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CNN LATE EDITION WITH WOLF BLITZER

Special Edition: Crisis in the Middle East

Aired August 13, 2006 - 12:00   ET

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


WOLF BLITZER, HOST: It's 11:00 a.m. in Washington, 8:00 a.m. in Los Angeles, 6:00 p.m. here in Jerusalem and in Beirut, 7:00 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for our special "Late Edition: Crisis in the Middle East."
We'll speak with the Israeli security cabinet minister, Isaac Herzog in just a few minutes. First, though, let's go to Melissa Long at the CNN Center in Atlanta for a quick check of what's in the news right now. Melissa?

(NEWSBREAK)

BLITZER: Thanks very much, Melissa.

We'll be speaking with Michael Chertoff later this hour. Although a cease-fire is expected to go into effect in about 14 hours, both Israel and Hezbollah are launching some fierce parting shots right now.

And there may be a new wrinkle for Lebanon regarding the cease- fire. Let's go, first, to Beirut and our bureau chief, Brent Sadler, for all the latest developments. Brent, what is going on?

BRENT SADLER, CNN CORRESPONDENT: Thanks, Wolf. A serious complication emerging from inside the Lebanese capital.

Yesterday, the two Hezbollah members of the government here made it clear to some started ministers that Hezbollah wanted to keep its weapons south of the Litani River -- in other words, that zone that is supposed to be demilitarized under the cessation of the hostilities plan thrashed out at the U.N.

Now, there was supposed to have been, Wolf, a cabinet session to discuss implementation, on this side of the border, at the top of the last hour. But that has now been postponed, and, we understand, postponed for up to 48 hours.

So we have a situation now, Wolf, whereby, when the cessation of hostilities comes into effect, 8:00 a.m. local time, Monday morning, whereas the government has unanimously, including Hezbollah, of course, agreed to the plan, Hezbollah's position, militarily, is not to implement it.

It really is a growing problem here. And that's why the cabinet session has been postponed and why cabinet ministers, now, are at the prime ministry, just across the road from where we are, trying to reach a solution to this growing problem. Wolf?

BLITZER: So the bottom line, Brent, is that Hezbollah may not necessarily be willing to go along with this call by the United Nations Security Council to fully disarm south of the Litani river -- that's about 20 to 30 kilometers north of Israel.

Is that what you're hearing?

SADLER: It means, very simply, that, south of Litani, in the southern area where all the fight is going on, Hezbollah is, in effect, making it impossible politically for the Lebanese army to deploy.

The government is saying yes, but Hezbollah, a very important part of that government, though there are only two members -- that armed militia saying, we want to keep our weapons.

How can the Lebanese government, say ministers here, enact that resolution when Hezbollah is basically tying their hands behind their back? Wolf?

BLITZER: A potentially significant snag there. Thank you very much, Brent Sadler. We're going to be getting back to you in Beirut.

Joining us here in Jerusalem now is the Israeli security cabinet member, Isaac Herzog. He's just come from that cabinet meeting where the cease-fire resolution approved by the Security council was approved.

Minister Herzog, thanks very much for coming in.

ISAAC HERZOG, ISRAELI CABINET MINISTER: Thank you, Wolf.

BLITZER: Let me just get your quick reaction to this news coming in from Brent Sadler, our Beirut bureau chief, that the Hezbollah forces below the Litani river may not be willing to give up their weapons, give up their rockets.

And as a result the Lebanese army may not be willing to go in, because they say this may be an intolerable situation if they go in and the Hezbollah remains armed.

What is your understanding?

You've been briefed fully of what Hezbollah has to do south of the Litani river.

HERZOG: If what you described would really happen, that would mean that Israel will be fully backed and our case will be clear to the whole world, that there is nobody to do business with.

Now, we'll wait and see what happens tomorrow morning, whether the Lebanese are capable of adhering to the cease-fire, as was agreed by the United Nations Security Council, or are they puppets of Hezbollah? We'll wait and see the development. If they will violate the resolution, it will be very sad and Israel will keep operating in order to (inaudible) their infrastructure in those areas.

BLITZER: At this elevated level that you've been operating over the past 48 hours?

HERZOG: We are operating in order to arrange for a swifter and a smoother entry for the international force that will come in to the area, according to the Security Council resolution, a force which we, of course, we give a lot of credit to, to stabilize the area and to combat any insurgents or Hezbollah people in the area.

So, of course, the proof of the pudding, as you know, is in the eating. And we'll wait to see the outcome.

BLITZER: If the cease-fire, which is supposed to go into effect 8:00 a.m. local time, 1:00 a.m. Eastern time, back in the United States -- if there are no more rockets coming into northern Israel, if the Katyushas -- about 200 or so landed today -- if that stops, does that mean Israel will stop its military actions?

HERZOG: Israel has decided -- the government of Israel has decided, almost unanimously, this afternoon, Israel time, to adopt the U.N. Security Council Resolution 1701 and to adhere to it.

So the arrangement is a cease-fire, 7:00 am tomorrow morning. This is our full intention, full and unequivocal intention.

BLITZER: There is a report in an Israeli newspaper today that Syria is continuing to send military equipment, rockets into Lebanon for Hezbollah, even right now.

Is that the intelligence you have?

HERZOG: That's pretty unbelievable. But the Syrians have been supplying armaments and missiles and launchers and whatnot to the Hezbollah throughout this period by all sorts of smuggling alleys and roads and highways.

That's why we've taken steps in order, of course, to stop these convoys, through all sorts of means. But it's something for the world community to account for.

Now, the U.N. Security Council resolution sets an immediate embargo on supplying any weapons of this nature to the Hezbollah or to any other illegal force in Lebanon.

And now Syria is fully exposed to a U.N. embargo. And it's something I expect the secretary general of the U.N. to be very forceful and very effective on. That's his duty.

BLITZER: If you have evidence that weapons are still coming into Hezbollah after 8:00 a.m. local time tomorrow morning, is that a violation of the cease-fire?

And will Israel then resume its military action?

HERZOG: The embargo takes place, already, backdated to Friday. The embargo is immediate. And I hope that the U.N. presence and the U.N. Security Council, as well as the secretary-general, will take full responsibility on the situation.

And the international force is due to be deployed in all those passages to make sure that it won't happen.

BLITZER: There's other reports here in Israel that you, your forces, IDF forces, have killed members of the Iranian Revolutionary Guard fighting with Hezbollah in Lebanon. Is that true?

HERZOG: We have information hinting to that effect. I prefer to leave it to our military. But I do know that there is some truth in this.

BLITZER: So, what does that mean if Iranian forces are working with Hezbollah in Lebanon?

HERZOG: That means that the security council resolution calls for their immediate removal from the area as well. But what it means in the larger scope of the things is that, in fact, we are confronting the hatred and the game that Iran is spreading around the world, the double game, the hatred, the fear, the danger that it spread throughout the world into liberal democracies, and that we are at the forefront of this battle, clearly.

BLITZER: The reaction here in Israel has been disappointing from your government's perspective. A Haaretz poll that came out asked the Israeli public who was winning this war. Forty-four percent saw no winner. Thirty percent said Israel was losing. Only 20 percent said Israel was winning this war.

What do you say right now? It's 33 days. Hezbollah is still launching 200 rockets against northern Israel. Today, you have not crushed Hezbollah yet.

HERZOG: I say that we've hit Hezbollah in a major way. The Hezbollah suffered major setbacks. We've achieved a lot. We've achieved tremendously a lot, bearing in mind that we are dealing with one of the most sophisticated, well-armed armies in the world. A terrorist organization, which has no boundaries, no red lines, no limitations.

And we are hitting it big time. And we are succeeding. And the poll that you are dealing with was taken last Wednesday. And it bears in mind a national mood that came about because of the casualties and the bombardment of northern Israel. But when you look at the broader picture, we've achieved a lot in the international community, we've achieved a lot in the security council and we've achieved a lot on the ground.

BLITZER: You haven't...

HERZOG: And in the last few days, we've achieved even greater achievements as well.

BLITZER: Do you have any reason to believe those two captured Israeli soldiers are going to be back in Israel anytime soon?

HERZOG: We will do whatever we can, and today, we are fully backed by the international leadership, which is fully mobilized towards the release, the immediate release of these abducted soldiers without preconditions.

BLITZER: But will you be...

HERZOG: This is the resolution of the security council.

BLITZER: Will you be willing to return to Lebanon, to Hezbollah those Hezbollah troops that you've captured over the past 33 days?

HERZOG: The security council resolution says immediate release without precondition. I think this is the rule. And I leave all the rest to the backroom ideas that are raised in the international community in order to bring back these soldiers safe and sound back to Israel.

BLITZER: And if there's no -- if they're not back?

HERZOG: We will operate -- you know that the Israeli soldiers are always -- we're working hard to save them and to release them. This is one of our main objectives. We care for every human being and for every soldier as much as we can.

BLITZER: It sounds like the pitfalls in this cease-fire that's supposed to go into effect in less than 14 hours are enormous, and this war may simply continue.

HERZOG: But I must say that I beg to differ. I believe that there is a strong will by all parties concerned to maintain a cease- fire and to have a new Lebanon and a new situation in Lebanon. There are radical forces that would like to derail the region into the abyss, that would like to throw us into further bloodshed.

If we will need to fight, we will fight. We have no problem fighting. But I do hope, I sincerely hope, that the parties concerned, as well as the government of Lebanon, which includes Hezbollah people, will be committed to their word. Of course, the proof will be seen tomorrow.

BLITZER: Isaac Herzog, a member of Israel's cabinet, just coming from that cabinet meeting. Thanks for coming in.

HERZOG: Thank you very much.

BLITZER: And coming up at the top of the hour, we'll get a different perspective. My conversation with Lebanon's special U.N. envoy, Nouhad Mahmoud, about the prospects for restoring peace to his country. But up next, the former Israeli prime minister, Ehud Barak, weighs in on the cease-fire deal. We'll get his perspective.

Then, the foiled terror plot against U.S.-bound passenger jets. We'll talk with the U.S. homeland security secretary, Michael Chertoff, about whether more plotters may still be at large. Our special "Late Edition," live from Jerusalem, continues right after this.

(COMMERCIAL BREAK)

BLITZER: Our web question of the week asks this: Are you less likely to fly after the latest terror threat? You can cast your vote. Go to cnn.com/lateedition. We'll have the results at the end of this program.

Straight ahead, the former prime minister of Israel, Ehud Barak, on Israel's next moves once the cease-fire begins. You're watching a special "Late Edition: Crisis in the Middle East."

(COMMERCIAL BREAK)

BLITZER: Welcome back to our special "Late Edition: Crisis in the Middle East." And joining us here in Jerusalem with his assessment of Israel's next moves, the country's former prime minister, Ehud Barak. Prime Minister, thanks very much for coming in.

You were chief of staff, you were prime minister six years ago when you ordered the complete withdrawal of Israeli forces from south Lebanon. It looks to a lot of Israelis -- and I've been here for the past week -- that this campaign, 33 days going, from Israel's perspective, has not necessarily been a huge success.

EHUD BARAK, FORMER ISRAELI PRIME MINISTER: Yeah, it -- we inflicted major blows on the Hezbollah, but we also suffered certain blows. But we are fighting, and I believe that both governments got the most they could get from the present situation in this cease-fire resolution.

BLITZER: So even though you're not a member of this government, you think it's a good idea for Israel to accept this U.N. Security Council cease-fire?

BARAK: I don't think that Israel had any choice but to accept it after we did not launch a major operation during the first month. We cannot launch it after the U.N. Security Council resolution is ordered.

BLITZER: It looks like it was launched two days ago. They tripled the force, in effect, from 10,000 Israeli forces on the ground to roughly 30,000 right now. But what you're saying, this was too little too late?

BARAK: But I think that it's too early to debrief the whole operation, but basically where we are, and now it's time to do whatever we can to destroy even more of the Hezbollah infrastructure within the next 12 or 13 hours and then see what happens next.

BLITZER: What do you think will happen? You know Hezbollah. You fought against them for a long time. The past six years, they clearly built up an impressive military capability. What do you think they will do?

BARAK: First challenge will be what happens immediately after cease-fire, even if you assume that we'll stop air raids and they will stop shooting Katyushas, what happens is you ask if some trucks will come from Syria with new launchers and new rockets.

BLITZER: What happens?

BARAK: If we attack them, some might argue that it's not defensive. You are resuming your air attacks...

BLITZER: Because the U.N. Security Council resolution says Israel must stop all offensive military operations.

BARAK: Right. If we don't, it will end up with just an opportunity for Hezbollah to regroup. Now, assume that within the area we control now in Lebanon south of the Litani, and the site explosive will hit one of our tanks. Is it an offensive attack? Who are we going to be -- who are we going to shoot at? So, it will be not fully quiet. That's the major risk until the international force will come.

BLITZER: Here is what Hassan Nasrallah said yesterday, the leader of Hezbollah. He said, "As long as there is Israeli military movement, Israeli field aggression and Israeli soldiers occupying our land, it is our natural right to confront them, fight them and defend our land, our homes and ourselves."

BARAK: So, I expect a certain kind of friction and skirmishes will continue, even when exchange of shooting and air raids will stop. But that can easily deteriorate. And now, within a few days, refugees will begin to come...

BLITZER: Return to their homes.

BARAK: ... back south. Yeah. Civilian. But the Hezbollah can decide on a moment, split of a second, to change to civilian. Probably some Hezbollah will come with them. You cannot fully control it. And even when the U.N. Security Council ordered force will come, the kind of enforcement for UNIFIL, I don't really see them going to fight against Hezbollah.

So there is still a real test for the ability of the international community to impose upon Lebanon to comply, and the jury is still out about where it all leads.

BLITZER: The question is, a, will Hezbollah cooperate with the Lebanese army, and with this beefed up UNIFIL, United Nations Interim Force in Lebanon, 15,000 U.N. troops, supposedly 15,000 Lebanese army troops, 30,000 troops in the southern part of Lebanon, are they going to be able to get the job done to make sure that your people in the northern part of Israel, effectively, don't come under any threats from Katyusha rockets again?

BARAK: Once the U.N. force is fully deployed to the border with Israel, I believe that it will take some time before Hezbollah will dare to operate once again. But the whole process, until they come and during the deployment, is going to be very sensitive, and it's not yet clear how it's going to end. We might end up with resumption of full-scale or half-scale hostilities between us and the Hezbollah, not just in a few months or years to come, but even in a few days or weeks.

BLITZER: Let me get your political analysis of what's happening here in Israel right now with the prime minister, Ehud Olmert. You were the prime minister. You know politics in Israel. You're not only a former chief of staff and a former foreign minister. Ari Shavit, he's a columnist that writes for the newspaper Haaretz, wrote this. He said, "If Olmert runs away now from the war he initiated, he will not be able to remain prime minister for even one more day. You cannot lead an entire nation to war, promising victory, produce humiliating defeat and remain in power."

How politically vulnerable is Ehud Olmert, the prime minister, right now?

BARAK: I happen to be a good friend of Ehud Olmert. And I hope, wish and pray that he will be successful and remain in power. I believe it is highly capable person, probably made some mistake along the way, as any new prime minister without direct military experience might have done in that situation. I hope that we should give him the opportunity, and I hope we will.

BLITZER: Let me read to you what Fouad Siniora, the prime minister of Lebanon, wrote in The Washington Post this past week: "Israel seems to think that its attacks will sow discord among the Lebanese. This will never happen. The people's will to resist grows ever stronger with each village demolished and each massacre committed."

If the goal of the Israeli government was to try to divide the Christians and Sunni Muslims in Lebanon, the government, from Hezbollah, that looks like it failed.

BARAK: You know, I cannot pretend that all the objectives that were set by our government at the beginning for releasing the abducted soldiers to the dismantling or disarming of Hezbollah have materialized. But the Hezbollah suffered a major blow. And we get what we can get out of it.

And it's clear to me that somehow in the Lebanon, in the long term, when the dust settles, if we are out of Lebanon and the international force deployed, that time will come for the Lebanese to write the check to themselves, namely to decide whether they are ready to comply with U.N. Security Council resolutions, the new one, 1701, and the previous ones, 45 and 1559.

I believe it's a major issue for the whole of the world. We are dealing with a much wider screen, both from North Korea, the launching of the missiles, to the ayatollahs in Iran with their nuclear proliferation, to the world terror won by Sunnites in al Qaida.

We're in a big struggle. This is one corner where the international political will can impose upon Hezbollah to put an end to it and to follow U.N. Security Council resolutions. If we cannot be successful here, we will fail in other places as well. BLITZER: Ehud Barak, the former prime minister of Israel. General, thanks very much for coming in.

BARAK: Thank you.

BLITZER: How safe are you in the aftermath of the alleged airline terror plot? We'll hear from the U.S. homeland security secretary, Michael Chertoff.

But first, we'll have a quick check of what's in the news right now, including an update on the condition of the Cuban president, Fidel Castro. Stay with our special "Late Edition." We're live from Jerusalem, crisis in the Middle East.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer, reporting from Jerusalem.

Word of the foiled plot prompted immediate changes in U.S. airline security measures. That was the plot involving U.S.-bound planes from London.

Just a short while ago, I spoke with the U.S. Homeland Security secretary, Michael Chertoff.

(BEGIN VIDEOTAPE)

BLITZER: Mr. Secretary, thanks very much for joining us.

Here's a key issue on the agenda right now: Is there any evidence that you've collected so far that would indicate that any of the alleged plotters, terror plotters in the United Kingdom have had contacts or associations with anyone in the United States?

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: Wolf, that's the number one issue we're focused upon. We are following all the leads, all the information collected by the British. We are sifting through to see what contacts, if any, these plotters had with Americans.

Right now, I can still tell you that the current evidence does not show any plotting occurring inside the United States or any plan to conduct operations within the United States. But that is the issue we will be continuing to monitor, minute by minute, as we go forward.

BLITZER: Because, as you know, there was some suggestion, in reviewing phone calls, logs of phone calls, records of phone calls, that some of these alleged plotters did have -- did make phone calls to the United States.

What, if anything, can you tell us about that?

CHERTOFF: As I said, we monitor that kind of information very carefully. And when we do get phone contacts -- and as you know, there are direct and indirect phone contacts all the time that crop up in these investigations -- the FBI goes out immediately to determine whether there is anything about that contact that raises any kind of a suggestion of a problem.

We particularly deal, of course, with the era of mobile phones, where people can trade phones or trade SIM cards. And that adds an additional layer of complexity.

But I can still tell you that, as of now -- and of course it's subject to change -- we do not see any plotting inside the United States or any indication of operational activity by these plotters inside the United States.

BLITZER: The other day, you and your colleagues suggested that this plot, this alleged plot had the hallmarks of Al Qaida.

Are you increasingly convinced now that this was a very sophisticated, Al Qaida-oriented plot?

CHERTOFF: Well, there is no doubt it was sophisticated. And we have at least about a couple dozen people in custody in Britain. There are people in custody in Pakistan, so it's plainly a transnational plot.

Whether it is an Al Qaida plot, in the sense that it was directed and approved at the highest levels of the organization, is an issue that I think we have to hold judgment on until we're reviewed all the facts and all the evidence.

BLITZER: Have you seen the so-called martyrdom tapes, the videotapes that some of these alleged plotters made, suggesting they were ready to commit suicide to undertake this mission?

CHERTOFF: Well, as you know, it's a common practice for suicide bombers to prepare these martyrdom tapes, which are basically their message to the world. We saw a little bit of that after the London bombing. We saw one of the bombers had a martyrdom tape that was aired by one of the networks.

In this case, though, I want to not comment specifically on evidence that may turn up in the British courts because there are very strict court rules, as you know, in Britain. And I don't want to imperil the British prosecutions.

BLITZER: John Reid, the British home secretary, said this on television in England today.

He said, "I have to be honest and say, on the basis of what we know, there could be others out there ... so the threat of a terrorist attack in the U.K. is still very substantial."

Is it the working assumption of the U.S. government, as well, that other terror plotters, other cells remain at large?

CHERTOFF: I've been in literally daily, and sometimes several times a day, contact with Home Secretary Reid. And we completely agree with his assessment.

As he's indicated earlier, the British believe they've picked up the main actors. But first of all, there are some threads that have to be run down. And second, we always face that issue of elements of the plot we may not fully have investigated and be completely aware about. So the watch word here, Wolf, has to be "better safe than sorry." And that explains why we're continuing to operate at elevated alert levels, so we can take precautions against anything that we might run across that hasn't yet turned up.

BLITZER: Let me read to you from an editorial in the Saturday's New York Times.

It said this: "The most frightening thing about the foiled plot to use liquid explosives to blow up airplanes over the Atlantic is that both the government and the aviation industry have been aware of the liquid bomb threat for years, but have done little to prepare for it."

I wonder if you'd want to respond to that charge.

CHERTOFF: I think it reflects, Wolf, a lack of understanding of what we are doing.

In fact, last year and earlier this year, when we suspended the rule that used to prevent you from bringing nail clippers on airplanes, we explained to the public that we did that because we were retraining our screeners to be focused on explosives, that we thought we had minimized the risk of hijackings, and we now needed to work on cutting-edge explosive threats.

And that's why we trained 38,000 screeners in modern techniques for spotting detonators. That's why we've run pilot projects that are particularly focused on liquid explosives. And that's why we've invested heavily in research on different models of explosive detection.

But you know, here I do need to make one point. The difficulty is not only can we detect the explosive; the difficulty is, what do we do with explosives made out of very common chemicals, chemicals that almost everybody has almost everybody has with them in their dry cleaning or their cosmetics.

Because we don't want a system that has so many false positives that we have hours and hours waiting on line at the airport because we have to open every bottle and every cosmetics case.

So the challenge here is not just technology, but it's finding a technology that will fit with our system and not create delays and impediments for the air traveler.

BLITZER: I guess the criticism from the New York Times and from other quarters is, simply put, that if you knew for years -- and there have been other attempts to go ahead and blow up planes using liquid explosives -- if you knew for years that this was a serious potential problem, why did it take this foiled plot to stop American travelers from bringing liquids on planes?

CHERTOFF: It was the sophisticated nature of the disguised bombs, I think, that caused us to take the step of making sure that we could protect American travelers by stopping liquids from coming on the plane, at least for a period of time.

In the past, when we've looked at and analyzed these kinds of bombs, they've been in a form that our screeners are capable of recognizing. We've particularly focused on the detonators.

In this case, without getting too specific about the details, it appeared to us, at least initially, that the disguise method might be so sophisticated that we might need to change the training for the screeners and take some additional measures.

So what we need to do now, Wolf, because protection of the public is the paramount value here, is analyze the design of these devices, reverse-engineer them, see what are the characteristics that we can focus on in terms of any adjustments in our training and screening, and then move forward, based on that knowledge, to fine-tune the screening system we have in place.

BLITZER: There is a new investigative piece out that the Associated Press has put out.

Let me read to you a couple of paragraphs from it. "As the British terror plot was unfolding, the Bush administration quietly tried to take away $6 million that was supposed to be spent this year developing new explosives detection technology. Lawmakers and recently retired Homeland Security officials say they are concerned the department's research and development effort is bogged down by bureaucracy, lack of strategic planning and failure to use money wisely. The department failed to spend $200 million in research and development money from past years, forcing lawmakers to rescind the money this summer."

Is all that true?

CHERTOFF: It's not accurate. And let me unpack each of those elements. First of all, we have spent, in fiscal year '06, which is this year, a little under $800 million on detection research and deployment, and that's over and apart from the amount of money we've spent specifically training screeners on explosive detection.

And that's an important part, the human element. It's not only technology.

We have $44 million in research this year. We have a comparable amount next year.

There had been some discussion before this plot was discovered about moving a very small amount of that money to plug a budget shortfall in the security measures around federal buildings, but we rejected that before this plot was actually discovered. So it was not something that was reversed because of the plot.

As far as the $200 million is concerned, again, the entire research budget, and science and technology budget for the department, which covers all kinds of things, does involve hundreds of millions of dollars. We have tried not to simply shovel it out the door at every new technology or every new idea. And so we have not spent all the money.

But it doesn't mean that the money has lapsed or that it won't be spent. What it does mean is that we want to do precisely what those observers have said. We want to be strategic. We want to make sure that our research is driven by real-world, practical considerations.

And what we want to do most of all is make sure we're spending the money on things that will help the American people and protect the American people and not merely to fund corporations and vendors who want to sell their new devices.

So we've got a brand new head of science and technology. The former head of the Navy's research program just got sworn in literally four or five days ago. And we're going to be continuing to move aggressively but prudently in spending the taxpayers' money on security.

BLITZER: Michael Chertoff, the secretary of Homeland Security, thanks for spending some time with us here on "Late Edition."

CHERTOFF: Wolf, good luck.

(END VIDEOTAPE)

BLITZER: And throughout the day on Monday, this programming note, CNN is going to show you where America is most vulnerable to terrorist attacks.

No matter what time you tune in, you'll get some specific and essential insight on where the threats are and what you can do to stay safe. "Target: USA," all day Monday, only here on CNN.

I want to show you some pictures we're getting in from Haifa, only moments ago, Katyusha rockets landing in the center of Israel's third largest city.

Once again, this on a day some 200 rockets have already landed in northern Israel, only hours before a cease-fire is supposed to go into effect. These are pictures coming in from Haifa.

Just ahead, more on the crisis in the Middle East. Also, Iran and its role in fomenting sectarian violence in Iraq. Stay tuned. Our interview with the U.S. ambassador in Baghdad, Zalmay Khalilzad. He's standing by live. He'll be joining us. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Only moments ago, Hezbollah rockets landed in Haifa, along Israel's Mediterranean coast, Israel's third largest city, its main port area.

These are pictures that are just coming in to CNN. No word yet on casualties. This, on a day that some 200 rockets, already, have landed in northern Israel. We'll keep watching these pictures as they come in from Haifa.

Welcome back to our special "Late Edition: Crisis in the Middle East." I'm Wolf Blitzer, reporting from Jerusalem.

While much of the world's attention is on this conflict between Israel and Hezbollah, there's been no let-up in the very dangerous, deadly situation unfolding right now in Iraq.

And there are deep concerns right now that Iran could have a major hand in some of the unrest in Iraq. Joining us now from Baghdad is the United States ambassador to Iraq, Zalmay Khalilzad. Mr. Ambassador, welcome back. How deeply concerned are you that Iran may be, may be playing a role in fomenting sectarian violence inside Iraq?

ZALMAY KHALILZAD, U.S. AMBASSADOR TO IRAQ: Well, we are very concerned. Iran is playing a role in the sectarian violence that is taking place here. It is providing arms, training and money and other support to groups involved in sectarian violence, including militias that have death squads associated with them. So, yes, we are concerned, Wolf.

BLITZER: Is it getting worse, the Iranian involvement? Because we know that a lot of Iraqi leaders, the Iraqi Shia leaders in particular over the years, have had pretty close relations with the government in Tehran.

KHALILZAD: Well, the Shia leadership, generally, has taken a patriotic stand with regard to the current crisis, although they've had good relations in Iran when they were in the opposition. And those relations continue, but Iran is also working with some of the commanders that work for these leaders and some of the leaders of death squads directly without the knowledge of their party leaders.

And the concern that we have is not only with regard to the activities so far, but also that as the situation with regard to the Iranian nuclear issue gets focused on that they might escalate the pressure against the Iraqi government and against the coalition.

BLITZER: There has been some suggestion, and I don't know if you share it, that this war that's been going on now for 33 days between the Israelis and Hezbollah in south Lebanon, some suggestion that the Iranians, who support Hezbollah, as you well know, are exploiting it to try to undermine the United States further in Iraq. Do you see any evidence to back that up?

KHALILZAD: Well, I think that what has happened in Lebanon and between Lebanon and Israel and Hezbollah is having an impact on the region. Of course, in Iraq as well. The Iraqis, in general, have felt sympathetic to the Lebanese because of the destruction that has taken place, but they have not escalated the pressure on us so far, although there are indications that the Iranians would have liked them to do so.

But I believe that Iran is seeking to increase its ability to impact us here, and that the nuclear issue might be the issue that will trigger increased Iranian pressure against the coalition and against those who are working with the coalition to build this new Iraq.

BLITZER: And as we speak, Mr. Ambassador, we're showing our viewers some live pictures from Haifa, Israel where more Katyusha rockets have only moments ago landed in the center of the city, Israel's third largest city. Let me read to you, Mr. Ambassador, what a foreign ministry spokesman in Tehran said regarding some of your recent comments. He said this. He said: "What should an ambassador say when he and his country are facing failure after failure on a daily basis? It is natural that he tries to accuse others for this failure by again and again repeating such baseless charges."

They're denying flatly that they are playing any role in trying to foment sectarian strife in Iraq.

KHALILZAD: There is ample evidence, evidence that we have, evidence that some of the Iraqi government officials have as well, that Iran, while seeking and speaking as if it wants to have good relations with Iraq and government-to-government level on the one side, they do. But at the same time, there is no question that they are providing arms, that they are providing money, that they are providing training directly or through Hezbollah to groups here, including death squads, including giving the names of people to some of the death squads that they would like to see eliminated in Iraq, and that they are putting themselves in a position by bringing new systems, new rockets, new motors. That would give their friends the ability to do more harm to the Iraqi government and to the coalition.

BLITZER: The new Newsweek poll that has come out asks, is the United States making progress or losing ground in Iraq? Thirty-one percent said the U.S. is making progress. Fifty-eight percent thought the U.S. was losing ground. Eleven percent said they don't know. Is the situation in Iraq right now -- you're a blunt man, Mr. Ambassador. Is it getting close, potentially, to a civil war?

KHALILZAD: Well, sectarian violence has become the principal problem here. Of course, terrorism also continues. And Baghdad and the area around it is where 90 percent of the violence is taking place. The government and its coalition support has got a new plan that's implementing for security in Baghdad.

Together, we have brought some 13,000 more forces here. We're moving district to district to increase security. And, in recent days, the trend has been more positive, but we will have to wait and see whether this trend will continue. I believe that the sectarian violence is serious.

I believe Iraqis have overcome difficult challenges before in terms of the formation of the national government, the constitution, and they can overcome this as well. But the potential for things getting more difficult is there as well, not only because of the Iraqi factors, as I mentioned before, because of the external factors, particularly Iran.

BLITZER: Mr. Ambassador, good luck to you. Thank you very much for joining us. Be careful in Baghdad. Thanks for joining us on "Late Edition." And there's much more ahead on our special "Late Edition." We're live from Jerusalem. We're watching the crisis in the Middle East. Hezbollah rockets have just landed in Haifa. Once again, some 200 rockets landing in northern Israel already today, only hours before a cease-fire is scheduled to go into effect.

Meanwhile, some 30,000 Israeli troops are pounding Hezbollah targets in Lebanon as well right now. If there's going to be a cease- fire, doesn't look like it's about to take place any time soon.

We're going to take a quick break. When we come back, we'll speak with Lebanon's special U.N. envoy, Nahoud Mahmoud, on his government's plans for dealing with this new U.N. Security Council resolution and Hezbollah. "Late Edition" continues right at the top of the hour.

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

I want to go right to Haifa right now, where the sirens are once again being heard, suggesting that Katyusha rockets may be coming into Haifa right away.

Fionnuala Sweeney has just returned to her location. I know, Fionnuala, you were there on the scene only moments ago. Some Katyusha rockets landed in Haifa, causing some damage there.

We're not exactly sure what, but update our viewers on what you know and what you can see.

FIONNUALA SWEENEY, CNN CORRESPONDENT: Well, Wolf, I can tell you it's been a pretty busy half hour here in Haifa. In fact, it's been quite busy all day -- air raid sirens going off intermittently. But within the last few minutes, they are going off pretty much back to back.

And there has been some direct hits on the city behind us. The very latest information we have is that at least two people have been seriously injured.

But overall, in northern Israel, some 232 rockets have fallen so far. That has to be one of the highest counts yet since this conflict began.

Forty, we know, fell inside cities. And I can tell you now, Haifa, a few minutes ago was filled with smoke, black smoke behind us, here. And every few minutes, the air raid sirens go off.

We had been expecting this, more or less, throughout the day because the air raid sirens had been going off quite a lot. And it was only a matter of time because we saw rockets hitting the sea and then maybe another air raid siren would come and we would see rockets hitting, maybe, again in the sea.

So we knew it had been building up to something. But it really has peaked in the last half hour or so. And, as I say, various direct hits on the city. And the latest we have -- but remember; it's only happened in the last few minutes -- is that at least two people have been critically injured. Wolf?

BLITZER: That black smoke that we saw coming up over the skyline of Haifa, suggesting, perhaps, those Katyusha rockets may have hit, perhaps, some gasoline or some oil depots or whatever.

How big of an area do you think that black smoke covered?

SWEENEY: Actually, the smoke is quite contained, relatively contained, where it makes a direct hit. It doesn't necessarily mean, Wolf, that it's hit a petrol station or gasoline station.

It could have just hit a house. This is fairly routine practice here, once we see a rocket hit, you see black smoke rising from various buildings and then, of course, the wind carries it throughout the city.

But essentially, it allows you, the density of the smoke, allows you to pinpoint very easily where there has been a direct hit.

And there have been several in the city in the last half hour or so. And then the smoke dissipates. Usually there's silence, of course, when these air raid sirens finish, because people have taken cover.

And then, always, always within a matter of minutes, the air is punctuated with the sound of ambulance sirens and fire engines, as the medical services try to go to the various locations which have been hit.

Remember, last Sunday, it was also a number of direct hits on the city. At least three people were killed and more than 100 injured. But that was only in one barrage.

And we have witnessed several barrages here, particularly in the last 30 minutes or so. And so I suspect that there will be a casualty toll from this. At least, we now already know at least two people, seriously injured, but I suspect that could rise. Wolf?

BLITZER: Fionnuala, we're going to be getting back to you. Fionnuala Sweeney in Haifa for us. We're watching the story unfold.

Only less than 13 hours before a cease-fire is supposed to go into effect, Israel continuing to pound Hezbollah targets in Lebanon and we see Hezbollah pounding Israeli targets in northern Israel, including the city of Haifa.

We're going to speak shortly with the Lebanese special U.N. envoy, Nahoud Mahmoud. That's coming up.

But first, I want to briefly go to Tehran, Iran. Our Aneesh Raman is in Iran right now, speaking with top Iranian officials.

Aneesh, we've heard serious allegations, including in the last few minutes, from the U.S. ambassador to Iraq, Zalmay Khalilzad, that Iran, right now, meddling dangerously in Iraqi affairs, trying to foment sectarian violence and attacks against U.S. targets in Iraq.

What's been the reaction from Iranian officials?

ANEESH RAMAN, CNN CORRESPONDENT: Wolf, earlier today, I conducted an exclusive interview with Dr. Ali Larijani, the chairman of the Supreme National Security Council.

I asked him about the charges being made by Zalmay Khalilzad. He denied them outright. He said Iran is not meddling with the Shia militias and Shia groups there to destabilize Iraq.

He, as well, had strong words for Khalilzad, alleging that Khalilzad had a meeting, not long ago, with Sunni insurgents, telling them to aim their guns away from the U.S. and aim their weapons toward Iran.

I asked him, of course, about the continual allegations from the U.S. and Israel that Iran continues to arm Hezbollah. He denied those outright, saying Hezbollah's weaponry is very basic, easily obtained elsewhere.

He denied, as well, any contact during this war, direct or otherwise, between Iran and Hezbollah.

How this is playing into the broader picture -- Larijani is also the country's chief nuclear negotiator -- they say that they are not yet ready to suspend their nuclear enrichment.

They see no deal that makes it worth it. And they reiterated that a victory for Hezbollah will be seen as a victory for the Muslim world, including Iran.

And you get these sense they are still desperate to be engaged with by the United States. Wolf?

BLITZER: Aneesh, we're going to be checking back with you. Aneesh, doing some exclusive reporting for us in Tehran, in Iran. Aneesh Raman, thank you very much.

Whenever the fighting does end here in the Middle East, Lebanon faces major challenges, not only rebuilding devastated areas but also maintaining political stability.

Joining us from New York is the country's special envoy to the United Nations, Nahoud Mahmoud.

Mr. Ambassador, thanks very much for coming in.

Is it your sense, 13 hours away from this cease-fire, given the very, very lively action, shall we say, that the Israeli military is conducting now in Lebanon, that Hezbollah is conducting in northern Israel that there is a chance this cease-fire really will stop the guns from being fired? NAHOUD MAHMOUD, LEBANON'S ENVOY TO U.N.: Well, we hope so. But I don't understand why do we need this grand finale for this bloody campaign of one month?

I mean, what they think they will achieve in 24 hours or 48 hours, which they couldn't achieve in one month -- so that's not very helpful, anyway.

BLITZER: So, are you referring to the Israeli military action, which has clearly intensified on the ground and in the air over the past 48 hours, but you're also -- I wonder -- are you also including Hezbollah's escalated military activity, as well?

MAHMOUD: Well, it's always a return to the Israeli escalation, yes.

BLITZER: I missed what you said. Explain what you mean.

MAHMOUD: It was always -- the escalation from our side was always a return for the escalation from the Israeli side.

BLITZER: Well, but Hezbollah, in this particular conflict, 33 days or so ago, Hezbollah started it. Is that right?

MAHMOUD: They just started it. And the Israelis took the rest.

BLITZER: What is your understanding what the Lebanese army, 15,000 troops, together with as many as 15,000 United Nations troops going into south Lebanon -- what is your understanding what they will do to disarm Hezbollah forces below the Litani river?

MAHMOUD: Well, they have the political backing of the whole government. And they are not going to use force to disarm Hezbollah. Hezbollah will just leave the area, as armed elements, as I understand it. And the Lebanese army will take over the whole region, along with the United Nations forces.

BLITZER: You really believe, Mr. Ambassador, that Hezbollah voluntarily is going to give up what it's spent 20 years, if not longer, building up in south Lebanon underground bunkers, command and control facilities, very sophisticated rocket capability, and simply leave this area and disarm?

MAHMOUD: Well, in Lebanon it happened before. If you remember in 1990 we had much larger militias in Lebanon, and they were much more equipped than Hezbollah now, and along with the national dialogue, national consensus, we reached the disarmament of all of them voluntarily, and that happened before and can happen again.

BLITZER: We heard one of the Israeli cabinet ministers in the first hour here on "Late Edition," Isaac Herzog, make a serious allegation that Syria even right now continuing to send weaponry into Lebanon for Hezbollah. He says this is a violation of the United Nations Security Council resolution. What do you know about this charge? MAHMOUD: We don't know anything about that, and the Israeli always have their allegations without any proof. We don't see where the proof of that.

BLITZER: If Syria is doing that, if Syria is doing that, Mr. Ambassador, is that a violation of the Security Council resolution?

MAHMOUD: I suppose so, but the Israeli are not letting any truck move in all Lebanon. I don't know how they are going to do it.

BLITZER: What about the Iranian role with Hezbollah right now? What can you tell our viewers that you believe Iran is doing to encourage or, I don't know, maybe discourage Hezbollah right now? The allegations, of course, from the U.S. and Israel and other sources is that Iran created this whole mess by encouraging Hezbollah to kidnap and kill those Israeli soldiers.

MAHMOUD: Well, this scenario we don't know about it, but now it is the moment of truth for everyone, and we'll see who will abide by the Security Council resolutions and who will not. So we have this week is very crucial, and we hope that things will go the way we like it to go.

BLITZER: Here's what President Bush said this past week. He said, "Syria and Iran sponsor and promote Hezbollah activities, all aimed at creating chaos, all aimed at using terror to stop the advance of democracies." You want to respond specifically to President Bush?

MAHMOUD: Well, our democracy actually get the biggest hit from Israel. It's not from anyone else. The same as the Palestinian democracy, so these two democracies in the Middle East got hit by Israel mainly.

BLITZER: The pictures we're getting in, I want to show our viewers some live pictures as we speak, Mr. Ambassador. These are coming in from Haifa right now. These pictures from northern Israel. Katyusha rockets once again coming in -- excuse me, these are pictures coming in from Beirut right now.

Even as we saw a few moments ago live pictures from Haifa, where Hezbollah rockets coming in. These are live pictures that we're seeing from Beirut right now. Israel in these final hours before a cease-fire, clearly trying to go after various Hezbollah targets, as well. Is there a chance, Mr. Ambassador, that this whole issue of the prisoners, the two Israeli prisoners being returned to Israel, is there a chance given the current environment that that's going to happen?

MAHMOUD: That will happen through negotiation. That could have happened through negotiation from the very first day, but the Israeli choose the escalation and choose to have this war against Lebanon to destroy the whole country and to kill more than thousand people and to have also some effect from their side, so that was their choice.

BLITZER: What is your understanding of what Lebanon, your government, must do as far as these two Israeli prisoners are concerned? I'll read to you what Secretary of State Condoleezza Rice said on Friday in New York.

She said, "There is a sensitive issue about Lebanese prisoners. But I want to be very clear. There isn't a linkage here, and there's no prisoner exchange that is even envisioned in this resolution." What is your understanding of the whole prisoner issue based on 1701, the new U.N. Security Council resolution?

MAHMOUD: Well, we hope that both issues will be addressed. If it's in parallel or simultaneously, that's not the issue. The issue is that we get our detainees and Israeli get their prisoners back, and I hope that the Lebanese government will be instrumental in that.

BLITZER: This may sound like a very, very optimistic question, Mr. Ambassador, maybe quixotic, maybe overly, overly hopeful. But is there a chance that out of this current crisis, this war that has now lasted 33 days, taken so many lives, destroyed so much property, that Israel and Lebanon, the governments of Israel and Lebanon might be able to sit down, work out their remaining dispute, territorial dispute involving the tiny area called Shebaa Farms and work out a peace treaty along the lines that Israel has done with Egypt and with Jordan?

MAHMOUD: Well, it's too early for that, and the Security Council resolution set some procedure to solve the Shebaa Farm. And we hope that we'll get back Shebaa Farm after the delineation of the borders.

But about having a peace treaty with Israel, that will be in the near -- in the future, and that depends from how the solution of the whole problem of the Middle East will go, because the others also have their problem and Lebanon will be, I think, the last state to sign a peace treaty with Israel. Regarding all the complication in the area, in the region.

BLITZER: All right. Mr. Ambassador, Nouhad Mahmoud, he's the special Lebanese enjoy to the United Nations, joining us from New York, Mr. Ambassador, thank you very much for spending some time with us here on "Late Edition."

We're watching breaking news unfold in two cities along the Mediterranean, in Haifa where Katyusha rockets have landed in the city's center as well as in Beirut where Israeli air strikes are continuing to pound what Israel says are Hezbollah targets. This is new video coming in to CNN right now from Beirut. We're going to go to Beirut and speak with our Brent Sadler. That's coming up.

Also, the other story we're following, do tighter security measures mean safer skies for you? Senators Chuck Hagel and Jack Reed, they're standing by to assess the terror threat, the crisis in the Middle East and the war in Iraq.

And then, a new cease-fire plan calls for a beefed-up United Nations security force. But will that be sufficient to keep the peace? We'll get special insights from the former NATO supreme allied commander, General George Joulwan. "Late Edition" continues right after this.

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BLITZER: Breaking news happening here in the Middle East. These are live pictures you're seeing from Beirut, the Lebanese capital, where only moments ago, Israel resumed airstrikes, pounding what Israel says are Hezbollah targets in Lebanon, in Beirut right now.

Earlier, a few minutes earlier, in fact, Hezbollah rockets landing in the city center of Haifa earlier today. Some 200 Hezbollah rockets landing in Haifa. A tale of two cities, Haifa and Beirut, only hours before a cease-fire scheduled to go into effect. We're following all of the latest developments in the crisis in the Middle East.

Let's go up to Beirut. Brent Sadler, our bureau chief, is standing by with more. What do we know, Brent?

SADLER: Just a few minutes ago, Wolf, the city shook to the sound of more explosions, this the second time today, the second wave of strikes against the southern suburbs of the Lebanese capital. We're not sure if it's long-range naval gunfire, or air strikes, or a combination of both. But I can certainly tell you that the two waves of strikes today have been the heaviest attacks we've seen since the start of the war 33 days ago against the southern suburbs of Beirut. So you had continuing rocket fire, as we've seen over the past few minutes, particularly serious around Haifa. This may well be retaliatory fire for those strikes against civilian population areas of Haifa. These strikes, again, hitting as we can see from these pictures, smoke slowly drifting across the capital after these two strikes.

Now, that has been going on, Wolf, at the same time as there was expectation just a couple of hours ago that the Lebanese cabinet here would once and for all make absolutely clear that the cabinet, including Hezbollah, would go along with an implementation plan to put the Lebanese army into the south, as per the conditions of that Security Council resolution.

Now, that cabinet meeting was postponed at the last minute, because there is still a hitch that Hezbollah has with deploying the Lebanese army and Hezbollah laying down its weapons. Hezbollah insisting it will keep its weapons in the south, and that would mean in effect the Lebanese government would have its hands tied if it decided to send the army down there. So a big problem here politically right now, Wolf.

BLITZER: And only hours before the cease-fire goes into effect, some major parting shots, literally, between Israel and Hezbollah. We're going to watch all of this very, very closely.

Brent, thank you very much. We'll check back with you shortly.

Coming up, we're going to continue our special coverage of the crisis in the Middle East. Two top U.S. senators standing by to weigh in. We'll be right back.

(COMMERCIAL BREAK) BLITZER: Welcome back to our special "Late Edition: Crisis in the Middle East." I'm Wolf Blitzer, reporting live from Jerusalem.

With us now to discuss this war that's going on now, day 33, also here to discuss airline terror and other issues, two key United States senators. In Washington, Chuck Hagel, Republican of Nebraska. He serves on the Foreign Relations and the Select Intelligence Committees, as well as in his home state of Rhode Island, Democrat Jack Reed. He is a member of the Armed Services Committee. Senator, thanks very much for coming in.

Senator Hagel, what do you make of this cease-fire that's about to supposedly go into effect in less than 13 hours? You've been calling for a cease-fire for weeks now. It's taken 33 days. What do you think?

SEN. CHUCK HAGEL (R), NEBRASKA: Well, I'm glad we have one, Wolf, but now we must get it implemented and not squander the moment and squander the opportunity. We need to stop the slaughter and the bloodshed, and get this up on a more comprehensive, higher plane, put into a system here some strategic planning in a comprehensive way that includes everyone in the Middle East. Obviously, the United Nations is part of this.

There's a lot of work to be done, but the United States must now be engaged in a very sustained way. We cannot afford any more crisis diplomacy. We've got to be at this now daily to make it work. There is some opportunity here, Wolf.

BLITZER: Senator, I think I may have just lost the last part of your answer over there, but let me bring in Senator Reed and see if he wants to weigh in on this, as well.

Senator Reed, do you have complaints about the way the president, the secretary of state have handled this crisis in the Middle East?

SEN. JACK REED (D), RHODE ISLAND: Well, one of the problems is that there was no real strong diplomatic presence involvement by the president and the secretary of state prior to this crisis, so in many respects they were trying to put something together on the run from scratch. That slowed down this effort, and I think it has prolonged this long, long battle that's been going on.

I think this cease-fire is a very important step, but I think it'll really translate onto the ground as just a cessation of the aerial bombardment by Israel, and I hope the rocket bombardment by Hezbollah. But until we get a multinational force on the ground, I think we can still expect episodes of violence.

And then we have to -- and I agree with Chuck -- transfer or translate quickly from this cease-fire to a long-term commitment to build up Lebanon so that it can be an effective counter to Hezbollah and be an effective partner for stability in the region with Israel.

BLITZER: I know you've been critical, Senator Hagel, of some of the policies of the Bush administration, in the crisis in the Middle East, as far as Iraq is concerned. But is this, as some critics are suggesting, too little too late, as far as the U.S. diplomacy has been concerned?

HAGEL: Well, I think sustained U.S. diplomatic efforts has been missing in the Middle East, specifically focused on the Israeli/Palestinian issue. I have believed for a long time -- I have been told this by leaders in the Middle East, by both Arab and Israeli leaders -- that the core issue in the Middle East is the Israeli/Palestinian issue. And I don't believe you will find stability, peace, opportunity, prosperity ever in the Middle East until there is an awareness and some confidence that we are moving toward the resolution that seemingly everyone agrees with, and that is a two-state solution, but a process must be put in place to do that. And that is going to take sustained engagement, Wolf, and there's where the United States really, truly is indispensable.

We can't impose peace. We can't make it rain. We can't do it all, but without American leadership bringing a consensus of purpose together and a focus, because we are trusted generally by both sides, then we will fail. And this will widen into a much deeper and more dangerous situation if we don't get control now, and that's why this cease-fire is so critical that we not squander this opportunity now to build on this.

BLITZER: Senator Reed, the president sees this war between Israel and Hezbollah, what's happening in Iraq, as part of a much bigger war on terror that the United States faces around the world. He said this on Thursday, I'll read it to you. He says, "This nation is at war with Islamic fascists who will use any means to destroy those of us who love freedom, to hurt our nation." Do you agree with the president as far as the bigger picture is concerned?

REED: I think the president makes a significant mistake when he conflates the war in Iraq particularly with the global war on terror. What we saw this week with this airplane incident was an example of distributed cells across the globe, young Islamic radicals. They are being, I think in some respects, motivated by what they see going on in the Middle East, but they are not part of any type of struggle within Iraq.

That is becoming a sectarian civil war. There are many forces at work here, but I think the president oversimplifies the challenges we face. We have a terrorist challenge which is very distributed in European capitals. This terror plot against the airlines emanated apparently from Pakistan and Great Britain. And then we have a separate battle in Iraq. That's a battle the president chose, which has very tangential relations to this war on terror.

And then we have the issues in the Middle East that have been there long before 9/11. That's the struggle between Israel and the Palestinian Authority and the constant effort to build up a stable Lebanon, which goes back many, many decades. So I think the president tends to oversimplify these things, and frankly, I think his strategy as a result has been flawed.

BLITZER: We're going to take a quick break, but I want Senator Hagel to respond to that. Senator Hagel.

HAGEL: Well, I think Jack hits the high points there. It goes back to what I have said for a long time, Wolf. Until we come at this from a comprehensive framework of peace in the Middle East, understanding it is a regional issue. We should go back, for example, to King Abdullah of Saudi Arabia's 2002 Beirut declaration. Come at this from a wide lens angle of understanding.

Yes, there is a terrorist component, but it's bigger than that, it's wider than that, it's deeper than that. And to try to simplify it into, well, Iraq is the most key action going on in the world today for America's interests because of terrorism, I don't think that that's quite accurate.

Terrorism is part of this, of course, but it is so much bigger and wider, and we are going to have to enlist, not unlike what we did after World War II, the world community in a focused consensus effort to deal with these issues. There will be no winning any kind of a war on terrorism or any other challenge of the 21st century unless we do that.

BLITZER: Senators, stand by. I want to continue this question, the questioning, but we have to take a quick break. We're going to have much more coming up with senators Hagel and Reed after a quick check of what's in the news right now. We're also watching the breaking news out of Haifa and Beirut, where there have been more explosions, more Katyusha rockets coming into Haifa tonight and more Israeli air strikes in Beirut. We'll be right back.

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BLITZER: Welcome back. We're showing you some live pictures from Beirut, where only moments ago, Israeli warplanes once again hit what they say are Hezbollah targets in various parts of the Lebanese capital. These are pictures coming in from Beirut right now.

Earlier, we saw Hezbollah rockets land in Haifa, only a little bit down the coast, the Mediterranean coast, clearly only hours before a cease-fire is supposed to go into effect. Both Hezbollah and Israel making major military moves designed to inflict as much damage as possible on the other side.

Welcome back to our special "Late Edition: Crisis in the Middle East." We're talking with two key U.S. senators, Republican Chuck Hagel of Nebraska and Democrat Jack Reed of Rhode Island.

Senator Reed, let me read to you from what Harry Reid, the Democratic leader in the Senate, said this week. He said, "Ask any foreign policy pro, and they'll tell you we're less safe now than we were five years ago -- and that the Bush crowd is largely responsible."

Do you agree with your leader?

REED: The five years that have passed since 9/11 have made us, obviously, more aware of the terror threat. But we haven't taken all the steps we need to take to truly protect America.

And that's not just the conclusion of Harry Reid or anyone else. The 9/11 Commission gave the administration very low remarks on investment to protect America, in terms of our air transport system, our port security system, and a host of other means.

We've got to do a lot better. This plot, uncovered this week, shows how adaptive, how innovative, how cunning our adversaries are. And so we have to continue to be on our guard and continually to invest more and more into homeland security.

That has not been done by the administration. I think, frankly, they've been so occupied with Iraq, that we've spent so much there, billions and billions of dollars a month, that the focus and the resources for doing all we can for homeland protection has been diverted.

BLITZER: Senator Hagel, as you know, Senator Lieberman, the Democrat from Connecticut, lost the Democratic primary this week, some say, in part -- at least in large measure -- because of his strong support for the Bush administration's policies in Iraq.

What's the major political lesson you think politicians should learn from Lieberman's defeat?

HAGEL: Wolf, I don't know what lessons we can learn or draw from that election.

I would respond this way, in going back to the questions you asked Senator Reed.

I think, first of all, the American people wants all of us, leadership in both parties, including the president, to stay above this fray and quit using terrorism and our national security interest as a political edge issue for both parties. I think it's irresponsible. America deserves better than that. And I would admonish both parties, Republicans and Democrats, to stop it.

First, we're Americans, and then we're Democrats or Republicans.

Second, what lessons can be drawn out of the Lieberman defeat? I don't know. I'm not one, Wolf, who believes you can take every election and isolate some political lesson there.

I think it's far more complicated, just like the Middle East. Joe Lieberman believes in things. He voted certain ways. He said things. And I think that's to his credit, quite frankly.

I'm occasionally out of step with my party, too. Does that mean I'm a bad Republican or ought to be thrown out of office? That's up to the good people of Nebraska to decide that. But come on, let's get this above the nonsense and get it out of the political sewer that the American people are sick of. And let's focus on the security of this country first, as our responsibilities as elected officials.

That's why I think the poll numbers show, Wolf, the Congress held in such disregard, as is the president.

Our poll numbers, in the Congress, are lower than the president's. And I think it is a direct result of the American people feeling that we all have failed them. And in many ways, we have.

BLITZER: Senator Hagel and Senator Reed, we have to leave it right there. Thanks to both of you for joining us on our special "Late Edition." I appreciate it very much.

Up next, the former NATO supreme allied commander, retired U.S. Army General George Joulwan, on the future of U.N. troops in Lebanon. Stay with us. We'll be right back.

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BLITZER: Welcome back. There are currently 2,000 United Nations troops stationed along the Israeli-Lebanese border. The new U.N. Security Council resolution calls for beefing up that presence to as many as 15,000 U.N. troops, in addition to 15,000 Lebanese soldiers expected to go south, in the southern part of the country.

Joining us now from Washington is the former NATO supreme allied commander, retired U.S. army general, George Joulwan.

What do you make, General Joulwan, of this plan for peacekeeping, peacemaking if you want to call it, that that the United Nations Security Council has come up with?

GEORGE JOULWAN, FORMER NATO SUPREME ALLIED COMMANDER: Well, I think, Wolf, the key here is the devil is in the details. We don't know all the details yet, but what seems to be emerging is this 15,000-man force built around UNIFIL, that's currently a U.N. force in southern Lebanon.

I'm concerned in three areas: one, that it may be a Chapter 6, which is traditional peacekeeping. And I would urge that it would be a Chapter 7, which is peace enforcement.

Secondly, I'm not sure the clarity of the mission here, of what this force has to do.

And third, I would urge that this is a great opportunity to really have a disarmed, demobilized militia, the Hezbollah, out of southern Lebanon and the Lebanese armed forces, with international backing, regaining Lebanese sovereignty over that territory.

BLITZER: Here's how the secretary of state, Condoleezza Rice phrased it on Friday. She said, "This force has a big mandate. It has a robust mandate .. but it has never been the expectation that this force is going to disarm Hezbollah. That will have to be done by the Lebanese.

The Lebanese army doesn't want to disarm Hezbollah, either. They want Hezbollah to disarm themselves. It looks like, unless Hezbollah wants to cooperate, no one is ready to try to disarm Hezbollah, with the exception of the Israelis. And they're supposed to stop fighting in a few hours.

JOULWAN: We have to learn from the past. As you recall, when we went into Bosnia, part of the requirement that NATO had was to disarm the warring factions and demobilize them. And we did that in six months.

I think you have a six-month window here to get it right. And that ought to be this army demobilizing the Hezbollah -- they've become a political and social force, not a military force -- that's the Lebanese armed forces.

And the United States, and particularly the international community, needs to provide the wherewithal for that to happen. If we don't do it, Wolf, we'll be revisiting this again in five or 10 years.

BLITZER: There's a lot of second-guessing going on here in Israel, General, as to the military strategy, over these 33 days, conducted by the Israeli military, backed by the political leadership, relying initially on air power and then going in with heavy ground forces, only, really, in the last few days.

What do you make of this military strategy, from your perspective as an analyst?

JOULWAN: That happens in a democracy, Wolf, as you know. And Israel is a democracy. And you're going to have that. I think there was some hesitation.

What is of more concern to me is this is being perceived as a victory for Hezbollah, not only by the Arab countries, but also by many inside of Israel.

That is very dangerous. That's why what happens in southern Lebanon is extremely important to our vital interests, the U.S. vital interest in the region. And I would say that's more vital than Iraq is. What happens in Israel and in Lebanon is more vital than what's happening in Iraq.

BLITZER: General Joulwan, as usual, thanks very much. We always love having you here on "Late Edition." Up next, was the Bush administration involved in Israel's military campaign against Hezbollah? Startling allegations coming from The New Yorker's Seymour Hersh. He's standing by. He'll join us next.

(COMMERCIAL BREAK)

BLITZER: Welcome back to our special "Late Edition: Crisis in the Middle East." Did the Bush administration see the Israel- Hezbollah conflict as an opening for a U.S. strike against Iran? Joining us now from Washington is the Pulitzer Prize-winning journalist and The New Yorker magazine staff writer, Seymour Hersh. He's got a major article on this subject that is just coming out.

Spectacular suggestions, allegations being made by you, Sy Hersh, allegations now being formally denied by the White House, the Pentagon, the State Department. But let me read to you from your article: "According to a Middle East expert with knowledge of the current thinking of both the Israeli and the U.S. governments, Israel had devised a plan for attacking Hezbollah -- and shared it with Bush administration officials well before the July 12th kidnappings" of those two Israeli soldiers.

Tell our viewers what you say you've learned because, as you know, the denials are coming in fast and furious.

SEYMOUR HERSH, "NEW YORKER" MAGAZINE: Well, one thing there's no question about, that this was known what Israel was going to do, it's attack on Hezbollah, the basically using air, primarily, was known to this White House. And I will tell you also to the State Department. They both had different reasons, the State Department and White House, for wanting Israel to do it, encouraging them to do it, supporting them.

Our Air Force worked very closely with the Israeli air force for months before this, not necessarily with a deadline knowing when it would happen. It was always going to be whenever there was an incident they would take advantage of an incident. The word I used was fortunate timing. When the Hezbollah grabbed some of the Israeli soldiers in early July, that was then a pretext -- I think that's the only word -- for a major offensive that had been in the works a long time.

The State Department always viewed what Israel was going to do, Condi Rice and her colleagues, as a way to stabilize -- going after Hezbollah would stabilize the Lebanese government and give them a chance under 1559 to take control. The White House, I write in this article, talking about specifically about Cheney's office, sort of center for the neocons, their view was different. Israel's attack on Hezbollah was going to be sort of a model, prototype, that is, a lot of air against a dug-in underground facility. Everything in southern Lebanon that Hezbollah had was underground.

For them it was going to be a test run for the bombing and the attack they really want to do, probably next year if they can. I'm not saying they've decided, but they want to go after Iran, and Iran, of course, the Persians have been dug in since, what, the 11th century so we know it's a tough call.

BLITZER: Because they're saying that these Sy Hersh conspiratorial theories so far-fetched they're rejecting them out of hand, especially this notion that what the Israelis have done now in Lebanon against Hezbollah is a prelude, a test run, if you will, for what the U.S. hopes to do against Iranian targets in Iran. And I want you to explain the nature of your sources, if you can -- I know you have confidential sources -- how good these sources are that are making this spectacular accusation.

HERSH: You know, when I did Abu Ghraib, the same kind of stuff was thrown at me, that I'm fantasizing, I'm a fantasizer, and I'll just put, you know -- I'm not writing from some off the wall weekly. The New Yorker is very solid. The editors of The New Yorker, my editor Dave Remnick and others know who my sources are. In many cases, they've talked to my sources. This is one of the procedures that The New Yorker -- very close fact-checking.

It's not about they're denying what I'm saying. It's about what these people have said to me. These are people inside, very much inside who are very concerned about the policy. And something else that was in the story is this, is that this White House will find a way to view what happened with the Israelis against Hezbollah as a victory. And they'll find a way to see it as a positive for any planning that is going on towards Iran.

I'm not saying Iran's a done deal. What I'm saying is, the idee fixe about Iran is almost as it was about in the first couple years after 9/11 in the White House as about Iraq. These guys, the president, Cheney and others, want to go. It's very much on their minds.

The nuclear weapons, whether they're there or not, have existential for this White House. This president does not want to leave the White House with that problem unsolved, and so, therefore, encouraging and abetting the Israelis to go after Hezbollah, after all, you cannot attack Iran as long as Hezbollah has missiles.

You have to get rid of those missiles, a potential deterrent, before you can go after Iran. That's the way they looked at it in the White House. I think it was something that really should be examined by a Congressional committee. It's sort of time to decide whether we're a democracy or not. This president's doing an awful lot of foreign policy without sharing it with the rest of us.

BLITZER: Because what they're criticizing your sourcing, they're saying you're speaking to former government officials, former intelligence officers, consultants to the U.S. government. The sourcing doesn't seem to include any current officials who are intimately involved with this type of planning.

HERSH: Well, it does. I mean, there are current officials talking to me, and if you read the sourcing carefully you'll see there are people, Middle East experts, you know, whether it's in or out of the government. The bottom line is, it's not a question -- you know, you and I have known each other a long time. Long of tooth we both are.

I would not write something, and I understand this is going to be all over the Middle East. It is already as far as I hear. And I understand the implications of the story. All of us do. And nobody is suggesting that Israel wouldn't have done what it did without the Americans. They didn't -- Israel didn't need the White House to go after Hezbollah, but it's the idea that they got tremendous amount of support from this White House.

That's the idea that -- why do you think this president has spent four and a half weeks doing nothing to get an immediate cease-fire, putting no pressure on the Israelis? It's all part of what they view as sort of a plan for what they want to do next. And it's not conspiratorial. It's simply the way...

BLITZER: Sy Hersh. Sy Hersh writing in The New Yorker magazine. And appreciated coming in Sy. Always appreciate speaking with you. Thanks very much.

HERSH: Great to be here.

BLITZER: And to our viewers, that's it for our "Late Edition" this Sunday, August 13. Please be sure to join us again next Sunday and every Sunday at 11 a.m. Eastern. I'm also in "The Situation Room" Monday through Friday, back from Jerusalem tomorrow. Until then, thanks very much for watching. I'm Wolf Blitzer reporting.

Up next, right after a quick check of the news, "This Week at War" with John Roberts.

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