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THE SITUATION ROOM

George W. Bush Interview; Chavez Likens Bush To Devil; New Chief Judge in Hussein Case Asserts Authority; Dueling Republicans Try To Reach Compromise Over Terror-Fighting Tactics Before Leaving Washington For Campaign Trail

Aired September 20, 2006 - 16:00   ET

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


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

Happening now, a new vow from President Bush to kill or capture Osama bin Laden. It's 4:00 p.m. in New York. I spoke earlier one on one with Mr. Bush about the terror threat and whether he's scaring the nation. The president of Pakistan already reacting to our interview and he doesn't sound pleased at all.

Also this hour, tough questions for President Bush about the nuclear standoff with Iran. Would he compare President Mahmoud Ahmadinejad to Hitler? You'll find out in our exclusive interview.

And fighting words at the United Nations. The Venezuelan leader Hugo Chavez likening President Bush to the devil and the rhetoric only got hotter and stranger after that.

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

President Bush now back at the White House after his high stakes, high-drama trip to the United Nations. And he's facing new reminders of international anger at him and at the United States.

The Venezuelan President Hugo Chavez today likened President Bush to the devil in a long and rambling address over at the United Nations General Assembly. He went on to say at the podium where Mr. Bush spoke yesterday, he said that podium still smells of sulfur.

President Bush tried to keep much of his focus today on Middle East peace, holding talks with the Palestinian leader Mahmoud Abbas before leaving New York. Mr. Bush also joined me for an exclusive interview on a variety of issues critical to the nation and to his presidency, including the war on terror.

(BEGIN VIDEOTAPE)

BLITZER: Mr. President, thanks very much for doing this.

You know, I look out at this skyline, and I remember the words you said last week at that news conference. You said, "They're coming again" -- the terrorists. And that's pretty frightening. What did you mean?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It means there are people out there plotting and planning to kill Americans. And it is frightening. And that's why, you know, it's important that we have the tools necessary to protect us. And I think that was in the context of whether or not we ought to have a program that enables us to get information -- within the law -- from people who may have knowledge about an impending attack.

BLITZER: Because you know your critics say you're simply trying to scare the American public to score political points.

BUSH: Well, they don't sit where I sit. They don't see the intelligence I see. And, frankly, if anybody thinks there's not an enemy coming to attack us, they just don't see the world the way it is. Because, well, just take the last plot we -- that the Brits found out about and we helped them, and that is people getting on airplanes getting ready to blow them up, pure and simple.

And this is a dangerous world, Wolf. And you know, I know there are some out there that kind of look at the world the way they wish it would be, but the job of the president -- particularly one who saw what happened to us on September the 11th and vowed that day to do everything to protect the people -- is to do just that. That's our most important responsibility.

BLITZER: Now, we're here in New York, we see the skyline. We all remember what happened five years ago. We remember the bullhorn, when you said the people who brought these buildings down, they're going to hear from us pretty soon.

(BEGIN VIDEO CLIP)

BUSH: And the people who knocked these buildings down will hear all of us soon.

(END VIDEO CLIP)

BLITZER: Osama bin Laden's still at large, Ayman al-Zawahiri is still at large. What went wrong?

BUSH: Well, a lot went right. Khalid Sheik Mohammed is -- if we can get a good bill out of the Senate and the House -- is going to go on trial. Ramzi Binalshibh, Abu Zubaydah -- the whole ...

BLITZER: But the guys -- the major guys are still at large.

BUSH: Well, no question Osama bin Laden's at large, but the man who ordered the attack and about 75 to 80 percent of al Qaeda that was involved in planning and operating the attacks are in -- just -- Osama ...

BLITZER: But the United States is the most powerful country in the world ...

BUSH: Can I finish? Let me finish. BLITZER: Why can't we find these guys?

BUSH: Wolf, thank you. Just give me a chance to finish.

Osama bin Laden is in hiding and we're still spending a lot of time trying to find him. But the key thing that the American people have got to know is that security comes not only with getting him -- which I'm convinced we will -- but also doing other things to protect them.

One is to dismantle al Qaeda. Two is to listen to phone calls if al Qaeda's calling to the United States and respond to that. Three is to get information so we can prevent attack. Getting bin Laden is important, but putting things in place, putting procedures in place that protect you is equally important, and we're doing both.

BLITZER: Do you think the Pakistanis could be doing more, because there's a lot of suspicion that Osama bin Laden, Ayman al- Zawahiri, Mullah Muhammad Omar -- the leader of the Taliban -- they're someplace in Pweda (ph), in Pakistan, Waziristan, and that the Pakistanis, for whatever reason, are giving them a truce, amnesty. They're not doing what they should be.

BUSH: Yes, no, that's not the way I view it. I view it that Musharraf -- they tried to -- al Qaeda, that is, tried to kill Musharraf several times. And I view President Musharraf as somebody who would like to bring al Qaeda to justice. As a matter of fact, we'll be discussing that with him on that subject on Friday at the White House.

BLITZER: But there are others in Pakistan who may not have his commitment.

BUSH: Maybe. Maybe. There's no question there is a kind of a hostile territory in the remote regions of Pakistan that makes it easier for somebody to hide. But we're on the hunt; we'll get him.

But remember: protecting America is, no question, getting bin Laden, or Zawahiri, as you mention, but it's also making sure that we understand what the enemy is thinking and getting ready to do to prevent these attacks from happening in the first place.

BLITZER: If you had good, actionable intelligence in Pakistan where they were, would you give the order to kill them or capture them?

BUSH: Absolutely.

BLITZER: And go into Pakistan?

BUSH: Absolutely.

BLITZER: Even though the Pakistanis say that's their sovereign territory.

BUSH: Absolutely. We would take the action necessary to bring them to justice.

(END VIDEOTAPE)

BLITZER: And just a short time ago, the Pakistani President Pervez Musharraf was asked about what President Bush just said to me, that he would go into Pakistan's sovereign territory to capture or kill Osama bin Laden or other al Qaeda leaders. Listen to this.

(BEGIN VIDEO CLIP)

PRES. PERVEZ MUSHARRAF, PAKISTAN: We wouldn't like to allow that at all. We will do it ourselves. We would like to do it ourselves.

(END VIDEO CLIP)

BLITZER: And we're going to bring you much more of our exclusive interview with President Bush. Does he think Iran would actually drop a nuclear bomb on Israel? The answer, that's coming up. More of our interview with President Bush.

The Venezuelan president, Hugo Chavez, never has hidden his hostility to President Bush, but he took it to a new level today in a new forum with his angry tirade over at the United Nations.

Let's bring in our senior U.N. correspondent Richard Roth -- Richard.

RICHARD ROTH, CNN SR. U.N. CORRESPONDENT: Wolf, a frequent diplomatic cliche here about world problems -- the devil is in the details. Well, today the Venezuelan president went much further, accusing U.S. President George Bush who addressed the General Assembly yesterday of being the devil himself.

(BEGIN VIDEO CLIP)

PRES. HUGO CHAVEZ, VENEZUELA (through translator): The devil came here yesterday. Yesterday, the devil came here. Right here. Right here. And it smells of sulfur still today, this table that I am now standing in front of.

(END VIDEO CLIP)

ROTH: It was a sweeping denunciation of President Bush and his policies. He said President Bush is trying to own the world, a liar, a terrorist. The response today, Secretary of State Rice saying I'm not going to dignify his comments. It's not becoming a head of state.

John Bolton said he enjoys the freedoms that everyone in America does. He could walk to Central Park, say the same thing, something he is unable to allow the people of Venezuela to do back home -- Wolf.

BLITZER: Were there U.S. diplomats -- I don't know if you noticed -- sitting in the General Assembly when Hugo Chavez was making this declaration?

ROTH: One low-level note taker was present at table. President Karzai of Afghanistan who wasn't in the hall said we should be stressing unity here, not disunity. Others, including the deputy Syrian foreign minister liked parts of it. There is a lot of people at the U.N. who don't like the Bush administration and Chavez is a great outlet for getting that anger out on the world stage.

BLITZER: All right, Richard, thanks very much. Richard Roth at the United Nations.

Let's bring in Zain Verjee. She is joining us from New York today with a closer look at some other important stories making news.

Hi, Zain.

ZAIN VERJEE, CNN ANCHOR: Hi, Wolf.

In Thailand, military members have overthrown the government and the king has apparently given his blessing. Today, a statement on Thai TV says the country's long-reigning king is endorsing the bloodless coup.

It says the king met with the military leader who says he's now in control and promises to soon return power to the people. Yesterday, the Thai Prime Minister Thaksin Shinawatra said he was in control. Today it is unclear if his position has changed.

In Iraq, staggering statistics amid steady violence. Today, 12 people were killed in separate suicide bombings in Samarra and in Baghdad. Among the dead, a young child. Now this adds to an already grim tally of death over the past two months. A new report from the United Nations says nearly 6,600 Iraqi civilians were killed between July and August, and nearly 21,000 Iraqis have died in Iraq this year alone.

Also in Iraq, a dramatic entrance, dramatic exit and a melodramatic ejection in the Saddam Hussein trail. A new chief judge quickly asserted his authority. He threw out Hussein after the former dictator complained about the fairness of the trial and just wouldn't stop talking. Earlier Hussein's lawyers walked out, complaining about yesterday's firing of the first judge. That judge was ousted for allegedly being biased toward Hussein.

And UFOs near the shuttle Atlantis will not stop it from landing. That would unidentified floating objects. Three more were spotted near the shuttle today after astronauts noticed two pieces yesterday. NASA says that they do not believe the mystery debris will be a problem. They've cleared Atlantis to land tomorrow morning. NASA says one of the unidentified objects may have been a piece of plastic from the shuttle's exterior.

Back to you, Wolf. Sorry I missed you in New York. But Jack's looking after me here very well.

BLITZER: It's good to have you and Jack together in New York.

VERJEE: Finally.

BLITZER: Jack is there. Jack, it was good seeing you yesterday when I was in New York.

JACK CAFFERTY, CNN ANCHOR: We're just overwhelmed with important people here at CNN and in New York City. We got all those people from the U.N. Yesterday we had you here. Today we have Zain here. It's almost more than I can handle.

VERJEE: We're very important here, Jack. But I have to tell you, Wolf, we are sitting next to each other, Jack is looking after me, and we're sharing an office. He's also going to be getting me tea with milk, no sugar.

BLITZER: Go ahead, Jack.

CAFFERTY: She does carry on.

More than five years after 9/11, and old wanted dead or alive is still wanted dead or alive. Where the hell is Osama bin Laden? The "Washington Post" recently reported bin Laden's trail has gone stone cold. U.S. commandos who are working to capture the terrorist leader haven't had a credible lead in more than two years.

However, in the last few months the CIA has stepped up its efforts. More officers and resources are being assigned to the case. And although no one knows for sure where bin Laden is, he is still thought to be somewhere along the Afghanistan-Pakistan border.

Today President Bush told Wolf in his interview that he would give the order to go into Pakistan to kill or capture Osama bin Laden if he had good intelligence. Later today, Pakistan's President Musharraf says his country wouldn't like that so much. He says they'll do it themselves. Here's the question: should the United States go into Pakistan to catch Osama bin Laden? E-mail your thoughts to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile -- Wolf.

BLITZER: It's a sensitive subject, but I'm sure the Pakistanis are not happy with the president told me earlier today.

CAFFERTY: No, it could touch off a lot of unrest in that country. You know, the Musharraf government isn't that strong. And if U.S. forces were somehow allowed on to Pakistani soil to chase down Osama bin Laden, that could create some real problems for Pervez Musharraf.

BLITZER: The president said absolutely he would give that order. We're going to have more on this, Jack, coming up -- stand by.

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

Coming up, much more of my exclusive interview with President Bush. Up next, I'll ask the president why he didn't meet face to face with Iran's president. Plus, the political border -- battle over the border. Calls in Congress for a wall along the border grow louder. But will the president of the United States sign such a bill if it comes to him? You'll hear his answer.

And later, does Bill Clinton want his wife to run for the White House? Larry King asks the former president. We'll find out what he said. All that coming up later this hour right here in THE SITUATION ROOM. And by the way, you can watch Larry's entire interview with Bill Clinton at 9:00 p.m. Eastern.

And this important note, at 10:00 p.m. Eastern, Anderson Cooper sits down with the Iranian President Mahmoud Ahmadinejad. And you can see my entire interview with President Bush in our 7:00 p.m. Eastern hour right here in THE SITUATION ROOM. Three major presidents, Bush, Clinton, Ahmadinejad -- only here on CNN.

(COMMERCIAL BREAK)

BLITZER: At the United Nations, the U.S. and key allies are working to set a new early October deadline for Iran to suspend its nuclear activities.

But they're still at odds over a possible sanctions. The Iranian President Mahmoud Ahmadinejad accuses the major powers in the U.N. Security Council seeking to rule the world through weapons and threats. Both Ahmadinejad and President Bush addressed the U.N. General Assembly yesterday. Today I spoke at length with Mr. Bush about the Iran nuclear threat during our exclusive interview.

(BEGIN VIDEOTAPE)

BLITZER: You're here in New York. The president of Iran is here in New York. You have a chance -- I don't know if you still have a chance, but you had a chance to meet with him. Given the stakes involved -- a nuclear confrontation -- what do you have to lose by sitting down with Mahmoud Ahmadinejad?

BUSH: Our position is very clear to the Iranians, that if they want to sit down with American officials, that they first must verifiably suspend their enrichment program. They know our position, the world knows our position, and I clarified it at the United Nations over the past couple of days.

BLITZER: But if it would help -- if it would help to sit down, talk to them and try to convince them. You know, there have been other moments where great leaders have made that major decision, have a breakthrough -- Nixon going to China, Sadat going to Jerusalem. What would be wrong to just sit down with them and tell them, you know what, here are the options before you?

BUSH: Yes, well, he knows the options before him. I've made that very clear. Secondly, Wolf, in order for there to be effective diplomacy, you can't keep changing your word. At an important moment in these negotiations with the EU3 and Iran, we made it clear we would come to the table, but we would come to the table only if they verifiably suspended their enrichment program.

And the reason that's important, that they verifiably suspend, is because we don't want them to have the technologies necessary to be able to build a nuclear weapon. A nuclear weapon in the hands of Iran in the middle of the Middle East would be a very destabilizing and troubling occurrence.

BLITZER: India and Pakistan already have a nuclear weapon. Israel has a nuclear weapon. Why would it be so bad if this Iranian regime had a nuclear weapon?

BUSH: This Iranian regime is -- promotes militias like Hezbollah to create instability. This Iranian regime has made it abundantly clear that they would like to destroy Israel, who is our ally.

BLITZER: Do you think they would drop a bomb or launch a missile on Israel?

BUSH: Wolf, my judgment is you've got to take everybody's word seriously in this world. Again, you can't just hope for the best. You've got to assume that the leader, when he says that he would like to destroy Israel means what he says. If you take -- if you say, well, gosh, maybe he doesn't mean it, and you turn out to be wrong, you have not done your duty as a world leader.

BLITZER: So you take him seriously at that?

BUSH: Absolutely I take him seriously, just like I take al Qaeda seriously when they say they're going to attack us again, just like I take these extremists seriously when they say they're trying to disrupt democracy.

BLITZER: George Voinovich, the Republican senator from Ohio, has compared him to Hitler.

BUSH: Yes, you know, I mean, people have got strong opinions about him, and I can understand why. He's a -- look, Olmert -- Prime Minister Olmert of Israel reaches out to President Abbas of the Palestinian territories to try to help establish a democracy, and there's an unprovoked attack by Hezbollah on Israel.

Hezbollah's funded and armed by Iran. Iran wants to stop the advance of democracy and peace, and I can understand why people have strong opinions about the Iranian regime. Our goal is to have a diplomatic solution, starting with convincing the Iranians that they either face isolation and possible sanctions if they don't give up their weapons programs.

BLITZER: The foreign minister of Israel told me the other day that they believe the Israelis -- there's only a few months left, a few months of a window, before they get to a point where there's literally a point of no return and they've learned how to enrich uranium and effectively could go forward and build a bomb. How much time does the world have to resolve this?

BUSH: First, if I were the Israeli foreign minister, I'd be deeply concerned about somebody in my neighborhood whose stated objective was the destruction of my country, and the desire of that country to end up with the capacity to do so. And so I can understand her concerns. I'm not going to discuss with you our intelligence on the subject, but time is of the essence.

BLITZER: Is it a few months though?

BUSH: Well, time is of the essence, and that's why here at the United Nations I spoke with our allies. Condi Rice met last night with foreign ministers of the EU3 and Russia, and I think China was there as well, urging them to follow through on the resolution we got passed at the United Nations Security Council. I'm concerned that Iran is trying to stall, and to try to buy time, and therefore it seems like a smart policy is to push this issue along as hard as we can and we are.

BLITZER: Because a lot of experts say short of regime change in Iran, or military action, there's no way this leader in Tehran is going to give up that nuclear ambition.

BUSH: We'll find out. The country can face isolation. They could face, you know, sanctions, or they can choose a better course. The choice is the Iranian leader's choice. I spoke yesterday at the U.N. and I spoke directly to the Iranian people.

It's important for the Iranian people to know this, that we respect their heritage, we respect their history, we respect their tradition. We believe this can be a great nation if the government, you know, relies upon the talents of its people and encourages and nurtures those talents.

BLITZER: Is there anything you heard from him in his address last night or your analysts that was encouraging?

BUSH: Not really.

(END VIDEOTAPE)

BLITZER: Could President Bush take a do-over on Iraq or on calling terrorists Islamic fascists? More of my exclusive interview coming up here in THE SITUATION ROOM in the next hour. And you can see the entire conversation with the president during our 7:00 p.m. Eastern hour, right here in THE SITUATION ROOM.

And that will kick off a CNN prime-time lineup jam-packed with huge interviews. Larry King goes one on one with former president Bill Clinton at 9:00 p.m. Eastern. Anderson Cooper talks with the Iranian president, Mahmoud Ahmadinejad, at 10:00 p.m. Eastern.

Bush, Clinton, Ahmadinejad coming up, only here on CNN. But up next, dissecting what the president said. Paul Begala and Bay Buchanan help me break down my one on one conversation with Mr. Bush. Stick around for today's strategy session.

And later, he's agreed to plead guilty and serve time in prison. But as of today, Representative Bob Ney is still a member of the United States Congress and that's not sitting well with some other lawmakers. That story in today's political radar.

Stay with us. You're in THE SITUATION ROOM. (COMMERCIAL BREAK)

BLITZER: Welcome back to THE SITUATION ROOM. I'm Wolf Blitzer in Washington. President Bush making news today in our exclusive interview on the Iran nuclear threat, the hunt for Osama bin Laden and the immigration work.

Let's go over some of what the president's key points were in our strategy session. Joining us now are political analysts, Democratic strategist Paul Begala and Bay Buchanan, the president of American Cause.

On the hunt for bin Laden, the president was very firm. He said absolutely when I pressed him would you go into Pakistan, cross into that sovereign territory, and kill or capture bin Laden if you had what's called actionable intelligence? He said absolutely. And President Musharraf is not very happy about that.

PAUL BEGALA, DEMOCRATIC STRATEGIST: Right, it's easy for him to say that in the comfort of a suite at Waldorf Astoria, but he had bin Laden. He had actionable intelligence. He had him at Tora Bora and he wimped out. Then he came home and last year, maybe this year, disband the CIA's bin Laden unit. He's Osama been forgotten to George W. Bush. I mean I'm glad he said that, I just wish he had done it when he had the chance.

BLITZER: Bay, what do you think?

BAY BUCHANAN, PRES., AMERICAN CAUSE: The unit Paul is talking about was just moved to another section and consolidated. He has not given up on Osama. It was very clear the president was very strong and confident that they will get Osama. He has every intention to do so and he said exactly the right thing in answer to your question.

Of course Americans want to hear that the president of the United States is going to get the guy who basically was the architect behind 9/11. Of course he is going to do that and the general said exactly the right thing, to say, my gosh, that would be interfering with our sovereignty over here. Let them both make that position. I guarantee you, they'll work together to capture that fellow.

BLITZER: Because it is a sensitive issue. There are a lot of people who suspect, as you know Paul, that the Pakistani government is not necessarily doing everything they should to try to find al Qaeda, the Taliban, especially this truce, this deal they worked out along the border with Afghanistan, in Waziristan.

BEGALA: That's a problem, Jack Cafferty mentioned it earlier in your discussion with him, is that the Pakistani intelligence, a lot of our folks say in published reports, has still got a pretty serious element that is sympathetic to al Qaeda. The president, I think, tried to dance around that.

I think Musharraf probably is an ally and doing about as much as he can. But again, we had him. We had the Tenth Mountain Division right there and the president wimped out and put a bunch of mercenaries in there who let bin Laden go. So I think his words really ring hollow right now.

BUCHANAN: It is fascinating, the evidence also indicates that Mr. Clinton had him in the crosshairs and backed off as well.

BEGALA: That's not true. He shot at him with 50 or 60 cruise missiles and, you know, he got away.

BUCHANAN: There was another time we had him and he said, nope, don't go in.

BEGALA: That's part of the lie ABC put out on that TV show that was absolutely defamatory.

BUCHANAN: Listen, Osama bin Laden attacked us three times under Bill Clinton. Three times he attacked the U.S. property and what did -- Bill Clinton did absolutely nothing.

BEGALA: That's not true. Look, it is simply not true. If you want to believe ABC's propaganda, you can do that. But I know that George W. Bush in that interview with you seemed very defensive, when you were standing by that window, and you talked about that skyline. I thought it was a wonderful way to draw him into it, because he is obviously emotional about it, as we all are.

BLITZER: What do you think of...

(CROSSTALK)

BEGALA: But he did have him, and he did let him go.

BLITZER: What do you think of this Iranian president, Mahmoud Ahmadinejad, and this elevation, if you will? All of a sudden, he comes to the United Nations, and he is seen as almost like a -- a superpower right now.

BUCHANAN: You know, we have given him enormous, enormous attention, that I don't think he deserves.

I -- he is a loudmouth, and, you know, over there, spewing all kinds of hatred. But I don't think he has the power or the intention of doing half of what he talks about. What he's done is created himself to become a world leader.

He is not a world leader. He's just a thug that's sitting over there in a country that we have to pay attention to, but we certainly don't have to give him the kind of platform we have given him.

BEGALA: I think Bay is right.

And the president helped to give him that platform way back when he named Iran as the axis of evil. We were engaged in a real war against al Qaeda in Afghanistan. Every American supported that. And, then, that speech is what began getting the president off track. And, at that time, the president of Iran was Khatami. He was much more moderate. And, if the president back then, two, three years ago -- four years ago -- had said what he said yesterday at the U.N. to Iran, we might not have had Ahmadinejad rise.

(CROSSTALK)

BEGALA: He -- Bush empowered the crazies over there.

BLITZER: I want to go to another issue.

We're going to play, later in THE SITUATION ROOM, an exchange that I had with the president on this whole issue of the border security. At one point in the interview, I asked the president -- the House has already passed legislation supporting a 700-mile fence along the U.S.-Mexican border, Senate moving along the same lines now. And it's clear this is not going to be part of what the president originally wanted, which is comprehensive immigration reform, including a guest-worker program. It's simply designed to build a fence, if you will.

And I asked the president, if that legislation reaches his desk, would he sign it?

Listen to this.

(BEGIN VIDEO CLIP)

BLITZER: Even though it is not part of what you want, comprehensive immigration reform, if the Senate passes what the House has passed, will you sign it into law?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Yes, I will sign it into law.

(END VIDEO CLIP)

BLITZER: All right. That's news, because, earlier, as you well know, given some of the deals he worked out, it was all supposed to be a big package deal.

I take it, Bay, you must be encouraged by that.

BUCHANAN: We are thrilled by it.

But this is the concern, Wolf. There is no question the American people want this. This is like a 96 percent issue out there. And the Republicans are using it, as best they can, trying to get something through, in order to let the American people know we're serious about border security.

The problem is, what we hear out there is that we're looking at a lame-duck session, very likely, where the guest-worker amnesty deal will be finalized. That's our concern. We want to make certain we get the border security. But we would also would like to see enforcement of the laws, immigration laws, in this country. And we do not want to see any amnesty or guest worker. That's where the American people are. And we have got to make certain our legislators don't go that route.

BLITZER: The president did say, Paul, that he would sign that narrow legislation, building the fence into law, but then he would continue working for the guest-worker program and the comprehensive immigration reform that he initially wanted as part of one big package.

BEGALA: Since George Bush has taken office, illegal immigration from Mexico is up 87 percent. Fines against corporations who hire illegal aliens are down 90 percent.

He has a policy. It is to let corporations hire illegal aliens, and never punish them. I want to know, if Congress sends him a bill, not just to build a fence, which is fine, but to punish corporations that support him and contribute to him who hire illegal aliens -- he will veto that in a hot minute.

That would be the real test, Bay, between his supporters, like you, and his contributors, like the big corporations who are hiring these illegal aliens.

(CROSSTALK)

BUCHANAN: And I will tell you, the reason it has never gotten to him is because the Democrats will never let that such -- that kind of rule go through the Senate.

The key here is, if the Democrats...

BEGALA: Oh, no, no. The Democrats supported employer sanctions.

BUCHANAN: Yes. Well, they only do if it's comprehensive.

(CROSSTALK)

BUCHANAN: But the key here is that the president will sign such a thing, if it allows the guest worker, because it makes it all moot anyhow.

BLITZER: All right, guys, we got to leave it right there, because we're out of time.

But we are going to have a lot more of the interview I had with the president coming up in the next hour. Then, the full interview will air 7:00 p.m. Eastern tonight.

Paul, Bay, thanks very much.

Up next: new developments in the political war over interrogating terror suspects. Are dueling Republicans any closer to a compromise?

And, on Capitol Hill, are fellow Republicans trying to kick out one of their own, after his confession to corruption?

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

(COMMERCIAL BREAK)

BLITZER: Dueling Republicans are trying to beat the clock and reach a compromise over terror-fighting tactics before they leave Washington for the campaign trail. There are new developments to report this hour.

Let's go to our congressional correspondent, Andrea Koppel -- Andrea.

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: Wolf, day two of negotiations between the White House and a small group of Senate Republicans over military detainee legislation continued today, mostly behind closed doors, as both sides sought to narrow differences, to find common ground over what one Republican described as the deal- breaker issue. That is Article 3 of the Geneva Conventions and the War Crimes Act.

Now, even though neither side wanted to tip their hands today, speaking to reporters in the hallway, one of the three leading Republicans who is blocking the president's bill, Senator John McCain, told reporters, in his words, the two sides were -- quote -- "making progress" and that good-faith efforts were being made by both sides.

But, in an effort to keep up the pressure on the White House, Senator McCain's office released yet another letter of support from a former military official, this one from the former chairman of the Joint Chiefs of Staff, Hugh Shelton, saying -- quote -- "General Shelton is the fifth former chairman of the Joint Chiefs who has expressed concern regarding a proposed change in Common Article 3, joining former Secretary of State General Colin Powell, General John Vessey, General John Shalikashvili, and Admiral William Crowe."

Former Secretary of State George Shultz voiced his concern in a statement yesterday, as well.

Now, we're told by Republicans who have seen the proposals and counterproposals that have been flying back and forth over the last couple of days that there really is a mutual desire by both sides to find agreement.

(BEGIN VIDEO CLIP)

SEN. JOHN CORNYN (R), TEXAS: Well, they're still talking. And that's the best sign that people are interested in reaching a successful conclusion, talking, rather than fighting, and I should say, you know, playing this out, frankly, in the press, because people tend to harden their positions and take on more of an adversarial posture, which is not necessarily conducive to a settlement.

So, I'm -- you know, I'm -- I remain hopeful that at least the Article 3 issue can be resolved.

(END VIDEO CLIP)

KOPPEL: Meanwhile, over in a -- in the House, in a sign that the Republican renegades aren't just in the Senate, one week after the House Armed Services Committee signed off on the president's legislation, the House Judiciary Committee rejected it by a vote of 20-17.

Now, a couple of Republicans weren't there tonight. Nevertheless, there were three Republicans who voted against the legislation. There is a chance, according to a committee staffer for the Judiciary Committee, that chairman Sensenbrenner may have a re- vote again tonight.

Nevertheless, Wolf, for the White House, again -- for a Republican dominated committee, rather, it was a surprising, albeit symbolic setback, again for the White House -- Wolf.

BLITZER: Andrea, thank you -- Andrea Koppel on the Hill.

On our "Political Radar": An historic matchup is set in the Massachusetts governor's race. A former Clinton administration official, Deval Patrick, is trying to become the state's first African-American governor, after winning the Democratic primary yesterday. Democrats are dominant, of course, in Massachusetts.

But get this: They haven't held the governor's office since 1991. Patrick faces Lieutenant Governor Kerry Healey, the Republican nominee chosen yesterday. She is hoping to be the first woman elected governor in Massachusetts. The current governor, Republican Mitt Romney, is leaving office, as he eyes a presidential bid.

In the Washington state primary, Senate Democrat Maria Cantwell easily won her party's renomination, weathering liberal criticism of her vote for the Iraq war. Democrats appeared to rally behind Cantwell, knowing she is considered vulnerable this fall. She will face Republican challenger Mike McGavick.

In the battle for Congress, new evidence of incumbents in trouble -- a new Quinnipiac University poll in New Jersey shows Democratic Senator Bob Menendez is several points behind Republican challenger Tom Kean among likely voters. But Menendez is several points ahead among registered voters.

And, in the Ohio Senate race, incumbent Republican Mike DeWine is running neck-and-neck with his Democratic challenger, Congressman Sherrod Brown, in another Quinnipiac University survey. Brown actually had a one-point advantage.

In Rhode Island, Republican Senator Lincoln Chafee trails Democratic challenger Sheldon Whitehouse by points in a new American Research Group poll of likely voters.

And, in Connecticut, Democrat-turned-independent candidate Senator Joe Lieberman is running neck-and-neck with Democratic challenger, Ned Lamont. In the ARG poll of likely voters, Lieberman has a two-point edge.

Some GOP leaders hinting today that they back a new call for Congressman Bob Ney to resign. The Ohio Republican has agreed to plead guilty to corruption charges in connection with a Jack Abramoff lobbying scandal. Another Ohio Republican congresswoman, Republican Congresswoman Deborah Pryce, is leading the push for Ney to quit right now.

(BEGIN VIDEO CLIP)

REP. DEBORAH PRYCE (R), OHIO: As a member from Ohio, I believe that -- very strongly that Bob Ney should resign. It's a tragedy that's happened to his family, but he has betrayed the trust of his constituents and of his colleagues here in the House. And I do believe that he should resign.

(END VIDEO CLIP)

BLITZER: Some top Republicans are raising the possibility that Democrats could move to expel Ney from Congress.

Coming up: taking center stage in a key congressional race in Colorado, the battle over immigration. Our Bill Schneider will tell you how and why immigration reform is looming so large.

And what do you do when your husband is also one of your best political strategists, if not your best political strategist? Larry King asks former President Bill Clinton if he is encouraging his wife to run for president. And, if so, what would he tell her?

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

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Let's check in with Zain once again -- she's in New York -- for a closer look at other stories making news -- Zain.

VERJEE: Wolf, the pope says he's sorry for the misunderstanding, but does not say he's sorry for using the quotation that he did.

Today, Pope Benedict XVI says he understands how the words of a 14th century Byzantine emperor about Islam may enrage Muslims around the world, but the pope says he was misunderstood and that he has deep respect for Muslims. The pope stopped short of an all-out apology for using the historical quote that characterizes the Prophet Mohammed's teachings as evil and inhuman.

Efforts by Palestinian President Mahmoud Abbas to form a unity government is being praised. Today, a group including the United States, Russia, the United Nations, and the European Union issued a statement welcoming Abbas' efforts, and urging the world to address the growing Palestinian humanitarian needs. The group said it hopes a Palestinian unity government between Hamas and Abbas' Fatah Party would recognize Israel and renounce violence.

And holding steady -- today, the Federal Reserve decided to keep interest rates unchanged. The Fed says the economy is slowing down, and that may mean there is no need to raise rates in the near future. This is the second straight meeting where the Fed left the rates unchanged -- Wolf.

BLITZER: Zain, thanks very much.

Let's move on to some other important stories. Thailand's long- reigning king has reportedly endorsed a military coup that ousted the prime minister. But the Bush administration calls it a step backward for democracy.

So, what's the situation on the ground right now?

Our Abbi Tatton has been following that story online.

What are you picking up, Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, well, the overwhelming message we're getting from people recording things on the ground and uploading them to the Internet is that things are calm and relaxed.

Take a look at this video sent in to CNN's I-Report by two German friends traveling in Bangkok. It shows that, yes, the tanks are on the ground, that there are -- troop presence. This is along one the Sukhumvit road in Bangkok, one of the major thoroughfares through the city at an intersection. They report about 30 soldiers around there and similar intersections nearby.

And, also, if we move on to pictures here elsewhere in Bangkok from this morning, from Mark Lopus, you can see the tanks moving into the city this morning. And it's not just Bangkok. Going north now, to the city of Chiang Mai, Thailand's second largest city, these from Julie Ann sent in. You can see that there are tanks there, too.

But, overwhelmingly, we're seeing that the atmosphere is relaxed. People are posing for photos with the soldiers. The soldiers seem relaxed, also.

And on the Thai blogs that we saw yesterday, passing along information, discussing updates and news, and also rumors, as programming was suspended on the televisions -- we're also seeing calm on the streets there being the message today -- Wolf.

BLITZER: Abbi, thank you very much.

Up next: Who should go in for the kill? If Osama bin Laden's whereabouts become known in Pakistan, should the U.S. go in, cross the border, and find him? Or should Pakistan get the job done? Jack Cafferty with your e-mail.

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

(COMMERCIAL BREAK)

BLITZER: As we told you earlier, President Bush tells me he will sign a bill to build a 700-mile fence along the U.S.-Mexican border, even though he previously insisted on comprehensive immigration reform. The Senate voted today to take up the measure, after it was approved for a second time by the House. Republicans are trying to show they're tough on immigration, an issue that's clearly at the center of a number of key House races.

Our senior political analyst, Bill Schneider, is covering one of those races in Colorado.

He's joining us from Denver -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, it's been said the center does not hold. That's wrong. The center is holding here, in Colorado's 7th Congressional District, where there is a wide- open race for a House seat.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Here in the Denver suburbs, we found something rare: a perfectly balanced congressional district.

(on camera): The district is one-third Democrats, a lot of them moving into new developments, like this one in Golden.

The district is one-third Republican, places like Rolling Hills -- nice view.

And a third independents, in places like Wheat Ridge, and these voters have the balance of power.

(voice-over): The district has a closely watched race for Congress between liberal Democrat Ed Perlmutter and a conservative Republican Rick O'Donnell. Aha. Polarization.

Not exactly.

LYNN BARTELS, "ROCKY MOUNTAIN NEWS": Both of them are really to one side of their parties, but they're racing to the middle, because of the November election, and because of the kind of district it is.

SCHNEIDER: Which is:

BARTELS: About as mainstream, suburban mom as can you get.

SCHNEIDER: You can see the Republican candidate racing to the middle on Iraq.

RICK O'DONNELL (R), COLORADO CONGRESSIONAL CANDIDATE: I think the strategy to win the world peace has been flawed.

SCHNEIDER: And on embryonic stem cell research.

O'DONNELL: Maybe there is a centrist approach, where we can allow some federal funding of safe embryonic stem cell research.

SCHNEIDER: But, on illegal immigration, it is the Democrat who is racing to the middle. ED PERLMUTTER (D), COLORADO CONGRESSIONAL CANDIDATE: Securing the borders, busting the organized crime element, and making employers abide by the law.

SCHNEIDER: The state legislature tried to give Democratic candidates political cover by passing one of the country's toughest bills against illegal immigration.

O'DONNELL: So, what the legislature here did took some steps in the right direction, but its hands are tied, because, ultimately, it is a federal and not a state issue.

SCHNEIDER: That could be a problem for the Republican.

BARTELS: Because it's perceived that a Republican president and a Republican Congress haven't done anything about immigration.

SCHNEIDER: In this case, racing to the middle means racing away from your own party.

(END VIDEOTAPE)

SCHNEIDER: The center does exist all over the country. What makes this Colorado district unique is that here, unlike anywhere else, the center has been empowered -- Wolf.

BLITZER: Bill Schneider, thanks very much for that.

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

CAFFERTY: You know that fence you were talking about that the House voted to build?

BLITZER: Yes.

CAFFERTY: They didn't appropriate any money to build it.

BLITZER: It's an authorization bill.

CAFFERTY: I mean, it's just all nonsense, what they're doing.

Anyway, we will talk more about that at 7:00 tonight.

President Bush told Wolf in his interview earlier today that he would give the order to go into Pakistan to kill or capture Osama bin Laden if he had good intelligence. Then, later today, Pakistan's president, Pervez Musharraf, said, thanks, anyway, but Pakistan can handle that job all by themselves.

The question is, should the U.S. go into Pakistan to catch Osama bin Laden, or, better yet, kill him?

Lana in Seattle: "Yes, we should go into Pakistan to capture bin Laden, but we won't. Bush is too busy marketing Ahmadinejad as enemy number one, just like he did with Saddam Hussein. And we're all taking the bait. The media also are responsible for not hammering this administration on why they haven't captured the mastermind of 9/11. Instead, you're focusing on Bush the bully's current playground fight."

Mike in Ohio: "It will not be a question of whether we should or should not. In reality, the current administration wants bin Laden captured in October, in order to bolster the Republican chances in the midterm elections."

Maurice in Wisconsin: "We should not make two mistakes in a row. We invaded Iraq on inaccurate information. Why should we believe Osama bin Laden's in Pakistan? I think it is more likely he's in New York or California or Florida."

Andy in Nevada: "Jack, we should go in after him. I don't think we can trust the Pakistanis to be diligent. And we need to have done with this once and for all."

Karl in Oklahoma: "Surely we would never send troops into a sovereign country without an invitation, right? Oh, wait."

And Terry in North Carolina: "Bush is doing such a good job of crushing democracy and helping the al Qaeda recruiters, that Osama doesn't even have to go to work anymore. No, we shouldn't go into Pakistan. Bin Laden is probably sipping chardonnay on the Riviera" -- Wolf.

BLITZER: Thank you, Jack, for that.

Still to come: Will she or won't she? The Hillary-Clinton-for- president question -- her husband answers.

That's coming up next.

(COMMERCIAL BREAK)

BLITZER: Now to the burning political question for 2008: Will Senator Hillary Clinton run for president?

Our Larry King asked a man who should know. That would be her husband.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

WILLIAM J. CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I will say what I have said until I'm blue in the face.

I think it would be an error for her to think about this now, until she is reelected, and has a chance to get a sense of the lay of the land, and what her options are for service in the Senate, and what's -- and what the presidential options are. That's what I believe.

So, I wouldn't even discuss it with her now.

LARRY KING, HOST, "LARRY KING LIVE": All right. And... (CROSSTALK)

CLINTON: ... the second thing I want to say is, if she did decide to run, I have no idea if she would win. You know, she would be the immediate favorite, but there's a million things that can happen.

(END VIDEO CLIP)

BLITZER: And you can see all of the Bill Clinton interview on CNN's "LARRY KING." That airs tonight -- "LARRY KING LIVE," 9:00 p.m. Eastern, only here on CNN.

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

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