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THE SITUATION ROOM

Terror Attacks Targeting Commuters in India's Financial Capital; NYC Subway Alert

Aired July 11, 2006 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM, where new pictures and information are arriving all the time.
Standing by, CNN reporters across the United States and around the world to bring you today's top stories.

Happening now, blood-thirsty attacks in one place cause worry halfway around the world.

It's 2:30 a.m. in India, where dozens are dead after terror attacks ripped through trains during rush hour. Now, that's putting New York City on high alert in the middle of its rush hour.

It's 5:00 p.m. in Guantanamo Bay in Cuba, where the Bush administration is now vowing terror detainees will not be tortured and will be treated humanely. I'll ask one U.S. senator just back from Guantanamo Bay about conditions there.

And it's 2:00 p.m. in the California valley, where the grapes are growing to feed your love for California wine. But could global warming end the love affair?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Terror attacks targeting commuters in India's financial capital. We're just learning that authorities now say at least 147 people were killed in a series of explosions on packed trains in the bustling city of Mumbai, formerly known as Bombay. And now the shock waves being felt right here in the United States, with New York City increasing transit security as a direct result of those attacks in India.

We're going to go to CNN's Mary Snow in just a moment. She's in New York.

Let's go to Mumbai first. CNN's Seth Doane is joining us on the phone with the latest.

What's the latest information, Seth, you have on what happened today?

SETH DOANE, CNN CORRESPONDENT: Well, Wolf, the latest numbers we're getting, as you said, were about 147 killed and at least 380 people injured. These numbers coming from the additional commissioner of police in the -- region here of Mumbai. I've just come back, been walking along the train tracks here in Mumbai and saw the first train -- the bomb that hit the first train. And it is torn apart in the first class cabin. It's torn off parts of the roof and the entire sides of the cars. You can see right through it.

BLITZER: Is there anybody, Seth, claiming responsibility for this? What do authorities say? Does it have the fingerprints of al Qaeda or al Qaeda sympathizers?

DOANE: Well, there has been a lot of speculation. But the Indian officials have been very careful to say -- they have called the attackers "terrorists," but they've been very careful not to blame anyone. No one has claimed -- claimed responsibility for these attacks as of yet.

BLITZER: It was pretty sophisticated. Seven separate attacks, carefully coordinated. The timing very reminiscent of what happened last year in London, the year before in Madrid.

Is there an assessment there that this is part of the same kind of sophisticated terror plot?

DOANE: Well, it certainly was indeed sophisticated when you imagine seven explosions in just the case -- in just the force of 11 minutes. A lot of people on the ground, of course, looking at the numbers, July 11, 7/11, 11 minutes. Certainly speculation, and then rumor among people here on the ground. But as I say, nothing official from the government yet.

BLITZER: And right now, is there a situation that they're bracing for more? What's the reaction among rank and file Indians?

DOANE: Well, the reaction is actually quite interesting. What we've sampled on the ground here firsthand is actually text messages coming out from various community leaders, encouraging people in Mumbai to get back on the trains tomorrow, to say the terrorists will have won if you take a day off work, if you don't get on the train. Please, get on the train. Show -- show that this city is strong.

And just to give you a bit of context here, Wolf, the train is the lifeline to the city. There are about 4.5 million people that ride the train in the western region, the region that was hit so hard today. But about 10 million people every day go on and off these trains.

BLITZER: Seth Doane, our CNN reporter who's now on the scene in Mumbai for us.

Seth, thanks very much. We'll be checking back with you.

Let's bring in CNN's Tom Foreman. He's here in THE SITUATION ROOM for a closer look of how these bombings unfolded, where they unfolded.

Show us what you've got. TOM FOREMAN, CNN CORRESPONDENT: You look at the satellite pictures of this area and you can tell exactly why -- Seth was correct when he say this is the life's blood of the area.

Look at this rail line that we're talking about in Mumbai, formerly known as Bombay. This is the rail line that we're talking about running right through here, financial capital. This is home to the Indian film industry, Bollywood. Lots and lots of people, lots of important business there.

And these are the stations all along the way that were hit. From down here, which is closer to the business part of everything, on up the way, we'll just keep jumping along these stations and show you each one that was hit.

And you can see that some of them are big stations like this. Some of them start moving more into residential areas.

Nonetheless, at rush hour, going home. Things that would be enormously crowded because the train system is so very important there. It really is the life's blood of many people trying to go to many places.

This is Borville (ph) station. This is the one where they had two explosions and they found yet another bomb there. Some people were four to five miles away from this station, way back into here, so they could easily hear the explosions here.

And one of the important things to bear in mind here, as we move toward the last explosion site, was that as bad as this was, this obviously could have been much worse if only because of this. Look at this. In the area that we're talking about, there are five major bridges that are crossed over by this train system or bodies of water that it has to cross through.

Obviously, if there had been explosions in any of those areas, it would have complicated rescue efforts, it would have complicated any kind of evacuation efforts. Terrible accents, but that's how it happened, all along that line right through this very important capital of India.

BLITZER: And those trains servicing millions and millions of commuters. Anyone who has been to India -- I've been to India -- knows how packed those trains are. When you look at the numbers, yes, 145 people killed, but god knows it could have been a whole lot worse.

FOREMAN: Twenty million people in this area. Twenty million.

BLITZER: Amazing.

Thanks very much, Tom Foreman, for that.

The attacks in India are causing huge worries in New York City right now. Police there on a higher state of alert, stepping up security, especially on the subways and the trains.

Mary Snow is outside a train station. She's joining us now with more.

Mary, what do you have?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, just a short time ago, the Department of Homeland Security and the FBI issued a statement saying that there is no specific or credible threat to the U.S. mass transportation system.

New York officials are also echoing the fact that there is no specific threat to New York. However, security has been stepped up at city train stations like this. We're in Herald Square, one of the largest stations in New York City.

Police have added a couple of hundred extra officers for the evening rush hour. Some of the other steps that they've taken, they have doubled the number of random bag searches of people going downstairs into the subway system.

Also, they're using explosive detective unit here at this station and others throughout the city. Police sweeps also being increased. It's not just city stations, but also commuter lines, like the PATH and other trains that go to suburbs around the city.

It's estimated about 4.5 million people ride the city's subways every day. The police commissioner says it is being done as a precautionary measure.

(BEGIN VIDEO CLIP)

COMMISSIONER RAYMOND KELLY, NEW YORK POLICE: In this world of ours, it's difficult to separate these things. Again, we are reacting in an abundance of caution. We have no specific information. And again, I must stress, there is no specific threat here to our subway system, but we're going to do what we think is prudent at this time.

(END VIDEO CLIP)

SNOW: And Wolf, we've also been checking in other cities around the country. Los Angeles says that it is deploying some of its officers to busier stations. Also, Atlanta saying that it is stepping up security at its train station, saying it also is doing this as a precautionary measure -- Wolf.

BLITZER: All right, Mary. Thank you.

Mary Snow on the streets of New York. A higher state of alert there as a result of what's happened half a world away in Mumbai, India.

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

We'll have more on this story coming up this hour.

The Bush administration is complying with a recent Supreme Court ruling that struck down plans for military tribunals for detainees at Guantanamo Bay in Cuba. And the administration is now putting that in writing, that detainees will be treated humanely as stipulated by Article 3 of the Geneva Conventions.

Let's get some more from our senior Pentagon correspondent, Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Wolf, the Pentagon says that it's been treating detainees all along in the spirit of the Geneva Conventions. But now, especially with respect to one provision in particular, they'll be following the letter as well.

(BEGIN VIDEOTAPE)

MCINTYRE (voice over): Rebuked by the Supreme Court for failing to abide by the Geneva Conventions in its plans to try terror suspects held at Guantanamo, the Bush administration is now reluctantly extending some limited Geneva provisions to all detainees. Specifically, Common Article 3, which bars "... outrages upon personal dignity, in particular humiliating and degrading treatment."

The new protections are being granted despite Justice Department arguments that the provision is too vague and subject to political interpretation by America's adversaries.

STEVE BRADBURY, ACTING ASSISTANT ATTORNEY GENERAL: The application of Common Article 3 will create a degree of uncertainty for those who fight to defend us from terrorist attack.

MCINTYRE: The Pentagon hopes the move will fend off further legal challenges to its detention policies, following the Supreme Court decision in favor of Salim Hamdan, Osama bin Laden's bodyguard and driver. Deputy Defense Secretary Gordon England concludes in a memo, "The high court ruling means that Article 2 applies as a matter of law to the conflict with al Qaeda."

In testimony before the Senate Judiciary Committee, the administration pledged to cooperate with Congress to fix the legally flawed military commissions that were struck down by the court.

SEN. PATRICK LEAHY (D), VERMONT: I'm a former prosecutor. And I find it hard to fathom that this administration is so incompetent that it needs kangaroo court procedures to convince a tribunal of United States military officers that the worst of the worst imprisoned at Guantanamo Bay should be held accountable.

MCINTYRE: Senator Lindsey Graham, a former military lawyer, says at issue is, how much due process are terrorists due?

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: The question is, does it make sense to apply Common Article 3 to a group of people who do not sign up to the convention, who show disdain for it, who would do everything in their power to not only trample the values of the Geneva Convention, but every other treaty that we've entered into?

(END VIDEOTAPE) MCINTYRE: The Pentagon argues that the new protections given detainees are not a change in policy because it already treats humanely -- detainees humanely. And they note that only this one provision now will be a matter of direct policy. The other provisions of the Geneva Convention do not necessarily apply to detainees at Guantanamo.

BLITZER: Jamie, thanks very much.

Jamie McIntyre at the Pentagon.

So what are the current conditions at Guantanamo Bay? And how are detainees right now being treated? In a few minutes I'll ask the Senate's second ranking Democrat. Senator Dick Durbin is just back from a trip to Guantanamo Bay. He'll be joining us live right here in THE SITUATION ROOM.

Time now for Jack Cafferty and "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, it could be a first for President Bush. Karl Rove has told the editorial board of "The Denver Post" that Mr. Bush will likely cast the first veto of his presidency against a stem cell bill which would expand federal funding of embryonic stem cell research.

President Bush objects on moral grounds to using embryonic stem cells for medical research. The House passed this bill last year; the Senate is expected to pass it soon. Majority Leader Bill Frist supports the bill, says he'll try to bring it up for a vote soon.

That will put the ball in the president's court. A lot of people in the scientific community insist the potential for progress is much better using the embryonic stem cells.

Rove says the bill's backers don't have enough votes to override a presidential veto, but one of the sponsors of the bill in the House says that support among lawmakers is growing. So that should change.

Anyway, here is the question: Should President Bush use his first veto against a stem cell bill?

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

BLITZER: Thanks, Jack.

Jack Cafferty.

And if you want a sneak preview of Jack's questions, plus an early read on the day's political news and what's ahead in THE SITUATION ROOM, you can sign up for our daily e-mail alert. Simply go to cnn.com/situationroom.

Up ahead, the CIA unit charged with finding Osama bin Laden disbanded. Why? Was it a mistake, as some critics say? I'll ask the former director of the CIA's counterterrorism center. Also, the Bush administration reverses course, now extending Geneva Conventions protection to detainees at Guantanamo Bay, as we just heard from Jamie McIntyre. I'm going to speak about it with Senator Dick Durbin. He's just back from Guantanamo.

Plus, new developments in the case against a Coke employee accused of trying to sell secrets to Pepsi. We'll have details.

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

(COMMERCIAL BREAK)

BLITZER: Welcome back.

As we just heard from our Pentagon correspondent, Jamie McIntyre, the Bush administration is now explicitly spelling out its rules for the humane treatment of terror detainees at Guantanamo Bay in Cuba. My next guest visited the detention center only yesterday.

Democratic Senator Dick Durbin is back with us. He's on Capitol Hill.

Senator, thanks very much for coming in.

Did you actually get a chance to meet with any of these nearly 500 detainees there?

SEN. RICHARD DURBIN (D), ILLINOIS: Yes, I did get a chance to see them. There wasn't any direct contact with them, but we were given access to the entire camp facility.

I think it was one of the first tours that saw everything. And I want to salute Admiral Harris, who I think is doing a great job with the soldiers and sailors at Guantanamo under very trying conditions.

BLITZER: He's the commander of the base there.

When you say you could see the detainees, did you watch them being interrogated?

DURBIN: Yes. There was a camera in one of the rooms. So we watched one of the interrogations, and it was much different than you might imagine.

A relationship had been developed between the interrogator and the translator. The interrogator set down, opened a bag, handed the detainee a Subway sandwich. He lit up and started eating the sandwich and started talking. It was a much different circumstance than most people would imagine

BLITZER: Some of the critics would suggest this was a dog and pony show for an important legislator who had come by to visit, that this was simply not the real world at Guantanamo.

Are you convinced that what you saw is actually the reality of that prison? DURBIN: You know, that's possible, Wolf. But I don't believe it happened.

I think that Admiral Harris went out of his way to make sure that we saw the situation in the reality that they face. Now, there could be tougher interrogations. I'm sure there are. But I think under most circumstances what I heard was reassuring, because the chief interrogator told me they follow the Geneva Conventions. They follow the Uniform Code of Military Justice.

And I talked to some of the other interrogators, and they acknowledged that a few years ago, the message from the Pentagon and from the administration was really confusing. They were saying the Geneva Conventions didn't apply and there'll be a new definition of torture.

That wasn't not fair to the interrogators or the troops. And I'm glad that that era is behind us.

BLITZER: If this situation has so dramatically improved, why were you told that -- those three suicides occurred only a few weeks back, why did three of those terror detainees commit suicide?

DURBIN: That's hard to answer. And I know there were other attempts that were made, too.

I'm sure that some of them become so despondent that they decided that suicide is the only option. There are some that are, of course, under treatment now for depression, the kind of psychiatric medication that is needed for them to continue.

That is going to happen in a situation with 450 people, some of whom have been incarcerated for more than four years. But I think overall, the environment and circumstances at Guantanamo are dramatically improved.

BLITZER: Is -- are you pleased -- I assume you're pleased by the memorandum that the deputy defense secretary, Gordon England, put out today, saying that the Geneva Conventions should be applied to these terror detainees even though they were not uniformed military personnel representing a state government or anything along those lines?

DURBIN: You know, Wolf, we've fought many wars and used the Geneva Conventions standards and used them successfully to interrogate prisoners and for the conduct of our own soldiers. This was the first administration that I know of that decided that they should depart from those standards and values.

That was a serious mistake. And history will not judge them well for that decision. But I'm glad to see that Gordon England made that decision today in a memo that all of the detainees in military custody will be protected by the Geneva Conventions.

BLITZER: If the U.S. tomorrow were to capture Osama bin Laden on the battlefield in Afghanistan, or Pakistan, or wherever he might be hiding out, or Ayman al-Zawahiri, the number two, what would you recommend? How -- should they be accorded the rights of prisoners of war under the Geneva Conventions?

DURBIN: I know that Osama bin Laden has been guilty of some of the worst war crimes in the history of humankind. And if he is apprehended, he must be held responsible for that conduct, should be tried and treated accordingly.

We must treat him, though, with the kind of basic values that we've always stood by as a nation. And in doing so, we're not only projecting our image to the world, we're saying exactly how we want our soldiers treated if they are ever taken prisoner.

BLITZER: Would you want him in -- at Guantanamo Bay, or at a federal maximum security prison in the United States, like Marion, Illinois, for example?

DURBIN: Well, I would tell you I couldn't guess the best place for his incarceration. I hope the CIA will reactivate its efforts to find him. That's for sure. And if they do find him, I'm not sure where he'll be tried. But I believe that that should be the outcome.

BLITZER: Your bottom line is you were impressed by what you saw at Gitmo?

DURBIN: I was impressed, but I understand the powerful negative image of Guantanamo around the world. And I do believe we should close down that facility over a few months' period of time.

We're down to about 300-plus detainees who would have to be transferred to some other facility. But it would say to the world the Supreme Court decision has been a break with the past. And from this point forward, the United States is going to be much more open and transparent in its treatment of prisoners, and we're going to live consistent with the Geneva Conventions standards.

BLITZER: Senator Dick Durbin is the second ranking Democrat in the Senate.

Thanks for coming in.

DURBIN: Thank you, Wolf.

BLITZER: And coming up, is the U.S. making progress in Iraq? We're going to have details of a new nonpartisan government report adding some new fuel to the fiery debate.

Plus, I'll ask a former CIA counterterrorism official about the decision to shut down the special unit charged with finding Osama bin Laden.

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

(COMMERCIAL BREAK)

BLITZER: Let's check back with Zain for a closer look at some other stories making news -- Zain.

ZAIN VERJEE, CNN ANCHOR: Wolf, from the Senate today, approval of a proposal allowing cheaper prescription medications to come across the border from Canada. It prohibits Customs officials from stopping people with legitimate prescriptions from bringing the medicine into this country.

The measure, which passed 68-32, stacked onto a $32 billion homeland security spending plan. Critics argue that the loophole could open the door for unsafe drugs and even terrorists.

Investigators say a massive explosion that destroyed a Manhattan townhouse was no accident. They say they've confirmed that someone tampered with a gas line leading into the building before the blast. They suspect the owner, a New York doctor, blew up the multimillion- dollar building to avoid selling it in a bitter divorce dispute. He was pulled from the rubble after calling for help.

And a case of corporate intrigue. Coca-Cola's formula remains safe, but three people are under indictment for trying to steal and sell the soft drink giant's trade secrets. A former Coke employee and two men are accused of contacting Pepsi and offering to sell the information for $1.5 million. All three pleaded at their arraignment following today's indictment -- Wolf.

BLITZER: Zain, thank you very much.

In a state of affairs in Iraq right now, violence and an ugly video that's not suitable to show. Today an attack in Baghdad left at least five people, perhaps as many as 16 dead. More than 40 were killed around the country.

Meanwhile, a disturbing new video claiming to show the bodies of two U.S. soldiers recently killed in Yusufiya. The U.S. military says it proves the terrorists are barbaric. Insurgents are calling it revenge.

Our senior international correspondent, Nic Robertson, has more -- Nic.

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Wolf, this new video released on the Internet lasts about five minutes. It is as gruesome as any al Qaeda video has become.

(BEGIN VIDEOTAPE)

ROBERTSON (voice over): This al Qaeda banner and a few brief images is all we can show. Most of the rest is too gruesome.

It reads, "This video is issued and presented as a revenge for our sister who was dishonored by one of the soldiers of the same brigade these two soldiers belonged."

What we can't show you is how the tape goes on to explicitly show the two U.S. soldiers, the disemboweled and beheaded body of Private 1st Class Thomas Tucker, from Madras, Oregon, and the heavily mutilated body of Private 1st Class Kristian Menchaca, from Houston, Texas. Both of the 502nd Parachute Infantry Regiment of the 101st Airborne who were abducted by insurgents after a gunfight at their checkpoint in Yusufiya, just south of Baghdad, on June 16th.

Several days later, another soldier from the 502nd told commanders about what allegedly happened at this house in nearby Mahmoudiya, the rape and murder of Abir al-Janabi (ph), a young Iraqi woman, and the murder of her family.

The U.S. military has now charged six soldiers from the 502nd for involvement in the case. But the news of the alleged rape by the U.S. soldiers didn't come out until nearly two weeks after the abduction of Menchaca and Tucker. And U.S. military commanders dispute al Qaeda's claim of vengeance.

UNIDENTIFIED MALE: There is nothing at all that we can find that shows any correlation whatsoever between the two events.

ROBERTSON (on camera): Having watched the gruesome video, it is impossible to say whether insurgents did have prior knowledge of Janabi's (ph) alleged rape and murder, because that's the only way their claim would stand up, that they targeted Menchaca and Tucker because of their unit.

The other detail in the video that raises questions is its quality. The video is poorly shot and shaky, very unlike the last al Qaeda production focusing on their former leader, Abu Musab al- Zarqawi, that was polished and professionally shot.

(voice over): The five-minute video also released part of Osama bin Laden's last message to continue attacking U.S. troops. Whether an opportunistic capitalization on events or deliberate revenge, the video reveals the very brutal way the two U.S. soldiers died in Iraq.

(END VIDEOTAPE)

ROBERTSON: It really is a very disturbing reality check of just how brutal the insurgent campaign here has become -- Wolf.

BLITZER: Nic Robertson.

Thanks very much.

Meanwhile, a gag order for President Bush? Attorneys for a soldier want it against the president, the Pentagon, and everyone else involved in the case. Steven Green is accused of rape and murder in Iraq. His defense team tells a federal judge in Kentucky that a gag order is needed because of strong and inflammatory opinion all over the news media.

Green and four of his former comrades are charged in the attack near Mahmoudiya in March. Green has pleaded not guilty to the charges.

As many assess the cause of the recent violence in Iraq, back here in the United States lawmakers are evaluating the overall state of the war. Let's bring in senior national correspondent John Roberts. He is watching this as well. John?

JOHN ROBERTS, CNN CORRESPONDENT: Hey, good afternoon, Wolf.

The Iraq War shaping up to be the major issue in the midterm elections with Republicans and Democrats both attempted to gain the advantage on it. Today, critics of the president's policy in Iraq were handed more ammunition with the new report with Government Accountability Office that it delivered to the House Government Reform Committee.

(BEGIN VIDEOTAPE)

ROBERTS (voice-over): The Government Accountability Office delivered a sharp rebuke to the White House, concluding that while its 2005 national strategy for victory in Iraq is an improvement over the original post war plan, it still lacks all of the key characteristics of an effective national strategy. GAO chief David Walker testified by video conference.

DAVID WALKER, GAO COMPTROLLER-GENERAL: The United States, Iraq and the international community should consider taking additional actions to help achieve sure and sustainable success in Iraq.

ROBERTS: The GAO was particularly critical about the price tag of war in Iraq, stating "The strategy neither identifies the current and future cost of U.S. involvement in Iraq."

That cost, by the way, through 2007 is $374 billion, including some funding for Afghanistan. The GAO also criticized strategy for battling corruption. Particularly in the oil sector which was supposed to help play for rebuilding. The report found as much as 10 percent of refined fuels are diverted to the black market. What's more, 30 percent of imported oil was smuggled out of Iraq and sold for profit.

It all made incendiary election year issue even hotter.

REP. DENNIS KUCINICH, (D) OH: And we're here talking about national strategy for victory in Iraq? Who are we kidding? Come on. Get real. Wake up, America. This administration has lied to the people and they are selling this lie all over and they are selling it here again to this committee. Balderdash!

ROBERTS: The White House insists it's making progress in Iraq. In its daily Iraq, message, things to remember, claiming the president's strategy is working. And on that point, the president gets support from a frequent visitor to Iraq.

REP. CHRIS SHAYS, (D) CT: After digging ourselves to a deep hole during the first year, we've made significant progress.

(END VIDEOTAPE)

ROBERTS (on camera): But the there is another huge problem facing the U.S. and the Iraqi government. The recent escalation in sectarian violence that has killed scores of people in Baghdad in just the past few days. The U.S. ambassador to Iraq, Zalmay Khalilzad today called it the biggest challenge facing Iraq. And he warned if the U.S. pulled out now Iraq could ignite to a full scale civil war. One that could pull its neighbors into a broader regional conflict, Wolf.

BLITZER: How testy did it get in that hearing today?

ROBERTS: Well, as you know, the Government Accountability Office is a nonpartisan organization. But some Republicans took offense to what they saw as a very negative tone to this report. So Congressman Dan Burton took on GAO chief David Walker. Saying you were nominated by President Clinton. This isn't indicative of partisan vendetta, isn't it. And Walker had to hold him off and said I call them as I see them.

But it got pretty testy in there at points.

BLITZER: John Roberts, thanks very much. John Roberts reporting.

How does the U.S. view recent events in Iraq? The Bush administration specifically? On Thursday I'll be speaking with Ambassador Zalmay Khalizad. He is the U.S. ambassador in Baghdad. He's going to be here in Washington. That's coming up Thursday right here in THE SITUATION ROOM.

And coming up. Osama bin Laden still at large. We're learning more now about what some say were some missed opportunities to actually capture him.

And might rare California wines become even more rare? Some experts say if global warming has its way, that's what is going to happen. Chris Lawrence standing by to join us. He'll explain. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're learning more about the decision to shut down a special CIA unit charged with hunting Osama bin Laden. Including some new details of missed opportunities to capture the world's most wanted terrorist. Our national security correspondent David Ensor is joining us with the latest. David?

DAVID ENSOR, CNN CORRESPONDENT: Wolf, the nature of the terrorist threat has been changing over the years since 2001. And the view at senior levels of the CIA was they needed to put more resources on tackling the homegrown threats, these wanna-bes and take some resources out of the hunt for bin Laden.

(BEGIN VIDEOTAPE)

ENSOR (voice-over): He's still out there. Still putting out tapes. But the unit at the CIA formed in 1996 to track him down was disbanded late last year, intelligence officials confirm, and its analysts reassigned to other counter terrorism tasks. The CIA unit was closed, intelligence officials say, because homegrown al Qaeda inspired groups like bombers of Madrid are a greater concern than bin Laden himself. But the bin Laden unit's first director, Michael Scheuer says closing it is a mistake. Since leaving the CIA in 2004, Scheuer has said that before 9/11 the units gave policymakers under Clinton and Bush many chances to get bin Laden.

MICHAEL SCHEUER, FORMER CIA ANALYST: We provided at least 10 opportunities, the clandestine service, either to capture Osama bin Laden or to give locational information to the military.

ENSOR: Asked about the decision to close the bin Laden unit, President Bush said there are still personnel looking for the al Qaeda leader and that it's only a matter of time before he's found.

BUSH: And we're not going to stop looking so long as I'm president. Not only for Osama bin Laden but anybody else who plots and plans attacks against the United States of America.

(END VIDEOTAPE)

ENSOR (on camera): Intelligence officials say and there are still some at the CIA and along the mountains of the Afghanistan- Pakistani border whose sole job is tracking bin Laden and his top deputies. Wolf?

BLITZER: David, thanks very much.

For more on this we're joined by Robert Grenier. He is the former director of the CIA's counterterrorism center. Thanks very much for coming in.

ROBERT GRENIER, FORMER CIA COUNTERTERRORISM UNIT: My pleasure.

BLITZER: Before I get to that. A quick thought from you in what happened in Mumbai today. It looks like a very sophisticated, carefully timed series of seven attacks. Has the hallmarks, maybe the fingerprints of what happened a year ago in London, maybe the year before in Madrid. What is your bottom line assessment?

GRENIER: It's really impossible to say, of course, at this point. We'll have to wait more information. I would be very concerned about making charges at this point, and pointing fingers at potential organizations that may have been responsible without knowing more. Of course, one would be very concerned about the possibility that Kashmiri separatists might have been involved.

BLITZER: It would be prudent as New York City is doing today to elevate and take some additional security precautions around train lines and subways in the United States?

GRENIER: Surely.

BLITZER: So that makes some sense. Let's talk a little bit about what David Ensor was reporting. The hunt for Osama bin Laden. The president denies they closed down the unit searching for Osama bin Laden. Others are saying they have actually expanded it and created a new one, much bigger, much broader, more robust. What do you know about this?

GRENIER: This is a decision that I took during my tenure. It's very unfortunate that I think the way the issue has been framed has been highly misleading for people. And I can understand why they would be extremely concerned. It seems absurd to think that the unit responsible for pursuing bin Laden and al Qaeda would be shut down. Sounds as though CIA has just declared victory and gone home. And of course nothing could be further from the truth.

So let's just back up a couple of steps and think a little bit. Shed some light on this unit. It was set up in the mid '90s, actually and was responsible for pursuing bin Laden but actually for pursuing al Qaeda world-wide. Remember, al Qaeda was a very different organization at that time. It was a vertically integrated organization, relatively clear, clear lines of authority, it was based in Afghanistan and had tentacles in various parts of the world.

Al Qaeda is a very different organization now. Obviously it still exists in a truncated form but the face of Islamic terrorism has changed a great deal.

BLITZER: These sympathizers or supporters of al Qaeda.

GRENIER: Absolutely. In fact, you might think of it in terms of three concentric circles. You have al Qaeda itself, you have a number of other well-formed organizations in various parts of the world. Some are closely affiliated with al Qaeda and some only distantly affiliated with al Qaeda, if at all, and then a third ring of cells, groups, individuals who are motivated by the same ideology, but really have no clear material link with al Qaeda at all.

BLITZER: Did the U.S. miss - you were there right in the middle of all this. Miss opportunities to capture or kill Osama bin Laden because officials were preoccupied with Iraq or other issues?

GRENIER: Absolutely not. Absolutely not. Obviously, intelligence resources have been stretched as a result of the need to pursue terrorist targets in Iraq. There is no question about that. But in terms of priority and the aggregate amount of resources being applied to the al Qaeda problem, that has not been stripped out at all.

BLITZER: Because in Afghanistan, at Tora Bora and other places, the accusation is they were getting close. Then all of a sudden they decided to take those assets, linguists and other special operations forces and move them to Iraq.

GRENIER: Uh-huh. There were some, of course who did have to be move to Iraq. But generally speaking those resources had to be removed from other targets. Not from al Qaeda, not from other terrorists targets.

BLITZER: So you're basically suggesting the focus, pressure was there. It was just bad luck they didn't catch them?

GRENIER: If they were opportunities that were missed. It was not for want of trying or application of resources.

BLITZER: A lot of analysts are really worried about what's happening in Mogadishu right now, in Somalia. This is a major city in the horn of Africa where it looks like al Qaeda potentially could create the kind of terrorist state that they had with the Taliban in Afghanistan. How concerned are you about this latest threat?

GRENIER: I'm very concerned about it. This is not a new threat. This didn't just crop up as a result of the fighting over the past couple of weeks. There has been a progression, for the better part of a year now, where radical Islamists in Mogadishu have been gaining increase in strength. And other war lords seeing that tendency over time took action to try to counter it and of course that lead to the recent fighting and military defeat. Now the Islamists are controlling virtually all of Mogadishu and much of southern Somalia. I'm very concerned about the possibility of their establishing a major safe haven.

BLITZER: One more question. All of these audio tapes and video tapes that we're hearing, seeing from Osama bin Laden, Ayman al- Zawahiri. Does this indicate to you a show of strength on their part, or an actual show of weakness?

GRENIER: Well, I'm not so sure I would characterize it either way. I think that clearly, right now, bin Laden is not a day to day operational planner. Really what he is is more of a figurehead. That's not to say he's not significant or not important. After all, what we're talking about is much more movement than a single integrated organization. So the role of the figure head, the role of the ideological leader, if you will, is a very important one. I think the pattern of this communications conforms to that responsibility and not to an operational one.

BLITZER: Robert Grenier, the former director of the CIA counterterrorism center, thanks for coming in.

GRENIER: You're very welcome

BLITZER: And still to come, the trickle down effect of prices at the pump. As they rise, what political price can the president expect to pay? That's coming up at our 7:00 p.m. Eastern hour. But up next, a wine lover's nightmare. Less California wine to enjoy. Will global warming make that happen? Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Global warming is threatening California's multibillion dollar wine industry. That's the crux of the new study that says as much as 81 percent of the state's prime growing areas will be unusable by the end of this century.

CNN's Chris Lawrence is joining us live from wine country in California with the story. Chris?

CHRIS LAWRENCE: Yeah, Wolf. We're about 100 miles or so north of Los Angeles, in the Santa Barbara valley area. Some of the best wine in the world is produced right here in vineyards like this one. But that wine takes a very specific temperature set to grow. Needs the right amount of sunlight. It needs hot days, cool nights. It's very particularly.

What climatologists are saying, when global warming develops, the number of hot days will increase so much. It could wipe out almost 80 percent or more than 80 percent of the premium vineyards here. That's a huge number. We're talking a very big business here that employs thousands of workers, a multibillion dollar business. Listen to what vineyard owner thinks about this study and why some climate researchers believe they are on the right track with this.

(BEGIN VIDEO CLIP)

NOAH DIFFENBAUGH, CLIMATE RESEARCHERS: We're projecting 81 percent decrease in total production in the United States for premium wines. That's primarily tied to the increase in frequency of extremely hot days as greenhouse gas concentrations rise over the next century.

ROBERT WISTED, VINEYARD OWNER: It's hard for me to believe that we could get so warm that it would be an issue with the ability we have to cool off at night. And I don't know exactly what time of the year the study referred to in terms of heat, but we're only hot here in parts of June, July and August, and cool most of the rest of the year.

(END VIDEO CLIP)

LAWRENCE: We'll take a walk through the vineyards and talk more with some of the vineyard owners about how they feel about this study and how it could affect them coming up in the next hour of THE SITUATION ROOM at 7:00 Eastern.

BLITZER: Thank you very much. What a beautiful backdrop you have. We're anxious to see your report. Thank you very much, Chris for that.

Discouraging news for American drivers today. The Energy Department is raising its estimate for the average price of gas this summer to $2.88. But we're already paying about $3 a gallon. So what gives? Our Internet reporter Jacki Schechner is here to explain. Jacki?

JACKI SCHECHNER, CNN CORRESPONDENT: Wolf, it all comes down to how you define summer, or how the Energy Department defines summer. Now according to their outlook, summer goes from April to September. Traditionally summer is the end of June to the end of September. And that, affects gas prices or at least the averages. Take a look at this. In April, the price was considerably lower than where we are now for the summer seasons. We're looking at cents here. So you're talking about $2.74 a gallon. That brings down the average. They say the reason why gasoline prices are going up is because the price of crude is going up. And also because demand is outpacing supply, among other factors. One thing we want to show you online is gasbuddy.com, a Web site that tracks local gas prices across the country. The use volunteer submissions. They do a daily map and you can see anything in yellow, orange and red is approaching $3 a gallon or even above it at this point, Wolf.

BLITZER: Thank you very much, Jacki. Up ahead, Jack Cafferty has the stem cell battle on his mind. Should President Bush use the first veto ever against the embryonic stem cell bill? Jack standing by with the "Cafferty File". Plus the growing grass roots movement that wants secretary of state Condoleezza Rice to run for president. Will she do it? Can she win? That story coming up in our 7:00 p.m. Eastern hour.

(COMMERCIAL BREAK)

BLITZER: Zain Verjee joining us once again with quick look at some other stories making news. Hi, Zain.

ZAIN VERJEE, CNN ANCHOR: Hi, Wolf.

Ann Coulter's syndicator dismisses allegations that the outspoken columnist plagiarized materials in some of her writings as having no merits. "The New York Post" and two Web cite excerpts from Coulter's conservative columns and her latest book "Godless" as containing text that resembles other works. Universal Press Syndicate says, quote, "There are only so many ways to requite a fact and minimal matching text is not plagiarism."

Massachusetts attorney general Tom Riley says that he plans to treat the Big Dig tunnel site where a woman was killed today as a crime scene. And that could lead to charges of negligent homicide. Four concrete ceiling panels weighing at least 12 tons fell crushing a car carrying newlyweds. The man managed to crawl out to safety but his wife was killed. The heavily criticized $14 billion project is the costliest highway project in U.S. history.

Defense secretary Donald Rumsfeld says the resurgence of Taliban forces will not succeed despite continuing movement of militants across borders. Rumsfeld traveled to Kandahar to visit troops there. That was after an announced trip to Kabul today to visit with President Hamid Karzai. Mr. Karzai called for continued U.S. support for building Afghanistan's police force. Rumsfeld challenged Europe to come up with a master plan to help Afghanistan curb its massive drug trade. Wolf?

BLITZER: Thank you, Zain, for that. Up next, taking a political stand on a moral debate. Jack Cafferty an his question of the hour. Should President Bush use his first veto against a stem cell bill? We'll read your e-mail right after the break. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Let's go right to Jack in New York. Jack?

CAFFERTY: President Bush is likely going to cast his first veto of a bill that would expand federal funding of embryonic stem cell research. That's according to Karl Rove and he should know.

The question this hour is, should President Bush do this?

Rose writes from Pasadena, California, "George Bush is so blinded by religion he just can't help himself. By vetoing this bill he'll be handing out thousands of death sentences to those who suffer from terminal illnesses that could be cured with embryonic stem cell research. I guess the right to life is reserved only for the unborn."

Cara in Edgewood, New Mexico, "He shouldn't but he will. I'm sure Bush and the Republicans are terrified that through stem cell research they'll find a cure for stupid, hastening the death of the Republican Party." That's cruel.

Rob in Des Moines, Iowa, "I think Bush should veto this bill. Let God do what God does and scientists do what scientists do."

Robin in Grain Valley, Missouri. "Of course he should veto a bill that takes like to save life. Next he needs to ban all death. No more killing cows for food. No killing chickens, no killing plants, no killing bugs or even weeds. No more killing the terrorists to save American lives. All killing must stop, well, except the death penalty."

In Texas I hear they did away with the electric chair and replaced it with electric bleachers.

Confused in Ohio rights, "It depends on whether any same sex stem cells might want to get married."

And we got one from Al in Lawrence, Kansas but I was told by the propriety monitors in Washington that I wasn't allowed to read it. So I won't. We have people that don't have enough to do down there.

Finally, if you didn't see your e-mail here you can go to cnn.com/caffertyfile and read more of them online. Maybe we'll post the one from Al in Lawrence Kansas online if we can get it past the censors.

Wolf?

BLITZER: It must have been sensitive. But we'll leave that discussion ...

CAFFERTY: It wasn't sensitive. It was funny. We just have some prudes in authority today because the regular executive producer is off.

Jack, I'll take a closer look at it during our break. We're back in an hour here in the SITUATION ROOM. We're here weekdays 4:00 to 6:00 p.m. Eastern. Back at 7:00 p.m. Eastern.

LOU DOBBS TONIGHT starts right now. Kitty Pilgrim filling in for Lou. Kitty?

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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