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Tony Blair Interviewed for Second Time in Scandal Probe; Suicide Bombings in Hilla, Iraq; Key U.S. Lawmakers Joining Forces Against President Bush's War Strategy for Iraq

Aired February 01, 2007 - 12:00   ET

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

JIM CLANCY, CNN INTERNATIONAL ANCHOR: Police question British prime minister Tony Blair again in the widening cash-for-honors probe. Does it mean Mr. Blair's exit from Downing Street may come sooner?
HALA GORANI, CNN INTERNATIONAL ANCHOR: This strange tale of Iraq's messianic cult plot. Accounts of the deadly battle near Najaf pose more questions than answers.

Is it Quebec town's new rules for residents a signal to immigrants about the limit of Canada's renowned tolerance?

GORANI: And flirting with disaster, why Italian women are rallying around Prime Minister Silvio Berlusconi's wife.

It is 6:00 p.m. in Rome, Italy, 5:00 in the evening in London.

Hello and welcome to our report broadcast around the globe.

I'm Hala Gorani.

CLANCY: I'm Jim Clancy.

From the capitals of Europe, to the Middle East, to Canada, wherever you're watching, this is YOUR WORLD TODAY.

We're going to get to those stories in just a moment. But first, the death toll in Hilla, Iraq, south of the capital, Baghdad, has climbed to 45 in attacks there. We're going to continue to monitor this serious situation and bring you updates as soon as they come in.

GORANI: But first, we start in the United Kingdom. It's a criminal investigation that has shaken British politics and put the country in uncharted political water.

CLANCY: The spotlight really turning now to Tony Blair and some of the Labour Party's key people.

GORANI: Now, more than 90 of those questioned by police in this case so far deny any wrongdoing.

CLANCY: Now, whether or not there was criminal activity, there's bound to be significant political fallout from the investigation. It is the news actually that the prime minister, Tony Blair, was questioned for a second time by police that has pushed this story right back on to the front pages. Becky Anderson live for us right now outside 10 Downing Street with more details -- Becky.

BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: Yes, that's right. Outside 10 Downing Street as questions are being asked, Jim, about just how long Tony Blair can continue as British prime minister after news broke today that he had indeed been questioned for as a second time -- as a witness not as a suspect, we must say, -- in a scandal that goes to the very heart of the British government. It's the cash- for-honors investigation and allegations that his party offered titles to businesses, seats in the is House of Lords, the upper chamber in the U.K., and knighthood in return for secret loans that bankrolled, effectively, the 2005 election campaign.

Now, just hours after he was questioned on Friday, this is what he said to me during an interview at the World Economic Forum in Davos.

(BEGIN VIDEO CLIP)

TONY BLAIR, BRITISH PRIME MINISTER: You know, these reports come in and out the entire time. They were answered in absolute detail by my press office yesterday, Becky. And I've got absolutely no intention of getting into these issues now. And why don't we just let the thing take its course.

(END VIDEO CLIP)

ANDERSON: Well, investigators have also arrested two of Tony Blair's key aides. One back in January, the other, who was the head of communications -- or is the head of communications for Tony Blair -- the other his chief fund-raiser, a guy called Lord Levy, Lord Michael Levy, who's known here to many as "Lord Cashpoint." Charges of conspiracy to pervert the course of justice swirling around those two characters.

Now, Tony Blair was today in the Midlands, visiting a sports complex. He was asked a couple of questions by journalists there. "What did you say to police? And are you going to resign?"

Well, the prime minister -- the British prime minister refused to comment. But his silence certainly not silencing critics here in the U.K. As I say, Jim, questions being asked at this point about just how long he can last -- Jim.

CLANCY: All right. Probably the most important U.S. ally in world diplomacy, and certainly in the issue of Iraq there in a lot of trouble.

Becky Anderson, of course, is going to have more from this story at her live location there outside 10 Downing Street on "World News Europe" and "Business International" a little bit later right here on CNN International -- Hala.

GORANI: Well, taking you to Iraq, police there say and tell CNN that two explosions have ripped through a crowded market in the Shiite city of Hilla. Police say that at least now 45 people have been killed and 150 others injured. The blast occurred in a central market around 6:00 p.m. local time. Hilla is a located about 100 kilometers south of the capital, Baghdad.

CLANCY: All right. Let's get an update live from Baghdad. And our own Michael Ware is standing about there and following developments ver closely on this.

Michael, what's the latest you can tell us about what happened there?

MICHAEL WARE, CNN CORRESPONDENT: Well, Jim, what we understand, as Hala said, at about 6:00 p.m. in central Hilla, this town just south of the capital, in a crowded market, as people would have been buying their goods for the evening meal, two suicide bombers entered with explosives attached to their chest, according to local police. Now, they say that a police officer noticed at least one of these men and approached him.

Upon confrontation, they say, the man then detonated himself, wounded and killing a number of people. Shortly thereafter, within close vicinity, the second suicide bomber, the officials say, detonated himself.

Like we've been saying, as it stands right now, we believe that there are as many as 45 dead and up to 150 wounded. And the people that we're talking to down there say that those numbers, unfortunately, are expected to rise.

CLANCY: Michael, I want to talk to you a little bit about an incident that happened on Sunday. A major battle developing. Right at the start, it was said -- the reports coming out of the Iraqi -- the official version from the Iraqi government, was that this was a cult who was bent on attacking some of the Shia religious leaders in the city of Najaf. But now there's some cell phone video that is coming out, mobile phone video showing piles of bodies on the ground. Iraq's government spokesperson maintaining that all of this was as a result of the violent messianic cult.

What do we really know? Who's telling the truth here?

WARE: Well, it's very hard to say, Jim. I mean, as you're well aware, I mean, the fog of war shrouds everything. Not just here, but in most conflicts.

What we do know for a fact is that a tremendous engagement took place on Sunday just outside Najaf. It certainly appears that there was quite a fight here.

Now, what the government is saying is that this essentially was a messianic cult, an apocalyptic cult. Just when this war couldn't get any more bizarre, we now start to see the emergence of such things, according to Iraqi government.

The U.S. military is less clear. Officers I've just been speaking to said the jury is still out on just who these people were.

A military spokesman said that according to military intelligence, we're talking about a Shia splinter group. He wouldn't explain exactly what that meant.

However, what did happen is that Iraqi forces engaged this group north of the city. The government says they had plans to kill the Shia leadership in that city and allow their leader to take over.

Either way, once the engagement began, other Iraqi units were called in and they had American advisers. Those American advisers then called in American air cover, two Apache helicopters. One of them which went down.

As the fight continued throughout the night, F-16s and A-10 anti-tank aircraft and an AC-130 aircraft were also brought in. By the end of it, according to the U.S. military, there's 250 dead on the side of the faction that was fighting, the so-called sect, and they say that so far there's at least 400 prisoners. But at the end of the day, there's other accounts from locals on the ground, local media. We really don't know what went on -- Jim.

CLANCY: All right. Well, maybe when they get a chance to talk to some of the people who have been captured, they can sort some of this story out.

Michael Ware, as always, thanks to you, for your reporting there from Baghdad -- Hala.

GORANI: All right. Well, let's turn to some other stories we're following today for you.

(NEWSBREAK)

GORANI: Coming up, putting aside partisanship to send a powerful message.

CLANCY: When YOUR WORLD TODAY comes back, key U.S. lawmakers joining forces against George W. Bush's war strategy for Iraq.

GORANI: And then, a controversial code of conduct. A virtually all white Canadian town draws fire for rules aimed at "potential immigrants." Those rules might surprise you.

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to CNN International and YOUR WORLD TODAY.

We turn now to Iraq and what could be a huge rebuke of the U.S. president's war strategy from political friends and foes alike this time. Support is building on Capitol Hill for a bipartisan resolution that would criticize George W. Bush's troop increase. Now, after some revisions to Republican-sponsored legislation in the Senate, key Democratic leaders have signed on, increasing the chances that it will past. Republican senator John Warner says debate on the bill expected to begin next week will be one of the "most historic and important" in U.S. history. Now, if such a congressional rebuke does pass, it won't force the president's hand in Iraq. It is non-binding, and that is crucial. But it would be a stinging reminder of the war's unpopularity, piling even more pressure on the president to change course.

But as Dana Bash reports, some of Mr. Bush's allies on Iraq are now going on a counteroffensive of their own

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice over): President Bush's allies are so worried that resolutions opposing his Iraq plan could pass, they're not waiting for next week's formal debate to start slamming them.

UNIDENTIFIED MALE: Do not throw mere words out that have no concrete effect except undermining our troops and emboldening the enemy.

UNIDENTIFIED MALE: Our responsibility is to sell it to the American people, not just to criticize, not to come up with resolutions that don't mean anything, intended to embarrass the president.

BASH: Preemptive strikes not just aimed at Democrats, but at fellow Republicans, meant to pressure GOP senators not to vote against the president.

SEN. SUSAN COLLINS (R), MAINE: Comments like that are really inappropriate.

BASH: Instead, it is intensifying the deepening discord within the Republican Party.

Susan Collins is one of four GOP senators co-sponsoring a resolution that opposes sending more troops to Iraq.

COLLINS: Those of us serving feel very strongly, are not motivated by political purposes.

BASH: But when GOP senator Jim DeMint was asked if he thinks fellow Republicans, including former Armed Services chairman John Warner, are really trying to embarrass the president, he said, "It's clearly not an act of leadership."

Bush allies admit there is less pressure on GOP lawmakers to stand with the president.

SEN. JOHN CORNYN (R), TEXAS: The president has the bully pulpit of the office of president of the United States. But I think in many ways, the American people have sort of chosen up sides on this issue and are not listening.

BASH (on camera): The one person Republicans think does still have clout is General David Petraeus, the man the Senate just confirmed to lead U.S. forces in Iraq. CNN is told General Petraeus has been making the rounds this week on Capitol Hill trying to convince lawmakers he needs additional U.S. troops in Iraq in order for the mission to succeed.

Dana Bash, CNN, Capitol Hill.

(END VIDEOTAPE)

CLANCY: All right. We had expected that Hala would be speaking with Senator Jon Kyl about his stand, which is in favor of the Bush administration view that more troops and a short-time spike in levels would help improve the security situation there. We'll have to bring that to you a little bit later here in our report.

Meantime, let's go Canada for a minute, where French-speaking Canadians in the province of Quebec have long fought to retain their traditional identity within the larger culture that is Canada, of course. But a new code of conduct is one small town is raising a lot of criticism. At issue: When does respect for one's culture become intolerance of everyone else's?

Jed Kahane reports.

(BEGIN VIDEOTAPE)

JED KAHANE, REPORTER, CTV NEWS (voice over): It's a tiny town, and with the exception of one citizen, Herouxville is entirely white, French-speaking, and Catholic. So it might seem a little odd that the town council has just adopted a code of conduct for potential immigrants.

ANDRE DROUIN, TOWN COUNCILLOR: Seeing who we are, what are our standards, and, god, hell is raising up.

KAHANE: Here is a sample. "We do not consider it normal to kill women in public beatings or burn them alive." "Women can drive and write cheques and show their face in public... the only exception is Halloween."

The list goes on and so does the praise for the council's initiative.

"I have gotten nothing against those people," says this woman, "but these are the rules." To others, those rules are alarmist and intolerant.

SALAM ELMENYAWI, MUSLIM COUNCIL OF MONTREAL: Racist (INAUDIBLE) are coming out of the woodwork now. And that it is not being obscure or subtle.

KAHANE: So why is a town as homogeneous as this going so far out on a limb? The answer may lie two hours away in Montreal, where for months now, commentators like Stephane Gendron have taken a hard line against accommodations made for religious groups, windows at a local gym glazed over to satisfy Jews, (INAUDIBLE) winning the right to carry ceremonial daggers, and Muslims being granted their own praying rooms at schools.

Gendron is against it all. STEPHANE GENDRON, RADIO HOST: We should have zero tolerance for that. You're just a regular citizen. Religion is at home. Fine. Otherwise, too much.

KAHANE: Gendron says Herouxville's motion goes way too far. As this observer says, you reap what you sow.

JACK JEDWAB, ASSOCIATION FOR CANADIAN STUDIES: I think the people who have generated the debate in this particular way are in part to blame for what's happening in this particular town, which has now become a focal point for xenophobia and Islamophobia in Quebec.

KAHANE: The sign says "Welcome," but not everyone believes it anymore.

Jed Kahane, CTV News, Montreal.

(END VIDEOTAPE)

GORANI: All right. Let's revisit there the story on a move in Congress and within the Senate and House of Representatives to pass a non-binding resolution criticizing the administration's policy and strategy on Iraq. We want to speak with one of the senators who supports President Bush's troop increase in that country.

Senator Jon Kyl, a Republican from the state of Arizona, joins us now live from Washington.

Senator, thanks for being with us.

It really looks like there is a congressional movement. And what is key is that it is bipartisan to criticize and oppose the president's troop increase strategy in Iraq.

You still support it. Why?

SEN. JON KYL (R), ARIZONA: First of all, it needs to be given a chance. The Baker-Hamilton commission has been held up -- their recommendation -- by all of the president's critics, and yet they testified yesterday before the Senate Foreign Relations Committee that the plan should be a given a chance to succeed.

Senators can speak out and put themselves on record any time we want to. We don't have to pass a non-binding resolution to do so. And unfortunately, the passage of a such resolution would send a very bad message to our enemies, to our allies, and especially our troops that we put in harm's way.

GORANI: But when you say time, what do you mean by time? A few weeks, a few months? And then if it fails again, then what?

KYL: By the way, what if it succeeds? General Petraeus thinks it has a good chance of succeeding. The president thinks it will succeed. And this will certainly prove a lot of people wrong who disapprove of the strategy right now. It seems to me...

GORANI: Sure. But Senator, you're in favor of it. So we -- I need to ask you...

KYL: If I could -- if I could just -- let me just finish my point here. It seems to me that resolutions like this can become a self- fulfilling prophecy. In other words, they, themselves, undercut the effort.

That's one reason why I don't support a resolution. General Petraeus has testified to the Congress -- and we just got through unanimously confirming his appointment to run the operation over there -- that he believes it can succeed. And I guess the way I would put it back to you is, if he says he thinks it will succeed, and he's the person we put in charge of its success, why wouldn't we want to give it a chance?

GORANI: Right. But then you're saying you would like to give it a chance. And others who support this troop increase are saying the same thing. But it is a question of time. It can't be an open-ended commitment to increase troops level.

KYL: No, you're right.

GORANI: When will you say, all right, we tried this and it didn't work, assuming that it doesn't have the effect that you think it will.

KYL: It is neither open-ended nor is there a specific date. Virtually everybody, even the president's critics, agree that you don't want to put a specific date on paper, because that enables the enemy precisely how long they simply have to hold out before they get to take over. So even the president's critics are not in favor of a specific date. You know the resolutions usually call for within six months, we begin a withdrawal, and so on and so on.

So you can't put a timetable on it. You shouldn't.

GORANI: Right.

Now, regardless of whether or not these resolutions are binding and non-binding -- and the House speaker, Nancy Pelosi hasn't (ph) even hinted that perhaps she would support binding legislation in order not allow troop increases in Iraq -- but this is a sending very strong message to the U.S. president, saying, you know, from both sides of the aisle, we are very, very skeptical of this strategy, isn't it?

KYL: Yes. It's even more than very skeptical. They say it won't work. They oppose it.

By the way, it's only a handful of Republicans and all Democrats. So...

TONY HARRIS, CNN ANCHOR: Let's take you to Boston now, where we're hearing from the two suspects in court this morning pleading not guilty to the charges against them in yesterday's hoax in Boston.

(JOINED IN PROGRESS)

UNIDENTIFIED MALE: ... how people live their lives today and how they're going to live their lives in the future and how they're going to look at the past.

UNIDENTIFIED MALE: Hold on a second. Hold on a second. For example, afro, I think, comes kind of from the '70s. But then again, there's other styles like the greased-up hair, when they actually used grease. And I'm not totally sure where that comes from, whether or not it's from the 20s or -- it's definitely not from the '60s, I don't think.

UNIDENTIFIED MALE: But the '60s sort of -- we're taking this very seriously.

UNIDENTIFIED MALE: Yes, please don't interrupt.

HARRIS: Well, I haven't heard it.

OK. My understanding is that these guys are kind of making a goof of this process at this moment right now. And apparently in the court this morning, there was a little bit of this going on as well.

Our Boston bureau chief, Dan Lothian, is standing by.

Dan, can you explain what the heck these guys are doing?

DAN LOTHIAN, CNN BOSTON BUREAU CHIEF: That's a good question. I mean, I was listening to part of what they were saying. It did sound like they were explaining something that was sort of bizarre.

I have no idea. What I can tell you is, what happened in court, when they walked in, they were making -- they war waving, they were kind of giggling a little bit. We were told that they were very nervous and were certainly surprised by the extent to which this situation, in their sense, has gotten out of control.

Beyond that, though, you know, I have no explanation for what's going on behind me. I did hear a little snippet, though, is that they are taking this -- one of them said that "We are taking this seriously.: So perhaps...

HARRIS: Well, it doesn't look like it. It doesn't -- yes.

LOTHIAN: It doesn't appear that -- it doesn't appear that way, you know, based on what they're saying, based on some of their actions. But I don't know. I mean, it's sort of -- it's bizarre actions.

HARRIS: Well, Dan, as we see the picture of the two guys there, sort of walk us through what happened in court this morning, the charges that they're facing. And these are serious charges.

LOTHIAN: They are serious charges. They're both being charged with one count of placing a hoax device and then disorderly conduct. That one's a lesser charge.

But, nonetheless, they did plead not guilty to those charges. They were being held on $100,000 bail. That was reduced, though, to $2,500 cash bail each. They also have to check in by phone once a week with a probation officer and then check in -- or rather daily they have to check in by phone and then meet once a week with a probation officer.

Essentially what they are saying, what their lawyers are saying, what their supporters are saying, is that, you know, these guys were just out doing their job. They never meant any harm. They never thought that this would balloon to what it did. They never thought that these devices would be seen as bombs.

The prosecution is saying, listen, these are -- these are items, these are devices that had batteries and wires and were placed in areas where a bomb would normally or typically be placed to cause maximum damage. So they're taking it very seriously, but obviously, you know, there is some bizarre behavior on the part of the two suspects.

HARRIS: And Dan, I asked you this question last hour in the NEWSROOM. Let me ask it again, because we heard from the judge, hearing the charges in the arraignment this morning, there seems to be a real question here about intent.

LOTHIAN: Right.

HARRIS: Did these two guys knowingly take action in planting these hoax devices, knowingly plant them, expecting that they would cause a panic?

LOTHIAN: Right, and you did hear that in the arraignment. And I -- you know, based on my interpresentation and what we heard from the attorney general last night, was that this was an issue as to, you know, what happened.

You know, you create -- you do a hoax, and then if there is sort of mayhem after afterwards, that is what the effect is and that is what you're being charged with. But certainly during the arraignment you heard a lot of talk about intent, and that will no doubt be at the heart of this. You know?

HARRIS: Yes.

LOTHIAN: And if you talk to the family members and the friends, they're saying, listen, these guys never intended for anything like this to happen. This is their job, they were given instruction to go and place these items out and about town, and to document it, which is what they did -- allegedly did -- and placed it on their Web site.

HARRIS: And at this point we still don't know if, for example, the advertising company that they were working for, or even Turner Broadcasting, the parent company of CNN, could be on the hook for this.

LOTHIAN: That's correct. I mean, if you listen to mayor, obviously there's a lot of anger.

HARRIS: Yes.

LOTHIAN: While some will say that this thing is, you know, overblown, the mayor is quite angry and says that, you know, Turner Broadcasting should be held accountable. And then we've also heard from NBTA, the transit authority here. You know, they have to shut down -- stop buses, shut down trains yesterday. And they have drafted this letter seeking compensation for the loss that they may have sustained yesterday.

So, clearly a lot of people have taken it seriously in terms of the fallout from what happened. Whether or not, you know, the intent was there, the reaction was that, you know, there was this big security scare in Boston yesterday.

HARRIS: OK. And Dan, I guess they're wrapping up whatever -- whatever they're doing here.

LOTHIAN: Right.

HARRIS: Dan Lothian, or Boston bureau chief for us, following this story.

Dan, appreciate it. Thank you.

(NEWSBREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

CLANCY: Hello, everyone. Welcome back to YOUR WORLD TODAY. I'm Jim Clancy.

GORANI: I'm Hala Gorani.

And here's some of the top stories we're following for you. The British Prime Minister Tony Blair has been questioned by police for a second time in the political favors for cash investigation. Police report he was questioned as a witness, not as a suspect. But what has some up in arms is that the meeting was kept secret at the request of police until now. Mr. Blair was actually questioned last Friday.

CLANCY: Now police are telling CNN two explosions have ripped through a crowded market in the Shia Muslim city Hilla, that's just south by about 60 miles or 100 kilometers south of the capital Baghdad.

Police report 45 people killed. More than 150 others wounded. The blast occurred in a central market at a peak hour, around 6:00 p.m. Hilla, as we noted, is south of the capital and it has seen its share of violence.

GORANI: An Iraqi government spokesperson maintains that a violent Messianic Shiite cult sparked a fierce battle in Najaf over the weekend. He dismisses reports that it was a tribal conflict. The fight only after Iraqi forces called in U.S. reinforcements. Iraqi officials say more than 200 people were killed. Some 600 people were arrested. New mobile phone footage shows piles, you see it there, piles of bodies on the ground.

CLANCY: Returning now to our top story, Britain's cash for honor scandal. With a lot of speculation and a lot of rumors floating around, how will this impact Prime Minister's Tony Blair's political future? Our own European political editor Robin Oakley gives us a look back at how it all got underway.

(BEGIN VIDEOTAPE)

ROBIN OAKLEY, CNN EUROPEAN POLITICAL EDITOR (voice-over): Money, it said, makes the world go round. It takes plenty of it to fund political campaigns. In 2005, with an election approaching, Tony Blair's labor party was well short of the $20 million pounds, that's $35 million it was allowed to spend.

(on camera): When most of short of ready money, we go to bank cash machines, ATMs. Tony Blair turned instead to his friend, adviser and chief fundraiser, Lord Michael Levy, the man they call Lord Cashpoint.

(voice-over): Lord Levy persuaded a dozen top businessmen to sign fat checks. Among them there property developer Sir David Garrard, health care supremo Dr. Chai Patel, stock broker Barry Townsley and frozen curry king Sir Gulam Noon.

Between them, they stumped up about $4 million pounds. Within months, all four were nominated by Mr. Blair for purities, placed in the unelected House of Lords. But the titles were blocked by the committee, which vets new peers. And it emerged labor officials had encouraged the four not to give donations to the party, which by law would have been declared, but to offer loans instead, which could be kept secret.

DR. CHAI PATEL, HEALTH CARE ENTREPRENEUR: They contacted me to see if I was willing to make a donation, to which I agreed. Subsequently I was phoned up by him to say that they would rather have the money, but rather have it in the form of a loan. And the main advantage of it being was that it was anonymous.

OAKLEY: As details emerged, lawmakers called for a police investigation. Lord Levy was arrested and questioned about possible offenses related to the sale of peerages and concealment of party donations.

Questioning the prime minister said many, then became inevitable.

ALEX SALMOND, LEADER, SCOTTISH NATIONAL PARTY: It's inconceivable that Lord Levy could be up to anything, if indeed he was up to anything without the knowledge and consent of the prime minister.

OAKLEY: Mr. Blair already stands convicted of hypocrisy. Labor won office party by hanging the label of sleaze around the necks of the previous conservative government, led by John Major. And he promised then to be different.

TONY BLAIR, BRITISH PRIME MINISTER: I think we have to be very careful with people fluttering around the new government trying to make all sort of claims of imprudence. That we are pure and pure. OAKLEY: But though he brought in a law forcing the disclosures of gifts to political parties, Blair's fundraisers have worked their way around this law by asking for non-declarable loans instead. And the prime minister doesn't plead ignorance.

BLAIR: I did of course as leader of the labor party, know about the donors, the already published donors, these particular individuals, but also about the fact that they made loans to the labor party.

OAKLEY: It isn't a one party investigation. The police have questioned many conservatives, too, including the party's last leader, Michael Howard. But that hasn't stopped the awkward questions to Mr. Blair.

MIKE WEIR, SCOTTISH NATIONALIST LAWYER: Why is he interviewed by the metropolitan police. What innocent explanation will the prime minister offer for the fact that 80 pence in every pound donated to the labor party came from people who were subsequently honored?

OAKLEY: Nor the taunts of his main opponent.

DAVID CAMERON, CONSERVATIVE PARTY LEADER: Prime minister, back to prison. That's got a sound ring to it.

OAKLEY: There won't necessarily be charges at the end of the day. Direct links between political gifts and peerages may be impossible to establish. But in the deepest investigation of political corruption in Britain for decades, an embattled prime minister has already been badly damaged.

Robin Oakley, CNN, London.

(END VIDEOTAPE)

GORANI: All right. We're remaining in Britain, one day after nine suspects were arrested in what security sources say was a terrorist plot. Police in Birmingham, England are now seeking further detention to be able to hold the suspects for up to 28 days before charging them. International security correspondent Paula Newton joins us now live from Birmingham, England. I understand the suspects appeared in court in last few hours, Paula.

PAULA NEWTON, CNN INTERNATIONAL SECURITY CORRESPONDENT: Hala, yes that is the latest development here. Earlier today, a judge granted police another week to interview all nine suspects and it was under very, very heavy security, Hala, that three of them opted to appear in court.

The rest declined their opportunity to sit before a judge. Just to recap on the law here, Hala, what happens is that the police can be given up to 28 days to question the suspects without charging them. But they do have to appear procedurally before a judge.

And all of this caps what was a very tense day in this community.

(BEGIN VIDEOTAPE)

NEWTON (voice-over): Into the early-morning hours here, police were still searching for evidence and keeping their silence. Even as forensic experts continue to sweep the area for a second day. Police have confirmed very few details of the alleged plot, saying the investigation is still active, more arrests are possible.

The dramatic raids here in Birmingham have left this Muslim community anxious and on edge.

The details of the alleged plot are bad enough, the kidnap, torture and beheading of an innocent. But the accusation that the target was a Muslim serving in the British army, it is too hideous a detail for many here to believe without truth.

IMAM MUHAMMAD SAJJAD: Take the proper way, take them to the court and prove and then say that they are guilty. Don't think that every Muslim is potentially dangerous.

NEWTON: And there is another issue nagging at people here, too -- for some Muslims being a foreign soldier fighting on Muslim land is still a spiritual struggle. There are about 300 Muslims serving out after total of 180,000 in Britain's armed forces, which means, at times, choosing to serve your country over the Koran.

But some see no contradiction. Zeeshan Hashimi is a British Muslim soldier whose brother has already lost his life serving in Afghanistan. He says he isn't rattled and won't be intimidated.

ZEESHAN HASHIMI, BRITISH MUSLIM SOLDIER: And I like to stand by my beliefs, and I'm not going to let or allow anybody to use their forcefulness into changing my views. If that had happened and I was a young turk, a British Muslim who's thinking of joining the military, I would have still joined it. I live my life by my rules. I'm not going to let anyone else dictate my life.

NEWTON: But the British minister of defense will be reviewing security for its Muslim recruits.

COL. BOB STEWART, FMR. BRITISH COMMANDER: Clearly, soldiers might not seen in public, as often as they have been recently in uniforms. Soldiers will be warned to be careful about their personal security, and alert states will be revised to consider this threat.

(END VIDEOTAPE)

NEWTON: Sources say, that one British Muslim soldier remains under protective custody. Well, Hala, the question here that we've been trying to answer, and we're not able to confirm, is whether or not police found a hitlist with as many as two dozen more so-called targets. Again, nothing that we can confirm here -- Hala.

GORANI: All right, Paula Newton, continuing to follow this storm from Birmingham, England.

A lot more ahead on YOUR WORLD TODAY. Stay with CNN. (COMMERCIAL BREAK)

GORANI: You're with YOUR WORLD TODAY on CNN International.

CLANCY: That's right. We're seen live in more than 200 countries all around the globe and wherever you are. Welcome.

Well, the U.S. pointing a finger at Iran again, repeating accusations of interference in Iraq. The U.S. undersecretary of states says Iranian military and intelligence officials shouldn't be, in his words, running around Iraq fomenting violence.

Nic Burns spoke out to our Colleen McEdwards a short while ago. Here's how he responded when she asked him whether there's any specific evidence.

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NICHOLAS BURNS, U.S. UNDER SECRETARY OF STATE: Our soldiers have been attacked and we know how they've been attacked, and we've seen actually the armaments that they've used in the attacks, and they do trace back to Iran.

(END VIDEO CLIP)

GORANI: Well, as the Bus administration continues the stream of accusations against Iran, some wonder why it's focusing so much time and attention on that country during the time of war with another.

CLANCY: That's right. And as John King reports for us, the U.S. president may have both political and strategic motives here.

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JOHN KING, CNN CORRESPONDENT/ANCHOR (voice-over): The war is in Iraq, yet Iran is more and more the target of the president's tough talk.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Iran is providing material support for attacks on American troops. We will disrupt the attacks on our forces.

If we were to fail in Iraq, Iran would be emboldened in its pursuit of nuclear weapons.

KING: Why all this focus on Iran now?

SHIBLEY TELHAMI, UNIVERSITY OF MARYLAND: Part of it is strategic and part of it is undoubtedly political, and the two come together.

KING: Strategic, and the Pentagon officials say they have solid evidence that they are supplying rockets, Katyusha rockets, parts for powerful roadside bombs known as explosively formed projectiles.

And military sources tell CNN the Pentagon is investigating a possible Iranian role in the January 20 raid in Karbala that left five American soldiers dead. Though the State Department yesterday was more cautious.

Beyond Iraq, Iran's nuclear program and its support of Hamas and Hezbollah make it a growing strategic headache for the United States. In addition to the administration's stronger words, two carrier groups have been sent to the Persian Gulf, part of a clear message to Iran.

ADMIRAL WILLIAM FALLON, U.S. NAVY: It seems to me that in the region, as they grow their military capabilities, we're going to have to pay close attention to what they do and what they may bring to the table.

KING: Administration critics say diplomacy would work better than more tough talk.

LEE HAMILTON, CO-CHAIR, IRAQ STUDY GROUP: What's happened? Iran has become the most powerful country in the region. It continues to support terrorist organizations. It's continuing to develop its nuclear potential. How can anyone say today that our policy towards Iran is working? It is not.

KING: Politically, the goal is to help sell an unpopular plan to increase U.S. troop levels in Iraq, an idea even many of the president's fellow Republicans oppose.

PETER HART, DEMOCRATIC POLLSTER: The president now has a circle that is equivalent to the circle that Richard Nixon had at the very end of his presidency. Republicans are leaving him. They're sending a message.

TELHAMI: You have people who are asking for withdrawal. And the president, in highlighting the Iranian threat inside Iraq, is driving the point home that an American withdrawal would create a vacuum that would benefit Iran.

KING: The verbal sparring with Iran is also contributing to an already troubled U.S. image in the Arab world. Professor Telhami conducts an annual poll of Arab public opinion.

TELHAMI: Every leader they like is a leader who is standing up to the United States of America. For the very first time this year, the president of the United States is more disliked than the prime minister of Israel. That is quite telling.

John King, CNN, Washington.

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CLANCY: All right, we're going to change pace from world diplomacy and politics to another issue, and this should be familiar to you.

Hell, they say, hath no fury like a woman scorned. For those of you a bit younger, I think you substitute in there, or dissed.

GORANI: Well, when it involves a former Italian first lady, the whole country is talking. Coming up, a lesson of marital harmony, courtesy of Silvio Berlusconi.

Stay with us.

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CLANCY: Well, some said it was humor. Others weren't laughing at all. Two men have been arrested after an unusual marketing campaign caused chaos in Boston, Massachusetts. The men had been hired to place electronic sign boards around the city to promote a cartoon show for Turner Broadcasting. The battery-powered devices triggered fears they were really terrorist bombs bringing traffic to a halt. Now the men are speaking out about it, at least a little bit.

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PETER BERDOVSKY, DEFENDANT: What we really want to talk about today, it's kind of important to some people. It's -- yes, it's kind of important to some people. It's hair cuts in the '70s. We really want to discuss the style of them.

SEAN STEVENS, DEFENDANT: We feel it's really important because we think it's been a big inspiration on how people live their lives today and how they're going to live their lives in the future and how they're going to look at the past.

BERDOVSKY: Hold on a second. For example, afro I think comes kind of from the '70s. But then again there's other styles, like the greased up hair, when they actually used grease. And I'm not totally sure where that comes from. Whether or not it's from the '20s or from -- it's definitely not from the '60s.

STEVENS: The '60s sort of -- we're taking this very seriously.

(END VIDEO CLIP)

GORANI: Right.

CLANCY: They seem very serious. Their lawyer had told them, you stand right on the right on your television screen, told them don't say anything about it. And they truly didn't.

GORANI: Well, I don't know which part of that can be held against them in a hoax trial, but whatever.

CLANCY: Or they'll get serious when they get up in front of the judge.

Turner Broadcasting, which is the parent company of CNN, has apologized for the incident I think more than once.

CLANCY: Right. Well,m we're going to be following that story and seeing what happens to those two and others. Now what started off...

CLANCY: ... I was going to say, speaking of apologies. GORANI: This is a huge one. And it was public, too. It started off as a domestic dispute and its becoming a reality show playing out on front pages and television screens across Italy and the world now.

CLANCY: Yes, you bet. We're talking about the former prime minister Silvio Berlusconi and his very attract wife, Veronica. Now he was out at a public event and he flirted saying, "You know, if I wasn't married, you know I'd marry somebody like you." Innocent? She didn't think so.

GORANI: Like you? I married you. She demanded a public apology. He said sorry. Well, they may have kissed and made up, but is it really all behind them now? We want to know. Alessio Vinci has more on this fact.

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ALESSIO VINCI, CNN CORRESPONDENT (voice-over): No longer prime minister Silvio Berlusconi is still the prime headline grabber. This time though, it's not politics or his legal troubles. But his second wife making him the talk of the nation.

It all began with an open nation by Veronica Berlusconi, 20 years his junior, demanding a public apology for sexist comments he allegedly made during a gala dinner. The letter splashed on the front page of one of Berlusconi's least favorite newspapers.

In it, she complained about her husband's widely reported comments to a group of young women. "If I weren't married," he allegedly said, "I would marry you right now." To another woman he said, "I would follow you anywhere."

Veronica Berlusconi said the comments damaged her dignity, belittled her and most importantly, set a bad example for her children. Her decision to go public she wrote, was made after failing to obtain a private apology.

Journalist Maria Latella is the editor of a woman's magazine and the author of a book about Mrs. Berlusconi.

MARIA LATELLA, EDITOR: Women of her age and they have wrote to her, how Veronica did this, the thing I would like to do. I have not the courage to do or the thing I will do now.

VINCI: Such a bold and unexpected move by a woman known for staying out of the limelight. And in a country where politicians and private lives never make news, had the nation spellbound for a day.

Television networks and Web sites buzzed with commentary on privacy and women's rights. By late afternoon, Berlusconi was ready to apology. "Your dignity should not be an issue," he said, in a statement that was immediately picked up by the national media. "I guard it preciously in my heart, even if I make thoughtless jokes. Forgive me, accept this public display of a private pride as an act of love."

And signed it off with a huge kiss, Silvio.

(on camera): Had all this played out in U.S., the outcome may well have been the end of a political career. But here in Italy, it all ended up with a nice family dinner at Berlusconi's estate near Milan, children included. Alessio Vinci, CNN, Rome.

(END VIDEOTAPE)

GORANI: And that's the way spats should always end.

CLANCY: That is YOUR WORLD TODAY. Think about it. I'm Jim Clancy.

GORANI: I'm Hala Gorani. Stay with CNN.

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