Return to Transcripts main page

The Situation Room

Iran's President Shrugs Off U.N. Nuclear Deadline, Proposes One-on-One Televised Debate With President Bush; Wanted Polygamist Warren Jeffs Captured Near Las Vegas; Iraqi Military Battered by Die- Hard Shiite Militia Forces; Donald Rumsfeld Lets Loose on War Critics; Tropical Storm Ernesto Churns its Way Toward Florida; A Look at Katrina, One Year Later

Aired August 29, 2006 - 16:59   ET

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

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

Happening now, it's 12:30 a.m. in Tehran, where Iran's president shrugs off a U.N. nuclear deadline and proposes to settle it all by going mano-a-mano with President Bush in a televised debate.

Our Aneesh Raman is the only network correspondent in Iran.

It's 1:00 a.m. in Baghdad. Militia die-hards are giving the new Iraqi army more than it can handle. Is a radical Shiite leader now the most dangerous man in Iraq?

And it's 2:00 p.m. in Nevada. Scratch one off the FBI's most wanted list. How police caught up with a fugitive leader of a polygamist sect.

Wolf Blitzer is off today.

I'm John King. You're in THE SITUATION ROOM.

His nation faces United Nations demands and a deadline to halt its nuclear program, but Iran's president makes it clear he's not worried about possible sanctions. And today he threw down the gauntlet, daring President Bush to go one-on-one.

Our Aneesh Raman is the only network correspondent in Iran now. He joins us now live from Tehran, only on CNN -- Aneesh.

ANEESH RAMAN, CNN CORRESPONDENT: John, it was a rare news conference by President Ahmadinejad, only the third since he took office, and it quickly turned to the unexpected.

(BEGIN VIDEOTAPE)

RAMAN (voice over): Hours ahead of a U.N. deadline, Iran's president, reveling in the flash of cameras, was from the start eager to change the subject, and within minutes he issued a challenge to the U.S. president. MAHMOUD AHMADINEJAD, IRANIAN PRESIDENT (through translator): Mr. Bush, the president of the United States, should participate in a direct television debate with us discussing world affairs, how to end world predicaments so that we can voice our point of view and they, too, can voice their point of view. But the condition is that there is no censorship, especially for the American nation.

RAMAN: An unlikely prospect, but a sign that Iran sees itself as the balancing power to the United States, its president the leading voice for disenfranchised Muslims worldwide. A key reason Iran will not back down amid the nuclear dispute and calls for suspension of its nuclear program.

(on camera): Is suspension of the nuclear program at all on the table for any talks that might take place?

AHMADINEJAD (through translator): Access to peaceful nuclear energy and power is our -- the right of the Iranian people. We have chosen our right, and under international law we want to use our right. Nobody can prevent us from it.

RAMAN (voice over): And that is what the U.N. will now have to decide, will it invoke sanctions in an effort to prevent Iran from having a nuclear program, or will Iran's calls for peaceful negotiations give enough reason for the U.N. to avoid confrontation and embark on a new round of talks.

(END VIDEOTAPE)

RAMAN: And John, where does that leave Iran? It is now offering money to rebuild Lebanon, offering support for the Iraqi government, and desperate here in Tehran for the U.S. to see it as the regional superpower -- John.

KING: Aneesh Raman for us, only on CNN, live in Tehran.

Aneesh, thank you very much.

President Ahmadinejad sounds like a man who thinks he has the upper hand at the moment.

Aneesh, thank you.

And now to new developments in a bizarre story here in the United States. He says he's a man of god, but police say the acts he committed were ungodlike, to say the least.

Let's get details now from CNN Justice Correspondent Kelli Arena -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: John, you know, to his thousands of followers, Warren Jeffs is a prophet who says that he speaks for god on earth. But the FBI says that he's a polygamist who victimized young girls and should be behind bars.

(BEGIN VIDEOTAPE) ARENA (voice over): Officials feared a violent showdown, but in the end, Warren Jeffs was taken into custody quietly by a Nevada state trooper after a routine traffic stop.

GEORGE TOGLIATTI, DIRECTOR, NEVADA PUBLIC SAFETY DEPT.: The vehicle last night was a new 2007 Cadillac Escalade with temporary license plates out of Colorado that were not visible. So that was their reason initially to stop the vehicle.

ARENA: Inside of the car, the trappings of life on the run, cell phones, walkie-talkies, laptop computers, wigs, sunglasses, credit cards and more than $50,000 in cash.

MARK SHURTLEFF, UTAH ATTORNEY GENERAL: We've been saying now for probably six months, asking people to look out for entourages of SUVs with darkened windows, that he would be accompanied by his security, which he usually is.

ARENA: Instead, he was riding with one of his wives and a brother.

Jeffs has been on the FBI's most wanted list since May for allegedly arranging marriages between underage girls and older men. He rules over the Fundamentalist Church of Jesus Christ of Latter-Day Saints, a polygamist sect with an estimated 10,000 followers.

JON KRAKAUER, AUTHOR, "UNDER THE BANNER OF HEAVEN": He's raped and sodomized many, many children, girls, women, and he's created this culture that is damaging in its own right.

ARENA: Jeffs was indicted in June in Arizona for allegedly arranging a marriage between a 16-year-old girl and a married man. He's charged in Utah with two felony counts of rape as an accomplice for allegedly arranging the marriage of a teenage girl to an older man in Nevada.

(END VIDEOTAPE)

ARENA: Jeffs is expect to be extradited to either Utah or Arizona to face charges, but the exact plan hasn't been worked out yet, and he does remain in federal custody -- John.

KING: Bizarre case.

Kelli Arena, thank you very much.

ARENA; You're welcome.

KING: In another high-profile case, officials say he sincerely believes he killed JonBenet Ramsey, and police once believed him. But now they're having to explain how such a high-profile capture ended up with the wrong man.

The Boulder, Colorado, district attorney says police needed to bring John Mark Karr from Thailand to the United States to obtain DNA samples directly from him and that they couldn't get the proper DNA they needed from John Mark Karr in Thailand.

(BEGIN VIDEO CLIP)

MARY LACY, BOULDER COUNTY DISTRICT ATTORNEY: It became inevitable that we had to bring him back by another procedure because the Thai government designated him as an undesirable person. And once he's designated as an undesirable person, which was based on several different factors, including our e-mails and the information we sent over there, they want him out of the country. They expel him within 24 to 48 hours.

So that made our expeditious route something we absolutely had to follow.

(END VIDEO CLIP)

KING: Now Karr's DNA is why they authorities didn't file charges against him in the 1996 killing of the young beauty contestant. But the Colorado district attorney says Karr still believes he killed Ramsey, even though there's no physical evidence linking him to the crime.

Tropical Storm Ernesto is pushing toward the Florida Keys. And while Florida residents brace for rough weather, the Mid-Atlantic region may also have something to worry about.

Let's turn again to CNN meteorologist Jacqui Jeras. She's in our CNN hurricane headquarters -- Jacqui.

JACQUI JERAS, CNN METEOROLOGIST: Hey, John.

(WEATHER REPORT)

KING: And with forecasters lowering expectations for Tropical Storm Ernesto, NASA has stopped moving the space shuttle Atlantis toward its shelter and has started rolling it back -- you can see it behind me live -- toward the launch pad.

The about-face order came when the shelter was about halfway through its daylong trip to the hangar. NASA says now September 6th is the earliest possible date to launch the shuttle.

Time now for what we call "The Cafferty File." Jack standing by in New York.

Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: Let's hope that shuttle thing doesn't work like washing your car, you know. They decide to move it back on the launch pad, it could be a sure sign of trouble, just like if you wash your car, that's how come it rains the next day.

All right. On to other things.

It may one day be viewed as the defining moment of the Bush presidency. A year ago today, Hurricane Katrina slammed ashore in the Gulf, bringing a lot of harsh reality with it. Lives lost, homes destroyed, families uprooted, economies wrecked.

And for days afterward, the federal government did nothing. And in Louisiana, the state and local governments didn't do much more.

The government we all depend on to protect us in a time of crisis failed big time. America's 35th largest city was under water and the political cronies in charge of the relief agencies were clueless as to what to do.

New Orleans has been described as a city that lost its soul that day. Now a year has passed. The Big Easy is no more.

Thousands of people have not returned, they never will. Homes that were destroyed haven't been rebuilt. Huge sections of the city remain buried under debris that is yet to be cleaned up. Six of the city's nine hospitals remain closed. Just 54 of the 128 public schools expected to open this fall.

But like swallows returning to Capistrano, the politicians flocked to New Orleans on the first anniversary of Katrina to draw attention to one of America's great failures.

Here is the question. One year later, what is the lasting legacy of Hurricane Katrina?

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

I find it absolutely amazing, John, that any politician who had anything to do with Katrina had nerve enough to walk into the city of New Orleans today

KING: Quite a few of them there.

CAFFERTY: Oh, yes. Well, they're shameless, you know.

KING: All right. I look forward to the responses from this one. And I bet they will be more serious than the debate responses. That's my guess.

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

Up ahead, he has a powerful militia and political clout. We'll show you how a controversial Iraqi cleric is threatening the U.S. mission and could soon emerge as one of the country's most powerful leaders.

Also, Defense Secretary Donald Rumsfeld lashes out at war critics. We'll have details of a blistering new attack.

Plus, President Bush pays tribute to Hurricane Katrina victims. We'll take you live to New Orleans one year to the day since the killer storm hit. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: A key pillar of the Bush administration's Iraq strategy is building up Iraq forces so they can take over the jobs of security from U.S. troops. But the Iraqi military this week has been battered by die-hard Shiite militia forces, and the real winner may be a powerful Shiite cleric.

CNN's Brian Todd has that story -- Brian.

BRIAN TODD, CNN CORRESPONDENT: John, Muqtada al-Sadr's exact role in that deadly exchange this week is a point of debate. But al- Sadr's power is on the rise at the very same time new questions are being raised about the real strength of the Iraqi army.

(BEGIN VIDEOTAPE)

TODD (voice over): Iraqi forces are now reeling from a battle that's left them exposed. A senior Iraqi Defense Ministry official tells CNN some Iraqi soldiers battling Shia militants in the southern city of Diwaniya this week ran out of ammunition. The official says some of them were then captured and executed.

Still, a U.S. military spokesman says other Iraqis reacted swiftly and decisively and brought the situation under control. But who are they up against? Iraqi defense sources tell CNN the militias in Diwaniya were followers of Muqtada al-Sadr, a popular anti-American Shiite cleric.

Iraq's deputy prime minister was asked about that on THE SITUATION ROOM .

BARHAM SALIH, IRAQI DEPUTY PRIME MINISTER: Muqtada al-Sadr has disavowed those people, and this is what some of his close associates have informed the prime minister, that these groups were operating outside his control.

TODD: But analysts say even if that's true, al-Sadr is emerging as a major power in Iraq, controlling more than two dozen seats in parliament, four government ministries, and a deadly militia called the Mehdi Army.

VALI NASR, AUTHOR, "THE SHIA REVIVAL": Muqtada al-Sadr is building his organization on the model of Hezbollah: militia, plus political control, state within a state.

TODD: Senator John McCain says U.S. forces should take out al- Sadr and his militia. Analysts caution, with his millions of followers, that kind of move might start another, more dangerous insurgency. Saddam Hussein once took out al-Sadr's father, who was an ayatollah, only for his son to emerge later.

MARK PERRY, CONFLICTS FORUM: This is very close to the surface for the Sadr family. Now that they have a chance to lead, I don't think they're going to give it up.

(END VIDEOTAPE)

TODD: Analysts say al-Sadr, even though he's only in his early 30s, has a great sense of when to challenge U.S. forces and when to pull back. That's one reason they believe that if and when U.S. forces pull out of Iraq, Muqtada al-Sadr may emerge as one of that country's most powerful leaders -- John.

KING: And one of the reasons, Brian, no one can answer the question, when will the U.S. troops come home?

Brian Todd, interesting report. Brian, thank you very much.

And Defense Secretary Donald Rumsfeld let loose on war critics today, accusing them -- listen to this -- of appeasing a new type of fascism.

Let's go live to our senior Pentagon correspondent, Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, John, this is the second speech in two days from Donald Rumsfeld attempting to answer critics of the Bush administration's policy to fight terrorism around the world. And Rumsfeld's argument, in a nutshell, is the critics don't get it.

(BEGIN VIDEOTAPE)

MCINTYRE (voice over): Secretary Rumsfeld picked a friendly venue, the American Legion National Convention in Salt Lake City, Utah, to deliver a history lesson that amounted to a blistering attack on his critics and a vigorous defense of America's war on terrorism.

DONALD RUMSFELD, SECRETARY OF DEFENSE: Indeed, in the decades before World War II, a great many argued that the fascist threat was exaggerated, or that it was someone else's problem. It was, as Winston Churchill observed, a bit like feeding a crocodile, hoping it would eat you last.

Once again, we face similar challenges in efforts to confront the rising threat of a new type of fascism, but some seem not to have learned history's lessons. And that is important in any long struggle or long war where any kind of moral or intellectual confusion about who and what is right or wrong can weaken the ability of free societies to persevere.

(END VIDEOTAPE)

MCINTYRE: In his speech today, Rumsfeld acknowledged that every war, he said, has mistakes, setbacks and casualties. But in saying that, he urged the long view. He quoted French politician George Clemenceau as saying war is a series of catastrophes that ends in victory -- John.

KING: Interesting day. Jamie McIntyre at the Pentagon.

Jamie, thank you very much.

And coming up, Tropical Storm Ernesto is bearing down on Florida. The impact being felt right now. The country's leading hurricane expert, Max Mayfield, is standing by to join us right here in THE SITUATION ROOM.

Plus, he set an ambitious goal to help his city recover from Katrina. Now with his self-imposed deadline approaching, we'll look at the results of Mayor Nagin's 100-day plan for New Orleans.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: Wolf Blitzer is off today.

I'm John King. You're in THE SITUATION ROOM.

And our Zain Verjee joins us with a look at other stories making news right now.

Hi, Zain.

ZAIN VERJEE, CNN ANCHOR: Hi again, John.

Heavy rain and flooding is forcing about 75 people to evacuate their homes in Polk, Pennsylvania. That's about 65 miles north of Pittsburgh.

More than two and a half inches of rain has fallen since yesterday. Officials are closely watching an earthen dam, and they're monitoring a raw sewage spill in the rive close by.

These are the first up-close pictures that we've seen from the crash of Comair Flight 5191. And the FAA has just revealed that there was only one air traffic controller in the tower at the time of the crash. The agency's own policy requires two controllers.

Forty-nine people died when the plane's crew tried to take off on the wrong runway at a Kentucky airport on Sunday.

Crude oil prices fell again today as Tropical Storm Ernesto veered away from production fields in the Gulf of Mexico. The price per barrel fell below $70. And it's now 10 percent over the last three weeks -- that's down 10 percent. Gas prices are also down for the same period by almost 20 cents a gallon.

A charity founded in the wake of 9/11 says it's one of four such groups that will benefit from Oliver Stone's new movie, "World Trade Center". It says the organization will share 10 percent of the film's first five days' box office receipts. That's more than $2.5 million. The movie has earned about $55 million since it opened three weeks ago. Have you seen it, John?

KING: Have not. Have not. Maybe. It's a maybe.

VERJEE: Do you watch -- do you watch movies much?

KING: I have questions about whether I want to watch these 9/11 movies.

VERJEE: Yes. All right. Thanks.

KING: Thank you very much, Zain.

Tropical Storm Ernesto is bearing down on Florida. And there are fears of flooding. But does the storm pose a greater threat to residents farther up the East Coast? A hurricane watch has been issued for Georgia and the Carolinas.

Joining me now to help explain all this, Max Mayfield, the director of the National Hurricane Center in Miami.

Thanks for joining us, Max.

Let's begin with Ernesto now and the threat to Florida as you see it.

MAX MAYFIELD, DIRECTOR, NATIONAL HURRICANE CENTER: Well, we've got really good news here, John. We've had both the Air Force and NOAA hurricane hunters out there, actually morning and afternoon, monitoring it on radar now. There are just no signs of any significant strengthening at all. So it looks like we're going to have a tropical storm move over the middle Keys, much of the peninsula, but at least it's not going to strengthen into a hurricane, and that's good news.

But, as you said, then it's going to eventually head up to the Carolinas.

KING: Well, let's deal with the eventually in just one second.

I want to ask, are you concerned as people -- you say just a tropical storm. People are watching all this anniversary coverage of Katrina. Are you worried they'll say, "Oh, I'm fine, then. I don't have to worry about anything"?

MAYFIELD: Well, I keep thinking back to the 2004 hurricane season. And we had more people that died after those storms than we did during the storms. I can tell you how I think this is going to happen.

After the -- after Ernesto moves through, they'll get up on the rooftops, trying to make some repairs. They recently got thousands and thousands of blue tarp down here in south Florida. They'll -- a lot of people can fall off the ladders and fall off the roofs.

You know, if we exercise a little bit of caution here -- and also, carbon monoxide poisonings and electrocutions. If we do have downed power lines, people walking out in the water there.

We just need to be careful here and we'll be fine. There's no reason to have any loss of life for this system in the state of Florida

KING: Well, let's project forward, then 24 hours. When it moves off Florida, goes back out over the water, you think the possibility could become a hurricane for the Carolinas or for the north?

MAYFIELD: We have a hurricane watch out here from Altamaha Sound Georgia, up to Cape Fear, North Carolina, and the thinking is that if holds together as it moves along the -- off the Florida peninsula here by tomorrow night, if it's out in the Atlantic far enough it certainly does have a chance to strengthen back to a strong storm or possibly even a hurricane.

If it stays a little bit more over the peninsula, that's not going to happen. A little bit further off the coast, better chance for it to strengthen.

KING: Well, I want to take you back, Max, a little bit of a flashback if you will, and some of it's a little painful. But I want you to listen to something. You're going to hear your own voice. This is Max Mayfield talking at a FEMA briefing on August 28th, 2005, as Katrina was about to hit land. Listen to this.

(BEGIN VIDEO CLIP)

MAYFIELD: So, if the really strong winds clip Lake Pontchartrain, that's going to pile some of that water from Lake Pontchartrain over on the south side of the lake. I don't think anybody can tell you with any confidence right now whether the levees will be topped or not, but there's obviously a very, very grave concern.

(END VIDEO CLIP)

KING: Perhaps a painful memory on this day, Max, the one-year anniversary, but you said perhaps the levees will be topped. Did you feel people listened with sufficient urgency then? And I guess the better question is, if you said that again today, do you think they would listen with more regard now?

MAXFIELD: Well, that loss of life is certainly just not acceptable. We don't ever want to see that happen in the United States again, and I think I've participated in about six Congressional hearings. In one of them, somebody asked me when we became concerned with the levee system.

I believe I answered about 60 years ago. You know, we've known that there was, you know, great vulnerability in New Orleans and the southeast Louisiana area. That was always a concern. A hurricane as powerful as Katrina, you bet we were concerned about that.

KING: We'll talk to you again in our 7:00 hour, and I might want to revisit this a little bit, but look ahead to this current storm, Ernesto. You talked about a tropical storm hitting Florida. The watch is up. You're seeing a lot of wet weather, possible flooding as this week progresses?

MAXFIELD: We're seeing some -- we're likely to see some urban flooding. You know, the Florida Peninsula, most of it, is so flat that really shouldn't be that big of a deal down here if people would just exercise some caution. It'll be a little bit of a greater concern up here in a couple of days when it gets up into the Carolinas and the Virginia area.

KING: I want to come back to this point. It's the one-year anniversary of Katrina. When you're in a briefing with the governor, with FEMA officials in Washington, perhaps the conversation with the president of the United States, is it a different conversation now than it was one year ago?

MAYFIELD: Actually, I can share a little bit of that.

We've been doing video teleconferences through the hurricane liaison team since Thursday, when we first started running an advisory. And we usually had two a day briefings, noon and 6:00 p.m. But FEMA, FEMA has really been on top of this, as has DHS.

The state emergency operations centers have been on line. We have had SOUTHCOM, NORTHCOM. I would estimate there a thousand people on these conference calls.

So they are really leaning forward. In my opinion, they were really, really on top of this system. There may be some concern here that it was overdone, but at least the way I'm looking at it, it's a really good exercise.

KING: Max Mayfield, appreciate your thoughts looking forward and looking back a bit. We'll see you again in our 7:00 hour...

MAYFIELD: Thank you, John.

KING: ... as we continue to watch Tropical Storm Ernesto.

Thank you, Max.

And let's check in now with CNN's Rusty Dornin, she's in Key West, Florida. Hey, Rusty.

RUSTY DORNIN, CNN CORRESPONDENT: Well John, just the outer bands of Ernesto have been hitting Key West just for the past couple of hours. We've had light rain and as you can probably tell, the wind is not doing too much. Many of the store owners along here have boarded up their shops, some haven't, some trying to keep things open.

Tradition of course in Key West during a storm is for people to party, but this storm isn't even enough and the local Jimmy Buffet Margaritaville, doesn't have too many patrons in here right now. But there are still concerns, we're here with Key West Mayor Morgan McPherson. Often it seems as though people don't treat hurricanes as much of anything in Key West. What are your concerns here? MAYOR MORGAN MCPHERSON, KEY WEST, FLORIDA: Well I think what you see isn't always what you get. The greatest concern that we have is the flooding. We want to make sure that as far as flooding is concerned that we're ready to take care of any of it that is necessary. We also want to make sure that we can cover all the municipalities up and down the Florida Keys.

It's not just us, it's them too. We want to make sure that if Marathon, Key Largo needs any help hat we'll be there to support them. The last thing is we want to make sure that any tornadoes that spin off of it that we're prepared for it. That our safety, as far as our emergency operations, from firemen, to public service and public works, as well as police officers are ready to handle the situation.

DORNIN: Ok great, thank you Morgan McPherson, the mayor here in Key West. We do understand from Monroe county officials that they're asking people not to evacuate the Keys anymore but to stay inside as the worst part of the storm is yet to come -- John.

KING: Rusty Dornin, part of our storm team out there ready. Rusty thank you very much. And coming up, it unleashed a torrent of rain, water and wrath unlike any storm ever seen in the United States. Hurricane Katrina one year ago today. What did the government learn about what to do before and after the storm. And with 1800 people dead and a nation's conscious shaken, what will the lasting legacy be from Hurricane Katrina? Jack Cafferty will have your e-mail. Stay with us.

(COMMERCIAL BREAK)

KING: The government calls it the single most catastrophic natural disaster in U.S. history. One year ago today Hurricane Katrina ravaged the gulf coast and flooded much of New Orleans. Today, President Bush paid tribute to the city and the storm's victims, taking blame, promising more help and imploring people to return. CNN White House correspondent Suzanne Malveaux joins us live from New Orleans with more on the president's stay -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well John President Bush spent most of the day in the Ninth Ward, that of course with the great devastation, those homes, that neighborhood there and the president really participating in a series of choreographed events.

One of them at the home of jazz legend Fats Domino, whose house had also been damaged during the storm. And the president meeting with neighbors and relatives as well. And then earlier in the day, participating in a memorial service at the famed St. Louis Cathedral in the French Quarter, not far from where he spoke in Jackson Square about a year ago, pledging to turn things around for New Orleans.

Now as you may know, there are a lot of residents who believe that the president's promises have been broken that those words were hollow in Jackson Square. They expected their lives would be a lot different at this point a year later. President Bush really wanted to make the point today that he is committed for the long term here, he has invested some $110 billion when it comes to the recovery effort and the region. But the president also wanted to let the people know he understood their frustration and again acknowledged mistakes.

(BEGIN VIDEO CLIP)

BUSH: I take full responsibility for the federal government's response. And a year ago I made a pledge that we will learn the lessons of Katrina, and that we will do what it takes to help you recover.

(END VIDEO CLIP)

MALVEAUX: Part of that John, of course, President Bush mentioning the $110 billion for housing grant money. Much of that however has not gotten to the people who need it the most. The president say it's stuck in the state and local bureaucracy.

At the same time the president emphasizing this message of long- term commitment, but they also want to make sure to try to diminish some of those initial images of President Bush a year ago, vacationing at his Crawford ranch, slow to change his schedule.

A tip of Air Force One, the wing there, making a note to Hurricane Katrina victims who were drowning below. Those are the kind of images that democrats who are visiting New Orleans now say are ones of inconsistency, insensitivity and incompetence on the part of this administration -- John.

KING: And Suzanne you mentioned the Jackson Square speech and the political fallout, the criticism of that. One of the president's promises beyond rebuilding was to lead the country in the dialogue, to confront the poverty and the racial issues that were exposed by the devastation of Katrina. Even many of his loyal allies say he has failed to continue that conversation. Did that come up at all in the president's travels?

MALVEAUX: Well certainly there are a number of people who talk about that. They say that the dialogue about race and inequality really just went by the wayside. They say they're just dealing with bare bones survival at this point. How do they move on with their lives, much less what they consider some of the more ambitious goals that the president addressed that evening. So a lot of disappointment, a lot of frustration. But at this point they just want their homes back. They'll deal with all of that another time.

KING: Suzanne Malveaux, one year later in New Orleans. Suzanne thank you very much. And just days after his re-election, New Orleans Mayor Ray Nagin announced his 100 day initiative to help restore and rebuild his city. CNN's Randi Kaye has been following the progress of the mayor's plan, and with just one week left to go, she has this update.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Get a single and put it up there. It's just going to be one light switch there. RANDI KAYE, CNN CORRESPONDENT (voice-over): We first met Michael Reed 26 days into the mayor's 100-day plan. He was rebuilding his mother's home. He's still at it, without government help.

MICHAEL REED: So you know that I own that property and you sent me a tax bill but you can't send me no help to get that property back up and running.

KAYE: Mayor Ray Nagin had promised his plan would speed up rebuilding, reduce crime, clean up debris, and get the justice system rolling again. Why, then, just a week shy of 100 days do so many residents still feel forgotten?

REED: We're the victims of what the government is not doing. They're sitting on their hands in their offices and they're still sucking up their air-conditioning. They're still doing what they did before the storm. And we're the ones that don't have our homes.

KAYE: Rob Kuwig, who heads the 100-day committee, says there's no magic wand.

You told me 26 days into the 100-day plan that it was unfair of me to be critical of the progress. So now we're approaching 100 days. Is it still unfair of me to be critical or anybody else?

ROB KUWIG, 100-DAY COMMITTEE: No, I think that people can be critical and then they can be realistic. And all I'm saying is you've got to decide which side of the coin you want to dwell on. I think it's more important that we begin to look at the things that are actually happening here.

KAYE: Like the crime rate which Kuwig says has been cut in half. Courts are holding trials again and potholes are being paved. Even some public pools have opened. But should pools be a priority when people have been living in FEMA trailers for a year?

KUWIG: No. But it wasn't as though we stopped trying to build homes so that we could open up pools.

KAYE: And what about the city's $5 million trash pickup program?

KUWIG: Is it pretty yet? No. Is it getting a lot better? Absolutely.

KAYE (on camera): There are some signs of progress, like demolition, contractors are tearing down homes every day. The guy in that trackhoe says he's gotten so good at it he can take this house down in just 12 minutes.

(voice-over): But then what? Will homes like this one be rebuilt? City Councilman Oliver Thomas.

OLIVER THOMAS, CITY COUNCILMAN: I would like to see the city take all of its capital funds, whatever we have, and just spend it. Get together with non-profits, housing agencies, and let them have it. Let them start rebuilding yesterday. KAYE: For Michael Reed, even yesterday is too late.

REED: 365 days. That's over three 100-day plans. And the city of New Orleans haven't even given us a plan yet. I guess you'll come back in 365 more days and we'll still be waiting on the plan to rebuild.

KAYE: Patience for many here seems to have washed away with the storm. Randi Kaye, CNN, New Orleans.

(END VIDEOTAPE)

KING: Still a long way to go. And still to come here, U.N. Secretary-General Kofi Annan is touring the Middle East, practicing delicate diplomacy. We'll tell you what he hopes to accomplish. And it got its name from one of the most notorious figures in world history. So you can imagine why the Hitler's Cross restaurant is getting some bad reviews. We'll tell you what the owner decided to do about that.

(COMMERCIAL BREAK)

KING: United Nation's Secretary-General Kofi Annan says he hopes to double the number of U.N. troops in southern Lebanon to 5,000 by Friday. With the ultimate goal of three times that many. Annan is now in Israel with much at stake as he meets with that country's prime minister. CNN's Chris Lawrence for us is in Jerusalem with the latest.

CHRIS LAWRENCE, CNN CORRESPONDENT: John, Kofi Annan wasted no time letting Israeli officials know what the U.N. expects of them.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): Israel and the United Nations have had a rocky relationship. But Kofi Annan's arrival is important to both sides. Annan will push Prime Minister Ehud Olmert to stop Israel's blockade of Lebanon.

KOFI ANNAN, U.N. SECRETARY-GENERAL: We need to deal with the letting of the embargo, at sea, land and air, which for the Lebanese is a humiliation.

LAWRENCE: But one they may have to put up with. Israel has refused to lift its restrictions until the U.N. enforces an arms embargo against Hezbollah. Annan toured damaged areas in Lebanon before heading south to Israel, he'll meet with the prime minister under siege as Olmert deals with protests over how he handled the war and establish his three committees that will investigate what went right and wrong.

Do you think that Prime Minister Olmert needs to get certain guarantees during this meeting?

CHUCK FREILICH, FORMER ISRAELI DEP. NATIONAL SEC. ADVISER: The future of his premiership I think depends on his achieving some successes now, which Annan, the U.N. will certainly play a major roll in.

LAWRENCE: Chuck Freilich is the former deputy national security advisor for foreign affairs. He says, Olmert needs the U.N. to aggressively force its mandate to provide peace-keepers along Lebanon's border. Annan could also help broker a prisoner swap with Israel releasing Lebanese prisoners in exchange for two Israeli soldiers captured last month by Hezbollah.

FREILICH: That will be a major benefit for the prime minister that will enable him to say that he has achieved the objectives that he set out when the war began.

LAWRENCE: Israel and the U.N., a tense relationship that's being tested, by the simple fact both sides now need each other.

(END VIDEOTAPE)

LAWRENCE: Annan says Hezbollah needs to resolve the issue of the two captured soldiers and Israel must work quickly to take its army out of south Lebanon -- John.

KING: Chris Lawrence in Jerusalem. Thank you Chris. And up ahead, today's Katrina anniversary has Jack Cafferty wondering what's the storm's legacy. He's standing by with The Cafferty File. And coming up in our 7:00 p.m. eastern hour, you won't want to miss this. Iran's president versus George W. Bush. CNN's Jeanne Moos looks at the great debate challenge. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: Our Zain Verjee joins us with a look at other stories making news right now. Hi Zain.

VERJEE: Hi John. British officials say they have arrested two more people in connection with the plot to blow up passenger planes bound from the U.K. to the United States. They will reportedly be arraigned tomorrow. Of the 25 people originally arrested in the case, 15 have now been charged. Five others are still in custody and five have been released.

New signs of the financial crisis facing Gaza's Hamas led governments. Hundreds of unemployed Palestinians protested outside parliament, chanting for shame we are starving. International aids dried up since the Hamas electoral victory, leaving the government increasingly unable to pay civil servants and welfare recipients. The Civil Servants Union is planning to strike next week.

A cease-fire signed over the weekend is now in effect between rebels in the Ugandan government raising hopes that one of Africa's most brutal civil wars may finally be over. The deal calls for fighters with the so-called Lord's Resistance Army to relocate to Sudan. The group's accused of using tens of thousands of children as soldiers and sex slaves. And displacing some two million Ugandans.

A restaurant owner in suburban Mumbai, in India is bowing to pressure and changing the name of his eatery. The former Hitler's Cross Cafe is now simply The Cross Cafe. The owner was criticized by India's small Jewish community, but he says he was only looking for publicity and he really didn't mean to offend. The holocaust and Hitler's role in it are not known by some Indians -- John.

KING: Zain Verjee, Zain thank you very much. And now turning back to one of our top stories. Iranian President Mahmoud Ahmadinejad said today nobody can prevent Iran from pursuing what he calls its right to a peaceful nuclear program. Now some supporters of Iran's nuclear goals are taking an unusual step. Hacking the Iranian president's Web site. Internet reporter Jacki Schechner is here to explain. Jacki?

JACKI SCHECHNER, CNN INTERNET REPORTER: John, well President Mahmoud Ahmadinejad started a blog about two and a half weeks ago and it's believed to be run by the Iranian government. It only has one entry on it so far. Well today that blog was hacked. According to zoenh.org, an organization that tracks hacks and defacements on the internet.

They were actually contacted about 10:30 eastern time this morning by the hackers themselves. A group that calls themselves Y Underground. This is what the site looked like. This is the hack. Now Zoenh says that the group is Iranian and the message on the hack was written in Farsi using the Roman alphabet. Now the CNN international desk helped us with translation of this message.

And essentially it is thanking the Iranian president for supporting and defending Iran's right to nuclear energy. And while this group got their message across for a short period of time, we checked by in on the blog early this afternoon and it was restored to its original form. Again, there hasn't been any update on this blog John. It was first written on August 11. We haven't seen an update since then.

KING: Next time maybe a thank you card. Thank you Jacki.

Up next, Jack Cafferty wants to know, one year later, what's the legacy of Hurricane Katrina? Your answers up next. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: Live picture there of the Kennedy Space Center. That is space shuttle "Atlantis" now making its way back to the launch pad. It was about half way on its way into the hanger, NASA was moving out of precautions to tropical storm Ernesto, now it feels safe that the storm won't hit there.

So Atlantis making its way back to the launch pad. NASA says September 6th, now the earliest possible launch date. Time now to check back in with a guy who I bet would love to take a ride on the space shuttle, Jack Cafferty.

CAFFERTY: No, I'm too old for that stuff. The question this hour John, is a year later, what do you think the lasting legacy of Hurricane Katrina will wind up being? Gerard in Pennsylvania writes, "The legacy of Hurricane Katrina will serve as a lasting reminder as to the underlying reality of the disparity between rich and poor, the black population and the white, the strong and the weak."

Aaron in Wisconsin, "The legacy is how an American city can be shrunk from the size of Cleveland, Ohio to the size of Huntsville, Alabama, and still matter less to the politicians than something going on 10,000 miles away. There's one more legacy to come, whether they can get reelected anyway."

Alan in Verona, New Jersey, right down the street from where I lived, "Katrina's lasting legacy is of government mismanagement and how "the old boy network" and patronage contributed to a disaster of unnecessary proportions."

Joseph in California, "When will the human race stop trying to outwit mother nature? They built a city below sea level in one of the most hurricane-prone regions of the world, and then run around like Chicken Little after it is destroyed. And even worse, Americans are so naive, that they actually think the federal government is capable of resolving the situation."

Robert in North Carolina weighs in with this, "The lasting legacy of Hurricane Katrina is the reelection of New Orleans Mayor Ray Nagin. It's unbelievable that the residents of a city that didn't have an adequate evacuation plan would reelect the person that had the responsibility of seeing that they did."

And Heather writes this from New Orleans, "I am from New Orleans and have lived here my whole life. The tragedy that befell my home isn't one that I'll soon be able to forget. The legacy of Hurricane Katrina is one that I will see every day when I look into the eyes of my younger cousins as they are denied the simple pleasures of growing up a New Orleans kid. They will never know the fun of trips to the river with school friends or late night movies in the park. The beauty of growing up watching a New Orleans sunset on the lake or all the other great things that make our home so special."

If you didn't see your email here, you can go to CNN.com/CaffertyFile, read some more of these online -- John.

KING: Some of those quite political, but some pretty personal.

CAFFERTY: Yes, and poignant I thought, the last one.

KING: Interesting day, Jack Cafferty thank you very much. And remember we're here everyday, every weekday afternoon from 4:00 to 6:00 eastern and we're back on the air at 7:00 p.m. eastern, that's just one hour from now. We'll have an interview with Michael Brown. Remember, he was the FEMA director when Katrina hit, an embattled figure, a controversial figure, we'll talk to him one year after the storm.

Also an update on tropical storm Ernesto making it's way toward landfall in Florida with the possibility of becoming a hurricane later as it moves offshore and back north toward Georgia and the Carolinas. An update on that as well. Until then, I'm John King in THE SITUATION ROOM. "LOU DOBBS TONIGHT" starts right now. Kitty Pilgrim is in for Lou. Kitty?

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com