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President of Pakistan Says After 9/11 United States Threatened to Bomb Pakistan Back To Stone Age If It Didn't Help U.S.; Commerce Department Has Lost Track of Computers Containing Personal Information; Hassan Nasrallah Speaks in Beirut

Aired September 22, 2006 - 17:00   ET

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


JOHN KING, CNN ANCHOR: And to our viewers, welcome to 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 real page turner, it involves a book deal, a plot twist and a tale of two men's words. Did the United States threaten to bomb Pakistan back to the Stone Age after 9/11 and if so, did the president know about it? Pakistan's president says if you want to know you will have to read his new book.

No surrender. No defeat. It's 12:00 a.m. in Lebanon where the leader of Hezbollah claims victory against Israel and tells cheering supporters they will never lay down their arms no matter what a United Nations resolution says.

And the United States government is missing computers that might contain your personal information, might you be at risk? Wolf Blitzer is off today. I'm John King, you are in THE SITUATION ROOM.

Our top story this hour, involves a bit of he says, he says. The president of Pakistan says that after 9/11 the United States threatened to bomb his country back to the Stone Age if it didn't help them find those responsible for the attack. But President Bush says if anyone in his administration said that, he did not know about that. The two men met at the White House today and answered questions on that and other topics.

CNN White House correspondent Suzanne Malveaux is here with the details -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, John, Pakistan's leader, Pervez Musharraf has survived several assassination attempts. He seized power in a bloodless coup seven years ago, he is head of a nuclear state and of course he is one of the closest allies in the war on terror, but as the latest controversy shows, his relationship with President Bush is a complicated one.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): President Bush and Pakistan's leader Pervez Musharraf, took turns flattering each other over their commitment in the war on terror.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I admire your leadership.

PERVEZ MUSHARRAF, PAKISTANI PRESIDENT: I trust President Bush.

MALVEAUX: Their alliance was forged out of necessity following the September 11th attacks. Mr. Bush desperately needed Musharraf's cooperation to go after bin Laden and the Taliban in Pakistan's neighbor, Afghanistan.

But Musharraf now says he was coerced into cooperating. In an interview for CBS' "60 Minutes" Musharraf said after 9/11 the U.S.' then deputy secretary of state Richard Armitage threatened his intelligence chief that Pakistan would face America's wrath if it did not help fight the terrorists.

MUSHARRAF: The director of intelligence told me that he said be prepared to be bombed, be prepared to go back to the Stone Age.

UNIDENTIFIED MALE: Richard Armitage said you should be prepared to be bombed back to the Stone Age.

MUSHARRAF: Yes.

MALVEAUX: When asked about the alleged threat with Mr. Bush by his side, Musharraf said ...

MUSHARRAF: I am launching my book on the 25th and I am honor bound to Simon and Schuster not to comment on that book before that date, so ...

BUSH: In other words, buy the book is what he's saying.

MALVEAUX: For now, Musharraf's loyalties lie with the royalties. As for the alleged threat, Mr. Bush said he knew nothing of the exchange.

BUSH: And then Secretary Colin Powell came in and said President Musharraf understands the stakes and he wants to join and help route out an enemy.

MALVEAUX: The man accused of making the threat, Richard Armitage, said Musharraf's story is totally false and he told him so when the two men met Thursday.

RICHARD ARMITAGE, FORMER DEPUTY SECRETARY OF STATE: I said it never happened. I wasn't authorized to say such a thing and I wouldn't.

MALVEAUX: But the post-9/11 message was clear and tough.

ARMITAGE: This was black or white, that Pakistan was either with us fully or not.

(END VIDEOTAPE)

MALVEAUX: Now, John, another prickly debate that has emerged this week from President Bush. He irked Musharraf in making statements to CNN on Wednesday, Wolf Blitzer, when he said if Osama bin Laden had been spotted in Pakistan, he would go after him with or without prior permission from the Pakistani government. Today both of leaders trying to downplay that riff, saying that they are in the hunt together.

KING: In the hunt together. A fascinating day at the White House. Suzanne Malveaux, thank you very much. Be careful if you ever get a book deal.

Now to Iraq where the unrelenting violence now has some people saying the situation there is even worse than the horrors the country suffered under Saddam Hussein. Our Pentagon correspondent Barbara Starr joins us live with that story -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, John, top U.S. military commanders in Baghdad are making it very clear that there's a long way to go to bring security to the capital.

(BEGIN VIDEOTAPE)

STARR (voice-over): The top U.S. commander for Baghdad is putting the new Iraqi government on notice about cracking down on militias and death squads.

MAJ. GEN. JAMES THURMAN, U.S. ARMY: I consider that issue a problem that the government must deal with immediately.

STARR: Major General Thurman says he needs 3,000 more Iraqi army troops in the capital immediately but are some Iraqis still reluctant to fight? The United Nations special investigator on torture says the violence is quote, "out of hand." Manfred Nowak told reporters "the situation is so bad that many say it is worse than in the times of Saddam Hussein."

THURMAN: Some of the soldiers, due to the distance, did not want to travel into Baghdad.

STARR: But Human Rights Watch estimated that during the 25-year reign of Saddam's Baath Party rule the Iraqi government murdered some quarter million of its citizens.

MAJ. GEN. WILLIAM CALDWELL: We have a sense from them that most Baghdad residents do not feel safe traveling outside their neighborhoods because of the current security situation.

(END VIDEOTAPE)

STARR (on camera): And John, while the military says they are making progress in the security situation, they also acknowledge that many Iraqi citizens of Baghdad remain deeply afraid of the torture and killings right outside their front doors, John.

KING: Incredibly troubling story. Barbara Starr for us at the Pentagon. Barbara, thank you very much.

The Commerce Department has lost track of computers that could contain your personal information. CNN homeland security correspondent Jeanne Meserve has the details.

Jeanne?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: John, 1,138 computers, 15 handheld devices, 46 thumb drives, lost, stolen or missing from the Commerce Department since 2001.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): More than half of the missing laptops were used by temporary census workers to compile sensitive personal information like salary, educational level and occupation. Some of the computers had no encryption but the Commerce Department says there were password and protections.

DAVID SAMPSON, DEPUTY COMMERCE SECRETARY: Not even the fieldworkers who collect the survey data can access that data once that survey has been completed. And we know of no instances in which any data has actually been breached or misused.

MESERVE: But experts say the threat of data theft exists even on computers with encryption.

LILLE CONEY, ELECTRONIC PRIVACY INFORMATION CENTER: It's like the key to your home. If you lose that key you can't be sure that someone won't find that key, won't make copies of that key and use that key.

MESERVE: In a resent congressional survey, the Commerce Department's information security program got a D-plus. That grade and the missing computers, indications that cyber-security has not been the priority it should be, one member of Congress says.

REP. TOM DAVIS (R), VIRGINIA: In a digital age we still have an analog government. And we are not taking all the precautions that we need to take.

MESERVE: Last May a Department of Veterans Affairs computer containing data on almost 27 million veterans was stolen. It was later recovered. And in July a Department of Transportation computer was stolen with information on 133,000 Florida residents.

But one of the most amazing things about the current case is that 113 of the missing computers were not stolen. Commerce just didn't get them back when workers were terminated.

(END VIDEOTAPE)

MESERVE: The Commerce Department is sending certified letters to those former employees to try to get the computers back. It is also examining inventory and management practices to correct what it admits is an unacceptable situation -- John.

KING: Jeanne Meserve. Jeanne, thank you very much.

And Jack Cafferty is with us now in New York with the "Cafferty File." Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: Isn't that nice for the government to admit that that's unacceptable to lose all those computers. They admit that's unacceptable.

KING: Your government at work.

CAFFERTY: I am comforted by that. Whom do you believe? Pakistan's President Pervez Musharraf says that after 9/11 the U.S. threatened to bomb his country, an ally, back to the Stone Age if it didn't cooperate where us in the war on terror.

Mr. Musharraf says the threat came from then deputy secretary of state Richard Armitage who denies making it. Armitage says he gave Pakistan's intelligence chief a strong message that they were either with us or against us but he never threatened force.

Meanwhile President Bush says news reports this last couple of days are the first he's heard of the alleged threat by his administration. That's a little troubling. Earlier this week the president told Wolf that if he had good intelligence on Osama bin Laden that he was in Pakistan, he would send our troops in there, even though Pakistan says its territory is sovereign and they would ham the Osama thing themselves.

So here's the question, what does it mean if the United States threatened to bomb Pakistan unless it cooperated in the war on terror, e-mail your thoughts to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile.

I don't know what's more troubling, that we may have threatened an ally with that kind of action or that the president just found out about it yesterday.

KING: Oh, I suspect we weren't getting a completely accurate characterization of the events five years ago, I am going leave it there.

CAFFERTY: You think?

KING: I think.

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 on THE SITUATION ROOM, sign up for our daily e-mail alert. Go to CNN.com/situationroom.

And up ahead, will Pakistan or the United States take out Osama bin Laden when and if he's found? I will ask assistant secretary of state Richard Boucher. He is standing by to join us live.

Also after years of fighting, a deal finally is reached on rebuilding Ground Zero. We'll have the details for you.

Well, Hezbollah claiming victory, blaming America and making alarming announcements about missiles. Stay with us. You are in THE SITUATION ROOM.

(COMMERCIAL BREAK)

The leader of Hezbollah is claiming victory over Israel and warning his group is still armed with thousands of missiles it has no intentions of giving up. Thousand of people, tens is of thousands turned out to hear Hassan Nasrallah speak in Beirut where he blamed the war on Israel on the United States.

(BEGIN VIDEO CLIP)

HASSAN NASRALLAH, HEZBOLLAH LEADER (through translator): The war was an American war by providing the arms and the planning and by giving a deadline after deadline to the enemy.

(END VIDEO CLIP)

KING: Our Beirut bureau chief Brent Sadler joins us now with more on this remarkable rally today. And Brent, I want to begin with the threshold question. This is the first time we have seen Mr. Nasrallah in public, a message for the Lebanese government in what he had to say today and a huge crowd there to listen?

BRENT SADLER, CNN BEIRUT BUREAU CHIEF: John, it was the first time that Hassan Nasrallah appeared in public since the outbreak of the month-long war. This was a very, very powerful, if you like, gesture of defiance against the United States, against its closest Middle East ally, Israel, and a message of defiance to Israel's prime minister, Ehud Olmert that despite the military onslaught Israel led against Lebanon, Hezbollah claimed to have some 20,000 rockets still in its arsenal.

Also quite clear that the organizational skills of Hezbollah to pull together a rally containing hundreds of thousands of Hezbollah faithful is still very much intact. In fact, Nasrallah said not only the organizational capabilities on have the group were intact but also its military capabilities.

Also a very defiant message to the U.S. backed government of Lebanese prime minister Fouad Siniora, Nasrallah calling on the government in effect to make way for a new unity Lebanese government that would see more pro Syrian cabinet ministers that would be in closer alliance not only with Hezbollah, but Hezbollah's chief allies, Syria and Iran -- John.

KING: And Brent, it was in the cessation of hostilities, the cease-fire deal, call it what you will, that the two Israeli soldiers who had kidnapped to start all this would be unconditionally given back, sent back to Israel, and then there would be negotiations over perhaps releasing some Hezbollah prisoners and other conditions including land that Lebanon wants back.

Those two soldiers have not been released. Any reference to them at all. And the perception has to be, it certainly is in Israel, that Hezbollah is not keeping its part of the deal. KING: Many levels, many questions there, John, most of which still unanswered. The facts stand for themselves, two Israeli soldiers, their abduction sparked the 34 day war still in Hezbollah's hands. Hezbollah has made it abundantly clear that Hezbollah will not release those two soldiers unless there is a prisoner exchange of Lebanese detainees, prisoners who have been held by the Israelis for many, many years.

Now, there could be back-channel negotiations that could involve the Italians, one of the key peace-keeping components now coming into place in south Lebanon. There could be back channels to create such a prisoner swap. But, certainly as those U.S. - or UN forces deploy in the south, Nasrallah making it abundantly clear, again, that he says it's not the job of those international forces to spy on Hezbollah and to disarm Hezbollah. Very clear on those points -- John.

KING: And Brent help us understand from your extensive sources there, the security concerns here, Nasrallah coming out in public like this, there had to be some concern if the Israelis knew he would be out in a public setting they might I try to take him out.

SADLER: That's why Nasrallah went underground as soon as the war began. He has been out of sight, as I said, went underground. He told the crowd that even 30 minutes before his surprise appearance, he was arguing with his security advisers about whether or not he should attend. Those who did think he would make an appearance today thought he would only display himself for a few minutes, but in effect he stood there for almost an hour and covered the main points of non- disarmament, no prisoner exchange now and the challenge of the U.S. backed government here.

These very important points for Hezbollah and its alliance with Syria and Iran -- John.

KING: Brent Sadler for us on this quite interesting and potentially troubling day in Beirut. Brent, thank you very much.

And as the war between Hezbollah and Israel raged on, photojournalists profiled the conflict frame by frame. But what happens when the pictures you see do not represent the situation on the ground. Our Mary Snow brings us an update on a photo flap controversy you might remember.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT (voice-over): It was early August. Israel and Hezbollah were at war when Reuters News Agency itself came under five for this photograph of a Beirut suburb under attack. This is the picture of what really happened. The doctored photo shows heavier smoke from the Israeli raid.

TOM GLOCER, CEO, REUTERS: It's just a particularly stupid and for me a very embarrassing manipulation of a photo to make it more dramatic, to make it more visually compelling.

SNOW: Reuters CEO Tom Glocer is speaking out for the first time about the photo controversy in an effort to repair the damage to his news agency's reputation.

GLOCER: I think the important thing for Reuters is we take it really seriously when we make a mistake we admit it quickly even if it's embarrassing -- and it's very embarrassing -- we take corrective action.

SNOW: Glocer says freelance photographer Adnan Hajj was fired and his 900 plus photographs pulled. He had been covering the Israel Hezbollah conflict. CNN was unable to reach Hajj. Reuters says Hajj told them he was adjusting a dust spot on a smoky photo. A claim he reiterated in a BBC interview.

Hajj also denied altering this photograph of an Israeli F-16 jet which Reuters says was doctored and should show only one tracer fire. Reuters admits fault because its photo editors didn't catch the altered images. It was a blog site that blew that whistle. Photo editors are worried the problem goes far beyond Reuters.

SIMON BARNETT, "NEWSWEEK" DIRECTOR OF PHOTOGRAPHY: That is what keeps me awake most Saturday and Sunday nights.

SNOW: Simon Barnett the director of photography for "Newsweek" and says digital pictures are easy to alter with software but alterations are not always easy to detect.

BARNETT: If it's well done, it's almost impossible. There is no software out there that can tell you the history of a photograph.

SNOW: Reuters says it is working on developing software that could detect whether a photograph has been changed. Until then the question -- just how many pictures have been altered, especially in areas of conflict like the Middle East?

GLOCER: I would think it's extremely likely that there are incidents all around us of manipulated images and staged images.

SNOW: Mary Snow, CNN, New York.

(END VIDEOTAPE)

KING: Coming up, are there rifts between the United States and Pakistan when it comes to the hunt for Osama bin Laden and the broader war on terror? I will talk about it with assistant secretary of state Richard Boucher.

Plus, a presidential plug for an upcoming book. Pakistan's leader promoting his own book in a most unlikely setting. Stay with us, you are in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

ZAIN VERJEE, CNN ANCHOR: John, medical experts say the FDA needs to start tracking drugs after they go on the market. Currently the agency doesn't have the resources to track safety problems with new drugs or to warn the public about problems. A panel from the Institute of Medicine wants the FDA to review all new drugs after five years to find problems such as increased risks of heart attacks caused by Vioxx.

Police are searching for a man who tried to carry a pistol through security at Baltimore Washington International airport. Screeners found a pistol in a carry on bag today but the bag's owner slipped through the checkpoint and just disappeared. Officers closed two terminals for an hour and a half but never located the passenger. Police say that there's no evidence the man was a terrorist.

A North Dakota jury returns its first death sentence in a century. A jury today sentenced Alfonzo Rodriguez Jr. to death for the murder of 22 year old Dru Sjodin. She vanished from the University of North Dakota in 2003. When officials found her body five months later, they discovered she has been raped, beaten and stabbed -- John.

KING: Zain Verjee for us in New York. Thank you, Zain.

After years of wrangling over money, other resources and responsibility a deal has finally been reached on who will rebuild Ground Zero. On one side the New York-New Jersey Port Authority. And on the other, developer Larry Silverstein. So what will downtown Manhattan look like? Our Abbi Tatton is following that story. Abbi?

ABBI TATTON, CNN INTERNET REPORTER: John, there is going to be an additional 10 million square feet of office space shown in these towers in this animation from lowermanhattan.info. The Port Authority says today the construction is going to begin as early as this month, two teams working 10-hour shifts daily.

The Port Authority is responsible for the Freedom Tower, the tallest of the towers here rising 1,776 feet. The Port Authority is also going to be excavating the site for the three towers alongside, coming into view there, designs for which were unveiled earlier this month.

Those three towers are the responsibility of real estate developer Larry Silverstein who owned the lease to the World Trade Center. And the Freedom Tower is scheduled for completion in 2012 and the other three towers have until the following year to complete construction -- John.

KING: Abbi Tatton. Abbi, thank you very much. And coming up in our 7:00 p.m. hour, a congressman often critical of the president says no outsider has the right to do the same. Democrat Charles Rangel of New York. He will be here in THE SITUATION ROOM and I will ask what he thinks about Venezuelan President Hugo Chavez calling President Bush the Devil.

And allies aligned. President Bush calls the Pakistani president a critical ally in the war on terror. But is President Pervez Musharraf cutting side deals that hurt that relationship?

(COMMERCIAL BREAK)

KING: You're in THE SITUATION ROOM where new pictures and information are arriving all the time.

Happening now, stronger than ever, never to be defeated. That's what the leader of Hezbollah told cheering supporters in Lebanon today. Hassan Nasrallah says not only did Hezbollah win the recent war with Israel but now it's regrouped and rearmed.

Also does his story accurately reflect history? The president of Pakistan says the United States threatened to bomb his country back to the Stone Age after 9/11 if it didn't cooperate and if you want to know more, he says, you will have to buy his book.

And for or against the United States? President Bush says the Pakistani-American relationship with the U.S. in the war on terror benefits this country. Yet others say Pakistan's recent deal making Afghan tribal leaders actually benefits the Taliban.

Wolf Blitzer is off today. I'm John King, you are in THE SITUATION ROOM.

More now on our top story, rifts in the united front the United States and Pakistan take pains to present in the war on terror, CNN's Brian Todd is following the story.

BRIAN TODD, CNN CORRESPONDENT: John, what we are being told about the reality on the ground in the fight against the Taliban in the hunt for bin Laden seems to split from what we heard today in the East Room of the White House.

(BEGIN VIDEOTAPE)

TODD (voice-over): He has the president's trust in the hunt for bin Laden.

BUSH: And when he says, if we find - when we find Osama bin Laden, he will be brought to justice, I believe him.

TODD: But is Pakistani President Pervez Musharraf cutting side deals that hurt the war on terror? Take the agreement between Pakistan and tribal leaders near the Afghan border who are sympathetic to the Taliban.

PRES. PERVEZ MUSHARRAF, PAKISTAN: There will be no al Qaeda activity in our tribal agencies or across the border in Afghanistan. There will be no Taliban activity in our tribal agencies or across in Afghanistan.

TODD: But U.S. military officials on the front lines tell CNN Taliban fighters have launched more rocket attacks and cross border raids on U.S. forces and their allies in Afghanistan since the deal was reached in early September.

PETER BERGEN, CNN TERRORISM ANALYST: They are concerned that behind this peace agreement -- because part of the agreement means that Pakistani forces will pull out of these areas is that al Qaeda and militant groups with an al Qaeda agenda will reorganize.

TODD: So what's the real reason behind the deal? Analysts say when Pakistani forces battle the Taliban, the Pakistanis get their heads handed to them.

STEVE COLL, AUTHOR, "GHOST WARS": His case to President Bush is, let me give this a try. If I can secure their cooperation, they will seal the border more effectively than my army can.

TODD: Which leads us back to Osama bin Laden and the public differences Musharraf has had with President Bush. If the trail leads to Pakistan, who goes after him. Here's President Bush's take.

BLITZER: Would you give the order to kill him or capture him?

BUSH: Absolutely.

TODD: Here's President Musharraf.

MUSHARRAF: Let's not get involved in how it ought to be done, by whom it ought to be done. There's total coordination at the intelligence level between the two forces.

TODD: And in the view of CNN terrorism analyst Peter Bergen.

BERGEN: In practice the United States will go in. If there is actual intelligence (INAUDIBLE) they will either go in with cruise missiles or they'll go in with Special Forces and CI personnel on the ground.

(END VIDEOTAPE)

TODD: And according to a top former CIA official the U.S. would go into Pakistan without asking permission and would seek forgiveness after the fact -- John.

KING: Brian Todd for us on a fascinating story.

And for more on this we're joined from the United Nations by Richard Boucher, he's the assistant secretary of state for South Central Asian Affairs. Richard thank you for joining us. I want to pick up on several of the points in Brian Todd's piece right there. How much of this is for domestic consumption in that President Musharraf says of course it would have to be up to me, Pakistan is a sovereign nation, if you want to go after Osama bin Laden, Pakistan will do it, not the United States.

Can you tell the American people watching this that if the president had intelligence, a local commander had intelligence that Osama bin Laden was somewhere in those hills, that the United States could act without having any diplomatic meetings, without getting caught up in Pakistani politics?

RICHARD BOUCHER, ASST. SECRETARY OF STATE: John, the United States is determined to get bin Laden, Pakistan is determined to get him, Afghanistan is determined to get him. We're going to cooperate and thus we do cooperate in this sort of thing. I don't want to -- you can't speculate at this point, where we're going to find him, when we're going to find him.

What circumstances, who has the ability to get to him. The thing is that we're all determined to get him and wherever he appears, we're going to get him. And I think you heard from President Musharraf and President Bush today of their determination in that fight.

KING: Explain this tribal deal as best you understand it. I'm told by a senior official involved at the White House that both president and Secretary Rumsfeld went into these meetings with President Musharraf quite concerned because if the Pakistani army pulls out, they are concerned because the history, because of relationships, that some of these tribal leaders do have good working relations with the Taliban, with al Qaeda and that those groups could be allowed to flourish again -- flourish more up in that part of the country. What specific assurances do you have that that's not the case?

BOUCHER: The first thing to note is the Pakistani army hasn't pulled out. The Pakistani army is operating there and they've said that they will continue to operate in this area. They have put a lot of emphasis on the tribal leaders. This area has been governed by different arrangements in the rest of Pakistan going way back to the British days.

And what they reached is an agreement with the tribal leaders, so that the local leaders, the elders, that there will be no Taliban, no al Qaeda, no Talibanization in these areas. And relying on the elders to help enforce that and to help make sure that's true. This has the potential to work. It's worked in the past to keep these areas peaceful. And we think we need to give it a shot.

This has been a strategy that President Musharraf has developed over time. He's kept us fully informed about how he was doing this. And we've said we want to be supportive. It does have promise and the potential to work and we'll see it through with him. But I don't think you can say right now you can declare it a failure. We'll have to see how it works.

KING: I want to take you back in time. You are the ambassador now for a very dicey region of the world. Many Americans will recognize you and remember you from your days at the podium, fielding questions from the journalists at the state department, including back at the beginning of all this, back around the days of 9/11. Secretary Armitage is out saying he never used the term we'll bomb you back into the Stone Age when he met with Pakistan's intelligence chief just after 9/11.

But Mr. Armitage does concede he had some pretty tough language and said here is a list of demands, a list of things we need, the United States needs from your government. Secretary Powell will call your president tomorrow to see if he's prepared to accept them. This was a with us or against us and if the answer is now, we can't promise you we won't end up with our troops in your country. Was it not? BOUCHER: This was a critical moment. It was a critical moment where we had made a choice that we were going to go after the Taliban and the terrorists that Pakistan had to make the choice. And Deputy Secretary Armitage presented that choice very clearly and very starkly to the head of the Pakistani intelligence. We have told this story a number of times.

I have heard people in the meeting tell about it. I have never heard phrases like that used. And Rich Armitage says that's not something he said. But certainly we all recognize this is a very serious meeting about serious issues that faced us and serious choices that President Musharraf had to make. And the next day or a day or two after whenever Secretary Powell spoke with President Musharraf, he said we're with you.

He said we're in this fight with you and subsequently, you know for years after that now they've been working with us, fighting against al Qaeda, fighting the Taliban, fighting the extremists and trying to bring Pakistan on a moderate and stable course that means economic development, education, all the other things the president has talked about today.

KING: Let me ask you lastly Richard, about your assessment of this activity, let's put the hunt for bin Laden aside for a second. We are hearing and seeing the Taliban resurgence in Afghanistan. There is now concerns about this tribal deal we were just discussing. You say there is some promise to this. I think many Americans would say why are we asking these questions again, five years after, five years plus after 9/11. Why isn't this fire put out if you will?

BOUCHER: The Taliban have been able to operate on both sides of the border, that's been a source of strength. But you also have the other affect and that's the Afghan government, the Afghan army, the NATO troops, the drug eradication people have been pushing out to the edges of Afghanistan, pushing into these provinces where we hadn't been in strength before.

And as we push out, we're challenging people, we're challenging the Taliban, the drug dealers, the criminals, sometimes the local leaders and they're pushing back. And so there has been more fighting. We've been very intense at times. We've seen more intensity from the Taliban.

But I think we're determined, the Afghans are determined and the Pakistanis are now determined. The Taliban as President Musharraf said is a threat to them as well as to the region and we realize we have to fight this fight. This fight has to go on, on both sides of the border and the Pakistanis have to be part of it.

KING: Richard Boucher, assistant secretary of state for South Central Asian Affairs. Thank you for joining us today. Very difficult issues, we thank you for your insight.

BOUCHER: Thank you very much John, it's good to be with you.

KING: Thank you Richard. Take care. Now let's go to Ali Velshi in New York for a story just in to CNN -- Ali.

ALI VELSHI, CNN ANCHOR: Hey John, the plot thickens in the scandal that threatens to embroil HP. We've just heard from Mark Hurd the CEO of HP. He said that he still does not have all the facts in the case, the pretext in case surrounding Patricia Dunn, the outgoing chairman of the company. But he said that a law firm that was hired to investigate last week has come up with some news that is very disturbing.

As you know, Patricia Dunn was supposed to leave as chairman of the board on January 18th and then remain on the board. That all changes. Patricia Dunn is now leaving the company. Mark Hurd, the CEO is becoming the chairman of the board as well for now at least. This company under investigation by the California attorney general, by the SEC and now by Congress. We'll be getting testimony next week in Washington. We'll stay on this story but the scandal is getting worse for HP -- John.

KING: Ali Velshi in New York. Thank you for that developing story Ali. Thank you.

And still to come right here, a high profile plug for a presidential book, we'll show you how Pakistan's leader raised some eyebrows while getting some laughs. Plus Jack Cafferty is wondering what it means if the United States threatened to bomb Pakistan back to the Stone Age unless it cooperated in the war on terror. Jack's standing by with The Cafferty File, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(WEATHER REPORT)

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

VERJEE: Hi John. Rescuers in Germany are searching for the victims of today's deadly train crash, 23 people are dead and 10 others in critical condition after a high speed magnetic levitation train collided with a repair vehicle that was accidentally parked on a track. The train was making a test run and most of the people on the train were engineers.

Nineteen construction workers in Afghanistan are dead after militants set off a roadside bomb and then opened fire on the damaged vehicle, three others were injured. Officials say the attack took place in the southern part of the country but they didn't say how many people were on the bus or who the laborers were actually working for.

Iranian Vice President Muhammad Ali Abtahi (ph) is warning the west not to attack. At a military parade in Tehran today he said his country wants peace but he told spectators that Iran was prepared to defend itself if attacked. Meanwhile, western nations are discussing what sanctions to impose if Iran fails to halt its nuclear program -- John. KING: Zain Verjee in New York. Zain thank you very much. A poll out this month shows that more than three-quarters of Americans think something needs to be done right away about global warming. Our Fredricka Whitfield joins us to share who's hearing that call.

(BEGIN VIDEOTAPE)

FREDRICKA WHITFIELD, CNN ANCHOR (on camera): John, they're not often seen side by side but these two mavericks certainly can draw attention and this time the issue is the environment.

(voice-over): It's another Republican revolt. This time the battle is on global warming. California Governor Arnold Schwarzenegger and New York's Mayor Michael Bloomberg have joined forces on the front line.

GOV. ARNOLD SCHWARZENEGGER, (R) CALIFORNIA: You can see a perfect example of how much he is getting done in New York, of how much we get done here in California and how little is getting done in Washington. It is unbelievable. They are frozen.

WHITFIELD: That slap at the federal government came while the pair toured a plant that makes alternative energy, namely hydrogen power. Their, Bloomberg announced a plan to cut carbon dioxide and other greenhouse gases in New York City. While Schwarzenegger reminded the media he's about to sign a bill which will cut California emissions of harmful gases 25 percent by the year 2020.

Schwarzenegger is running for reelection this year and it's up to him say California political watchers to distance himself from President Bush who is unpopular in this state. Many voters still remember that Schwarzenegger campaigned for President Bush in the last presidential race.

They may also remember his 2003 campaign for governor driving around in a Hummer, a gas guzzler compared to most vehicles. The governor's office says Schwarzenegger still owns four Hummers but has not used them much since taking office. He's often driven around by state vehicles. So will this new campaign help Arnold's image?

ALDEN MEYER, UNION OF CONCERNED SCIENTISTS: Well I mean clearly California is our largest state, it's the sixth or seventh largest economy in the world. New York is our largest city, it's the financial capital of the world. The symbolic effect of the two of them getting together and saying this is a real issue and we're going to show some leadership because Washington isn't.

WHITFIELD: Administration officials say the White House is addressing global warming through increased research and incentives to businesses to cut emissions.

(on camera): Schwarzenegger and Bloomberg aren't the only leaders outside the beltway taking the helm on global warming. Billionaire Richard Branson committing $3 billion of his own money to help fight the problem. And former vice president Al Gore with his documentary "An Inconvenient Truth", attracting audiences around the country -- John.

(END VIDEOTAPE)

KING: Fredricka Whitfield in Atlanta. Thank you Fred. And coming up in our 7:00 eastern hour, he's an outspoken critic of President Bush, now a spirited defender in the face of verbal attacks on the president by Venezuela's Hugo Chavez. Congressman Charlie Rangel joins us right here in THE SITUATION ROOM.

And straight ahead, pushing books at a presidential news conference. We'll show you publicity at the highest levels. Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: Lou Dobbs is getting ready for his program just a few minutes away at the top of the hour. Lou give us a preview?

LOU DOBBS, CNN ANCHOR: Thank you John. Coming up at 6:00 p.m. eastern here on CNN. Tonight the U.S. military says thousands of Iraqi troops are now refusing to serve in Baghdad. That raises new concerns about the entire U.S. strategy in Iraq. We'll have a live report from the Pentagon with the latest.

Also Congress all but ignoring what could be the single most effective solution to our illegal immigration and border security crisis. We'll have a special report tonight on why our lawmakers are simply refusing to crack down on the employers of illegal aliens in this country.

And communist China's leaders say our treasury secretary Henry Paulson is an old friend of China. Is U.S. economic policy now dangerously tilted in favor of our most aggressive and challenging global rival? We'll have that special report and a great deal more at the top of the hour, we hope you'll be with us. John King, back to you.

KING: Lou, see you in just a few minutes. Lou, thank you.

We have heard some strange words from world leaders this week. Let's say today was no exception. CNN's Tom Foreman tells us what happened during a news conference with President Bush and Pakistani President Pervez Musharraf.

TOM FOREMAN, CNN CORRESPONDENT: John, we've got these accusations being thrown around out there of the U.S. threatening to bomb Pakistan back to the Stone Age, that sort of thing. And yet when he was asked about this at the White House today amid those historic settings where some of the extraordinary things have happened, his answer was also, extraordinary.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): The questions are serious -- did Washington threaten Pakistan into the Afghanistan war? Would Pakistan have opposed the Taliban on its own? But the answer from the Pakistani president during his visit to the White House sounded more like a head of marketing than a head of state.

PRES. PERVEZ MUSHARRAF, PAKISTAN: I am launching my book on the 25th and I am honor-bound to Simon and Schuster not to comment on the book before that date, so --

BUSH: In other words, buy the book is what he's saying.

FOREMAN: A presidential plug is priceless, of course, with Musharraf's new book going on the racks this coming week, and already appearing on some Web sites. Simon and Schuster will not say how much they paid him for "In the Line of Fire." But like a major league author, even after he left the White House he kept pitching.

MUSHARRAF: So you'll have to buy the book and read it.

FOREMAN: Perhaps there's just something in the air that has world leaders hawking books right now or the Pakistani leader simply has reading on his mind. Asked about conflicts with India he recited a quote.

MUSHARRAF: Because I always believed that one should never suffer from paralysis through analysis.

FOREMAN: That's from a book by another leader who knew about controversy, Richard Nixon. World leaders often write about their experiences but only after they leave office.

BUSH: Buy the book.

FOREMAN: So for international relations, it certainly seems like a new chapter.

(END VIDEOTAPE)

FOREMAN: Quite a day. Two more celebrity books to look for this weekend, "Pluto, My Memories as a Former Planet." And of course one for Neanderthal Man, How Come Everybody is Being Bombed Back to Me." John?

KING: I'm just going to button it up on that one. What might come out next would be dangerous. Tom Foreman, thank you very much.

Now what do Oprah, the founders of Google and Ross Perot have in common? Answer, they're something I'm not, billionaires. That's according to the new Forbes list of the 400 richest Americans. For more on who made the list and who besides me didn't, here's our internet reporter Jacki Schechner. Jacki?

JACKI SCHECHNER, CNN INTERNET REPORTER: Oh but you're so rich in other ways John. This is a fun one. The entire list is online at forbes.com. You might not be surprised by many of these. Bill Gates from Microsoft is number one on the list with a net worth of $53 billion.

Number two is investor Warren Buffett who comes in with a net worth of $46 billion. Number three, you may not have heard of, Sheldon Adelson who made his fortune in Las Vegas development, a net worth of 20.5 billion. For the very first time ever the entire list is billionaires and I will not recommend this, but 116 of them never graduated from college.

The youngest guy on the list is the cofounder of Google, Sergey Brin, the oldest is a guy named John Simplot (ph) who supplies more than half of McDonald's French fries, he's 97 years old. There are 47 women on the list, Oprah is one of them. Martha Stewart is not -- John.

KING: So you're saying four years of college, all those student loans all for naught? Jackie Schechner thank you very much. Up next here, Jack Cafferty wants to know what does it mean if the United States threatened to bomb Pakistan back to the Stone Age unless it cooperated in the war on terror. Jack's standing by with your e-mails in The Cafferty File.

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KING: Time now to check back in with Jack Cafferty, Jack?

CAFFERTY: John thanks. The question this hour, what does it mean if the United States threatened to bomb Pakistan back to the Stone Age unless it cooperated in the war on terror. Gary writes from Olathe, Kansas, "It's the type of diplomacy so typical of the Bush administration and the reason why Americans are thought badly of in so many parts of the world."

Bill in Tennessee writes, "It means that this regime is holding Pakistan hostage like they're holding us hostage. This you're either with us or for the terrorists mentality is wearing really thin."

Anthony in Connecticut, "Here we go again with every e-mail, a negative knock on our president. Am I the only conservative who stops to listen to you as I channel surf? Are there no others that send you e-mails that don't sound like liberal sobbing cry babies who just want a democrat back in power in Washington?

Bruce in Massachusetts, "It means Pakistan touted by Bush as an ally in the war on terror was from the start motivated not by any genuine desire to fight against the Taliban, their erstwhile friends, but rather by Bush making them an offer they couldn't refuse. So much for the moral high ground."

Jay writes, "Pakistan's population is still so radical that most of them would like nothing more than to see us bombed back to the Stone Age. Musharraf is just a pragmatist. He got F-16s and lots of money versus a bombed out cinder of a country as we had to have access to their air space in order to get to the Taliban."

Fred in Washington writes, "Jack this is how this administration built a coalition of the willing."

If you didn't see your e-mail here, you can go to CNN.com/CaffertyFile and read more of these online. We post some additional ones there for your viewing pleasure -- John.

KING: You didn't make the billionaire list, I assume you fell just shy.

CAFFERTY: Yes, just by $999 million 900 and something.

KING: But who's counting. Jack Cafferty thank you very much. We'll see you right back here at 7:00 eastern. "LOU DOBBS TONIGHT" starts right now -- Lou.

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