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THE SITUATION ROOM

Gunman Opens Fire, Takes Hostages At School Near Bailey, Colorado; President Bush's Guests for Dinner Include Karzai and Musharraf; Reverend Jerry Falwell Interview; Democrats Have Been Hoping To Get Mileage Out Of High Gas Prices, But Pain At The Pump Is Easing; Suicide Attacks Hit All-Time High in Iraq This Week

Aired September 27, 2006 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: 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, breaking news. A Colorado school shooting with echoes of Columbine. A gunman is holding two hostages. Police say he's armed, dangerous and apparently determined.

Also breaking news here in Washington. A public feud between the presidents of Pakistan and Afghanistan. As President Bush hosts presidents Musharraf and Karzai at the White House tonight, the two neighbors have little appetite for each other. Both presidents have choice words for each other right here in THE SITUATION ROOM.

And see no evil, fear no Hillary Rodham Clinton? The Reverend Jerry Falwell implies the devil himself would be a more likeable presidential candidate than the New York senator. I'll ask Reverend Falwell about that.

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

The president of Pakistan and Afghanistan swipe insults just before they sit down to discuss differences over dinner. In a moment, my exclusive interview with the Afghan president, Hamid Karzai.

First, though, that breaking news out of Colorado with dramatic reminders of the Columbine school shooting. Right now a gunman is holding hostages at a Colorado high school after going on a wild and unexpected rampage, reportedly firing several shots.

Let's get more now from our security analyst, Mike Brooks. He's joining us on the phone -- Mike.

MIKE BROOKS, CNN SECURITY ANALYST: How are you doing, Wolf?

As I told -- reported earlier in the show, a law enforcement source close to the investigation has told me that there is two hostages, both of them women, and he's reporting that one of the women is actually the alleged -- the wife of the alleged gunman. They're still trying to figure -- make sure that that information is correct. There was initially six hostages. There are now -- he released four of them. And as a former hostage negotiator, Wolf, I can tell you, that is -- that is a great sign. But if it does turn out to be a domestic situation, one of the things we do have to worry about is a possible homicide-suicide situation in that classroom.

BLITZER: And we don't know yet if all the students at the two schools, the high school, the middle school, have been successfully evacuated, do we?

BROOKS: I was told that most of the students were -- they did get out. You know, in the high school there are 467 students. In the middle school, 350. We saw earlier in the show some of those students being evacuated by buses, but all of the students are supposed to be safe, and there's no reports of any injuries as of right now.

BLITZER: We'll stay on top of this story, together with you, Mike. Thanks very much for that update.

Now to that exclusive engagement and a SITUATION ROOM exclusive. Happening now, at least very, very soon, dinner and very big reservations.

Just a short while from now it could be a lively meal over at the White House with hot food and cold shoulders. The guests include two presidents with appetites for insulting each other and the leader of the free world who hungers for them just to get along.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): I sat down with President Hamid Karzai today, 24 hours after Pakistan's Pervez Musharraf came in to THE SITUATION ROOM and had some harsh words for his neighbor.

PRES. PERVEZ MUSHARRAF, PAKISTAN: But denying turning a blind eye like an ostrich. He doesn't want to tell the world what are the facts for his own personal reasons.

BLITZER (on camera): That's a very, very strong assertion, turning a blind eye like an ostrich for your own domestic political reasons. You're refusing to deal what he says is the root cause of this explosion of terrorism in Afghanistan and spilling over into Pakistan, your failure to do what you should be doing.

PRES. HAMID KARZAI, AFGHANISTAN: He has said that before as well. Afghanistan is doing all it can, together with the international community. We're losing people every day.

BLITZER (voice-over): President Karzai says the source of the violence in his country can be traced back to Pakistan.

KARZAI: Somebody else must be doing it, and that somebody else is the sanctuary in Pakistan to terror.

BLITZER: President Karzai disputed President Musharraf's claim that exiled Taliban leader Mullah Mohammed Omar is hiding out in Afghanistan, saying he has information that Omar is in Pakistan. And he called on Mr. Musharraf to take action against madrassas, religious schools in Pakistan that he says are training grounds for extremists and terrorists.

(on camera): Is President Musharraf like an ostrich, turning a blind eye to these problems in Pakistan that you're referring to?

KARZAI: No, I wouldn't say that. He's a capable person. He may not be turning a blind eye to all of the things.

He told me in Kabul -- he said, "President Karzai, don't doubt my intentions. Doubt my capabilities."

Now, it is a question of capabilities, we'd like to tell him to raise those capabilities. The United States is there to help him raise those capabilities. The rest of our allies are there to raise his capabilities.

BLITZER (voice-over): Another sore point between Karzai and Musharraf, Pakistan's deal with tribal elders along the border with Afghanistan.

KARZAI: President Musharraf when he was in Kabul explained this to me, that this was a deal good for all of us. That this deal would stop the activities of terrorists this side of the border. Now, he told me in Kabul that this deal was signed with the Taliban.

BLITZER (on camera): Do you believe him?

KARZAI: Now I'd like to expand a little here. Now they say that the deal is with some of the tribes and the Taliban. Well, I read the deal in detail today again before this interview, and the deal clearly says the deal with the Taliban and some tribal chiefs.

BLITZER: You're not convinced this is a good thing.

KARZAI: I'm not convinced at all.

BLITZER (voice-over): The tensions will be high and so will the stakes when presidents Karzai and Musharraf dine with President Bush tonight. The war on terror and the hunt for Osama bin Laden hang in the balance.

(on camera): What will it take for you and President Musharraf to make up and work together instead of blaming each other for these problems?

KARZAI: Good intentions, sincerity, confidence, and verification.

BLITZER: Are you ready to do your part?

KARZAI: Absolutely.

(END VIDEOTAPE)

BLITZER: All right. Let's get some analysis now on what we can expect over the next few hours.

Our White House correspondent, Suzanne Malveaux, is joining us. Our senior national correspondent, John Roberts, is here in Washington as well.

First to you, Suzanne. Set the stage for us. We have these two powerful allies of the United States, very critical allies, Karzai and Musharraf, they're coming over to meet with the president. What do we expect?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, certainly what we expect to hear from President Bush is he's really going to try to reassure both of these leaders that they have the United States' support. That was the one thing that was common, both of those leaders in your interviews saying they really felt weakened in some way and they needed some help.

President Bush is going to try to reassure both of the leaders that they have that kind of help. And there's already a deal in the work with Pakistan over F-16s. There's already aid to Afghanistan.

Both of these leaders are going to be pushing for more. So while we don't expect necessarily any kind of news or announcements from President Bush, he certainly is going to try to reassure both leaders that, yes, we are going to try to give you that kind of support so that both of you can become stronger leaders, because the bottom line here, Wolf, is -- is that the Bush administration really needs both of these leaders to work together.

It is critically important in finding Osama bin Laden, Mullah Omar, but also from a symbolic political standpoint as well. The president has really made this freedom agenda, and Afghanistan in particular as a model in success in democracy, as his cornerstone of his foreign policy. So he desperately needs this to work.

BLITZER: The stakes, John, for the president of the United States are enormous right now, certainly coming only a few weeks before the election. But the stakes in the war on terrorism -- on the war on terror are enormous as well.

JOHN ROBERTS, CNN SR. NATIONAL CORRESPONDENT: Oh, huge, Wolf. And, you know, these are two of the three most important nations when you're talking about that war on terror, perhaps Iraq first, Afghanistan second, and Pakistan third.

President Bush can ill afford to lose either one of these leaders, particularly Musharraf. I mean, if not Musharraf, who else is he going to work with and get the level of cooperation in Pakistan that he's got with Musharraf now. So he has to give them some latitude, but at the same time try to keep them to say, let's stay focused on the big game here.

And more than that, get cooperation between the two of them as well. And the big point here, the big point of contention is over the Taliban. Afghanistan saying that Pakistan is responsible for the resurgence of the Taliban. Pakistan saying Afghanistan's not doing enough.

But I've investigated this for tonight's "PAULA ZAHN NOW" show, Wolf, and I talked with our terrorism consultant, Peter Bergen, today, who reminds me that it's Pakistan's longstanding policy of "strategic depth" to have the Taliban in control of southwestern Afghanistan so that if India were to attack Pakistan, Pakistan can retreat into that area, regroup, and prepare to come back again.

So this Taliban really is this big problem that President Bush has got to try to solve between these two countries.

BLITZER: And John raises -- makes a good point, Suzanne. Pakistan is a nuclear country, it has a nuclear bomb. And if something were to happen to Musharraf and others might take over, the stakes for the region, the relationship with India, also a nuclear power, you can just imagine the nightmare scenario that could unfold.

MALVEAUX: Well, it would be a disaster, Wolf. And the Bush administration really realizes they have got to hang on to Musharraf here. I mean, he has survived two assassination attempts, he has seized power in a bloodless coup. And there's been a lot of complaints over whether or not there really is a democratic state that's operating out of Pakistan.

Well, they're pushing democracy, but they're pushing cooperation a lot harder because they desperately need him. They need him to be strong, they need him to stay in that position, and essentially they need him to push harder in the fight against the Taliban and al Qaeda. And that is something that the Bush administration has been making very, very clear.

BLITZER: John, you know, everybody knows these two leaders, the presidents of Pakistan and Afghanistan, don't like each other, but what surprised me over the past few days is how willing they are publicly to make that clear, even as they get ready for this big dinner with the president tonight.

ROBERTS: It is kind of surprising, Wolf, and I think that you've just sort of upped the potential here for a food fight tonight at the White House by talking to both of them about what the other one's thinking.

But this is the hurdle that President Bush has to get over here. It's this finger-pointing. It's the "No, it's not my fault, it's your fault" game that both of them are playing.

There are problems on both sides of this border. Some of them might seem intractable at the moment, but the president has to do everything that he can to try work with these two people to try to bring them together into common goals. But right now, because of competing national interests, local politics, Wolf, that's a very different hurdle to get over.

BLITZER: John Roberts, thanks very much.

Suzanne Malveaux, we'll be checking with both of you throughout the next several hours.

Let's check in with Jack Cafferty right now.

Jack, I'm beginning to think maybe I shouldn't have done these interviews yesterday and today. Should I feel guilty?

JACK CAFFERTY, CNN ANCHOR: Yes, I don't know, Wolf. If war breaks out between Pakistan and Afghanistan, you know, you may have some guys coming by and knocking on your door asking for transcripts.

Ordinarily, we don't do a question two days in a row, but this is important enough to be an exception. The House just passed President Bush's bill to redefine the treatment of detainees, and the Senate's expected to do the same thing tomorrow. Buried deep inside this legislation is a provision that will pardon President Bush and all the members of his administration of any possible crimes connected with the torture and mistreatment of detainees dated all the way back to September 11, 2001.

At least President Nixon had Gerald Ford to do his dirty work. President Bush is trying to pardon himself.

Here's the deal.

Under the War Crimes Act, violations of the Geneva Conventions are felonies. In some cases, punishable by death.

When the Supreme Court ruled the Geneva Conventions applied to al Qaeda and Taliban detainees, President Bush and his boys were suddenly in big trouble. They had been working these prisoners over pretty good.

In an effort to avoid possible prosecution, they're trying to cram this bill through Congress before the end of the week when Congress adjourns. The reason there's such a rush to do this, if the Democrats get control of the House in November, well, this kind of legislation probably wouldn't pass.

You want to know the real disgrace of what these people are about to do or are in the process of doing? Senator Bill Frist and Congressman Dennis Hastert and their Republican stooges apparently don't see anything wrong with this.

I really do wonder sometimes what we're becoming in this country.

The question is this: Should Congress pass a bill giving retroactive immunity to President Bush for possible war crimes?

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

BLITZER: Jack, thank you.

Jack Cafferty will be back shortly.

Up ahead, a battle growing over the partial release of that intelligence report. Some want the full report released. Others say even the partial release has already done damage. We're going to have details of the debate.

And grim news coming in from the U.S. commanders in Iraq on suicide attacks. We'll get the latest live from the Pentagon. We'll also go to Baghdad.

Plus, Hillary Rodham Clinton and Jerry Falwell and Lucifer. Politics taking a devilish turn. The Reverend Falwell is standing by live to join us. We'll talk about the controversial remarks he's making about the senator.

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

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Politics are taking a devilish turn. First Venezuela's president repeatedly called President Bush "the devil" in a United Nations speech. Then the Reverend Jerry Falwell told an audience that he hopes Senator Hillary Rodham Clinton runs for president in 2008, saying because nothing -- "Nothing," he says, "will energize me constituency like Hillary Clinton. If Lucifer ran he wouldn't."

The Reverend Jerry Falwell is joining us now in THE SITUATION ROOM. He's joining us from Lynchburg, Virginia.

You've caused quite a little stir out there, Reverend Falwell. I've spoken to you obviously many times over the years.

First of all, I want to give some context why this is becoming a story. Listen to what Hugo Chavez himself said at the United Nations.

(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.

(END VIDEO CLIP)

BLITZER: And then a day or two later you said this, Reverend Falwell. Listen to this.

(BEGIN VIDEO CLIP)

FALWELL: I certainly hope that Hillary's the candidate. She has $300 million so far. But I hope she's the candidate because nothing will energize my constituency like Hillary Clinton. If Lucifer ran, he wouldn't.

(END VIDEO CLIP)

BLITZER: It was a little hard to hear. If Lucifer ran, you said, he wouldn't energize the base of the party. You understand why you're choice of words, "the devil," coming after Hugo Chavez has caused this uproar?

REV. JERRY FALWELL, CHANCELLOR, LIBERTY UNIVERSITY: Well, a totally different context. I said something that I believe with all my heart, that if the Democrats choose Hillary as their -- as their frontrunner, their presidential candidate in '08, this will energize people of faith in this country more than any other person. And then you heard the laughter.

Purely tongue-in-cheek and in joking, I said not even Lucifer could. Well, obviously Lucifer is not going to run, and I was not calling Hillary Lucifer. I left that to Mr. Chavez, who, by the way, should have been deported. He instead made his circuit in African- American churches, where he got standing ovations, sadly.

But neither the Democrats nor the Republicans defended our president. But in this case, the "L.A. Times" got all shook up that I said that she, Senator Clinton, would energize our people.

In fact, that is what would happen. And as long as the -- as the Republicans give us a good, conservative, pro-life, pro-family candidate -- and that's who was, by the way, at the conference. We had a two or three day conference there. Republican wannabe presidents were there like Newt Gingrich and senators Santorum and Allen and Brownback and so forth.

They were all there and we -- the idea was to get our people, a couple thousand pastors, charged up for '08.

BLITZER: And obviously mentioning Hillary Clinton does that.

Her spokesman said this in an e-mail to CNN after your remarks were publicized.

"Working for someone who believes in the Golden Rule, we're not going to engage in such vitriolic discourse. But it seems that a new low has been reached in demonizing political opponents."

Do you want to revise or amend, do you want to apologize to Senator Clinton for that -- making that comparison, making that reference to the devil?

FALWELL: Of course not, because I did not demonize her, and I would never do that to her or anyone else. I simply told a joke after I made the statement that I believe she would be our best candidate to oppose in '08, and I said that she'll -- most of the experts are saying she'll have $300 million to do it. I think we'll have 80 million people of faith in this country, evangelicals, to prevent her winning.

BLITZER: So you don't want to change anything?

FALWELL: No, I won't change a thing. That's exactly...

BLITZER: And you don't want to have any special words to Mrs. Clinton?

FALWELL: Well, I think she knows in her heart of hearts that if she listened to what you just listened to there, as everyone did, that part was a joke. I would never call anyone the devil.

There's only one devil, and it's not Chavez or President Bush or Hillary Clinton. He's a real devil, and he's somewhere else.

But on our human scene, nobody expects Lucifer to run for president in this country. But I would -- I would very much believe what I did say, and I have nothing to change.

BLITZER: I'm going to read to you two poll numbers from our recent CNN poll. First of all, a favorable -- favorable number as far as Hillary Clinton is concerned.

She gets a 50 percent favorable rating among those questioned in our CNN poll, 45 percent unfavorable, 5 percent unsure. That's a higher favorability number than President Bush.

And on this other question, "Which party would better handle moral issues -- moral issues? Democrats get 47 percent, Republicans get 40 percent.

How concerned are you right now about those numbers and the potential impact it could have in the midterm elections?

FALWELL: Well, I certainly wouldn't argue with the numbers because I haven't any idea what's in the hearts of Republicans or Democrats. I'm not a Republican or a Democrat. I am a strong social conservative who could just as easily vote for a Democrat as a Republican if he or she stood right on the life and family and freedom issues and free speech issues and religion, freedom -- religious freedom issues, and so on. So I really don't take any umbrage to those polls.

BLITZER: Reverend Falwell, as usual, thanks very much for joining us.

FALWELL: Thank you.

BLITZER: Reverend Jerry Falwell joining us here in THE SITUATION ROOM.

And coming up, is there a chilling effect from the partial release a classified intelligence report? CNN's Brian Todd standing by with details of a growing debate with huge implications.

Plus, U.S. military officials now reporting the worst week yet for suicide attacks in Iraq. We're going to go live in the Pentagon and to Baghdad.

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

(COMMERCIAL BREAK) BLITZER: In the battle for Congress, many Democrats have been hoping to get mileage out of high gas prices, but now the pain at the pump is easing and some voter anxiety appears to be easing as well.

Let's bring back our senior political analyst, Bill Schneider -- Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Wolf, gas prices have been going down. Does that mean Republican prospects are looking up?

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): The drop in gasoline prices seems perfectly timed for the midterm election. Democrats insist the issue will still work for them.

REP. NANCY PELOSI (D), MINORITY LEADER: Energy costs for America's families over in the course of a year makes a tremendous difference, the increase in energy costs. They will still be an issue in the campaign.

SCHNEIDER: But the latest CNN poll conducted by the Opinion Research Corporation shows a sharp drop in the number of Americans who say gas prices will be an extremely important issue in their vote. Lower gas prices give President Bush an opening to talk up the economy.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our economy s maintaining solid growth and performing in line with expectations.

SCHNEIDER: Do people believe the economy is doing better? Actually, they do.

In early September, 44 percent said the country's economy was in good shape. Now 59 percent feel that way. Some people believe the fix is in, that President Bush deliberately manipulated gas prices to help Republicans. Energy experts poo-poo the idea.

UNIDENTIFIED MALE: Surely if you picked up the phone and made, you know, five or 10 strategic phone calls, you might be able to influence prices to some degree, but, you know, I think that's a fairly far-fetched theory.

SCHNEIDER: Maybe. But 42 percent of Americans believe it.

The bigger question is this: If Americans are feeling better about the economy, why aren't Republicans doing better in the polls?

Take a look at people who feel the economy is good, but who oppose the war in Iraq. Which issue counts more?

Three-quarters of antiwar voters who feel good about the economy give President Bush a negative job rating. Seventy-one percent say they'll vote for a Democrat for Congress.

(END VIDEOTAPE)

SCHNEIDER: The reason why gas prices and the economy are not having a bigger political impact? One word: Iraq -- Wolf.

BLITZER: Thank you, Bill.

Bill Schneider is part of the best political team on television.

And don't forget, you can now get constant updates from CNN's political team online with the CNN "Political Ticker." An easy way to do it, simply go to CNN.com/ticker.

And you're in THE SITUATION ROOM, where new pictures and information are arriving all the time.

Happening now, keeping secrets. The Bush White House rejects a call by Democrats to declassify all of that intelligence report on the war on terror. The president released some of the report yesterday after a key finding was leaked to the news media that the Iraq war has helped recruit new Muslim extremists.

New bloodshed in Baghdad. Twenty-three people died in bombings and other violence in and around the Iraqi capital today. At least 10 of those were killed in a shootout near a Sunni mosque. U.S. military officials say suicide attacks in Iraq hit an all-time high this week.

A hostage drama outside of Denver. Two people are being held at a high school by a gunman who claims to have a bomb. Hundreds of others have been evacuated and are now in safe locations.

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

There are new developments in the brewing battle over a leaked report that discusses Iraq and the war on terror. The report now out in the open, at least parts of it, concludes Iraq has caused a rise in the number of people who want to kill Americans.

How might the leak actually hurt efforts to catch them? Will it?

CNN's Brian Todd is joining us now with more on that -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf today I spoke with four former CIA officers, two of them were senior officials. Their chilling conclusion, the broader damage from this leak to the war on terror is much greater than the actual facts in the document might indicate.

(BEGIN VIDEOTAPE)

TODD (voice-over): The White House holds firm, it will not release the bulk of a classified National Intelligence Estimate on terrorism. That would risk the lives of agents, officials say, compromise sources and methods, and ...

TONY SNOW, WHITE HOUSE PRESS SECRETARY: Would you want our intelligence analysts who are going to be able to give you their free and full views of what the situation is? If they think that their work is constantly going to be released to the public, they're going to pull their punches.

TODD: But the damage has already been done, say intelligence experts.

JOHN MCLAUGHLIN, CNN NATIONAL SECURITY ADVISER: I think having a political food fight about this estimate will have a chilling effect on analysts. I mean they write these things as serious documents for serious deliberation, not to be cherry picked by both sides to score political points.

TODD: John McLaughlin and former CIA officers we spoke to agree. This document doesn't reveal much sensitive information.

MCLAUGHLIN: A lot of it comes as no surprise such as the point that the global jihadist movement is decentralizing.

TODD: Or the finding that the Iraq war has rallied jihadists groups to their cause. But analysts say this leak shows a chink in America's armor. An intelligence process that's become heavily politicized, thus more vulnerable.

UNIDENTIFIED MALE: Friendly countries begin to wonder whether their sensitive information passed to us is secure.

TODD: There's also the spin factor. As one former CIA officer put it, Al-Jazeera will get this material and the jihadists will use it for propaganda. And there's cumulative damage. This is the fifth leak of a major intelligence operation in recent months, after the warrantless wiretapping program, the monitoring of terrorist financing, the collection of phone records, and the CIA secret prisons leak.

(END VIDEOTAPE)

TODD: The result of all those leaks put together, former CIA officers say terrorist networks now know more about how they're monitored than they've ever known before -- Wolf.

BLITZER: All right Brian, thank you very much. Brian Todd reporting.

There's also some disturbing news coming from U.S. military officials in Iraq. They're now reporting that suicide attacks have hit an all time high. Let's bring in our Pentagon correspondent Barbara Starr, she's got these disturbing details. Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, it has been a very tough week for U.S. troops in Iraq, but top U.S. military commanders behind the scenes are sending just one message to their Iraqi counterparts. Get your troops out on the street and get those Iraqi troops busy.

(BEGIN VIDEOTAPE) STARR (voice-over): Just a few days into the beginning of the holy month of Ramadan attacks have risen in Iraq, as predicted, especially in Baghdad where most of the sectarian violence is occurring.

MAJ. GEN. BILL CALDWELL, MULTINATIONAL FORCE IRAQ: In terms of attacks, this week's suicide attacks were at their highest level in any given week, with half of them targeting security forces.

STARR: In Baquba four women were killed in a firefight. The military said it is rare to encounter Iraqi women in violent situations. No one is sure if they were involved with the insurgents. The U.S. continues to emphasize what commanders say is the ineffectiveness of the attacks. Sixty-six U.S. troops have now lost their lives in Iraq during the month of September.

CALDWELL: Almost 50 percent of the vehicle-born improvised explosive devices were suicide attacks. The clear intent of these high-magnitude attacks are to produce mass casualties. But while we are seeing this increase in overall attack numbers, their effectiveness has not increased.

STARR: The threat of IEDs remains significant. It's now believed insurgents alter their tactics about every three weeks, changing how they place the bombs and how they detonate them. Troops on foot patrol are the most vulnerable. The Pentagon is now spending $80 million to buy 4,000 jammers that troops can wear and activate to keep IEDs from exploding around them.

(END VIDEOTAPE)

STARR: But, Wolf, all this very disturbing news about what the troops are facing in Iraq also comes during the same week the Defense Department awarded a contract worth billions of dollars to a private firm to monitor news organizations' coverage of the war in Iraq and CNN is going to be one of those organizations that the government monitors, Wolf.

BLITZER: All right, Barbara, thanks very much. What a story that is. Do that separately.

Coming up more of my exclusive interview with the president of Afghanistan, Hamid Karzai getting ready for dinner with President Bush and the president of Pakistan Pervez Musharraf, who he's been trading some rough words with. In our 7:00 p.m. eastern hour Mr. Karzai will tell you what he thinks of the Pakistani president who just yesterday told us that President Karzai is turning a blind eye like an ostrich when it comes to the war on terror.

And he's Osama bin Laden's right hand man. Right now he's said to have a special message for President Bush, even for the Pope. We're going to tell you what it is. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: For more now on the situation inside Iraq let's go to Baghdad, Michael Ware, our correspondent is standing by. First of all Michael, on the extraordinarily high number of suicide bombings this week more than what, ever before? I was pretty surprised to hear that.

MICHAEL WARE, CNN CORRESPONDENT: Well, what we're seeing is a regenerated al Qaeda, Wolf. We saw the death of the leader of al Qaeda in Iraq, Abu Musab al-Zarqawi in June in a U.S. air strike. What this organization is now displaying is its almost unlimited ability to replenish itself.

They lose its larger than life charismatic leader, they replace him immediately with another hard liner, and there is a spike in suicide bombings. And this is compared to a time when Zarqawi himself was able to unleash 11 suicide car bombs in the capital in one day. So you can tell where things are going, Wolf.

BLITZER: There's a new poll, you might have seen it, conducted by the University of Maryland which says that seven out of 10 Iraqis favor a commitment by U.S. led forces in Iraq to withdraw at least within a year. Seventy percent want the United States troops out within the next year. Is that a surprise to you?

WARE: Not really, Wolf, no. I mean there's been a long-term resentment towards the U.S. presence here. I mean it's only been described in one term, and that's occupation. Be that Sunni, be that Shia. The only people in favor of the U.S. presence here in any ongoing capacity are the Kurds to the north. Otherwise, the Arab Iraqis just want the Americans to get out of the way and let them get on with business. Now, that could be a very bloody and ugly affair, nonetheless, that's what the people want, Wolf.

BLITZER: So the bottom line right now is you take a look at the immediate security situation in and around Baghdad, elsewhere in Iraq is what?

WARE: Well, to the north with the Kurds it's relatively quiet, however, we see al Qaeda groups or al Qaeda aligned groups regenerated and reformed there. Particularly Ansar al Islam. One of the groups that President Bush targeted during the invasion of 2003, he claimed that group was decimated, yet it's back with a vengeance.

In the south, the south is much more heavily controlled by the Shia militias. Now they're doing a tradeoff here and their Iranian backers. They want to destabilize the coalition, Brits and Americans in the south, and this is what U.S. military intelligence and British intelligence say.

They want to destabilize these forces just enough so that they're on edge and remain in a forced protection mode, and as long as they're focused on that, they don't worry about what else is going on. So by trading off a relatively stable environment this allows the militias and their foreign backers to further entrench themselves within the roots of power in the south -- Wolf.

BLITZER: All right Michael, thanks very much. Michael Ware reporting from Baghdad. There's a developing story, we're picking up details online. Potentially a new tape from the al Qaeda deputy leader Ayman al Zawahiri. Let's bring in our internet reporter Jacki Schechner, she's monitoring the situation online. What are we picking up Jacki?

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, this morning this banner appeared on jihadist Web sites. We've blown it up for you, the lower banner here has just made it bigger so you can see it closely. And it allegedly announces that we can expect to see a new message soon from Ayman al-Zawahiri.

It is not clear whether that's going to be an audiotape or a videotape, but allegedly it's going to talk about President Bush, it's going to talk about the recent controversial comments made by Pope Benedict XVI concerning Muslims, and it's going to allegedly address the conflict in Darfur. The message would be titled the crusaders war.

Now we've spoken to Laura Mansfield who is an online terrorism expert who said when we see a banner like this we then expect the message to be released online or online and to the media at the same time. Of course we're going to continue to monitor this, and as soon as we know more we will bring it to you -- Wolf.

BLITZER: And still interesting we're hearing from him, Zawahiri, not hearing from Osama bin Laden. We'll watch the story Jacki with you.

Still to come, a gunman goes on a rampage in Colorado, and right now police say that the gunman is armed, dangerous, and holding hostages. In a moment, we'll have the latest on this standoff.

And the woman who decided not to run against Senator Hillary Clinton is embroiled in a new New York controversy. We're going to have details. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Check back with Zain Verjee. She's taking a closer look at other important stories happening right now -- Zain.

ZAIN VERJEE, CNN ANCHOR: A hostage standoff at a school in Colorado. Police say that an armed man is holding two people at the Platte Canyon High School in Bailey, Colorado. The gunman is now isolated, he's in a classroom. There are reports that one of the hostages could be the wife of the gunman. Police say that the man may have a bomb there. They're checking it out right now. The bomb squad and a SWAT team are on the scene. Here is what we have as some of the latest comment from the Jefferson County Sheriff's Department.

(BEGIN VIDEO CLIP)

JACKI KELLEY, JEFFERSON COUNTY SHERIFF'S DEPT.: I don't know whether he has the ability to monitor the media coverage, and that's why we're careful not to say too much about SWAT operations or the bomb squad or specific locations. Obviously we want him to reach out to those people who are trying to negotiate with him. We'd like to know what he wants. We'd like to do what we can to resolve the situation.

(END VIDEO CLIP)

VERJEE: She went on to say negotiations are ongoing with the gunman. She said that there is sporadic communication with him, some of it by telephone. Wolf we're going to keep you updated on developments.

BLITZER: All right Zain. Thanks very much. Let's get a bit more now on that hostage situation at that high school in Bailey, Colorado. Our internet reporter Jacki Schechner once again standing by with details. She's picking up online -- Jacki.

SCHECHNER: Wolf, we're just able to get a closer look at the area we're talking about and also the school itself. Here you can see where Bailey is in relation to Denver. We're talking about 45 miles southwest from Denver, 40 miles southwest of Littleton, Colorado. Here is what the school looks like. This is Platte Canyon High School, about 450 students, there's also an adjacent school called Fitzsimmons Middle School and this has about 340 students in grades six, seven and eight.

We've got some photographs of the outside of the school and then the inside of the high school, this being the library, and then a classroom in that high school. Again, we don't know if this is actually the classroom that this gunman is holed up in, but this is a typical classroom at this high school we've been able to find online. Also, people are starting to post images and condolences online.

Someone from MySpace.com who used to be a student at the high school saying that his prayers are going out to the kids and the families involved here. And then a photo on flickr.com looking out from the school. We're going to continue to monitor Wolf for anything that shows up online.

BLITZER: Thank you, Jacki, for that.

And up ahead a closely watched race takes an unusual turn. One candidate is accused of spying on her own husband, now she's speaking out. And coming up in our 7:00 p.m. eastern hour, my exclusive interview with the Afghan President Hamid Karzai on the rift with the president of Pakistan and the war on terror. Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Lou Dobbs getting ready for his program that begins right at the top of the hour. He's standing by to tell us what he's working on -- Lou.

LOU DOBBS, CNN ANCHOR: Wolf thank you. Tonight insurgents kill six more of our troops in Iraq. A top U.S. commander is saying that we're going to have to change those strategies. And communist China's dangerous military buildup is now having a significant influence on our satellite technology. Is China trying to blind our spy satellites? Is the White House trying to play down this new Chinese threat? We'll have that special report.

Some members of Congress finally beginning to recognize the serious threat to our democracy from e-voting machines. Three leading senators now proposing emergency legislation to provide states with paper ballots. We'll have all of that, a great deal more coming up at the top of the hour here on CNN. We hope you'll be with us. Wolf, back to you.

BLITZER: We will be Lou. Thank you very much.

In New York a former prosecutor now running for attorney general is under federal investigation, and she's very angry about it. Our Mary Snow is covering this made for the tabloid story in New York. Mary, what's going on?

MARY SNOW, CNN CORRESPONDENT: Well Wolf when it comes to political messes it doesn't often get messier than this one. It's an unfolding scandal involving a current politician and a former big New York City name whose had a scandal of his own. In an unusual news conference Jeanine Pirro, the Republican candidate for New York State attorney general dropped a bombshell.

You may remember her as the one time short lived challenger to Senator Hillary Rodham Clinton. A defiant Pirro trying to beat media leaks announced that she's being investigated by the U.S. attorney's office because she wanted to eavesdrop on her husband. She insists she did nothing wrong, saying it was a private matter that was entirely legal.

(BEGIN VIDEO CLIP)

JEANINE PIRRO (R), NEW YORK ATTY. GEN. CANDIDATE: Sometime last year I came to believe that my husband was seeing another woman. In the midst of matrimonial discord I was angry and had him followed to see if what I suspected was true. Although I spoke about taping him, there was no taping by me of anyone.

(END VIDEO CLIP)

And then another surprise. The private investigator she contacted was Bernard Caric, the one time New York City police commissioner under Rudy Giuliani who became a lightning rod for scandal when he was nominated to become Homeland Security chief. He later bowed out. Pirro was asked about calling Caric.

(BEGIN VIDEO CLIP)

PIRRO: I knew Bernie for years when he was a police commissioner and one of the most respected people in New York City, I was the DA at the time. I mean I've known Bernie for years as many people do. He wasn't the police commissioner at the time, he had an investigations agency, and I talked to him.

(END VIDEO CLIP) SNOW: Now Caric's lawyers said quote, nothing legal was discussed and nothing illegal was done. Pirro claims that she's being targeted as part of a personal vendetta by the U.S. attorney who also prosecuted her husband in 2000 on tax evasion charges. Albert Pirro spent time in federal prison. The U.S. attorney in the southern district of New York confirms it is investigating Jeanine Pirro, it says it does not take politics into account in its investigations -- Wolf.

BLITZER: What a story. Thanks very much Mary. And the tabloids in New York will have a field day with this one.

Up next Jack Cafferty and The Cafferty File. Should Congress pass a bill giving retroactive immunity to President Bush for possible war crimes? Jack with your e-mail when we come back.

(COMMERCIAL BREAK)

BLITZER: Check back with Jack in New York for "The Cafferty File" -- Jack.

CAFFERTY: The question Wolf is, should Congress pass a bill giving retroactive immunity to President Bush for possible war crimes. They're in the process of doing that right now. The House just passed it, the Senate's expected to vote on it tomorrow.

Harry in Des Moines writes, "It's called CYA as in cover your a**. The Republican majority finds themselves in a situation where they may very well become the minority in a short time. They know this administration's guilty of war crimes by definition in Article 3 of the Geneva Conventions. And they themselves are guilty of aiding and abetting by subjugating their duties to provide oversight."

Randall writes, "No, Bush should not get a pass on war crimes and the Congress should not give it to him. These people make Nixon look like a choir boy. Just unbelievable."

Eric in Los Angeles, "Absolutely they should be given immunity and I'm a Democrat. I'd say the same for any president. For goodness sakes, they're trying to keep us safe. Absolutely."

Hushang writes, "I know it shouldn't be passed, but unfortunately it probably will. Bush has screwed up so badly that now he's not trying to fix what he's destroyed instead he's just trying to cover his own butt."

Robert in Calabasas, California, "Sure, give them all immunity. But first, like the good little boys they are, we should make them eat their spinach. Preferably the pre-packaged kind."

And Wolf in response to your interviews over the last two days with Pervez Musharraf and Hamid Karzai, John writes from Marlton, New Jersey, "Is there any way we could set up a pay-for-view for that Bush dinner tonight?" If you didn't see your e-mail here you can go to CNN.com/CaffertyFile and read more of them online. BLITZER: It could help pay off the national debt maybe that pay per view dinner. Jack, thanks very much. See you in an hour. I want to update our viewers on what's going on in Colorado. Zain, what do we know?

VERJEE: CNN affiliate Wolf, KUSA is reporting that the standoff at the school in Bailey, Colorado is over. It appears that the adult male gunman has been captured, that also according to KUSA. The gunman was holed up isolated in a classroom and holding two hostages in that classroom. He had burst into the school around noon local time firing shots.

It wasn't clear whether anyone had been injured or not, but we are just coming to learn that there is one woman that has been injured. She has been evacuated and removed from the school. She was put on a stretcher earlier on and went into an ambulance and a chopper is going to evacuate her and take her away. She is critically injured. We're going to bring you more details about this Wolf as it unfolds. We'll find out who he is and why he did it -- Wolf.

BLITZER: Zain, thanks for updating us. Zain Verjee reporting. That's it for us, we're back in one hour with Hamid Karzai. Let's go to New York and Lou Dobbs -- Lou.

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