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THE SITUATION ROOM

President Bush at the; Nuclear Deal With Iran?; Chilling Charges in Canada; Iraq's Prime Minister Offers Condolences After Insurgent Attacks; U.N. Ambassador Sounds off on Iran Strategy; ACLU Suggests Telecom Merger Be Closely Examined; Defense Attorneys Complain of Leaks in Iraq Killing

Aired June 6, 2006 - 16:57   ET

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


WOLF BLITZER, CNN ANCHOR: The president of the United States answering reporters' questions on the situation in Iran and Somalia, where warlords apparently sympathetic to al Qaeda have now taken charge in Mogadishu.
Let's listen in.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... al Qaeda safe haven. It doesn't become a place from which terrorists can plot and plan.

And, so, we're watching very carefully the developments there, and we will strategize more when I get back to Washington as to how to best respond to the latest -- the latest incident there in Somalia.

Yes.

QUESTION: President Bush...

BUSH: Where are you from? Here?

QUESTION: "Laredo Morning Times."

(CROSSTALK)

BUSH: Nice to be back here. Thank you.

QUESTION: Very nice to meet you, too.

BUSH: Rick and I were talking about the first time I came here, after I had won governor. He had already been in office for a while. It was the Washington Day parade, and I remember it fondly. It's good to be back in Laredo.

QUESTION: It's good to have you here, sir.

Are you all -- or you hoping to -- a lot of people say that the answer for immigration is to -- well, one group is saying that the quotas need to be raised for the amount of legal documented workers that can come in.

BUSH: Right.

QUESTION: Is that -- is that part of your proposal?

BUSH: Well, here's the -- I think that the framework I've outlined recognizes that Congress has got the right to regulate what they call green cards.

And if Congress thinks that the line for citizens from Mexico is too long, they can increase the number of green cards. If they think it's -- or -- or they can shorten the -- increase the number of green cards. If they think it's too short, they can eliminate the number of green cards.

In other words, they can control the flow of people from a particular part of the country.

What I want is, people who have been here for a while to be able to have the choice, if they pay a fine, if they learn the English language, if they have proven they work, to be able to get in the citizenship -- in the potential citizenship line, but at the back of it.

See, they don't get to be in the front. The people who have been here legally are in the front of the line. They get to wait in line. And if Congress wants to shorten the line, they increase the number of green cards.

QUESTION: And -- and -- and, I guess, for those that haven't been here that long, do you favor deportation of -- of those?

BUSH: Well, I believe that, as I've said in my remarks, that there ought to be a difference between those folks who have been here for a period of time, and, like, for those who own a home or have got a family established or have had a job for a long period of time and those who have arrived recently.

Those people ought to be given a temporary worker card for a limited period of time. And, when the time is up, they need to go home. That's what a temporary worker is. It's not a permanent worker card. It's a temporary worker card. And Congress needs to determine the length -- the proper length of time.

Right now, one consideration is three years with a three-year renewal. And what that will do is, that will help people, who are looking for somebody to do a job Americans aren't doing find workers.

It will also mean that somebody doesn't have to sneak across the border. See, we've got Border Patrol agents chasing down people who are trying to sneak across to do work Americans aren't -- aren't doing.

So, it seems like it makes sense to me that, here, you can come to our country on a temporary basis to do a job. And, when the time is up, you get to go home. That's how you enforce the border. You enforce the border with more Border Patrol agents, better technology, and a rational way to treat people who are coming here to do work Americans aren't doing.

That's -- that's one of the reasons I'm coming down here to Laredo, as well as Artesia, is, I want to talk to these Border Patrol agents, and I want to assure them that we're listening to what -- what they need to get their jobs done.

Our job in government is to say to people who are risking their lives and working hard is, what do you need to get the job done? And that's why I've been coming down here and will keep coming down here. Congress needs to get a bill -- yes, sir?

QUESTION: Mr. President, you spoke about progress earlier today in Artesia. You said that you feel it's progress that both the Senate and the House have both taken up the issues of immigration. What concrete progress can you point to in terms of winning over the conservative in your party who still stand pretty firmly against the idea of any path to citizenship for immigrants?

BUSH: Well, one thing is, it's conceivable you could have been asking me, how come you can't get any -- any chamber in Congress to pass a bill? And so progress, what I'm telling the American people is, is that from last fall to now we've got two bills out there. That's progress.

What else is progress is a common understanding.

One, we've got to enforce the border.

Two, that people need to be treated with respect.

Three, that there needs to be a assimilation.

Four, that we need to hold employers who break the law to account.

Five, there needs to be some way to deal with people who are here to work on a temporary basis.

And six, ultimately we're going to have to do something about people who have been here for a long period of time. In other words, people understand those are the principles that we've got to work on.

There's no question this is a difficult issue for some in Washington, D.C., but my job is to continue to call people to account and say we've got to work together to get a -- get a bill done. And one way to do it is to come right down here on the front lines of border enforcement and say to the United States Congress, there are people working hard on behalf of this country, and we owe them a comprehensive piece of legislation so they can do their job. And I'm going to keep doing it.

Yes, ma'am. Where are you from?

QUESTION: ABC News.

BUSH: ABC News? (INAUDIBLE). Always looking out for my fellow citizens.

QUESTION: Thank you.

Last summer you set a deadline for Congress (INAUDIBLE). Are you going to put such a deadline on immigration...

BUSH: My attitude is, is that in order for these people to be doing their job, they need a bill as soon as possible. And I'm looking forward to getting that conference -- seeing the conference get together.

You know, people -- there are people making statements. And that's important for people to set their -- set out their -- you know, say things and kind of set their markers. But conferences have a way of working things out, and I'm going to be continuing to urge people to work things out in conference.

They haven't yet sat down as a conference yet, but they will pretty soon. And that will give us a pretty good feel for, you k now, whether or not attitudes are hard and to the point where nothing can get done.

I don't think so. I think the people want something done in America. If you look at, you know, what people are saying, they are saying let's get something done in a comprehensive way. And I believe we can get something done.

No question it's hard work. But that's all the more reason to work hard to get it done.

I recognize some people in Washington would rather duck the hard issue, but that's not the way I am. And that's not the way most people in Congress are. They want to get the job done. So we just keep working it.

OK. Thank you, all, unless you want to stand out here a little longer.

You're back again.

QUESTION: I'm sorry. One last question.

BUSH: That's fine. I'm glad to be working with the local press.

QUESTION: Thank you so much.

Some people say that Mexico needs to do a whole lot more to just create more jobs that pay more decent wages for its people and that America should -- should help Mexico by investigating more or providing more, more development funds. Is that -- what do you think about that? And do you have any kind of proposals for that?

BUSH: I think -- I think the people that say that the long-term solution to immigration is for people to be able to find work in Mexico, they're right. And that's why I've been a strong supporter of NAFTA. One of the interesting things about the border here that I don't think a lot of Americans are aware of, but I know those of us who grew up in Texas are aware of, is that this part of the world used to be really poor. It was -- up and down the Rio Grande Valley there was a lot of impoverished people.

Laredo is a booming town. I mean, it's thriving. It has really changed a lot. And one of the main reasons why is because of trade with Mexico.

On the other side of the border, the border states are prosperous states. And so to answer your question, the first thing is to promote free and fair trade between Mexico and the United States.

Trade -- trade enhances wealth. It provides opportunities for people. The problem is in Mexico is that the opportunities you can find here on the border don't extend to the south of the country. And so, therefore, a lot of the Mexicans that we're finding at the border are people coming up from the south trying to find work so they can put food on the table.

And I have talked to President Fox about this very issue. And I know Rick has talked to President Fox about this issue. And that is, what more can we do with Mexico to encourage economic development south of -- south of the northern tier states.

President Fox, the last time I saw him, said that there are 100,000 vacant jobs in northern Mexican states. I think that's really interesting. And I said, "Well, what are we going to do about it?" And the issue is education. The issue is to make sure that people in the interior and the south of the country have got enough education, enough skills so they can fill those 100,000 jobs.

And so to answer your question, economic development works through free and fair trade, as well as helping -- as helping putting an education system in place that makes sense. Now, that's Mexicans -- Mexico's responsibility. That's their job.

But we can help. And we work with Mexico all the time. I know that -- I know that Texas has got all kinds of collaborative programs with Mexico to help their education system.

Yes, Steve? Are you enjoying the heat?

QUESTION: It's not so bad.

BUSH: That's because you have a fine looking hat on there.

QUESTION: Thanks, sir.

The word "amnesty," the critics seem to be able to just label this amnesty and get away with it.

BUSH: Yes.

QUESTION: I mean, are you having trouble fighting back that impression, is it sinking in to people that this is an amnesty...

BUSH: No, look, if you're one -- if you are one of these type of people that -- that basically say, you know, we've got to, you know, throw them out, and then you just use the word "amnesty." You toss it around.

You know, amnesty -- amnesty is something that nobody is for in America. I'm not for it. But in order to frighten people, you just say the word "amnesty."

On the other hand, you can't kick people out of this country. You can try -- you can stop people from coming in, but there have been people here in this part of the world, for example, that have been here for a decade. Honest, hard-working citizens doing jobs Americans aren't doing, providing for their families.

They own their home, and, you know, the fundamental question is, how do you treat them with respect and at the same time have a system that's fair and orderly and respects our laws? And so, my attitude is on that, if a person wants to apply for a citizenship, they've got to pay a fine first. They have broken the laws of the United States and they need to pay a fine.

Then they've got to prove they've got a clean criminal record, pay their taxes, and work. And then they can apply for citizenship, but they're at the back of the line. See, there's a line of people waiting to become a citizen. And they need to get to the back of the line, not the front of the line.

And that's how I think we can have an orderly system. That's not amnesty.

Amnesty is, OK, everybody who is here, you're a citizen. That's amnesty. And I'm not for that.

I think it would be a mistake. And the reason I'm not for -- and I recognize some people are for that. The reason I think it's a mistake is that, one, there are people who play by the rules here in America, law-abiding citizens who've applied for citizenship who are in line to become a citizen.

They adhere to all our laws. They are here legally. And they're in line, and they ought to be at the head of the line.

And if you said to somebody who's been here illegally you are an automatic citizen, then that means they are not at the head of the line. It means somebody jumped in front of them who have broken our laws.

Secondly, if people are granted amnesty -- in other words, the government would say you're automatically a citizen -- there are going to be another eight million people trying to get into this country because a lot of people want to be citizens of the United States. It's a great honor to be a citizen of this country. It's a great tribute to our country, by the way, that people are willing to come here to work and to live. We're the land of the free. We're the land of the opportunity. And yet, we've got to control our border. And so, therefore, to say to some group of people you are automatic citizens would increase the likelihood a lot of other people would try to come back in here so then can become a citizen automatically.

And therefore, I'm against amnesty. And I understand words in politics and words trying to frighten people. But it's -- the comprehensive approach that I've outlined, when people think about it, it makes a lot of sense. And you can't -- all five need to go together in order to be able to do the job of enforcing the border.

I've enjoyed this. And I hope you have. Thank you.

WOLF BLITZER, CNN ANCHOR: The president speaking with reporters in Laredo, Texas. He's down there to promote his immigration reform policy.

The first question, though, he was asked was the response that the U.S. and its partners at the United Nations are getting from Iran on the latest offer of incentives and potentially penalties as far as Iran's response to suspending its uranium enrichment program. Today some relatively -- relatively positive statements coming from Iranian officials.

Here's how the president responded when he was asked for his reaction.

(BEGIN VIDEO CLIP)

QUESTION: You said the talks were constructive.

BUSH: I thought that was -- I think that's positive. I want to solve this issue with Iran diplomatically. And I think that -- I appreciate Javier Solana carrying a message to the Iranians that America, Russia, China, Britain, France, and Germany, the main -- the main group of negotiators, wants this problem to be solved. And so we will see -- we will see if the Iranians take our offer seriously.

The choice is theirs to make. I have said the United States will come and sit down at the table with them so long as they are willing to suspend their enrichment in a verifiable way. It sounds like a positive response to me.

(END VIDEO CLIP)

BLITZER: "It sounds like a positive response to me," that's what he said.

We're going to continue to watch this story. There have been some other, though, critical developments, potentially, at least, in this nuclear standoff between Iran and the West, and that could mark the beginning of a resolution, perhaps, or it could increase tension even more. The Associated Press is quoting unnamed diplomatic sources in Vienna, Austria, saying the United States is offering to give Iran some nuclear technology in exchange for Tehran halting its nuclear enrichment program.

CNN has not been able to independently confirm that offer, which is reportedly part of this package of incentives being offered by Western nations, Russia and China, to Iran today in Tehran by the representative of the European Union, Javier Solana.

Let's bring in Zain Verjee from the CNN Center. She's watching this story, as well -- Zain.

ZAIN VERJEE, CNN ANCHOR: Wolf, more on what's going on over in Iran.

Iran's leaders now mulling over a proposed deal from the West for the country to end its nuclear enrichment program and cooperate with the International Atomic Agency Energy agency in exchange for a packet of incentives. The European Union foreign policy chief, Javier Solana, went to Iran in person to present the deal himself to the head of the country's Supreme National Security Council, Ali Larijani.

Now, both Larijani and Solana describing the talks as positive and constructive. Larijani said Iran basically needs some time to review the deal. It's a joint offer from Britain, France, China, Russia, Germany and the United States.

Now, as part of the incentive package, Washington says it is willing to break long-standing policy and conduct negotiates with Tehran, along with the Europeans. The U.S., in background, Wolf, believes that Iran is building a nuclear program with the intention of building a nuclear weapon.

Iran has always denied that. It said that it has a right to a nuclear program, but it's always insisted that its program is only for nuclear energy. A peaceful purpose, they say -- Wolf.

BLITZER: Zain, thank you very much.

And we're going to have a lot more on these potential negotiations with Iran. The United States ambassador to the United Nations, John Bolton, will be my guest here in THE SITUATION ROOM. That's coming up this hour.

Among other things, I'll ask him about that AP report saying the U.S. is now offering to actually give Iran some nuclear technology in exchange for an end to its uranium enrichment program. That interview with John Bolton coming up.

Other important news we're following.

Canadian prosecutors offering some new dramatic details about the alleged terror plot which led to the roundup of 17 Muslims in Canada. The new information concerns purported targets, and the charges are chilling.

Our homeland security correspondent, Jeanne Meserve, is in Toronto. She's watching this for us -- Jeanne. JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, it was defense attorneys who today made public some of the specifics of the terror allegations against their clients. And as you said, they are chilling.

(BEGIN VIDEOTAPE)

MESERVE (voice over): It sounds like a movie script, terrorists storm parliament and take politicians hostage. When their demands to free Muslim prisoners and remove Canadian troops from Afghanistan are not met, they behead their hostages, including Canadian Prime Minister Stephen Harper, and blow up buildings, including parliament and the headquarters of the Canadian Broadcasting Corporation in downtown Toronto.

But this is not a script. These are the Canadian government's allegations against Steven Chan (ph), one of the Canadian terror suspects. His attorney says, prove it. He has seen no evidence, only a synopsis of the charges.

GARY BATASAR, DEFENSE ATTORNEY: This is a two-year investigation that was going on. One would think that the two-year investigation would have brought forth a lot more evidence than eight pages and a one-page synopsis of Mr. Chan (ph).

MESERVE: Family members emerging from the courthouse after today's hearing found themselves in a scrum. Media and public interest in this case is intense. This is for Canada something like 9/11, a jolt, a realization that terror can hit you where you live.

In court, defense attorneys complained that security is so tight they have been unable to meet with their clients privately. A violation, they said, of the suspects' rights.

ARIFA ZARA, DEFENSE ATTORNEY: Regardless of the allegations and charges, everybody is entitled to be treated equally. And I think that unequal treatment just because of these allegations is improper.

BATASAR: This is not Guantanamo. This is Toronto, Canada.

(END VIDEOTAPE)

MESERVE: The defendants appeared in court today in white T- shirts, gray trousers, and shackles. Some were somber, but a few smiled and waved at friends and family members in the audience, apparently oblivious to the gravity of the charges against them -- Wolf.

BLITZER: Jeanne, what was the context of this statement that they wanted to behead the prime minister of Canada? How did that come up?

MESERVE: Well, it was the defense attorney who you heard in that piece, Mr. Batasar, in his presentation in the courtroom. He reeled off the specifics of this synopsis that he said he had received only this morning. Then when he came out to the cameras he talked a little bit more about it. The prosecution, in fact, had nothing to say about those allegations.

BLITZER: All right, Jeanne.

Jeanne Meserve in Toronto.

Thank you.

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

Let's go to Jack in New York with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Patrick Kennedy may have left rehab a little early. In his first public remarks yesterday, the Rhode Island congressman and son of Senator Ted Kennedy said that he wants to be treated like an African-American from a poor part of Washington if he is charged for crashing his car on Capitol Hill.

The accident remains under investigation. Kennedy says he wasn't drunk May 4th when he crashed into a stationary barrier at 3:00 in the morning. He was not given a breathalyzer. Capitol Hill Police simply drove him home.

Kennedy blamed the whole thing on prescription drugs. He said, "Ten of the 12 police officers said they didn't smell any alcohol on my breath." But he also said he couldn't remember crashing his car or being driven home by police. Kennedy just got out of a month in rehab.

So here's the question: What did Congressman Patrick Kennedy mean when he said he wants to be treated like an African-American?

E-mail your thoughts to caffertyfile@CNN.com or go to CNN.com/caffertyfile -- Wolf.

BLITZER: Jack, thank you.

Up ahead, my interview with the United States ambassador to the United Nations. I'll ask John Bolton about reports the United States is now offering Tehran nuclear technology if it stops enriching uranium.

Also, violence in Iraq escalating in the most gruesome way. We'll have details of the deadliest month since the start of the war.

Plus, one of the most respected voices in weather science speaks out on global warming. You might be surprised by what he has to say.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Iraq's prime minister, Nouri al-Maliki, is offering condolences and vowing a crackdown as Iraqis are left reeling from a wave of brutal insurgents attacks, including mass kidnappings, executions and beheadings. We must caution you, some of the images are disturbing as CNN's John Vause brings us the story from Baghdad -- John.

JOHN VAUSE, CNN CORRESPONDENT: Wolf, the numbers are staggering. They are based on a body count at the city morgue here in Baghdad. Four hundred victims this month alone could not be identified, and the numbers do not include Iraqis who had been killed in bombings or explosions, because, quite simply, their bodies never make it to the morgue.

Today, police made a gruesome discovery north of Baghdad near the city of Baquba, nine severed heads wrapped in plastic and shoved into boxes. Police say they made a similar discovery on Saturday, eight severed heads also wrapped in plastic, also shoved into boxes.

Police believe all of the victims were Sunnis, possibly revenge for the killing of Shiites.

In Baghdad, mortgagors were fired at the interior ministry. They killed two civilians at a nearby bus stop. And a roadside bomb targeting a U.S. military convoy killed an Iraqi woman, as well.

The Iraqi prime minister said today he has a plan to restore law and order. He gave few details, but said he would rely on the Iraqi security forces. He also accused unnamed groups of escalating the bloodshed to try and topple his national unity government -- Wolf.

BLITZER: John Vause in Baghdad.

Thank you.

So does the increasingly savage violence mean the insurgents are winning in Iraq, or becoming more desperate? And what do allegations of American atrocities mean for the U.S. mission in Iraq?

Joining us now, a key member of CNN Security Council, our world affairs analyst, the former defense secretary, William Cohen. He's the chairman and CEO of The Cohen Group here in Washington.

Let me ask you both of those questions. The increasingly savage nature, these beheadings, what is going on?

WILLIAM COHEN, FMR. DEFENSE SECRETARY: Well, there are two views on this, as you pointed out. And one may be that they are gaining power as such, and the beheadings are simply an indication that the government is unable to protect the people. And therefore, it could lead to its toppling.

Others would see this as simply they're getting more desperate, therefore more gruesome. I don't think anyone can tell what you is, in fact, taking place on the ground.

It's clear that the United States is in a position now where we're trying to turn over the authority and responsibility to the Iraqi government. The government doesn't yet have a minister of defense or interior minister. Until that takes place, it's unlikely they're going to be able to develop any kind of a consensus or a unity government.

So the violence is likely to continue. Unfortunately, the United States is in a position now where we're sort of caught in between the sectarian violence and inability of the Iraqi government to gain control of the situation.

BLITZER: Here's what the U.S. ambassador in Baghdad, Zalmay Khalilzad, says. "Unless there is increased security... a lessening of and containing of sectarian violence, this Iraqi government will face huge challenges that might pose a problem for the viability and success of the political process."

The stakes couldn't be greater right now. The whole mission in Iraq could collapse.

COHEN: Well, the stakes are great for the Iraqi government as it currently exists. They are also great for us, because the political pressure here in the United States is going to intensify as the American people continue to see that they are unable to get control of the violence on the streets of Baghdad and elsewhere.

So big stakes for Iraq and big stakes for us and the entire region. So, if this continues to escalate, then certainly that poses an instability threat for the rest of the Gulf region. And that's something that everybody, including our European friends and others, should be very concerned about.

BLITZER: And these investigations now of alleged U.S. atrocities, misconduct by Marines, whether in Hamdaniya or at Haditha, the timing of this is really, really awful given the enormous -- the complications of the situation.

COHEN: What it indicates is that a small group of people can, in fact, undo all of the good will that's been generated by a tremendous sacrifice on the part of the American soldiers. They have worked very hard to maintain order and discipline in a very difficult environment. And so, the excesses of a few can undo that good will.

And as we said before, this is not going to be a military solution but a political solution of winning the hearts and minds of the Iraqi people. To the extent the Iraqi people believe that we are committing atrocities on a wide-scale basis, we have no chance of winning those hearts and minds. So this is a very important investigation, one that must be seen as being open, transparent, and vigorously prosecuted by the government, the American government.

BLITZER: You served in the United States Senate. You were a Republican from Maine. I want you to listen to what Democrat Joe Biden of Delaware said on "Meet the Press"on Sunday.

Listen to this.

(BEGIN VIDEO CLIP)

SEN. JOSEPH BIDEN (D), DELAWARE: There is a system of accountability. The system of accountability is, it used to be a gentlemanly thing, as they say. When you make serious mistakes, you step forward and you acknowledge them and you walk away. Presidents can't and shouldn't do that. Secretaries of defense can and should.

(END VIDEO CLIP)

BLITZER: He thinks Rumsfeld should resign. He has thought Rumsfeld should resign for many other reasons, but he's making that call once again.

What do you think?

COHEN: As I've said on many occasions, there are two individuals involved who are really key to this decision. Secretary Rumsfeld, himself, to the extent that he feels he can continue to be effective, then obviously he'll want to say.

Most importantly is the president of the United States. To the extent that Secretary Rumsfeld is carrying out the wishes of the president of the United States, then he will -- he will stay. And so far, the president has indicated that Secretary Rumsfeld is doing his job as he sees -- as he sees it and as the president sees it.

So I doubt very much whether this is going to be persuasive given the current circumstance. But ultimately, it's not Secretary Rumsfeld. It's the president of the United States, the commander in chief who must be accountable fully for what's going on. And he must set the tone.

And to the extent that he is satisfied that a full investigation is under way, those who are implicated will be charged, if that's the case, if the facts bear it out, and they will be held accountable. So the president very strong on that issue. And Congress must also pursue its own independent inquiry to the extent it's not satisfied with how the investigation is being carried out.

BLITZER: Senator John Warner, the chairman of the Armed Services Committee, says he will do that once the investigation is complete.

William Cohen, thanks very much.

COHEN: My pleasure.

BLITZER: And coming up here in THE SITUATION ROOM, deal or no deal? Iran is said to be eyeing the offer for it to give up its nuclear activities, but there is reportedly one part of the deal that's raising eyebrows. I'll ask the United States ambassador to the United Nations, John Bolton, about it.

And an inconvenient truth or blown out of proportion? How real is global warming? Al Gore says very real, while a prominent weather forecaster says that's just a bunch of hot air.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to THE SITUATION ROOM. I'm Wolf Blitzer in Washington.

How far would the United States go to get Iran to give up its nuclear ambitions? How about supplying Tehran with nuclear technology? That's reportedly part of a package of incentives presented to Iran by the United States and other world powers.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now is the United States ambassador to the United Nations, John Bolton.

Mr. Ambassador, welcome to THE SITUATION ROOM. Thanks very much for joining us.

JOHN BOLTON, U.S. AMBASSADOR TO THE U.N.: Glad to be here.

BLITZER: Is the United States prepared as part of this incentive package with Iran to actually allow U.S. nuclear equipment to be provided to Iran for peaceful purposes as part of this package deal?

BOLTON: Well, you know, we're not really in a position now where we want to talk about things that may or may not be part of the package that Secretary Rice discussed in Vienna last week. And I know there are all kinds of pieces of speculation in the media.

Our view is that we wanted to present this to the Iranians, and Ambassador Solana has now done that. The Iranian government will now consider it. And we would just as soon try to keep this in diplomatic channels.

I know people are interested in it, and I'm sure it will come out in due course. But I don't think it's appropriate at this point to speculate on one piece or another that may or may not be part of the package.

BLITZER: Because if it were true, and the Associated Press is reporting it, quoting anonymous diplomats in Vienna, where the agreement was announced last week, if it were true, this would end, in effect, the 27-year-old economic embargo of Iran imposed after the Iranian regime held Americans hostage for, what, 444 days.

BOLTON: Well, as your question started off with an "if", that's exactly what I want to try and avoid, and I make no bones about it. I just don't think that it's appropriate at this point to talk about what may or may not be in there. The Iranian government has said they may make the whole package public. I suppose if they want to do that, that's up to them.

But I think for now, while they're still considering it, it's much better not to do this in piecemeal fashion and say, well, what about this or what about this? The presentation was made as a package. I think it should be considered as a package, and somebody with a higher pay grade than mine in Washington will decide when the package becomes troubling.

BLITZER: Here's what you said on "Nightline" last March 15, referring to Iran. "Just like September 11, only with nuclear weapons this time, I think that is the threat." The question is this. If this is such a threat, almost like al Qaeda, if not worse, since it potentially could have nuclear weapons, why even talk to them? Why negotiate with terrorists?

BOLTON: I think what the president and Secretary Rice have done with this offer to negotiate along with our European partners, if -- if Iran fully and verifiably suspends all enrichment and reprocessing activity, is to take away another excuse that the Iranians have had about resolving their nuclear weapons program.

This is a process point that's now being taken off the table. If the Iranians are truly serious about giving up the pursuit of nuclear weapons, this puts the ball back in Iran's court, which is where it really belongs, focusing on their pursuit of nuclear weapons.

It is precisely the fact that Iran has been the leading state supporter of terrorism for decades that underlines our concern about stopping them from getting nuclear weapons. So what the president's leadership has done here is to say if Iran is really serious about giving up its effort to acquire nuclear weapons, there's a way to do it. But the spotlight is now on them.

BLITZER: Why not also demand that they give up their support for terrorists, whether Hezbollah or other terror groups? Why not also make that as a demand for a resumption of a direct dialogue between the U.S. and Iran?

BOLTON: Because the only purpose of this dialogue is to resolve the nuclear weapons question. Just as we've had discreet dialogues with Iran in the case of Afghanistan, as we've offered to do in the case of the trouble that they're causing inside Iraq, this is a discreet subject, a subject of enormous importance to be sure, but it's not intended, as Secretary Rice has said, to open the way for discussion of all aspects of our relation.

We are extremely worried about Iran's support of the Hezbollah, Hamas, other terrorist groups. There's no question about that. And our efforts to prevent that kind of activity are not going to slow down.

BLITZER: Here's what the ayatollah said on Sunday. He said, "You," referring to the United States, "should know that the slightest misbehavior on your part would endanger the region's energy security. You are not capable of guaranteeing energy security in this region."

How worried are you that the Iranians could stop selling oil on the international market and disrupt the oil flow, presumably raise the price per barrel?

BOLTON: Well, I think Secretary Rice addressed that a couple of days ago. This is not something that -- that we see them doing, because of the harm that it would cause themselves.

And I must say, I mean, to be completely honest, it is tempting to respond to that kind of rhetoric, but I think to be serious and responsible now, we have put an important proposition to the government of Iran. It's important that we get a definitive response back from that government. And despite the temptation to respond to what this or that Iranian official is saying, I think it's important that we just stay put here for awhile and see what they come back and say.

BLITZER: You feel comfortable talking to a government that openly calls for the destruction of Israel?

BOLTON: Of course not, but the issue is what we're going to do in order to prevent them from acquiring nuclear weapons. And I think this dramatic step that the president and the secretary have taken eliminates any excuse that Iran or any of its apologists or supporters can have to say we didn't go the extra mile to achieve a diplomatic and peaceful solution. Let's focus on what the real conduct to be worried about here is, and that's Iran's pursuit of nuclear weapons.

So this is -- this is not a step that we took lightly. And it's a step that the Iranians need to consider very carefully. They face a choice now. They can go down one road and have one kind of relationship with the United States and its allies, or they can take another road if they reject this offer and face the path of international isolation.

BLITZER: Here's a paragraph that jumped out at me when I read it in Sunday's "Washington Post" about the build up to this major change in U.S. policy, expressing readiness for direct talks with Iran under certain conditions. Let me read this paragraph, because it refers to you.

"On Tuesday, the day before the announcement, Rice let U.N. Ambassador John R. Bolton, long a skeptic about dealing with Iran, in on the secret. Bolton then joined Rice, Hadley and Joseph over dinner and was asked to call conservative commentators the next day to explain the decision."

Is that true?

BOLTON: I read -- I read that paragraph with great interest, too. It's always fun to read things like that. It's somewhat inaccurate, because Nick Burns was at that dinner, as well.

But, you know, this was -- this was something the administration felt importantly, that the policy be explained. And I called many editors for whom I had written articles in my civilian days and talked to them about the policy. That's part of my responsibility in the job, and I take it very seriously.

BLITZER: But it sounds sort of humiliating, that they didn't include you in the decision making process. They only brought you in to go ahead and try to sell it to conservative commentators.

BOLTON: Well, take it the way it is. That's the job in the government.

BLITZER: But you accept that, obviously? BOLTON: That's why I'm here, I suppose.

BLITZER: Final question, on Iraq, while I have you. Some startling -- I thought startling -- comments from the new Iraqi prime minister, Nuri al-Malaki, referring to these allegations of U.S. military misconduct at Haditha and elsewhere in Iraq. Listen to what he said last Thursday.

"This is a phenomenon that has become common among many of the multinational forces. No respect for citizens, smashing civilian cars and killing on a suspicion or a hunch. It's unacceptable."

I was pretty surprised, this coming from a man who is prime minister largely because of the United States and the U.S. loss in lives, the invasion, the overthrow of Saddam Hussein and the hundreds of billions of dollars we've spent to try to establish a democracy there. And here, he's lecturing the United States about U.S. military misconduct. How did you feel when you heard that?

BOLTON: Well, I don't think that statement was terribly well advised. But I'll leave it to others to respond to it more directly.

BLITZER: You're becoming a diplomat, obviously. Ambassador Bolton, I remember you from the academic environment. You would have had a different response, I suspect, in those days.

BOLTON: I don't work for myself any more.

BLITZER: Totally understandable. Ambassador John Bolton, the U.S. ambassador to the United Nations, thanks for joining us.

BOLTON: Glad to be here.

(END VIDEOTAPE)

BLITZER: And coming up here in THE SITUATION ROOM he was a key architect of the Holocaust, so why did the CIA keep silent when it knew where he was hiding? We're going to show you disturbing new documents that have just been made public for the first time.

Also, another brutal day on Wall Street. What's driving down the Dow? Ali Velshi will have "The Bottom Line". Stay with us.

(COMMERCIAL BREAK)

BLITZER: Time now for Ali Velshi with "The Bottom Line" -- Ali.

ALI VELSHI, CNN CORRESPONDENT: Well, Wolf, chalk one up for the little guy. When you open up a brokerage account of any sort you sign away most of your rights to sue in the event that anything goes wrong. Instead, you have to take your fight to an arbitration panel, which is supposed to include two impartial non-Wall Street members.

Well, today we learned of a case of a couple in New York claiming that Prudential Securities mismanaged their account. One of those impartial spots on the panel was filled by a former vice president at Merrill Lynch.

Well, despite the odds that were stacked against them, the couple prevailed. They won a $14.5 million award from Prudential Securities. That's the third largest amount ever awarded by a New York Stock Exchange arbitration panel.

Their brokerage account, which was once worth $23 million, dwindled down to less than $1 million after four years.

Some other people's money dwindled around today. The Dow spent most of the day below the 11,000 mark, Wolf. We haven't been below 11,000 since early March. But stocks rallied.

The Dow hung onto 11,000 by a hair, down 46 points; 11,002 is the closing number. This is a day after Dan Bernanke, the Fed chief, rattled the markets talking about inflation. Today it was some other Fed officials who talked about inflation, and that means interest rates might be going up again. NASDAQ gave up about seven points to 2162, Wolf.

BLITZER: Ali, thank you.

Could allegations that AT&T and Bell South provided the NSA with millions of customer call records jeopardize a pending merger between the two telecom giants? Our Internet reporter, Jacki Schechner, is standing by with more including a new filing with the Federal Communications Commission -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, the ACLU filed comments with the FCC asking them to take a closer look at Bell South and AT&T, warning them to examine allegations the two companies handed over millions of customer records to the NSA. Now these allegations were first reported in "USA Today" last month.

I spoke to the FCC today. They won't comment on the merger or the NSA allegations but tell me they will consider and respond to the comments as they do with all comments in these sorts of procedures.

As for the telecom, Bell South tells me that the ACLU filing is irrelevant, because the allegations made in "USA Today" were false and erroneous. They have asked "USA Today" for a full retraction, saying they never had a contract with the NSA or any other governmental agency.

And AT&T won't comment on the ACLU move, but they tell me in their statement that they've issued previously and refer defend a customer privacy and they say when they are asked to comply with government regulations they do so -- will abide by all laws.

BLITZER: Thank you, Jacki, for that.

Let's go up to New York. Lou Dobbs getting ready for his program that begins right at the top of the hour.

Lou, what are you working on?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Wolf, thank you.

Coming up at 6 p.m. Eastern here on CNN tonight, we'll be reporting on primaries taking place in eight states. The outcome of many of these races will be determined by the issue of illegal immigration and border security. We'll have reports from key elections around the nation.

Also tonight, when will the National Guard reinforcements promised by President Bush finally arrive on our southern border? Governor Bill Richardson of New Mexico joins me to talk about what he has declared to be a border emergency.

And tonight, I'll also be talking with Richard Vigurie, a leading founder of this nation's conservative movement, who says President Bush has betrayed conservatism.

Three of the country's top radio talk show hosts join me, as well. And our exclusive report tonight on the potential, the rising threat of voter fraud nationwide.

We hope you'll be with us at the top of the hour right here on CNN. Back to you, Wolf.

BLITZER: We will, Lou. Thank you very much.

And still to come here in THE SITUATION ROOM, there are new developments into the investigations of military misconduct in Iraq. We're going to go live to the Pentagon for details.

And an architect of the Holocaust said to be responsible for sending millions of Jews to their deaths, was he allowed to roam free? Did the U.S. allow that to happen to Adolf Eichmann? We're going to have some startling new details that have been released today.

(COMMERCIAL BREAK)

BLITZER: Turning now to some newly revealed secrets from spy agency files. After decades, new details about how American intelligence left some Nazi war criminals go free and gave others jobs.

Let's bring in our Brian Todd. He's in the newsroom. He's been going through these amazing documents -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, it took an act of Congress eight years ago to get these documents released, and the CIA has been reluctant to put them out until recently. Today some startling revelations.

(BEGIN VIDEOTAPE)

TODD (voice-over): This face coming back to haunt the CIA. Why did the agency stay silent for at least two years while this Nazi war criminal was in hiding? Adolf Eichmann, an architect of the Holocaust, responsible for transporting millions of Jews to their deaths. Newly released CIA documents show the agency knew that Eichmann was hiding in Argentina well before his 1960 capture by Israeli agents.

UNIDENTIFIED MALE: It was not U.S. policy to track Nazi war criminals once the Cold War...

TODD: Among tens of thousands of pages, this 1958 passage on Eichmann: "He is reported to have lived in Argentina under the alias Clemens since 1952."

Historians say the CIA was given that information by the government of then West German chancellor Conrad Adenauer, but they say neither the CIA nor the West Germans attempted to capture Eichmann and didn't tell the Israelis where he was.

UNIDENTIFIED MALE: The Bonn government feared what Eichmann might say about Adenauer's national security adviser, Hans Glocker (ph).

TODD: Hans Glocker (ph), who historians say was a key Cold War player on the side of the allies but had previously served in the Jewish Affairs Department of the Nazi government.

Compromises like this found in case after case, like those of former Nazi officials tapped by the CIA as analysts or as so-called stay behind agents to be in place if the Soviets ever invaded West Germany. Compromises that experts say the agency is still dealing with in the war with al Qaeda.

ROBERT WOLFE, FORMER NATIONAL ARCHIVES OFFICIAL: Inevitably, this must require recruiting unsavory characters among the innermost circles of the enemy where few pure souls are to be found.

(END VIDEOTAPE)

TODD: But among those less than pure souls, historians say there wasn't decent intelligence. One expert says many of those Nazi war criminals peddled mostly hearsay and gossip designed to tell their American handlers what they wanted to hear -- Wolf.

BLITZER: Amazing stuff, Brian. Thank you very much. Brian Todd reporting.

Let's go to Jamie McIntyre, our senior Pentagon correspondent. There's some new developments in the case of some U.S. potential military misconduct.

What are you picking up?

JAMIE MCINTYRE, CNN CORRESPONDENT: Well, Wolf, Pentagon sources say that the U.S. military investigators have received permission to dig up the body of an Iraqi man killed last April in Hamdaniya.

That's a case where the U.S. already says it has solid evidence that some of the Marines staged that killing to make it look like the man, the victim, was a roadside bomber planting an IED in the road, but in fact investigators tell CNN that they believe he was dragged from his house and shot by the Marines.

Today defense attorneys decried the fact that these facts are coming out in public even before any of the defendants have been charged with anything.

(BEGIN VIDEO CLIP)

JEREMIAH SULLIVAN, CRIMINAL DEFENSE ATTORNEY: At some point when some of these men were seeking counsel, they were threatened with the death penalty, which creates just an unbelievable coercive environment.

I have not seen any statements, although apparently the statements are being reported by politicians, by government Marine Corps officials. No defense counsel has seen a charge sheet. No defense counsel has seen a report. There absolutely cannot be a rush to judgment.

(END VIDEO CLIP)

MCINTYRE: Sources say the charges in the Hamdaniya case may come soon, perhaps this week or next. But meanwhile sources are telling us that the investigation into the alleged massacre at Haditha could drag well into the summer, because investigators want to go back and reinterview some of the witnesses.

And they're coming to the conclusion that they need access to the bodies in that case to hook individual -- connect individual Marines with individual murders, something they haven't been able to do, because they haven't been able to get permission to exhume those bodies -- Wolf.

BLITZER: All right, Jamie. Thanks very much. Jamie's going to have a lot more coming up on this story in our 7 p.m. Eastern hour.

Up ahead, one weather expert likens global warming to a bunch of hot air. We're going to tell you who, why and how his thoughts are at great odds with Al Gore.

And in our 7 p.m. Eastern hour, if it happens in California, will it happen elsewhere? We're watching today's elections in the San Diego area. The outcome could foretell the fortunes of Republicans and Democrats in the midterm contest. Stay with us.

(COMMERCIAL BREAK)

BLITZER: One of the country's leading experts on -- is speaking out on global warming and finding himself at odds with many of his peers and with former vice president, Al Gore.

CNN's Mary Snow is joining us from New York. She's got the story -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, with global warming getting so much attention and vice president -- former vice president, Al Gore, pushing it to the forefront with his movie, "An Inconvenient Truth", one of the nation's leading forecasters is blasting the alarm bell that's being sounded over global warming. In doing so, he's also standing out as an outcast.

William Gray of Colorado State University, a leading authority on hurricane forecasts, says despite popular belief, he does not believe humans are contributing to warming the planet that is causing glaciers to melt, something that has been shown by scientists and featured in "Inconvenient Truth".

Dr. Gray says he believes the warming of the planet is part of a pattern that will eventually reverse. And he calls all the warnings hype. We spoke with him by phone this afternoon from Colorado State University.

(BEGIN VIDEO CLIP)

DR. WILLIAM GRAY, COLORADO STATE UNIVERSITY: I think this is a grossly exaggerated threat that they're largely manufacturing.

(END VIDEO CLIP)

SNOW: Now Gray claims skeptics are afraid to speak out for fear of not getting grant money. Now, other scientists acknowledge Gray's stature but strongly disagree with him.

(BEGIN VIDEO CLIP)

BRENDA EKWURZEL, UNION OF CONCERNED SCIENTISTS: If we wait until every last person understands the data as most of the scientists do, then it may be too late.

(END VIDEO CLIP)

SNOW: Now when it comes to figuring out when the next hurricane is coming, Dr. Gray is the one to listen to, but on the issue of whether the climate is warming to a potentially dangerous degree, Gore is the one in the mainstream. Gray is a lonely voice. We'll have more on that divide at 7 p.m. --- Wolf.

BLITZER: We were listening to him last week when he gave his forecast for the number of hurricanes expected this year. Thank you very much, Mary. We'll look forward to your full report coming up, 7 p.m. Eastern tonight.

Up next, he's back from rehab, but Congressman Patrick Kennedy reportedly says he wants to be treated like an African-American from a poor neighborhood. What's that all about? Jack Cafferty coming up with your e-mails.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Jack Cafferty with "The Cafferty File" -- Jack. CAFFERTY: Ted Kennedy's kid, Congressman Patrick Kennedy, said he wants to be treated like an African-American from a poor part of Washington if he's charged for crashing his car on Capitol Hill.

He just got out of rehab. The question is, what did he mean when he said that? Some of this e-mail is just priceless.

Debbie from Cumberland, Maryland: "I think Mr. Kennedy suffers from white guilt. If he wants to be treated like an African-American, he could wait months for rehab. Get roughed up by the police instead of a ride home. Spend a night or two in the drunk tank. Be forced to take a breathalyzer test. He's another clueless liberal who, given two minutes as an African-American, would be crying to his daddy to make him a Kennedy again."

Iza, Raleigh, North Carolina: "Jack, I'm African-American myself, and I know some fellow African-Americans might get defensive at this moronic comment. All I can do is laugh and shake my head."

LaTreetha, Spring Hill, Florida: "The realization there's a difference in the way African-Americans are treated when stopped by police is true. Mr. Kennedy's only saying what every African-American knows. This is a nation that still has a great distance to go to achieve the dreams of equal justice for all."

Ray: "He said he wanted to be treated like an African-American. What he really meant was, 'I'd like to shift the focus off the privileged nature of the way in which my situation was handled, and see if I can demonstrate some faux solidarity with African-Americans to get some votes."

Russell in Pocatello: "DWB is what it's called, Jack, Driving While Black. Or you can use DWAA, Driving While African-American. This is where you get pulled over just for being an African-American male. I do it all the time in Idaho, as well."

And Tom in Broomfield, Colorado: "Do you really think Kennedy wants to be charged, detained and given a public defender who already has 60 clients he can't adequately handle? Does he really want to be prejudged and mistreated by the justice system? Get out of the house, Jack. In America, you're guilty until you can prove you're rich" -- Wolf.

BLITZER: See you in an hour, Jack, when we come back here in THE SITUATION ROOM. I'm Wolf Blitzer in Washington. And let's go up to Lou in New York -- Lou.

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