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THE SITUATION ROOM

Britain Foils Alleged Terror Plot to Blow Up Airlines; Russia Introduces Resolution Seeking Humanitarian Cease-Fire; Israeli Forces Seize Mostly Christian Town of Marjeyoun

Aired August 10, 2006 - 19:00   ET

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


WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou. 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 tonight's top stories.
Happening now, new information about what may be the biggest terror plot since 9/11. British authorities say they foiled a plan to blow up planes heading toward the United States. It's midnight in London where investigators still are on the hunt for suspects and are probing an alleged al Qaeda connection.

Airports in the United States and Britain now are on higher alert. It's 7:00 p.m. at JFK Airport in New York City where new security rules have screeners and passengers scrambling. Would they have been ready for the worst? I'll ask the Homeland Security Secretary Michael Chertoff.

And in the Middle East conflict intense fighting and desperate diplomacy. It's 2:00 a.m. Friday in Lebanon where Israel is taking its fight against Hezbollah into new territory amid talk that a peace deal could be struck soon.

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

If you're just tuning in, a major story in the war on terror that if pulled off, would have killed thousands of people. The alleged plot involved terrorists boarding as many as 10 U.S.-bound planes in Britain. Once on board the terrorists would -- and detonate those bombs with everyday electronics like iPods or cell phones.

They allegedly hoped to blow up as many as 10 planes at the same time as they flew to the United States. Officials say British Airways, Continental, United and American Airlines would have been the targets. Right now 24 people are under arrest and sources with knowledge of the British investigation say two of them had prepared what are called martyrdom tapes, ready for suicide.

Also, senior U.S. government officials tell CNN two of the suspects recently traveled to Pakistan and later received money wired from there. CNN's Christiane Amanpour is standing by Heathrow Airport in London. CNN's Jeanne Meserve is working...

(AUDIO GAP) BLITZER: ... Washington, but we begin this late-breaking report from CNN's Deborah Feyerick in London.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Police went house to house, continuing the search in London, the industrial city of Birmingham, and the Thames Valley. British officials weren't saying much about the people arrested, but they believe they have the key players. In fact, sources familiar with the investigation say two of the suspects had already recorded so-called martyr tapes to be released after the alleged attacks.

DEP. COMM. PAUL STEPHENSON, LONDON METROPOLITAN POLICE: We are confident we have disrupted a plan by terrorists to cause untold death and destruction and to commit quite frankly mass murder.

FEYERICK: U.S. sources say those arrested are all British, some of Pakistani descent. In fact, according to sources, two of the suspects recently traveled to Pakistan and later received money wired from there. Officials in Pakistan say they helped British intelligence crack the case beginning as long ago as last December and more recently with information from a raid several weeks ago on the Afghan/Pakistan border. They also say it was information from Pakistan that convinced the British to act last night.

DOUGLAS ALEXANDER, U.K. TRANSPORT SECRETARY: The investigation reached a critical point last night when the decision was made to take urgent action in order to disrupt what we believe was being planned.

FEYERICK: The alleged plot, according to the British, was to simultaneously blow up as many as 10 airplanes flying from Heathrow Airport to the United States using potentially explosive liquids and other materials in carry on luggage. More than 200 inbound flights and another 200-plus outbound flights were canceled at Heathrow Airport. By the end of the day delays are fewer, but thousands of passengers are left trying to make plans to leave. The airport is still on the highest alert. Passengers are not being allowed to carry on any luggage, only wallets, medicine and travel documents are allowed, and they have to be carried through security in a clear plastic bag.

UNIDENTIFIED MALE: This step has been taken to ensure maximum secure so people can go ahead with their travel arrangements.

(END VIDEOTAPE)

BLITZER: That was CNN's Deb Feyerick reporting from London. Let's find out how the U.S. government is responding to this alleged terrorist plot. Our homeland security correspondent Jeanne Meserve is in Washington with more. Jeanne, what are you picking up? What are you learning about the nature of this plot?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Well, U.S. officials are saying that they have seen no indications that there was any plotting on U.S. soil or any communications between the people picked up in Britain with people or cells here in the United States. However, they do note that this investigation is ongoing, not yet completed. Something else could show up.

And also, of course, U.S. air carriers were the ones being targeted in these alleged attacks. In addition, they're talking some about the timing of this. As one official put it, we weren't pulling people off of planes. But clearly the attack was coming along very closely. They were near to a dry run, according to some accounts, and the real attack would have happened shortly after that. In addition, officials are shying away from the fact that this could be linked to 9/11 or to any other significant date. It is their belief that these terrorists would have acted when they were ready to act, the calendar would have had nothing to do with it -- Wolf.

BLITZER: And it does have the hallmarks, as they say, of al Qaeda, at least that's what the secretary of homeland security suggests as was other officials. We have seen some really long lines at airports across the country. Jeanne, how much longer do think the American public is going to expect to see these long lines?

MESERVE: Well actually according to...

(AUDIO GAP)

MESERVE: ... we've been receiving those lines are receding. According to screeners and travelers and airport officials, they aren't collecting as many of those banned items the word simply has gotten out via the media. People are either not bringing them or they're putting them in their checked bags.

Another phenomenon is that the screening lines apparently are not as long as they were, at least at some airports. The airport official I talked to out at LAX told me he thought that was because more people were checking their baggage and so that meant that although there were more that screeners had to do with each bag there were fewer bags for them to check at the screening checkpoints, so in some respects things could be easing up. How long these security measures will be in effect, we don't have any idea and neither do officials because that investigation isn't finished -- Wolf.

BLITZER: They're taking it day by day by day by day. That's a fundamental fact, at least that's what officials are telling all of us. Jeanne thank you very much. President Bush is calling the foiled plot to blow up airplanes a stark reminder of the terrorist threat to the United States. Some of his critics, though, are already asking if Mr. Bush is trying to use this frightening turn of events to his own political advantage.

Here's our White House correspondent Suzanne Malveaux -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well Wolf, President Bush was trying to focus on domestic issues with his trip to Green Bay, Wisconsin. Of course, a Republican fund-raiser, also remarks on the economy, but the news as you know is all about terror and today President Bush was trying to use this foiled terror plot to make the case that the administration is doing a good job in protecting the American people.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): President Bush used the foiled terrorist plot to make two points. First, to justify his war on terror.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This nation is at war with Islamic fascists who will use any means to destroy those of is who love freedom, to hurt our nation.

MALVEAUX: And second to convince Americans they are safer on his watch.

BUSH: This country is safer than it was prior to 9/11. We have taken a lot of measures to protect the American people.

MALVEAUX: It was Sunday when Mr. Bush first learned of the developing terror plot out of the United Kingdom during a video conference all with British Prime Minister Tony Blair, this photo was released by the White House that day to show the president engaged with world leaders on the Middle East crisis, but the terror plot remained secret. The following day Mr. Bush delivered this ominous warning during a rare Crawford news conference.

BUSH: Part of the challenge in the 21st Century is to remind people about the stakes and remind people that in moments of quiet, there's still a Islamist fascist group plotting, planning and trying to spread their ideology.

MALVEAUX: For the past four days White House aides say Mr. Bush received updates about the possibility of an impending attack. Wednesday Mr. Bush got another update from Blair that British authorities were seeing signs of something imminent and that it was time to move. That evening, the president gave the green light to Homeland Security Secretary Michael Chertoff to raise the threat level for air travel.

Aides say the president was not given a heads-up about the timing of the overseas arrests, nor woken up when they occurred. But some Democrats are suggesting that the White House used its advance knowledge to score political points. They object to the coordinated comments made in recent days from the vice president, the press secretary and the head of the Republican Party, all attacking the Democrats for being weak on terror.

KEN MEHLMAN, REPUBLICAN NAT'L CMTE. CHMN.: As a party that once stood for strength now too often stands for retreat and defeat.

MALVEAUX: Senior administration officials call the Democrats charge preposterous.

DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: If in the next 48 hours, we see Republicans exploiting this that will be unbecoming to them.

(END VIDEOTAPE) MALVEAUX: This foiled plot, of course, comes at a critical time for President Bush who is now dealing with the Middle East crisis and Iraq that may be descending into civil war and of course the anniversary of September 11 -- Wolf.

BLITZER: Suzanne Malveaux reporting. Thank you, Suzanne. Officials say the plot does bear all the hallmarks of al Qaeda. For more let's turn to our chief international correspondent Christiane Amanpour. Christiane is in London for us.

Christiane, first of all, based on everything you are hearing from British authorities, how sophisticated was this plot?

CHRISTIANE AMANPOUR, CNN CHIEF INT'L CORRESPONDENT: Well they are saying it's sophisticated. They're saying that it was impressive. And as you know the homeland security chief has also said that this was the result of a lot of careful planning and of course it was about to come, if it had, perhaps in a couple days. And this is at the height of the tourist season, sort of maximum impact, maximum destruction, and a huge, huge blow, not to mention many, many potential deaths. What they're saying also is and what other analysts are saying, is look back more than 10 years ago, 1994, al Qaeda, Ramzi Yousef, Khalid bin Shaikh Mohammed had this potential plot, of course was thwarted to blow up...

(AUDIO GAP)

AMANPOUR: ... liquid explosive device. And these are much more sophisticated and difficult to detect than what we have seen for instance in other suicide...

(AUDIO GAP)

BLITZER: Looks like we're having some technical problems with that satellite feed to Christiane. Christiane, stand by. We're going to get back to you. Christiane Amanpour with the latest she's collecting in London.

Jack Cafferty is off today. "The Cafferty File" will be back on Monday. We're following all the major developments in the terror plot as well as the crisis in the Middle East including word tonight that a United Nations resolution potentially could be imminent. We're going to have late-breaking developments.

Also, the new reality of air travel, much more on what all of us need to know about flying and how it's changed over the past 24 hours. We're going to go live to New York's Kennedy Airport. Mary Snow is standing by for that.

Plus, what President Bush said about plot that has some people upset. Live from Jerusalem. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Christiane Amanpour is in London. I want to go to Christiane once again. We had some technical problems, Christiane. First of all, Christiane, what do we know about those suspects picked up, this whole plot, the individuals, where they are from, what they were doing? What information are you picking up there?

AMANPOUR: Well what we know for sure is what the British police have said and that is where they're from because we know where the raids were and where the houses were, in a place called High Wycombe, which is known as the Thames Valley area not far from London, Birmingham, Waltham (ph), so those areas. Some of those have high Muslim populations. The police in England are not saying at all what their religion or ethnic mix is. They're very, very clear about not wanting...

(AUDIO GAP)

BLITZER: All right Christiane, we keep having trouble with that satellite. We'll try to work it out. Christiane Amanpour reporting for us from London. And we're going to have a lot more on this alleged terror plot in the skies. And that's coming up in a few minutes.

But there's also other important news we're following, significant new developments in the Middle East crisis. Russia now says it will introduce a U.N. Security Council...

(AUDIO GAP)

BLITZER: ... a humanitarian cease-fire. Meanwhile, diplomatic sources say major sticking points have resolved on the main U.N. resolution. They say the United States and France now agree on a deal that would deploy U.N. and Lebanese forces into southern Lebanon at the same time Israel and Hezbollah forces pull out but the fighting isn't letting up yet.

CNN's Jim Clancy is standing by in Beirut, but let's go to CNN senior national correspondent John Roberts. He's live along the Israeli/Lebanese border with more. John, what are you picking up?

JOHN ROBERTS, CNN SR. NAT'L CORRESPONDENT: Hey, good evening to you, Wolf. It's been reasonably quiet for the last few hours but in just the last few minutes it picked up again. We can hear armored personnel carriers going back across the borer, tanks joining them as well. There have been a number of Israeli bombs that have been dropped in the last half-hour, very large explosions that actually rattled the location that we're in, hitting very close to us, even though they're still probably about half a mile away. When a 500- pound bomb drops half a mile away from you, it can create quite an effect.

Another deadly day for Israel, fighting in the town of Marjeyoun, the Christian town not too far north of the border here in the tip -- northern tip of the Galilee Peninsula. One soldier was killed. And a real disagreement raging right now between Lebanese and Israeli officials over an Israeli army base that is just outside of the town of Marjeyoun. Marjeyoun, by the way, was the Israeli base of operations when they occupied Lebanon from 1982 to the year 2000. Lebanese authorities are saying that Israeli forces have taken control of that base and are detaining the 350 Lebanese soldiers and some refugees inside. Israel says, no, we are not holding on to control of that base. We're not occupying it.

We're simply telling people inside not to come out because the fighting is raging all around and it is too dangerous. But Wolf, even though we see a lot of fighting going on here in this valley and the surrounding hills, this is not the major expansion of the ground operation that the Israeli Cabinet approved yesterday.

(BEGIN VIDEOTAPE)

ROBERTS (voice-over): At nightfall, thick, oily smoke clouds a Lebanese hillside.

(SOUNDS)

ROBERTS: An Israeli artillery shell finds its mark. The strike is in support of troops fighting in the town of Marjeyoun within sight of Lebanon's Litani River. The operation began Tuesday night from the tip of the Galilee Peninsula, the farthest drive north yet for the Israeli army.

UNIDENTIFIED MALE: (INAUDIBLE)

ROBERTS: The goal is to eliminate the threat from Hezbollah raining Katyusha rockets on northern Israel. More than 160 fell today, 28 inside populated areas. One struck this house in the village of Dear al Assad (ph), killing an Arab mother and her 5-year- old child. Hunting down those launch sites is proving more difficult than first thought says Israeli army spokesman Michael Oren.

MICHAEL OREN, IDF SPOKESMAN: Hezbollah is deeply dug in here. They had six years to do it, and extracting them from their under ground tunnels, craters, arms caches is a laborious and dangerous process and it's not done overnight.

ROBERTS (on camera): In the light of day you can see the aftermath of an intense battle that was raging for more than 36 hours. This mark of a main battle tank has taken some sort of round here in its front end, stripping off a lot of the armor.

(SOUNDS)

ROBERTS: Walking now toward the Lebanese side, you can see that the border fence has been blown wide-open. Crossing over into Lebanon, these are the tank berms that were built for these (INAUDIBLE) to hide behind while they fired on Hezbollah positions. Smoke still hangs through this valley and we still hear the sound of gunfire in the Arab villages that dot these hillsides. The Israeli army is describing this though as only one of their pinpoint operations that they have been engaging in for nearly the last month. This is not part of an expanded ground campaign that still may lie ahead in the days to come.

(voice-over): Tanks and troops continue to mass near the border, though political leaders are holding off on an expansion hoping just the threat will pressure Lebanese officials to do a deal to end the fighting, but if diplomacy fails, they have vowed a major invasion, a move that has broad support in Israel.

UNIDENTIFIED MALE: I mean clearly that on a ground campaign you limit to a certain degree the amount of civilian casualties you're inflicting on the other side, even at the risk of incurring greater casualties on your side among your soldiers.

ROBERTS: But some Israeli officials are wary of sending large numbers of new troops into Lebanon, even scaling back their expectations of what this war will achieve.

UNIDENTIFIED MALE: Since we didn't initiate the war with them, we have to win it. We have to stop it.

(END VIDEOTAPE)

ROBERTS: Well that's a really interesting admission because the military and most of the Israeli population want a definitive victory in this war and that is to neutralize Hezbollah, but with Israeli officials now saying all they want to do is stop the war, it really questions what victory is in this conflict -- Wolf.

BLITZER: John Roberts reporting for us along the border. John thanks very much.

And the British Prime Minister Tony Blair suggesting potentially there could be a deal within 24 hours. We'll wait and see. Let's go to Beirut right now where Israel is dropping leaflets, warning residents of the city southern suburbs to evacuate right away.

CNN's Jim Clancy is joining us live once again from the Lebanese capital with the latest -- Jim.

JIM CLANCY, CNN CORRESPONDENT: Wolf, when we look at the situation of fighting we just heard described by John as well as that diplomatic breakthrough perhaps at the United Nations, the reality on the ground here is that people are still packing up.

(BEGIN VIDEOTAPE)

CLANCY (voice-over): A smattering of residents in Beirut's southern suburbs chose better safe than sorry and packed up their belongings. Leaflets dropped all across Beirut Thursday by Israel warned an expanded assault on the Lebanese capital would target Shiyah, Bergeborajna (ph) and Haes Saleam (ph), three neighborhoods in the southern suburbs that are home to more than 200,000 people.

One woman demonstrated her disdain for the marching orders dropped from the sky, while even the cautious voiced contempt.

UNIDENTIFIED MALE: We're not scared for evacuations. Even though we're leaving, we're steadfast in Lebanon. All of Lebanon is ours. And we are against the enemy and we are coming back and we will resist and we are Hezbollah and we're all Hezbollah.

CLANCY: As they picked up and read the leaflets, others echoed the defiance.

UNIDENTIFIED FEMALE: We are steadfast. We're not leaving. The country is ours and this is our area. It's neither Israel's land or anyone else's.

(SOUNDS)

CLANCY: But as Lebanon shutters with continued fighting between Hezbollah and Israel across the south, the urgency of a cease-fire is all too obvious. Still unknown whether the U.N. Security Council will approve plans for an Israeli withdrawal and the deployment of international peacekeepers and the Lebanese army. Lebanese defense analyst say without it, no cease-fire will work.

BRIG. GEN. SALIM ABOU ISMAIL, LEBANESE ARMY (RET.): If the international community and the United Nations are really working for peace in this area, they have to accept that. The United States will agree. Israel should agree and of course the Lebanese and Hezbollah they don't have any problem against that.

CLANCY: General Salim says it's not about the military capability of the Lebanese army, but the political context.

(SOUNDS)

CLANCY: Pressured by the cost of the conflict to Lebanon, Hezbollah has agreed to disengage if Israel withdraws and the Lebanese army goes in. If Israel stays, so does Hezbollah.

(MUSIC)

CLANCY: But Israel has not agreed. Many here say a missile strike from a pair of Israeli helicopters near the home of Saad Hariri, is a warning shot across the bow of the man who leads Lebanon's parliamentary majority. The historic lighthouse, nothing more than a cell phone tower today, had no apparent military value. But Hariri is at the forefront of those pushing for immediate Israeli withdrawal and the subsequent deployment of Lebanese forces.

(END VIDEOTAPE)

CLANCY: One bit of good news today, Wolf, two ships docked here at the port behind me. They unloaded much needed humanitarian aid supplies, one Greek, one French. Still, that aid cannot get to 100,000 people stranded in the south and for that the U.N. sharply criticized both Hezbollah and Israel -- back to you.

BLITZER: Thanks very much. Jim Clancy reporting in Beirut.

Still to come tonight in THE SITUATION ROOM, red alert. The head of Homeland Security Michael Chertoff joins us to answer the tough questions about all of our security.

Plus, Muslim leaders angry at President Bush over his choice of words. We'll have details of a growing controversy.

Live from Jerusalem, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: President Bush is causing some controversy with his...

(AUDIO GAP)

BLITZER: ... terror plot. He used one phrase in particular that some Muslims right now are finding very upsetting. Let's bring in Zain Verjee. She's joining us live from Washington with details -- Zain.

ZAIN VERJEE, CNN ANCHOR: Wolf, the message from Muslim leaders today to President Bush, be very careful. They're enraged because of a relatively new term the president is using -- Islamic fascists.

(BEGIN VIDEO CLIP)

BUSH: The recent arrests that our fellow citizens are now learning about are a stark reminder that this nation is at war with Islamic fascists who will use any means to -- to destroy those of us who love freedom, to hurt our nation.

(END VIDEO CLIP)

VERJEE: The president has been using that for about two months now, as recently as Monday, accusing terrorists of trying to spread a jihadist message of quote -- "Islamic radicalism and Islamic fascism". Muslim leaders say that language could unleash a quote -- "religious war against Islam".

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We'd have to have a definition of the term. These kinds of terms, Islamist, Islamic fascist, Islamic fascism, all of these kinds of terms are used quite loosely and they're never defined and they're often applied to mainstream, practicing Muslims who are not involved in any kind of a violence or planning for violence.

(END VIDEO CLIP)

VERJEE: Islamic leaders insist that American Muslims are dedicated to the security of this country. They add just because of terror stacks and plots, their faith should not be singled out -- Wolf.

BLITZER: Zain thank you. And to our viewers, you're in THE SITUATION ROOM where new pictures and information are arriving all the time. Happening now, 24 suspects are in custody in an alleged plot that could have been what some officials are calling mass murder on an unimaginable scale. British authorities say they disrupted the plan to use liquid explosives to blow up as many as 10 planes heading to the United States.

And U.S. officials say the attack may have been only days away. It's been a frantic and frightening day for air travelers in Britain and the United States and elsewhere. Long lines at U.S. airports are said to be easing up a little bit right now but passengers and screeners still getting used to the new rule. Most liquids are banned from carry-on.

And another intense day of warfare right here in the Middle East. While U.N. diplomats push harder for a peace deal, the British Prime Minister Tony Blair's office says an agreement possibly could be reached within 24 hours.

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

The alleged plot is very similar to two others several years ago, one of which actually succeeded. CNN's Brian Todd is in Washington. He's got details -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, experts say collectively these three plots including the one uncovered today are extraordinary for their sophistication and ambition.

(BEGIN VIDEOTAPE)

TODD (voice-over): Terrorists tried it before, and failed, January 1995, the plot code-named Bojinka, aimed to simultaneously blow up 12 U.S.-flagged carriers flying from Asia to the United States.

PAUL CRUICKSHANK, NEW YORK UNIVERSITY CENTER ON LAW AND SECURITY: The liquid explosive was put into a bottle which would normally contain -- which would normally contain the liquid for a contact lens solution.

TODD: The men behind Bojinka are familiar faces, Ramzi Ahmed Yousef, convicted for engineering the first attack on the World Trade Center in 1993, and his uncle, Khalid Shaikh Mohammed, the architect of 9/11 -- first up, a test run.

One passenger is killed on a Philippines Airlines flight bound for Tokyo. But, nearly a month later, a major mistake -- terrorists, apparently mixing chemicals, accidentally set a Manila apartment on fire. They're caught -- an estimated 4,000 lives spared.

Their inspiration? Experts say look to seven years earlier, November 1987. Korean Air Flight 858 blows up over South Asia. All 115 on board are killed -- the methodology, liquid and plastic explosives concealed in liquor bottles smuggled into the cabin, detonated by remote. This time, a former CIA official says, it was government-sponsored.

ROBERT GRENIER, FORMER HEAD OF CIA COUNTER-TERRORISM CENTER: Two individuals who were North Korean agents -- they were actually North Korean nationals, although, of course, they were traveling on false documentation -- and they were highly trained.

TODD: One method, one deadly success, but two high-profile failures. Why do the attackers keep coming back to the same M.O.?

GEORGE BAURIES, FORMER FBI AGENT: To continually go back after an area to show that they are -- that they are on that mission to bring the aircraft down, to have that splash effect.

(END VIDEOTAPE)

TODD: And, for that reason, experts say, terrorists will almost certainly try this method and this type of target again. Failure only hardens their resolve. The World Trade Centers attacks, they say, both of them, prove that -- Wolf.

BLITZER: Brian Todd, thank you.

And I spoke earlier about some of those issues Brian just raised with the homeland security secretary, Michael Chertoff.

(BEGIN VIDEOTAPE)

BLITZER: If the -- the U.S. and other countries have known about this potential of using some sort of liquid explosive to blow up a plane, why has it taken until now to implement the kind of security procedures to deal with this potential threat?

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: Well, of course, we are always looking at putting in security measures to deal with explosive devices.

And a lot of the measures we have put into effect dealt with the kinds of devices that were around and being used by terrorists and being built by terrorists over the last 20 years.

We have also, however, been looking at what I call cutting-edge techniques that terrorists might develop in creating improvised explosive devices. And we have done quite a bit of work on liquid explosives, which are challenging.

In this instance, because of the fact that it looks like a sophisticated design, and because we haven't had an adequate time to really study what the design was, we felt it was prudent to prevent any kind of liquid from coming on the plane.

Eventually, we will look at what they did. We will reverse- engineer it. And we will make sure that we make adequate countermeasures in place, so that we can prevent these kinds of bombs from coming on board.

BLITZER: Right now, the X-ray machines at -- at airports around the United States, around the world, I take it, cannot detect some sort of liquid explosives along the lines in this alleged plot?

CHERTOFF: I -- I would not make that assumption. What I will tell you, though, is, since we, obviously, did not have an opportunity to study the bombs before we took down the arrests, and because it may take some time to really analyze and understand what they have done, the prudent course was to prevent any kind of liquid that might be harboring an explosive device from coming in.

Once we have had an opportunity to study the devices that were being planned and designed here, we will have a better idea what adjustments, if any, need to be made in our screening tools.

You know, we're in a race, in a sense, against terrorist ingenuity. And, just as we see in the war in Iraq, the terrorists continue to try to retool their devices to defeat our defenses. And we constantly revise our defenses to defeat their devices.

BLITZER: There is a report now that the Associated Press is noting that these terrorists -- these alleged terrorists -- were getting ready for a dry run of this plot within two days. Is that true?

CHERTOFF: Again, Wolf, I want to be careful to respect the British process and not get specific about evidence. But what I can say is, it's not uncommon -- and, historically, in fact, we have seen that these kinds of plots almost always have a dry run or a casing element, before the actual plot is carried out.

And going back to that 1994 plot I told you about, involving the airliners over the Pacific, they, in fact, did a couple of dry runs before that plot as well.

BLITZER: How long will this heightened procedure, this heightened security alert at U.S. airports remain in effect? In other words, what will trigger going back down to that reduced level?

CHERTOFF: Well, as we get a better picture of the plot, as we get a better understanding to what extent we have actually scooped up everybody involved, we will be in a position to judge whether the threat is still as alive as we have to consider it to be today. But, you know, the motto here has to be, better safe than sorry. We know it's inconvenient. It certainly makes traveling more of a hassle than it was a few days ago.

On the other hand, we don't want to lose even a single life because we were careless or because we were too quick to let up. So, we are going to be careful. There's a lot more material to analyze. This is a complex investigation, as the British authorities have repeatedly emphasized.

And, so, we are going to be as deliberate and as expeditious as we can be, in trying to get our arms around the entirety of what we're looking at, so we can make some good judgments about how to keep the American people safe.

BLITZER: Is this the work of al Qaeda?

CHERTOFF: Well, as I think I said, and Attorney General Gonzales said today, it certainly has some of the hallmarks of an al Qaeda plot. And it's suggestive of an organization such as al Qaeda. On the other hand, I don't want to rush to judgment. There is a lot of evidence that has to be sifted. And we want to go through that process with the British before we draw a conclusion.

At the very least, I can say this, though. We are dealing with a plan that is every bit as sophisticated as the kind of plans we have seen al Qaeda carry out. So, whether or not, at this moment, we can conclude it is al Qaeda, we can certainly suggest, the plan presented the kind of threat that we would consider to be similar to an al Qaeda type of threat.

BLITZER: Susan Collins, senator from Maine, says this plot was the biggest terrorist threat since the attacks of September 11, 2001. Do you concur?

CHERTOFF: I think that's a fair observation, based on my knowledge of what has gone on in the last five years.

BLITZER: Secretary Chertoff, thanks very much for joining us. We will continue this conversation.

CHERTOFF: Wolf, I look forward to it.

(END VIDEOTAPE)

BLITZER: And we're getting new information right now on the alleged terror plot -- Kelli Arena standing by. We're going to go to her in a moment.

We're also going to go to CNN's Anderson Cooper. He's live from Heathrow Airport in London.

Plus: information you need to know before your next trip to the airport. The rules on what you can carry on board have changed pretty dramatically. We are going to go live to CNN's Mary Snow at JFK Airport in New York.

From Jerusalem, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're getting new details into CNN right now on the alleged plot to blow up airline -- airliners from London to the United States.

Our justice correspondent, Kelli Arena, has been working her sources.

Kelli, what do you have?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, I told you earlier that the British had been monitoring this group and this plot for some time. We now know, from several government officials, that an undercover agent, a British undercover agent, had infiltrated that group. And that's how they got the specific information that they needed to know that it was time to move in. I told you earlier that two suspects had gone to Pakistan. We are now told by U.S. officials that, while they were there, those two suspects met with an alleged al Qaeda operative, Wolf -- again, one more piece of evidence pointing to a possible al Qaeda link with this plan.

We also reported that there was going to be a dry run conducted within two days. We're also told now by U.S. officials that, while tickets for those airline flights were not purchased, the -- the group was allegedly going through Web sites, trying to find flights to various cities that left at -- roughly at similar times, Wolf. So, they were right up to the point of being able to move and buy those tickets, although that hadn't happened.

All the components, as you know, Wolf, for the explosives were purchased, were in the hands of -- of this group, according to U.S. officials. And the attack was expected, Wolf -- we have a timeline now -- within two weeks, or in a matter of days, but no longer than two weeks -- Wolf.

BLITZER: Kelli, thank you very much. Good reporting.

Let's go back to Heathrow Airport.

CNN's Anderson Cooper is on the scene for us.

Anderson, you know, what are you hearing from your sources there about this alleged (AUDIO GAP)

ANDERSON COOPER, HOST, "ANDERSON COOPER 360": Well, Wolf, of course, what we know now at this -- at this point, that, reportedly, it involved chemical liquids, or liquid chemical, brought on board.

The idea would be that the -- the chemical would be mixed with some sort of a paste or a powder, once on board the aircraft. It was described as a Gatorade type drink, a popular drink here in England, like this one right here, which is -- it's an orange color, could -- the actual liquid in this bottle would be poured out, replaced with some sort of a chemical liquid.

And that's why, now, not only can you not bring any liquids on board flights in carry-on luggage. You can't bring any paste, any toothpaste, any lotions, anything that would -- might be able to be replaced with some of these chemicals. Right now, obviously, there are very severe restrictions about what can bring on board, all based on what they think, at this point, the chemicals involved in this procedure were -- Wolf.

BLITZER: We know the threat alert at Heathrow, the main British airport in London, is at the highest possible level, meaning that some sort of terror attack could be imminent.

What are they saying? Are there still suspects at large who haven't been apprehended?

COOPER: The -- the investigation is still going on. As you know, there are 24 people right now in custody. But, by -- by no means, do they say this investigation is over. That -- that was also echoed -- echoed by Michael Chertoff. They are still looking to -- into a number of places and people, both here and -- and abroad, in other -- in other countries -- Michael Chertoff, though, making clear, earlier today, that, right now, there are no suspects inside the United States, that the investigation does not center in there. It mainly centers here.

As you know, most of the people arrested were from the London area, also others from -- from Birmingham and elsewhere in England.

But flights are now coming in and -- and going out here. The air -- the airports slowly trying to get back to some sense of normalcy. But it has been a major disruption, Wolf. As you know, about 180,000 people normally fly out of Heathrow every day in these -- these peak summer -- summer months.

So, there -- there -- for the next several days, there are going to be major disruptions to this airport and a number of airports in the region.

BLITZER: I guess the best advice for people flying any airport nowadays is, get there plenty early, and try not to take anything on board with you.

Anderson, thanks very much.

Anderson is going to have a lot more coming up tonight, "ANDERSON COOPER 360," live from Heathrow tonight, 10:00 p.m. Eastern, only here on CNN.

Also, coming up; the politics of terror. How might politicians be trying to use the threat of terrorism to their advantage?

And, if you're getting ready for a trip, be sure to pack some patience and unpack many of your personal items. Carry-ons like hair gel, lotions, even toothpaste, will no longer be allowed. We are going to tell you about all the new restrictions.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: More now on our top story.

The heightened response of today's terror plot has created some stiff new restrictions for many airline passengers.

CNN's Mary Snow is outside JFK Airport in New York. She has more -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, those restrictions also prompting delays. Outgoing flights tonight, those delays have been eased. But, incoming, there was a recent flight from the U.K. just arrived five hours late. And, in London, the restrictions are even tighter than they are here.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Wallet, my candies, my...

SNOW (voice over): Passengers arriving on an American Airlines flight from London to New York were only permitted clear plastic bags to hold their passports, wallets and essential items. Some were clearly shaken.

UNIDENTIFIED FEMALE: It's scary when you're sitting in your gate and the BBC is saying that the U.S. has announced a red alert of the flight you're about to get on.

SNOW: Many almost didn't board.

UNIDENTIFIED FEMALE: When we finally got through to departure, there were people there crying and getting upset, because we were actually watching it on the screen then, what was going on. And with that, then, we -- we did say that, if we hear one more little thing, we're going to back out, because of the children.

SNOW: For those who went forward, some reassurance.

UNIDENTIFIED MALE: We were made to feel more at rest because we had been through rigorous security checks. Plus, of course, we could see people weren't carrying things on to the plane.

SNOW: They said security was so tight, inspectors checked baby formula.

UNIDENTIFIED FEMALE: We saw a gentleman, actually, there. He had a tin of baby milk, and it had to be counted into a cup. He was only allowed to take a certain amount. I think he did have to taste it.

SNOW: But, in the United States, the TSA says parents do not have to taste formula, but should expect it to be examined. Prescription medications carried on board must match the passenger's name -- now banned as carry-on items: liquids, everything from perfume, to contact lens solution, to creams, and toothpaste. U.S. passengers are allowed to carry on electronic devices, like laptops and cell phones, unlike passengers who flew to the states from London today.

These new security measures are not enough for many to reconsider their plans.

UNIDENTIFIED MALE: It's in the back of your head, but, you know, it has been in the back of my head since September 11. The odds start to add against you, and -- and this just kind of raises it. But, with extra security, like they played out, it wasn't that bad.

(END VIDEOTAPE)

SNOW: Some airlines are advising passengers to arrive at least three hours before their flights. And they're also telling them to check with their airlines before heading to the airport -- Wolf.

BLITZER: Mary, thank you.

Up ahead: the politics of terror. Could this new plot impact the balance of power in the United States? How might it change the political outlook for Democrats, for Republicans?

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

(COMMERCIAL BREAK)

BLITZER: Unlike 9/11, America's halls of power were not the targets of this newly uncovered alleged plot to blow up airplanes. But this vivid reminder of the terror threat is being felt in Washington, because many voters are feeling renewed fear right now.

Let's bring in our senior political correspondent, Candy Crowley -- Candy.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Wolf, when a terrorist plot is uncovered in election season, it's hard to separate the two.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): At the airport, it's hard to know whether the glass is half-full or half-empty.

UNIDENTIFIED FEMALE: I suppose I felt more secure that the plot had been foiled, less secure that we live in such a crazy world.

CROWLEY: Nothing is more real or more scary than terrorism. And nothing is more important to voters.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We have taken a lot of measures to protect the American people, but, obviously, we're still not completely safe, because there are people that still plot and people who want to harm us for what we believe in.

CROWLEY: Politically, terrorism used to be his ace in the hole, but Iraq has sapped his strength everywhere. He needs a mojo infusion. And his party, looking like it could get rocked in November, could use a lifeline.

Republican House Speaker Dennis Hastert would like to keep his job.

REP. DENNIS HASTERT (R-IL), SPEAKER OF THE HOUSE: We have to do everything that we can to protect our people, to protect our nation. And that's what we're -- our fighting men are doing in -- in Iraq.

CROWLEY: Conventional wisdom is, when times get scary, people vote Republican.

But an ABC News/"Washington Post" poll shows Democrats with an eight-point edge on terrorism. The Senate's leading Democrat, who would like to trade up to majority leader, said, the plot to bring down British and U.S. planes proves the need to change course in Iraq.

"The Iraq war," he said, "has diverted our focus, more than $300 billion in resources, and created a rallying cry for international terrorists." Ditto John Kerry, '08 presidential possible, who took the opportunity to call Iraq a dangerous distraction.

The chairman of the Republican Party accused Democrats of focussing on political attacks.

Meanwhile, back in Connecticut, Democratic Senator Joe Lieberman, who lost his primary to anti-war candidate Ned Lamont, was tuning up his new campaign as an independent.

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: And if we just pick up, as Ned Lamont wants us to do, and get out by a date certain, it will be taken as a tremendous victory by the same people who wanted to blow up these planes in this plot hatched in -- in England.

CROWLEY: Ned Lamont, a newcomer, but a quick study, called for a serious discussion of security that is not bogged down in Iraq.

Meanwhile, back at the airport:

UNIDENTIFIED FEMALE: In the back of my mind, I thought, should I wait a few more days to leave London? But I -- I made it home safely, thank God.

(END VIDEOTAPE)

CROWLEY: Getting home safely has become the kitchen-table issue of our era. It is why terrorism and politics are so hard to separate -- Wolf.

BLITZER: All right, Candy, thank you.

Travelers caught up in the heavy airport delays all across the United States and Britain are sharing their experience online.

Let's get an update from our Internet reporter, Jacki Schechner -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, this is what BWI Airport looked this morning at 9:00.

And extraordinary story behind this photo -- it was sent to us here at CNN through our new I-Report by Glenn Fellman from Rockville, Maryland. He saw all of the lines. He went on to CNN.com to see what the news was. And he saw that he could send us a photo. So, he snapped this with his cell phone and did just that, his opportunity to be a reporter for CNN. He says that there were, he estimates, thousands of people there. And he said he travels once a month, and that these were the longest lines he has seen since right after 9/11.

Other photos being posted online at the photo blog flickr.com, this from Leon (ph) in San Diego, who's traveling for work to Salt Lake City. He said that he waited in a security line for two-and-a- half hours, and then just gave up on the trip.

And we wanted to let you know tonight that all of the major airlines have updated their Web sites with travel advisories. And many of them are suggesting that you get to the airport three hours before your scheduled flight -- Wolf.

BLITZER: Three hours, that is a long time. Thank you very much for that, Jacki.

Let's find out what's coming up right at the top of the hour. That means Paula is standing by -- Paula.

PAULA ZAHN, HOST, "PAULA ZAHN NOW": Hi, Wolf. Thanks.

We are going to have the very latest developments in tonight's top stories -- efforts to finally stop the fighting in the Middle East. Where is the diplomacy at this hour? We will tell you.

And the alleged terror plot to bring down U.S. and British airliners -- investigative correspondent Drew Griffin will give us some surprising insights into exactly what kind of liquid explosives can be smuggled on the airliners, and how they can be assembled into bombs. It's a lot easier, unfortunately, than you might think.

We're going to go in-depth on all of those stories, coming up at the top of the hour -- Wolf.

BLITZER: Thanks, Paula.

Still to come here in THE SITUATION ROOM, you're going to want to stick around for some of the "Hot Shots," some of the best pictures we're getting in from around the world right now.

Live from Jerusalem, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Check out some of the "Hot Shots" coming in from our friends over at the Associated Press, pictures on the Middle East, pictures likely to be in your hometown newspapers tomorrow.

A woman kisses a photograph before laying it on the grave of a fallen Israeli soldier killed yesterday in southern Lebanon.

South of Beirut, a Lebanese man carries his belongings across the rubble of apartment buildings destroyed by Israeli airstrikes.

In southern Lebanon, two Israeli tanks burn, after coming under attack by Hezbollah fighters.

And, somewhere in northern Israel, Israeli soldiers wish each other good luck before heading into battle on the ground in southern Lebanon against Hezbollah -- some of today's "Hot Shots," pictures often worth 1,000 words.

Let's check in with Zain one more time for a quick look at some other important stories making news -- Zain.

ZAIN VERJEE, CNN CORRESPONDENT: Wolf, the FBI has now find six of the 11 Egyptian students who were supposed to attend a summer college program in Montana, but they never showed up.

Authorities arrested two of the men in Maryland today. Chicago police detained a third man at O'Hare International Airport. The FBI says the students are not considered terrorists and that there's no link between them and the alleged plot to bomb U.S.-bound planes from the U.K.

Iraq's prime minister is condemning a suicide bombing which killed almost three dozen people today as a barbaric massacre. A suicide bomber blew himself up at a crowded market near a revered Shia shrine in Najaf, south of Baghdad. Iraq's Defense Ministry says a Sunni insurgent group has claimed responsibility in a Web message which calls Shias -- quote -- "venom" -- Wolf.

BLITZER: Thanks very much for that.

That's all the time we have. Let's go to New York, Paula Zahn standing by -- Paula.

ZAHN: Wolf, thanks.

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