinians themselves to receive international assistance for humanitarian purposes? Because the plight of the Palestinians now in the West Bank, in Gaza, clearly is growing worse.

OLMERT: Wolf, this is a much simpler issue. We don't have to wait until I meet with President Bush to say that we don't need the advice of any and we don't need the encouragement of anyone to want to help the humanitarian needs of the Palestinian people. At the present time, by the way, we don't know that there are any humanitarian problems. None at all. For the time being, the only problem is that some members of the government administration, who are known to get salaries from the government for not being involved in terror, did not receive their salaries.

All the other needs are met. And here I declare on behalf of the Israeli government that we will buy them all the medical equipment and all the drugs and all the medical supplies needed to all the hospitals in Gaza to make sure that there will be no shortage at all.

So in this area, there is a complete responsibility out of goodwill by Israel and by others. We will pay for it. We will not pay them. We will buy the drugs. We'll buy the equipment. We'll buy all the needs, and we will provide it to them directly. Because we certainly care for the humanitarian needs. And this is obvious.

But that doesn't mean that we have to pay salaries for terrorists who are now employed by a terrorist government only in order to strengthen this government.

BLITZER: We're out of time...

OLMERT: This is not a humanitarian need.

BLITZER: We're out of time, but I want to ask one final question, Mr. Prime Minister, on your predecessor, Ariel Sharon. What's the latest information on his condition?

OLMERT: Every morning when we wake up, we pray that we will hear that Ariel Sharon has waken up, opened his eyes, and he's back into full consciousness. And I still pray with all of the Israelis that it will happen very soon.

BLITZER: Mr. Prime Minister, we'll see you in Washington. Have a safe journey. Thanks very much for joining us on "Late Edition."

OLMERT: Thank you, Wolf. Thank you.

(END VIDEOTAPE)

BLITZER: And just ahead, President Bush's choice to head the CIA goes under the U.S. Senate spotlight. Are lawmakers buying into his security strategy? We'll speak live with two members of the Senate Intelligence Committee, Chuck Hagel and Ron Wyden. They're standing by.

Up next, though, a quick check of what's in the news right now, including President Bush's reaction to the new Iraqi government.

Stay with us.

(COMMERCIAL BREAK)

(NEWSBREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The formation of a unity government in Iraq is a new day for the millions of Iraqis who want to live in freedom.

(END VIDEO CLIP)

BLITZER: President Bush just a short while ago in Washington reaffirming U.S. support for Iraq's new government. Welcome back to "Late Edition." I'm Wolf Blitzer reporting today from New York.

Joining us from Washington to talk about Iraq and a lot more, Republican Senator Chuck Hagel of Nebraska. He's a key member of the Senate intelligence committee as well as the foreign relations committee. And Democratic Senator Ron Wyden of Oregon. He's also a member of the intelligence committee.

Senators, always good to have you on "Late Edition." Now, let me get your reaction to the formation of this national unity government in Iraq. Senator Hagel, I'll start with you. As you know, three key portfolios still not filled -- defense, interior, and national security. What do you make of this development today?

SEN. CHUCK HAGEL (R), NEBRASKA: It's a positive development. It's an important development. I think the president stated it exactly right. But as you have just noted, Wolf, there is a way to go. The three most critical portfolios have not yet been filled, or at least not been announced as to who will be the ministers.

But nonetheless, this is a significant step forward. What's important here is that the Iraqi government now be in place to start governing, start making decisions, so that the people in Iraq can start to develop some confidence that they are in charge of their future, they are making the decisions, they are the ones responsible for security and development. So, important step forward today. A ways to go, obviously. But this is important news.

BLITZER: Do you have any thoughts, Senator Hagel, on this report that Ahmed Chalabi is (inaudible) to be a likely candidate, or at least a possible candidate, to be the interior minister, which would run all the police forces, the internal security, more than 200 security forces under his control?

HAGEL: Well, that position is obviously critical. I don't know about that report. I have said for a long time, right from the beginning, Wolf, the future of Iraq is in the hands of the Iraqis. The outcome in Iraq will be determined by the Iraqis, not us.

And they are the ones who have to determine the makeup of that government. They are the ones who will determine their future. We can help support, but we will not be there indefinitely to do their work for them. So I don't know about that report. But it's up to the Iraqis now.

Senator Wyden, let me read to you today from a dispatch in The New York Times. "The violence has left Iraqi leaders isolated and embittered, and the democratic process has appeared increasingly irrelevant. The Bush administration's plans to reduce the number of American force to as few as 100,000 by the end of the year has been thrown into doubt. In private conversations American diplomats and military commanders have expressed growing pessimism about the prospects for any substantial change in the short term."

A pretty pessimistic assessment there. But what's your assessment?

SEN. RON WYDEN (D), OREGON: My assessment, Wolf, is that there may be an opportunity here, but I think we ought to be pretty cautious. For example, sectarian violence over the last three months has been higher than at any time in the last couple of years.

The Iraqi police, we saw stories about this today, clearly doesn't have things under control. And of course, Secretary Rumsfeld this past week in the Senate wouldn't commit to withdrawing some of our troops even this year. We've got to make real progress on Iraqis defending Iraq, and clearly we've got a long way to go.

BLITZER: You're a member of the intelligence committee, Senator Wyden. You heard the Israeli prime minister, Ehud Olmert, say on this program just a few moments ago he thought Iran was only a few months away, months in his words, from crossing a technological threshold, in his words, which would inevitably lead toward nuclear weapons. Is that the same assessment as you're hearing?

WYDEN: I do share his concern, and so do Senate Democrats, Wolf. In fact, this week we asked the administration to do a new national intelligence estimate to get at the bottom of these questions. We can't afford to see intelligence botched on Iran the way we saw it botched on Iraq.

And Democrats are going to try to get to the bottom of this. We know, for example, the real questions about how many centrifuges the Iranians have, and that of course is a key measure of their nuclear capability.

BLITZER: How much time, Senator Hagel, do you believe the international community has to allow diplomacy to work its way? HAGEL: Well, I don't know about time frames, but I do know this, Wolf. We, the United States, are going to have to engage Iran directly. And that agenda that has to be engaged is much wider than just nuclear proliferation.

HAGEL: It's going to have to deal with all the issues that confront not just the Iranian-U.S. relationship but the region. There will be no peace, prosperity, stability in the Middle East without the Iranians being part of that.

We had two days of hearings in the Senate Foreign Relations Committee this week. Almost every witness -- and there were witnesses from past administrations, Democrat, Republican; these are experts in the area -- strongly suggested the U.S. engage directly.

This is too important to leave on the outside, to let it just drift, and that's what we're doing. We're allowing this to drift. And when we're talking about nuclear proliferation, you don't get many second chances here. The margins of error just aren't there. It's a hair-trigger business.

So I think we need to continue to work with our allies, continue to stay moving in that direction. But at the core of this is going to be a direct U.S.-Iranian engagement, and I hope the administration is either planning for that now or starting to work that out.

BLITZER: Senator Wyden, you had one day of hearings before the Senate Intelligence Committee on General Michael Hayden to be the new director of the CIA. You asked him some seriously tough questions in the course of those hearings; then you went behind doors.

Do you now believe you will vote to confirm his nomination on Tuesday when the Senate Intelligence Committee considers confirmation?

WYDEN: Wolf, I haven't made a final judgment on it, and I don't expect to do so until I meet with the general again.

What I will tell you, though, that was partly striking to me is that the general has a reputation for being able to take very complicated issues and give simple answers. What happened at our hearing on Thursday, he was asked some pretty simple questions and was either giving complicated answers or wouldn't give any answers at all.

And there were some important contradictions at issue, as well. For example, in 2002, he came up to the Congress and testified that he couldn't listen to Americans' phone calls without a warrant, and yet the president's lawyers had advised him in 2001 that he could do just that.

We've got to get to the bottom of these questions. And I intend to meet with him again before I make a final judgment.

BLITZER: What about you, Senator Hagel?

HAGEL: I will vote for him. I think he's an exceptionally qualified candidate. I think he will do an excellent job.

There are many questions, just as Senator Wyden pointed out, that still need to be asked. I think this is rather complicated.

But as I said to General Hayden, both in private and at the hearing, we now, the policy-makers, the Congress of the United States, working with the president, needs to now develop a new framework, a new law, from within our Intelligence Committee, can work and assure Americans that their liberties are being protected as well as their national security interests. We now don't have that. Technology has overtaken past laws.

So we're going to have to work with Hayden. I believe he will be confirmed, and I think he will be an excellent choice. But we've got a long way to go here. This will not be the end of this debate, nor should it be.

BLITZER: All right, Senators, stand by. We have to take a quick break.

Lots more to talk about. We'll get Senators Hagel and Wyden to comment about the U.S. government's tracking apparently of phone calls around the United States. Also on immigration, what their thoughts are. Will the Senate come up with a compromise that will go to the House of Representatives?

Much more "Late Edition" right after this.

(COMMERCIAL BREAK)

BLITZER: A beautiful day here in New York City. Welcome back to "Late Edition."

We're talking with two key members of the Senate Intelligence Committee: Republican Senator Chuck Hagel of Nebraska, Democratic Senator Ron Wyden of Oregon.

Senator Wyden, you've now been briefed, together with all members of the Senate and House Intelligence Committee, on the warrantless wiretap program, as well as the report in USA Today that the National Security Agency has been tracking millions, tens of millions, billions of phone calls, actually, of Americans to get some patterns to determine if there's a terror threat.

First of all, based on what you know, is that USA Today story accurate? Because some of the giant phone companies here in the United States are flatly denying it.

WYDEN: Wolf, Chuck and I are not allowed to get into just those details. It's not in line with our oath of office.

But let me tell you what we do know. Americans are fearful today because again and again their government says one thing and then does another.

For example, General Hayden, in one day, six times said that this warrantless surveillance program consisted of international-to- domestic calls only and then only when you were talking about terrorists. But then folks here at home opened up their USA Today newspaper, heard about this domestic database, and they said we should have had some kind of inkling consistent with national security about what was really going on.

BLITZER: What about that? I want you to weigh in, Senator Hagel.

HAGEL: Well, Ron framed it, I think, appropriately and responsibly. Obviously, we are constrained because of the secret nature of these hearings and the knowledge that we are dealing with. So we are limited, obviously, Wolf, in answering your question.

But in addition to what Ron said, I would add that it goes back to a comment I made a couple minutes ago. It is my opinion that, in fact, the 1978 law that governs wiretaps and surveillance and warrants is out-of-date and technology has overtaken all of this. And I think it's critically important that we pass a new law -- and we do have bills in the Judiciary Committee, one that I helped write; Senator Wyden's been involved, Senator Specter has a bill -- that we come up with a new law so that the American people have confidence in what is going on to protect their security interests.

And that is a priority, no question about it, but so is guaranteeing the liberties and the rights protected in the constitution. That balance is critical. That's going to be the effort here that we're going to have to go forward with and write that new law.

BLITZER: It looks like, Senator Hagel, you have also been in the forefront in trying to come up with some sort of common ground, a middle position on immigration reform, working closely with the president. It looks like the Senate is basically going to go ahead with what the president wants.

The problem is going to be when you have to reconcile that with what the House has already passed, because a lot of Republican leaders in the House, Senator Hagel, are firmly opposed to the president's so- called guest-worker program that would lead eventually over many years toward citizenship for 10 million, 12 million illegal immigrants, potentially at least, here in the United States.

Is it your assessment, Senator Hagel, that you can work out a middle ground with the House, legislation that the president will be able to sign into law this year?

HAGEL: It is my assessment that we can work out a middle-ground compromise.

I do believe, I am hopeful, that the Senate will pass a good, responsible, comprehensive immigration reform bill this week. Yes, I have been in the middle of that. Many Democrats and Republicans have been right in the middle of it, as well.

I'm very proud of our efforts, and I think it's responsible. And it does comply with what the president's talked about. I firmly agree with what the president is saying about this.

It will be difficult in a conference with the House because they do have, at least a majority right now, we think, a little different attitude on how we deal with these real issues. These are complicated issues, Wolf. They have been allowed to develop over years of neglect. We've deferred them. That's why we have the mess that we have today.

So we're going to have to obviously do much more to protect the interest of our border and secure that border. And we do that. The compromise bill in the Senate is strong in this area, as what the president's talked about. But we go much further, because we need to deal with the 12 million illegals in this country.

BLITZER: All right. HAGEL: How do we deal with that? All the other issues. I'm confident we can do it. That's our job. That's what the American people expect us to do.

BLITZER: Senator Wyden, your leader, the Democratic leader in the Senate, made a very forceful statement this week when the issue of whether English should be declared the national language of the United States came up. Listen to what harry Reid said.

(BEGIN VIDEO CLIP)

U.S. SENATOR HARRY REID, (D-NV), MINORITY LEADER: While the intent may not be there, I really believe this amendment is racist. I think it's directed basically to speak to people who speak Spanish.

(END VIDEO CLIP)

BLITZER: Do you agree with Senator Reid, Senator Wyden?

WYDEN: Wolf, I've talked to Senator Reid, and what he really wants to do and what Senate Democrats want to do is work with Senators like Chuck Hagel to come up with a comprehensive bill. And you bet we see English and the English language as something that unifies us. It's something that brings us together.

Of course everybody knows that to really get ahead in this country you've got to know English, but let's try to first of all pursue this without all the divisiveness and polarization. In some instances, for example, we do need to have the forms in Spanish because otherwise some of the immigrants might not pay taxes.

BLITZER: Very quickly, we're out of time, but Senator Hagel, I want you to weigh in. What do you think?

HAGEL: Well, I think, again, this is all part of the debate of a democracy. Tough issue. It needs to be resolved. It's going to be imperfect. And let's have at it. We've had a great debate. We had 15 amendments offered that we debated and voted on last week. We're going to have more. That's the process. We're fixing and addressing the problem.

BLITZER: Senator Hagel and Senator Wyden, always good to have you on "Late Edition." Thanks very much for joining us.

And we're standing by to speak live with the United States ambassador in Iraq, Zalmay Khalilzad. And Iraq's deputy U.N. ambassador, Feisal al Istrabadi, on this, the day after the formation of a new Iraqi government.

And don't forget our web question of the week. When will Iraqi security forces take full control of their country? In six months, one year, two years, five years? Log on to cnn.com/lateedition to cast your vote. We'll be right back.

(COMMERCIAL BREAK) BLITZER: That would be for our North American viewers. CNN reporters will be "On the Story." That comes up right after "Late Edition," 1 p.m. Eastern, 10 a.m. Pacific, a little bit more than an hour from now.

And there's much more ahead on "Late Edition," including two views on Iraq's future now that a new government is in place. We'll speak live with the United States ambassador to Iraq, Zalmay Khalilzad and Iraq's deputy U.N. ambassador, Feisal al Istrabadi.

Then, anger down under. The Australian Prime Minister John Howard talks about the recent backlash against Muslims in his country and lots more.

And this programming note. Please be sure to join the best political team on television tomorrow night, 9:00 p.m. Eastern, on "Larry King Live." Larry will be in Washington. You'll get the inside stories on everything from the Hayden hearings to the CIA leak investigation. A special "Larry King Live." That comes up tomorrow night. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

We're standing by to speak live with the U.S. ambassador to Iraq, Zalmay Khalilzad, and Iraq's deputy U.N. ambassador, Feisal al- Istrabadi, in just a moment.

First, though, let's get a quick check of what's in the news right now. CNN's Brianna Keilar joining us from the CNN Center.

(NEWSBREAK)

BLITZER: A significant milestone for Iraq this weekend with the country's parliament approving a new national unity government. But with widespread violence showing no signs of letting up, very, very difficult work lies ahead, and the fate of U.S. troops on the ground in Iraq still very much unclear.

Joining us now from Baghdad, the U.S. ambassador to Iraq, Zalmay Khalilzad.

Mr. Ambassador, welcome back to "Late Edition."

How big of a problem is it that three key portfolios -- defense, interior, national security -- have been unable to be filled?

ZALMAY KHALILZAD, U.S. AMBASSADOR TO IRAQ: Well, it's still a challenge, an important challenge. The prime minister has said, and we agree with him, that those ministries should be occupied by people who are unifiers, they are not people with ties to militias, people who are broadly accepted by the Iraqis.

I think a few more days to get the best people, the right people for the job is the right approach. I anticipate that the decision will be made within a week.

BLITZER: All three of those portfolios you believe will be filled within a week?

KHALILZAD: That's what the prime minister, Maliki, told me when I saw him about three hours ago, that he has narrowed the list, he is interviewing some people and he's consulting with others, and that he anticipates that it'll be done within a week.

BLITZER: As you know, Ahmed Chalabi is a very controversial figure here in the United States. Many accuse him of leading the U.S. into the war in Iraq on some false intelligence, although he strongly denies that.

There's one report suggesting he's a front-runner as minister of the interior, which is in charge of the police, the security forces internally. Is that true?

KHALILZAD: Well, many names have been considered for the job by the prime minister, and there is a short list now that he is focused on. I don't want to talk about particular names. It's important that the Iraqi prime minister, who has the responsibility for nominating someone, that he discusses specific names.

BLITZER: Here's what the New York Times wrote on May 10th, and I want your reaction to this. Because clearly there's some hope, as the president of the United States says today, that a new day has started for Iraq, but there's also, as you yourself stated, deep concern about the enormous problems that lie ahead.

Here's from the New York Times: "Dozens of bodies surface daily. People are taken from their homes and executed. Assassinations are routine. But instead of looking to the government for protection, ordinary Sunni Arabs are taking up arms against it, perhaps the most vivid illustration of the depth of Sunni mistrust of the American- backed, Shiite-led security forces."

That sounds very, very gloomy. Is it that bad?

KHALILZAD: Well, it is bad. It is a fact that sectarian conflict, these killings, is the most serious challenge facing people in Baghdad. And it's very important for the new government to focus on security for Baghdad, for the people of Baghdad.

As I told you, I talked with the prime minister a few hours ago, and he has decided to review the security plan for Baghdad in the next few days and to provide for increased security for the people of Iraq.

But sectarian conflict -- militias, other unauthorized military formations -- are one of the biggest challenges that the new government faces.

BLITZER: Realistically, Mr. Ambassador, when do you believe the militias, whether the Badr militia, a Shiite militia, the Mehdi militia, or the Peshmerga, a Kurdish militia, realistically, when do you believe those militias and the other militias running around Iraq right now will be disbanded?

KHALILZAD: Well, it will take time, of course, but what is needed is there has to be a plan developed for decommissioning and demobilizing and reintegrating militia forces -- mostly into society, but some perhaps into security forces, as well.

This will take political decision, and at the same time it will take resources, and it will take time. Because these unauthorized forces, including militias, are the infrastructure of a civil war. They need to be brought under control. I'm happy to say that Prime Minister Maliki understands this. He has spoken clearly and forcefully, even today in his news conference, about the need that only authorized people should carry weapon in Iraqi streets.

BLITZER: Do you want to offer a time frame, Mr. Ambassador, how much time this will require? Are we talking months, years?

KHALILZAD: Oh, it will require months to develop the plan; it will require years to implement it.

BLITZER: What about your dialogue with Iran? Earlier you had suggested that you were authorized to begin direct talks with your Iranian counterparts in Baghdad, but you wanted to wait until after the formation of a government. Now that a government in Baghdad has been formed, when do you anticipate you will begin a direct discussion with Iranian diplomats in Iraq?

KHALILZAD: Well, the formation of the government has been not been completed yet. As you know, we still have three ministries that have to be completed. Then, if appropriate, we are willing to engage Iran.

BLITZER: So what do you think? When do you think that might start?

KHALILZAD: I don't know that. We've said we will complete the government process and then we will see. We have said in principle that we are prepared to engage them with regard to our concerns in Iraq after the completion of the formation of the government.

BLITZER: And I just want to nail down one point of some confusion. Did you meet in recent months with a representative, an emissary, an official of the Iranian government at some point to discuss various Iraqi-related issues? Because these reports keep surfacing, even though you've denied it in the past.

KHALILZAD: No, I have not met with any Iranian emissary or official since I have been here in Iraq to -- those reports that have surfaced have been wrong. And I'm glad to say that some of those reports have been denied by the authors themselves. They have made corrections to their earlier reports.

BLITZER: Many observers who were critical of the U.S. military involvement in Iraq right now say now that there's a national unity government about to be formed, a major step forward, why not simply declare a victory and pull out the U.S. forces? KHALILZAD: Of course, the Iraqi capabilities are improving. Right now there is about 260,000-plus Iraqi forces, and by the end of the year that number will go to over 325,000. And with changing the political circumstances, with the Sunnis participating in the political process, it is possible that the security circumstance will also improve, but I don't believe that it will improve immediately.

Given these two circumstances, if the security situation improves and grows in the capability of the Iraqi forces, strategically there should be the opportunity to adjust the composition, size and the mission of the force. But this will be very much dependent on our discussions with the new Iraqi government as well as with what happens in Iraq in the course of the next few weeks and months.

BLITZER: We're almost out of time, but I want you to respond to a comment made by the new prime minister of Italy, Romano Prodi. He said this. He said, "We consider the war in Iraq and the occupation of that country a grave error. It did not resolve, but rather, has complicated the problem of security. Terrorism has found in Iraq a new base and new pretexts for terrorist actions that are inside and outside the Iraqi conflict."

Italy had been, at least until this new government has been formed, a strong ally cooperating with the U.S. in Iraq. What do you make of what the new prime minister of Italy is saying?

KHALILZAD: I don't want to get in an argument with the prime minister of Italy, but the important point to keep in mind is that what everyone thought of, whether anyone should have come into Iraq or not, now that we are here, it is absolutely essential that Iraq succeeds. Because if Iraq does not succeed, if we withdraw our forces from Iraq before the Iraqis can take care of their own security, the consequences for the region and the world would be, indeed, very grave.

So I look not to the past but to the future. Iraq's future is about the future of the world, and we need to do everything we can that this country succeeds, that it can stand on its own feet.

BLITZER: Mr. Ambassador, thanks once again for joining us. Thanks for all your good work over there. We appreciate it, and be careful as we always tell you at the end of these interviews, Zalmay Khalilzad, the U.S. ambassador in Iraq.

KHALILZAD: Thank you, Wolf.

BLITZER: Thank you. Let's get a different perspective, or at least another perspective on where Iraq's government goes from here. I'm joined here in New York by Iraq's deputy ambassador to the United Nations, Feisal al Istrabadi. Mr. Ambassador, welcome back to "Late Edition."

FEISAL AL-ISTRABADI, IRAQ'S DEPUTY PERMANENT REPRESENTATIVE TO U.N.: Thank you. Good to be with you.

BLITZER: What do you think of the fact your new government has been unable to fill these three portfolios. Do you agree with Ambassador Khalilzad that it's only a matter of days, by the end of the week these portfolios will be filled?

AL-ISTRABADI: I think so. I suspect that before the prime minister fills those particular ministries, you want to make sure you have a combination of people that will work well. You want to make sure that they will be able to produce a common work plan. I don't think it is going to interpose a -- I don't think there will be a particularly long delay before we have those positions filled.

BLITZER: What is a bigger threat to Iraq right now, the insurgency from the Saddam loyalists, the terrorists, the foreign fighters, or the sectarian violence, the potential for a civil war? Which is a bigger threat to Iraq?

AL-ISTRABADI: I have never been one to believe in the civil war scenario, and I don't now. I think that there are very small numbers of radicals on either side who are taking advantage of an unfortunate security situation, but I continue to believe that in particular the jihadists and elements of the previous regime, who I think are principally responsible for the security situation in Iraq today, continue to be the largest threat.

And I believe that the overwhelming bulk, the overwhelming majority of the people of Iraq, 73 percent of whom voted in the last election, are united to and determined together to defeat this insurgency, so-called.

BLITZER: Here's what President Bush said on May 12 on what he regards as one of the major problems facing Iraq and stability and democracy. Listen to this.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The main challenge is the militia that tend to take the law into their own hands, and it's going to be up to the government to step up and take care of that militia.

(END VIDEO CLIP)

BLITZER: All right. What do you think the government can do to disband, to break up these militia, because as you know, the Shia militia are a source of grave concern to the Sunnis and vice versa. And then in the north, the Peshmerga, the Kurdish militia, there's at least 70,000 forces there in that militia. And President Jalal Talabani, who himself is a Kurd, says these are legitimate forces, if you will. He doesn't see any great desire to break up the Peshmerga.

AL-ISTRABADI: Well, I think that the goal is to integrate those elements who are armed into a national army or a national security force, and I do see that some of those, including the Peshmerga, probably have a significant role to play. They are very well-trained, well-equipped troops who have, in fact, been reintegrated or been reintegrating into Iraqi forces and have participated in operations throughout the country under the command of the ministry of defense, so I think that that has to be the goal.

BLITZER: Can you say the same thing about the Badr militia?

AL-ISTRABADI: Well, I don't want to get into specifics, but I think that process has been ongoing and will continue to be under way, and I think that that is what's going to happen, that these forces will ultimately be reintegrated. Obviously no government can have -- can tolerate having armed militias as such, but to the extent that we can integrate people into a unified national force, obviously that's what we're going to attempt to do.

BLITZER: Last week on this program, former President Jimmy Carter's national security adviser, Dr. Zbigniew Brzezinski, and he offered a gloomy assessment about the U.S. military presence in Iraq and its impact on the security situation and political situation there. Listen to what Dr. Brzezinski said.

(BEGIN VIDEO CLIP)

ZBIGNIEW BRZEZINSKI, FORMER NATIONAL SECURITY ADVISER: The longer we stay, the more we become the problem, the more likely the civil strife will escalate into civil war. It is not yet a civil war, but it's getting close to it.

(END VIDEO CLIP)

BLITZER: All right. You want to react to what Dr. Brzezinski said?

AL-ISTRABADI: Yes. I think there is some truth to what Dr. Brzezinski says in the long term. But on the issue of the long term, neither the American public nor the American government nor the Iraqi public or the Iraqi government wish to have a long-term presence of the multinational forces including U.S. troops.

But in the short term, until the Iraqis are able to provide for our own security, it is a simple fact of life that the multinational forces will need to remain as we build capacity. A short run or immediate withdrawal of the multinational forces in Iraq would be cataclysmic for us, and I think there is universal acknowledgment of that.

BLITZER: How much longer do you believe U.S. forces will have to stay? You think it's a matter of another year, two years, five years, ten years? What is your assessment?

AL-ISTRABADI: I don't want to play this sort of a guessing game. I know we're able to do much more in terms of providing for security ourselves than we could a year ago. A year from now we'll be able to do much more at that time than we are now. I think it is going to be a process that will unfold over time, and it has to be capacity- driven. The more quickly we can achieve certain targets, the more quickly the multinational forces can be drawn down.

BLITZER: Here's what The New York Times wrote on Friday: "Increasing portions of the middle class seem to be doing everything they can to leave the country. In the last ten months, the state has issued new passports to 1.85 million Iraqis, 7 percent of the population and a quarter of the country's estimated middle class."

Are the middle class fleeing Iraq as quickly as they can?

AL-ISTRABADI: I don't think so. I mean, there are large parts of the country that are quite pacific. There are some people who are leaving. That's certainly true. It's also true that, having been isolated from the rest of the world, people are taking advantage of an opportunity to travel for, in some cases the very first time in their lives.

But I think that in the parlance of Wall Street, I'm very bullish on Iraq's future. We have difficulties but I believe we'll overcome those difficulties. I think the forming of this government is a significant step in the right direction. And I think that we'll be able to get a handle on these problems.

BLITZER: We'll leave it on that upbeat assessment. Let's hope you're right. A lot of people watching and waiting, and a lot of lives are at stake. Feisal al-Istrabadi is the deputy Iraqi ambassador to the United Nations. Thanks for coming in.

AL-ISTRABADI: Thank you.

BLITZER: And coming up, like the United States, Australia is staying the course in Iraq. We'll have my special conversation with the country's prime minister, John Howard.

That's coming up. We'll also get his take on the nuclear standoff with Iran and whether the U.S. should engage in direct negotiations with Iran.

Plus, in case you missed it, our highlights from the other Sunday morning talk shows here in the United States.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: There's still time for you to weigh in on our Web question of the week: When will Iraqi security forces take full control of their country? Six months, one year, two years, five years? Cast your vote at cnn.com/lateedition. We'll have the results at the end of the program.

Straight ahead, my special interview with one of President Bush's closest allies when it comes to Iraq, the Australian prime minister, John Howard.

You're watching "Late Edition," the last word in Sunday talk.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) BUSH: Australians and Americans celebrate freedom's advance, because nations that respect the rights and dignity of their own people are the best partners for peace.

(END VIDEO CLIP)

BLITZER: President Bush welcoming his close ally, the Australian prime minister, John Howard, on an official visit to Washington this past week.

Welcome back to "Late Edition."

During his trip, I spoke with the prime minister about his country's military commitment in Iraq, the nuclear standoff with Iran and much more. He joined me from Chicago.

(BEGIN VIDEOTAPE)

BLITZER: Prime Minister, welcome to "Late Edition." Thanks very much for joining us.

You had extensive talks with President Bush here in Washington. Are both of you on the same page when it comes to Iraq?

JOHN HOWARD, AUSTRALIAN PRIME MINISTER: Yes, that's right. We'll see the distance. Obviously our military contribution is nowhere near as big as that of the United States. But the worst thing that could happen in relation to Iraq would be a premature drawdown or premature withdrawal.

We hope that the formation of a new government under a new prime minister will bring a lot of stability and therefore a lot of hope to that country.

It's obviously going through a very difficult time. The insurgency is obviously still a very big challenge. There is an enormous amount of inter-ethnic rivalry. And clearly, we are all concerned.

But you shouldn't translate that concern into a premature withdrawal or a premature drawdown of troops. I think that would be a mistake.

BLITZER: So as far as policy toward Iraq is concerned, there is no daylight between you and the United States?

HOWARD: No, our position is essentially the same. We supported the original operation. We were part of it. And we will continue, albeit on a very much smaller scale, we'll continue to play our part.

And we think that if the terrorists were to succeed in Iraq, then that would represent an enormous defeat for the cause of democracy in the Middle East and an enormous setback for the anti-terrorist cause around the world.

Because whatever arguments we might, in retrospect, have about whether things should have happened or not three years ago, the reality now is that we must finish the job. And if Iraq is left in a situation where it cannot secure itself and it falls into the hands of the insurgency or the terrorists, then the implication, not only for the Iraqi people but to the whole Middle East, are quite horrendous.

BLITZER: The United States currently has about 135,000 troops in Iraq. The United Kingdom has about 8,000. South Korea, Italy, Poland have a lot less. You have about 900 troops.

Some of these other countries are scaling back. Are you planning on scaling back or keeping that level for the foreseeable future?

HOWARD: We will keep the current level for the foreseeable future. We're not going to pull out until we are satisfied that the Iraqis can effectively secure their country themselves.

Now, we're playing an active role in bringing that about. We're playing a training role, as well as a security role. We have some 450 to 500 of our forces in the southern part of Iraq, and we will keep them there even after their current responsibilities in relation to a secure environment for the Japanese end. They will other roles to play now.

We can't tell when we might be able to withdraw them. Obviously, like the Americans, we don't want them to be there indefinitely. And we all are working toward giving the Iraqis the opportunity to look after themselves.

That has to be the objective. Nothing will be achieved in the long run if we don't encourage self-capacity by the Iraqis. And it's achieving a balance between getting that self-capacity on the one hand, but on the other hand not withdrawing prematurely. Because if that were to occur, then everything would be lost.

BLITZER: Let's move on to a neighbor of Iraq, Iran. Do you believe the United States, the Bush administration, like Britain, France and Germany, should be holding direct talks with Iranian officials when it comes to Iran's nuclear program?

HOWARD: I think what should happen is that the United Nations system should be allowed to work. I believe that the United Nations process now under way should be seen through.

Both America and Australia believe in trying to achieve a diplomatic solution to this very difficult problem. And I think in the first instance we should exhaust the United Nations process before we start examining alternative approaches.

BLITZER: Well, the U.N....

HOWARD: We don't...

BLITZER: Excuse me for interrupting. The U.N. secretary general, Kofi Annan, said this on May 12th. He said, "I have insisted very clearly, both in private in my contacts with the America administration and publicly, that I think it's important that the United States come to the table and that they should join the European countries and Iran to find a solution."

He's the secretary general. Do you agree with him?

HOWARD: Yes, well, when I talk about the United Nations processes, I mean the processes through the Security Council. I mean, I respect the views of the secretary general, but when I talk of the process I mean the process which is now under way, which involves the potential for further resolutions by the United Nations Security Council. And I think that is the path at this time that ought to be followed.

Three years ago, there was criticism of the United States and her allies, including Australia, for not further using the processes of the United Nations. The view was taken then that that was not going to work. We now, in relation to Iran, have the opportunity to see how full those processes can be made to work. It's quite a test for the United Nations, and we're very keen that that test take place.

BLITZER: So you don't have a position specifically as to whether there should be a direct dialogue on nuclear issues between the United States and Iran?

HOWARD: I think it's better at this time to go down the United Nations path.

BLITZER: But you can go down the United Nations path and still have a direct dialogue. The British, the French and the Europeans are talking directly with them and they support a U.N. dialogue, as well.

HOWARD: I think it's always a good idea, Wolf, or often a good idea to try one approach or play one card at a time in a difficult situation like this. And the card that I believe should be played at the present time is through the United Nations.

BLITZER: How should the world community deal with a leader like Mahmoud Ahmadinejad from your perspective?

HOWARD: Well, I think you have to deal with him in different ways. You don't overreact, but equally you don't take a backwards step. And my very strong view in relation to Iran is that we should stick to the path that we have chosen. We'll see how that works. I don't think it's wise of anybody to hypothesize as to what we might do if that particular approach is unsuccessful.

BLITZER: Because you're hinting at a military option. Is there a realistic military option if diplomacy fails?

HOWARD: Well, look, I'm not hinting at that. I'm very much of the view that we should try and solve this issue diplomatically.

BLITZER: Let's talk about ...

HOWARD: I don't think ...

BLITZER: Go ahead, finish your thought. HOWARD: I don't think it's appropriate ever for somebody in my position to start hypothesizing about other things. I don't want military action, and nobody wants military action, ever. It's always a last resort, and I think we should try very hard to solve this issue diplomatically and that is Australia's very strong position.

(END VIDEOTAPE)

BLITZER: Still ahead, more of my interview with the Australian prime minister, John Howard. He talks about whether his country is a target for terrorists because of its support for the war in Iraq.

Up next, though, a quick check of what's in the news right now, including the first meeting between the Israeli and Palestinian officials since Hamas gained control of the Palestinian government. Stay with "Late Edition."

(COMMERCIAL BREAK)

(NEWSBREAK)

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer, reporting today from New York. We return now to my interview with the Australian prime minister, John Howard, who visited the United States this past week.

(BEGIN VIDEOTAPE)

BLITZER: Australia also has about 540 troops in Afghanistan right now. Let me read to you from a May 3 issue of The New York Times: "Building on a winter campaign of suicide bombings and assassinations and the knowledge that American troops are leaving, the Taliban appear to be moving their insurgency into a new phase, flooding the rural areas of southern Afghanistan with weapons and men. The scale of the militants' presence and their sheer brazenness have alarmed Afghans and foreign officials far more than in previous years."

Question: Is the situation in Afghanistan getting better or worse?

HOWARD: Well, I think it remains very difficult, and it will be a long campaign. But you have to ask yourself, what is the alternative? Those who wring their hands about how difficult it is in Afghanistan at the present time must be asked, "Well, what is the alternative?"

I think if the coalition were to retreat in Afghanistan, were to pull out, the Taliban would take over again. And that would be an enormous setback to the anti-terrorist cause. I mean, it is unthinkable that there would be failure for the anti-terrorist cause in Afghanistan.

BLITZER: A lot of us... HOWARD: But it will be difficult. And it just underscores the necessity of countries in the coalition to remain close and to work together and to maintain their commitment.

BLITZER: A lot of us remember all those Australian tourists who were killed in that terrorist attack in Bali. The sense you get is that Al Qaida is targeting Australians largely because of Australia's very close alliance with the United States. Is that a fair assessment?

HOWARD: No, it's not a fair assessment. We are undeniably a close ally of the United States, and we don't make any bones about it. But the fact is that Australia was a target for terrorism before even the 11th of September, 2001. And Bali, of course, took place before the coalition operation in Iraq.

And if you look at where the terrorist attacks have occurred over the last couple of years, you'll find that they have occurred in places which have claimed the lives of citizens of countries that haven't been particularly close to the United States. And indeed, when terrorists attack, they attack with indiscriminate fury and without much selectivity.

When you attack countries, you frequently claim the lives of visitors to those countries. And I think the idea which is implicit in your question, which is if you make yourself a very small object and roll yourself up into a ball and disappear into a corner that you won't be targeted by terrorists, I think that is quite illusionary.

BLITZER: A lot of us were shocked at those images we saw in December when the mostly white Australians were attacking Muslims at that beach in Australia. How serious of a problem is this in Australia, these anti-Muslim sentiments clearly that were evident then?

HOWARD: Well, that particular issue was dealt with at the time, and I think rightly is a law and order issue. You often, in any country, get boil-overs between different groups. In the atmosphere of hot weather and perhaps the consumption of too much alcohol, that happens.

There is not, in my view, general anti-Muslim feeling in Australia. There is certainly great hostility to Muslim extremism in Australia, as there is in most countries. But the majority of the Muslims in Australia are upright, good Australians who hate terrorism as much as I do.

BLITZER: You were are a state dinner that President Bush and Mrs. Bush hosted in your honor here in Washington this week.

Rupert Murdoch, the chairman of the News Corporation from Australia, he said this about you. Let me read it to you. He said, "I think the prime minister could go on if he wanted to, but I doubt it. He is probably planning to go out at the top. He is on top of his form, and much better to go out that way than like Margaret Thatcher or losing an election." Question: Are you going to be running for re-election?

HOWARD: Well, I will remain prime minister of Australia and leader of my party, the Liberal Party, as long as the party wants me to and it's in the best interest of my party that I do so.

BLITZER: So what does that mean? How much longer do you see yourself...

HOWARD: What it means...

BLITZER: ... as the prime minister?

HOWARD: It means exactly what everybody knows it means, and that is I will stay as long as my party wants me to and it's the right thing for the party that I do. I don't give a running commentary beyond that on my future intentions.

BLITZER: Well, good luck to you, Prime Minister. Thanks very much for joining us. Welcome to the United States. Have a safe journey back.

HOWARD: Thank you, Wolf.

(END VIDEOTAPE)

BLITZER: And up next, in case you missed it, "Late Edition's" Sunday morning talk show roundup. But first, this:

(BEGIN VIDEOTAPE)

BLITZER: Casey Martin, what's his story? The professional golfer who fought for the right to use a golf cart in competitive play will become head coach of the University of Oregon's men's golf team. In 2001, the U.S. Supreme Court sided with Martin, whose right leg is severely weakened by a birth defect, forcing the PGA Tour to allow him to use a cart. The two-time All-American knows a thing or two about collegiate golf. His 1994 Stanford University squad, led by Tiger Woods, won the national title. Before leading the Oregon Ducks, Martin will play in a few more tournaments.

Ayan Hirsi Ali, what's her story? A prominent member of the Dutch parliament, the Somali-born Hirsi Ali resigned from office this week after learning she might be stripped of her citizenship because of false claims made on her asylum application in the 1990s. Elected to the Dutch parliament in 2003, Hirsi Ali won national recognition and praise from fellow lawmakers for championing the rights of Muslim women and opposing Islamic fundamentalism. She's now expected to move to Washington to serve as a resident fellow at the American Enterprise Institute.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: And now, in case you missed it, let's check some of the highlights from the other Sunday morning talk shows here in the United States.

On NBC's "Meet the Press" and ABC's "This Week," very different opinions about the government's tracking of Americans' phone calls.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, SECRETARY OF STATE: This president is committed to two goals simultaneously: first, that he's going to protect the privacy of the American people because that's who we are. But he's also going to protect us as a country.

And in order to do that, I think Americans understand that you can't have a situation in which Al Qaida and people associated with Al Qaida are having conversations inside the country that connect to conversations outside the country.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

U.S. SENATOR JOHN EDWARDS (D-NC): ... is the reason we have a separation of powers in this country. And the Congress had enacted a law that told the president exactly what he was supposed to do, and he just ignored it -- intentionally ignored it. If there was any question about this, the very least they should've done is go to the Congress and try to get the law changed.

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BLITZER: And on "Fox News Sunday" and CBS's "Face the Nation," the key topic was immigration reform.

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U.S. SENATOR JOHN MCCAIN, (R-AZ): The word "amnesty" in the dictionary means forgiveness. What we are talking about, and what the overwhelming majority of American people support, is an earned amnesty: background -- criminal background check, paying back taxes, $2,000 fine, learn English, work for six years before getting in line behind everyone else. It's very tough. It's called earned citizenship.

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U.S. REP. JAMES SENSENBRENNER, (R-WI): A lot of the illegal immigrants in this country will not sign up for whatever program it is -- call it amnesty, call it earned legalization -- because they're afraid they're going to lose their jobs. The market works. It is always cheaper to hire an illegal immigrant than to hire a citizen or a legal immigrant with a green card.

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BLITZER: Highlights from the other Sunday morning talk shows here on "Late Edition," the last word in Sunday talk. Up next, the results of our web question of the week: When will Iraqi security forces take full control of their country? In six months, one year, two years, five years?

And four our North American viewers, coming up right at the top of the hour, CNN reporters are "On the Story," including our correspondent Joe Johns on the political fallout from President Bush's immigration reform proposals. You won't want to miss it. Stay with us.

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BLITZER: Our "Late Edition" web question asks: When will Iraqi security forces take full control of their country? Here's how you voted. Six percent said six months, four percent one year, 13 percent two years, 77 percent said five years. Remember, though, this is not a scientific poll.

Let's get to some of your e-mail. C.E. Pringle from Denver writes this: "The abuse of power by the current administration is bordering on, perhaps crossing the border to, tyranny. How can we defend our Constitution against this assault?"

James from Gridley, California, writes, on the other hand: "The wiretapping program is precisely in line with the 9-11 Congressional Report recommendations. The use of the phrase, 'undermining our civil rights,' is only true if you are a terrorist or supporter of al Qaida."

Remember, we always welcome your comments. Our e-mail address is lateedition@cnn.com. Let's take a quick look at what's on the cover of this week's major newsmagazines here in the United States. U.S. News and World Report features President Bush and asks this provocative question, "How Low Can he Go?"

Newsweek magazine explores the mystery of Mary Magdalene. And Time magazine has the "radical" Dixie Chicks on the cover.

That's your "Late Edition" for this Sunday, May 21. Please be sure to join us next Sunday and every Sunday at 11 a.m. Eastern for the last word in Sunday talk.

And remember, I'm in "The Situation Room" Monday through Friday, 4 to 6 p.m. Eastern, another hour at 7 p.m. Eastern weekdays. Don't forget also to join the best political team on television tomorrow night on "Larry King Live," 9 p.m. Eastern. He'll be broadcasting from Washington. You'll get the inside stories on everything from the Hayden confirmation hearings to the CIA leak investigation, Iraq, Iran, all that. A special edition of "Larry King Live" coming up tomorrow night.

Until then, thanks very much for watching. I'm Wolf Blitzer in New York. For our North American viewers, "On the Story" is next.

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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