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THIS WEEK AT WAR

Week's War Activities Recounted

Aired March 3, 2007 - 19:00   ET

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


JOHN ROBERTS, CNN ANCHOR, THIS WEEK AT WAR: Are expectations set too high for next week's talk with Iraq and its neighbors and reality check in the spy business. Maybe the U.S. got it wrong about North Korean nukes. Plus the Shanghai stock market rocks Wall Street. China finds new economic clout. THIS WEEK AT WAR begins in one minute after a check on what's making news right now.
RICK SANCHEZ, CNN CORRESPONDENT: All right John. Thanks so much. We're going to get back to John in just a little bit. I'm Rick Sanchez at CNN headquarters in Atlanta. Here's what we're following for you. Three American soldiers were killed in central Baghdad today. The military says a roadside bomb exploded next to their vehicle. A meeting of the Arab league opens in Cairo, Egypt tomorrow. The group has some weighty problems to discuss including the security situation in Iraq and the Israeli/Palestinian conflict.

Also this, fate of a group of British tourists in Ethiopia is uncertain tonight. Senior Ethiopian official accuses commandos from neighboring Eritrea of kidnapping them. The group which includes several diplomats disappeared two days ago. I'm Rick Sanchez. Those are the stories we're following for you. Certainly, if there's more news, we'll break in right away. Now back to John Roberts and THIS WEEK AT WAR.

ROBERTS: A sit down for Iraq and its neighbors. Can it make a difference? Vice President Cheney tells Pakistan to crack down on al Qaeda and U.S. markets get the Shanghai flu. How much control does China have over America's economy? I'm John Roberts with THIS WEEK AT WAR.

Let's take a look at what our correspondents reported day by day this week. On Monday, a secret Pentagon warning that the U.S. military is maxed out, facing significant risks, responding to another war. Tuesday, a Taliban suicide bomber outside a U.S. air base. he target, Vice President Dick Cheney. Wednesday, Iran accepts an invitation to Iraq's neighbors conference next weekend. Thursday, another admission of faulty intelligence. New uncertainty over North Korean nukes. Friday, new reports that China is building up its naval forces, ships and submarines with nuclear missiles.

From bombs and bullets to America's economic security, we'll sort it all out for you today. Jennifer Eceleston on Iraq's upcoming conference, Bing West on the Sunni/Shiite conflict throughout the region and Peter Bergen on a renewed al Qaeda threat. THIS WEEK AT WAR.

We're going to get to all of that in a moment, but first, dramatic events at the end of the week surrounding Walter Reed Army Medical Center. The secretary of the Army out, the head of the medical center out after substandard conditions were uncovered at the nation's preeminent military hospital. Joining me now is CNN military analyst Brigadier General James "Spider" Marks, U.S. Army retired. Spider, let's take a listen to what Defense Secretary Robert Gates said about this on Friday.

(BEGIN VIDEO CLIP)

ROBERT GATES, SECRETARY OF DEFENSE: I am disappointed that some in the army have not adequately appreciated the seriousness of the situation pertaining to outpatient care at Walter Reed. Some have shown too much defensiveness and have not shown enough focus on digging into and addressing the problems.

(END VIDEO CLIP)

ROBERTS: Spider, we're told that Gates fired Army Secretary Francis Harvey because his solution to fixing Walter Reed Army medical center was to put Lieutenant General Kevin Kylie (ph) back in charge. Kylie had been in charge of Walter Reed when all of these problems developed and of course, Major General George Whiteman was relieved of duty back on Thursday. What do you think of all these developments?

BRIG. GEN. JAMES MARKS, U.S. ARMY (RET): That's right. Kevin Kylie commanded through '04 and then George just took command from Kevin's successor this past summer. Clearly what happened is, Kevin was present when the challenges and the problems and what's been identified at Walter Reed occurred. George had been in command six months. George probably could have provided a solution and been part of the fixes that they were looking for.

ROBERTS: It's clear that Gates was looking for something else other than a solution that Harvey proposed even in the interim. We have investigations being proposed in Congress. The president wants a bipartisan committee start to look into this. The Pentagon's going to be looking into this. Where's it all going?

MARKS: None of that is surprising, John and you know it. A lot of the focus will go into this as it must. There will be very specific deliverables. One of those should be what's the status of Walter Reed? It's supposed to close in a few years. Is it going to stay open? Will they invest money in that facility? That remains to be seen.

ROBERTS: That's something definitely that we're going to keep looking at and we'll bring you back to talk more about it. But right now, let's move on to developments in Iraq this week, first among them, calls for a regional conference to resolve the violence there. Is it an opportunity or just an elaborate photo op? Could it lead to more contact between Washington and Tehran? We want to bring in CNN international correspondent Jennifer Eccleston. She's in Baghdad and in Boston, "Atlantic Monthly" correspondent Bing West. He's also the former assistant secretary of defense and just returned from his 11th trip to Iraq. Bing West, the administration said they would not sit down with Iran and Syria in the past. Now they've come forward to say that they will attend this conference. Do you see this as being a significant shift in policy?

BING WEST, FMR. ASST. DEFENSE SECRETARY: John, I think it's a very healthy change, particularly if Iran and Syria both come because it indicates the administration is saying, look, let's all sit down and try to work this problem together and therefore I see it as an opportunity.

ROBERTS: And Jennifer Eccleston, what's the expectation there in Baghdad? Is anything going to come of this or might it just be a photo op, an opportunity for the Maliki government to say we're trying to do something.

JENNIFER ECCLESTON, CNN CORRESPONDENT: I think it's probably the latter. Most people will probably think there will be a nice statement coming out of it. There will be pledges of cooperation, pledges that the neighboring countries will do whatever it takes to stem the violence here, perhaps not even to mettle in Iraqi affairs. It will be a grand symbolic gesture when they really want on the ground here, all they really want is action.

ROBERTS: Spider what's the military thinking on this? The military has long said there has to be a political solution to this equation as well. Are they looking for anything to come out of this?

MARKS: A step in the right direction, certainly. I mean you've got to keep your enemies closer. You've got to understand what's happening in Iran, what Tehran wants to try to achieve, certainly in Damascus as well. So yes, I think there is a great opportunity and the military would be able to gain from this absolutely.

ROBERTS: Let's take a look at the situation on the ground. David Petraeus, now there, firmly ensconced trying to make some changes. American troops are coming over. Bing West, in the January/February issue of the "Atlantic Monthly" magazine, you wrote, quote, in the fourth year of war, America teeters on the verge of defeat despite being exponentially outnumbered and outspent, the forces of murder and chaos seem to be winning. You also ask, is it too late to reverse this trend? You're seeing anything on the ground that gives you hope since Petraeus has gotten there?

WEST: Since Petraeus went there, I've definitely seen a difference. There are many more American troops now on the streets in Baghdad and as they've come forward, so have the Iraqi security forces, and this is the first time, John, in this visit that I just came back, that I actually saw Sunnis and Shiites in different parts of the city walk up to American patrols and begin a conversation. I hadn't seen that before and I attribute that to meaning that some of the gang leaders on the other side, both Sunni and Shiite, have gotten out of town.

ROBERTS: There certainly is some indication that they've at the very least gone to ground if not gotten out of town altogether. And Spider, the United States military had another success this past week, uncovering the second huge arms cache, mostly components for these deadly EFP IEDs. Are they getting better intelligence? Are they making a dent in the number of munitions on the ground? MARKS: I would say that the intelligence certainly improves always over time. You get a better sense of the environment, more sources come forward, so you can really get your arms around it that much better. Is it going to make a difference on the ground? You certainly would hope so. The EFPs, the explosively formed projectiles, as they're called, aren't that numerous. It's not like finding a big cache of artillery shells, for example.

ROBERTS: There aren't as many that were leftover from the Saddam Hussein regime either. These are specially manufactured and brought in. Jennifer, the Associated Press reported this past week that there has been a 50 percent reduction in the amount of violence on the streets of Baghdad. Are you sensing that and if so, do you think it's a trend or is this just a temporary respite and things could gear back up again?

ECCLESTON: Well, it could be a bit of both. This is a result pretty much that new security operation going on in Baghdad. We do -- we have seen an enormous police presence on the street. There are many more checkpoints. And we're not just seeing those big type of disastrous events that we've become so accustomed to. Of course we still get the police blotter of the daily violence throughout the country, but there is a sense here that the violence has decreased and that's significant because U.S. and Iraqi officials have been saying since the outset of this new operation, it's just two weeks old, that the people need to have patience, that we won't see tangible results until the summertime when, in fact, they are seeing a few results now.

ROBERTS: Of course, Jennifer, it's also possible that insurgents and militia members may just wait them out. Jennifer Eccleston, thanks, Bing West and General Marks hang around, because we want to come back to you a little bit later on.

Ahead this hour, North Korea's nuclear might. The White House backs off its claim that the axis of evil nation is secretly enriching uranium. Is this another credibility crisis for U.S. intelligence?

And straight ahead, the Taliban boasts the U.S. vice president was the target of a suicide bomber in Afghanistan this week. What's his plan to combat the terror network's spring offensive and will his message to Pakistan's president get results?

But first, honoring a hero from a war 41 years ago. On Monday, President Bush awarded the nation's highest military award, the medal of honor, to Lieutenant Colonel Bruce Crandall, U.S. Army retired for taking his unarmed helicopter into one of Vietnam's hottest landing zones, the famous battle in the (INAUDIBLE) valley.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: They delivered desperately need supplies. They carried out more of the wounded, even though medical evacuation was really not their mission. If Major Crandall had stopped here, he would have been a hero, but he didn't stop. He flew back into x-ray again and again, 14 times he flew into what they call the valley of death. (END VIDEO CLIP)

ROBERTS: Ironically, Crandall made it to Hollywood long before he made it to the White House in the movie "We Were Soldiers Once." He was played by Greg Kinnear (ph), opposite star Mel Gibson.

(BEGIN VIDEO CLIP)

"WE WERE SOLDIERS," FROM PARAMOUNT PICTURES: (INAUDIBLE) have a choice in all this.

You sure don't.

(END VIDEO CLIP)

ROBERTS: Crandall rescued 70 Americans on that November day in 1965, 22 flights over 14 hours, braving fierce enemy fire, each and every time.

(COMMERCIAL BREAK)

ROBERTS: Vice President Dick Cheney has a stern warning for Pakistani President Pervez Musharraf, crack down on al Qaeda's terror network or risk losing U.S. aid. And Cheney gets a firsthand look at the growing chaos in Afghanistan as he becomes the target of a suicide assassination attempt. Can Afghanistan be saved?

Robert Grenier is the former director of the CIA's counterterrorism center. He was also the CIA's point person in Pakistan after 9/11. Peter Bergen is CNN's terrorism analyst, al Qaeda expert and author of "The Osama bin Laden I know." On Tuesday, the newly minted director of national intelligence said al Qaeda's elite is hiding out in Pakistan's northern tribal regions near the border with Afghanistan.

(BEGIN VIDEO CLIP)

VICE ADMIRAL MIKE McCONNELL (RET), NATL INTELLIGENCE DIRECTOR: The best of our knowledge, the senior leadership number one and number two, are there and they are attempting to re-establish and rebuild and to establish training camps. So it's something we're very worried about and very concerned about.

(END VIDEO CLIP)

ROBERTS: So you had Mike McConnell who's telling Congress we believe al Qaeda is there. You've got Cheney going over to Pakistan to not exactly crack heads with Musharraf, but certainly tell him he's got a problem on his hands if he doesn't do something about this. Is this an indication of heightened White House anxiety about the situation there, Bob?

ROBERT GRENIER, FMR. CIA COUNTERINTELLIGENCE DIR: I think clearly. This is really the culmination of a crescendo of warnings if you will, starting with General Abizaid, then went to Secretary Gates and now it's the first visit by Vice President Cheney to Pakistan since 9/11. I think this is designed and probably has gotten the attention of the Pakistanis.

ROBERTS: Cheney I guess was playing to some degree good cop, saying, I'm here to warn you that if you don't do something, Congress may cut off your money. And certainly, if we listen to what Carl Levin on the Armed Services Committee was saying on Tuesday, Congress is pretty upset about this. Listen.

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN (D) ARMED SERVICES CHMN: Long-term prospects for eliminating the Taliban threat appear dim so long as the sanctuary remains in Pakistan and there are no encouraging signs that Pakistan is eliminating it.

(END VIDEO CLIP)

ROBERTS: Peter Bergen, what to do about this? The U.S. can't go in unilaterally and I'm sure that it has to be careful of how much pressure it puts on Musharraf.

PETER BERGEN, CNN CORRESPONDENT: Yeah. I think what should be employed is collaboration rather than pressure. What's happening in the tribal regions is a major national security problem for Afghanistan, for Pakistan, because a number of suicide attacks coming out of that area. It's also a problem for NATO and the United States. So it's sort of we must come up with a collaborative plan of what to do with the tribal regions and what can we do? Pakistan is interested in putting more aid in. Obviously, we could be involved in that project. That's going to be a long-term project. But previous attempts by Pakistan to go in there with a large military footprint were quite counterproductive. These peace agreements on the other hand, they conducted have also been somewhat counterproductive. So it's not an easy situation to fix.

ROBERTS: Bob Grenier, the day after Dick Cheney left Pakistan, the Pakistani military went into (INAUDIBLE) and arrested a guy they say is number three in the Taliban, the former defense minister (INAUDIBLE). I don't want to say it was coincidence, but it happened right after Cheney left. Do you think this was a legitimate arrest, show arrest, trying to prove that they're doing something?

GRENIER: I don't think it was an accident that (INAUDIBLE) was arrested just on the heels of President Cheney's arrival. I think the big question now is whether or not this is going to be a sustained effort on the part of the Pakistanis.

ROBERTS: The vice president saw firsthand the consequences of Taliban activity in Afghanistan when he was the target of that suicide bomber and Peter Bergen, you had a terrific piece on earlier this week in which you talked about new Taliban tactics. Let's take a quick listen to that.

(BEGIN VIDEO CLIP)

BERGEN: The suicide bomber hits an Afghanistan army bus. That attack was in Kabul, just one of 139 suicide attacks in Afghanistan last year, a 400 percent increase over the previous year. In addition to suicide attacks, the jihadists are now replicating with deadly results that signature weapon of the Iraqi insurgency, the IED.

(END VIDEO CLIP)

ROBERTS: So Peter, a tremendous increase in the amount of suicide attacks. How much of a problem are they and what kind of risks do they pose to the Afghani government?

BERGEN: They are less effective than the Iraqi suicide attacks. A lot of these Afghan suicide attackers are just blowing themselves up. But over time they'll learn the attack against Bagram Air Force base that was supposed to be targeted at Vice President Cheney killed more than 20 people. So once you have a lot of these attacks, we had 139 last year, 27 the year before. It's going up exponentially, it stops reconstruction. It makes people frightened. It gives the impression the central government doesn't have things under control. So hopefully we will not see an exponential rise this year, but I'm not convinced that we won't.

ROBERTS: One thing that we heard about this, Bob, was that the U.S. military knew that there was a suicide cell in the area while the vice president was there, but they hadn't shared that information with the Afghan military. Is there a disconnect here? Is the U.S. sharing enough information with the Afghans?

GRENIER: Well, it's hard to say, and I suspect that there are differing degrees of reliability that certain Afghan officials have and that probably has some influence over the flow of information to them. In this particular case though from what I can tell, it seems as though this was fairly in-specific information. There was an indication that there was a suicide bombing unit that was somewhere in the Bagram area, but it doesn't add up to a specific threat to the vice president.

ROBERTS: Another surprising piece of information that we received on Thursday when Mullah (INAUDIBLE) who was the chief Taliban military commander come out and said that he had hundreds of suicide bombers who were ready to go in the spring offensive, also said that he was in regular contact with Osama bin Laden. Here's a little bit of his statement translated from earlier this week.

(BEGIN VIDEO CLIP)

TRANSLATOR: It's hard for anyone to meet bin Laden himself now, but we know he's still alive. He's not yet martyred. Information about him is easy to get. His comrades stand shoulder to shoulder with us. They keep us informed.

(END VIDEO CLIP)

ROBERTS: He seems like a serious guy and if we are to believe him, that they have hundreds of suicide bombers, what does this say about this anticipated spring offensive? What can we expect?

BERGEN: I don't think it's implausible they have hundreds of suicide bombers. They have got 139 to do it last year, so it seems that there is a rather large pool of people available. Clearly the spring offensive is going to be very bloody, everybody agrees. This is kind of a make or break year in many ways for Afghanistan. His claim that he's in touch with bin Laden, at least through intermediaries, I think is also reasonably plausible because according to U.S. military officials, Taliban and al Qaeda are sort of morphed increasingly, sharing tactics, ideology, personnel.

ROBERTS: And quickly Bob, Pakistan doesn't come to the table here, is there a hope of winning this engagement?

GRENIER: The engagement with the Taliban? I think that the chances right now for our success in this campaign are limited and if we don't have the active support of the Pakistanis, I would put them at next to nil.

ROBERTS: I wouldn't be surprised if the heat starts coming down on Musharraf to an even greater degree. Bob Grenier, Peter Bergen, thanks very much.

Still ahead, China, strategic competitor or strategic threat? Was the stock market plunge just the tip of China's newfound influence? And straight ahead, Sunni versus Shiite, does the religious war in Iraq threaten to engulf the entire Middle East and is America fanning the flames? THIS WEEK AT WAR.

(COMMERCIAL BREAK)

ROBERTS: We have all heard how the Sunni/Shiite split is tearing Iraq apart. Does it threaten to engulf the entire region and is the United States secretly encouraging the sectarian divide? Noah Feldman is an adjunct senior fellow at the Council on Foreign Relations, also a professor at New York University's law school. He has an article by the way in this weekend's "New York Times" magazine entitled choosing a sect in the Sunni/Shiite struggle. Does the U.S. have to take sides?

And back with us again is Bing West, former assistant secretary of defense. Let's take a quick look gentlemen at the lay of the land here and the map behind me you can see Sunnis, predominantly Sunni areas are highlighted in brown, predominantly Shiite areas in green, and the Kurds are a section of red to the north here. Saudi Arabia, Jordan, Syria the entire western section of Iraq, all predominantly Sunni, as well as Afghanistan and Pakistan. The Shiites have a majority in Iran, in the southwestern area of Iraq and then there's a pocket of Shiite influence as well there in Afghanistan. Noah Feldman, give us if you would the "Readers Digest" version of the history here of how the split started.

NOAH FELDMAN, COUNCIL ON FOREIGN RELATIONS: Fourteen hundred years ago when the prophet Muhammad died, there was a dispute about who would succeed him as the leader of the Muslim community. One party supported the prophet's cousin. a man called Ali and they became known as the party of Ali and the party is the word for Shia. They lost the dispute ultimately. Instead, the community of the Muslims had its leadership shifted to a companion of the prophet who was not a relative of the prophet. So what began as a political debate, then hardened into a religious and theological debate so you could say it's as old as Islam itself.

ROBERTS: So now we see that the Shiites on the rise and if you read (INAUDIBLE) Nasser's (ph) book on the Shiite revival, it really lays it out in quite an understandable way. We see Iran's Shiite government on the rise here and Bing West, what kind of tension is that creating across the broader Middle East, particularly with these Sunni dominated nations like Saudi Arabia?

WEST: Well, Saudi and some of the others are nattering at the edges, but they're just trying to position themselves. In essence, the issue still remains inside Iraq between the Sunnis and the Shiites, because the Shiites now have the power and they're saying now that we have the power, we don't want to share it with the Sunnis.

ROBERTS: And now Saudi Arabia is coming out and warning the United States, that if it looks like the Sunnis are going to get decimated by the Shiite-led government, then Saudi Arabia may step in. And there is some word -- this comes to us from Sy Hersh in his latest article in the "New Yorker," that the American government is involved in a clandestine operation to try to put more pressure on Shiites in the overall Middle East by leaning on them in other countries.

Here's what Sy wrote. In Lebanon, the administration has cooperated with Saudi Arabia's government which is Sunni in clandestine operations that are intended to weaken Hezbollah, the Shiite organization backed by Iran. The U.S. has also taken part in clandestine operations aimed at Iran and its ally Syria. A byproduct of these activities has been the bolstering of Sunni extremist groups that espouse a militant vision of Islam and are hostile to America and sympathetic to al Qaeda. Noah Feldman, does this scenario sound plausible?

FELDMAN: It's definitely possible and Sy Hersh has a way of getting his facts right. The problem really is that in the Middle East when you have a deep divide like the one between Sunni and Shia, if you support people who you think on your side, you may end up secretly supporting people who really hate you. So if we support Sunnis against Iran, we may end up with people who to some extent are sympathetic to al Qaeda.

ROBERTS: Bing West, Ahmadinejad, who is the president of Iran, is in Saudi Arabia this weekend, ostensibly to try to placate the Saudi's fears that Iran is trying to become the dominant power in the region. He seems to be worried about this idea of an expanded Sunni/Shia conflict. Do you think that the region is heading in that direction?

WEST: No. The issue becomes, Ahmadinejad wants to be the dominant figure there, obviously, and that's why he's fussing around with nuclear weapons and things of that sort. But I wouldn't say this is fundamentally religious driven. This is basically driven by a desire to have political power.

ROBERTS: Noah Feldman, does the United States have to take sides in this? Obviously it's siding with the Shiite government in Iraq, trying to bring peace and stability to that nation. It's also got an awful lot of friends on the Sunni side of the equation. As we mentioned, Saudi Arabia, Jordan, just to name a couple. Does the U.S. have natural allies in the region?

FELDMAN: We really don't. Our allies are the people who are either prepared to be moderate and work with us or in a best case scenario, even agree with some of our values like democracy and the people who are willing to fight against terrorism. That could be Sunnis in some cases. It could be Shia in other cases. And if the conflagration in Iraq between Sunni and Shia deepens and there's greater tension between these groups in the region, we do not want to be seen to be taking a side in that fight.

ROBERTS: Bing West, now that Iran is tasting this newfound influence, and Ahmadinejad actively trying to make friends the world over, can Iran's ambitions be contained? Can they be put back in the bottle again? What does it mean for Iraq?

WEST: Well, I think Noah was dead on when he said we don't have permanent allies here, but we have a permanent interest and that is not allowing Iran to develop nuclear weapons because that will dramatically change the dimensions in the Middle East. Whether that can be successfully done or not is about a four-year issue and it doesn't just relate to the United States. It will have to be that many other nations stand up and say, there are certain limits to how far we're going to allow Iran to go.

ROBERTS: Well, it's an enormously complex issue with very serious implications. Thanks for trying to help us make sense of it all. Bing West and Noah Feldman, appreciate your time.

Still ahead this hour, faulty intelligence on North Korea's nuclear program. Can we believe anything that the White House tells us anymore? Also ahead, we're back on the Afghanistan story and General Marks is back at the map. How rugged tribal lands are a perfect hideout for the Taliban and al Qaeda. THIS WEEK AT WAR.

(COMMERCIAL BREAK)

(NEWS BREAK)

JOHN ROBERTS, HOST: The Taliban's military commander claims he has hundreds of suicide bombers ready to attack in Afghanistan. One of them targeted the vice president last week.

How do they move across the border between Pakistan and Afghanistan so freely?

CNN military analyst Brigadier General James "Spider" Marks, U.S. Army, retired, is back at the map for us this week.

Spider, give us a lay of the land, if you would.

BRIG. GEN. JAMES MARKS, U.S. ARMY (RET.): Sure.

ROBERTS: What's the terrain like? Where are the areas where the Taliban and al Qaeda is regrouping? What are the challenges facing the Pakistanis and the U.S. military trying to go after them?

MARKS: John, let's get into the details a lot more closely, if we can.

Clearly, when you get along the border business Afghanistan and Pakistan, it is absolutely mountainous. By way of kind of orientation, this is where the vice president was this week. Waziristan, a lot of insurgent activity takes place there, moves freely across the border. And an al Qaeda leader was picked up in Quetta in Pakistan just this week.

ROBERTS: This was Mullah Obaidullah?

MARKS: Yes.

ROBERTS: Said to be...

MARKS: Absolutely.

ROBERTS: Said to be the number three?

MARKS: Number one or -- number two or number three guy. That's exactly correct.

ROBERTS: Right. And he was the former defense minister there, correct?

MARKS: Yes.

ROBERTS: Right.

MARKS: He was.

So let's move into Waziristan a little more closely and you get a sense of why the al Qaeda can move so very, very freely in this area.

as you go down a little closer, this is absolutely mountainous, very compartmentalized. You don't own any piece of this terrain unless you physically are standing on it. When you go down into these nooks and these crannies, this is very difficult to conduct any type of surveillance operations. You can move rather freely.

This internationally recognized border is simply just that. It's internationally recognized. The guys on the ground could care less. Tribal activity crosses over into Afghanistan and Pakistan very, very freely.

The vice president's trip to Pakistan this week was, let's tighten this up. Pakistani forces have routinely gone into Waziristan and have had a very tough fight.

ROBERTS: They have been severely beaten up, which is one of the reasons why Musharraf pulled them out and struck this deal with the tribal leaders there.

We remember that prior to 9/11, all of the al Qaeda camps were on the left side of that line in Afghanistan. Now, the United States has identified a number of camps on the Pakistani side of the border.

What would be the problem for the United States in going in there, unilaterally, with U.S. forces or air strikes, trying to clear out those camps?

MARKS: Well, first of all, John, the United States would not unilaterally act in Pakistan's sovereign territory. This is the closest ally...

ROBERTS: Despite the threat that they pose...

MARKS: Yes.

ROBERTS: ... to the United States?

MARKS: Absolutely. There must be a very tight handshake between the Pakistanis and the United States before any operation would take place in this type of terrain.

Now, your point about the training camps is a good one. What we saw in Afghanistan was a large footprint, very discernible. You could pick it up through technical means, satellites, imagery...

ROBERTS: They were out there in the open, then?

MARKS: Absolutely. Almost come and get me, daring that type of an engagement. In Pakistan, what we're seeing right now is very pinpoint, very precise, much more compartmentalize, decentralized in terms of the training. A tougher target to go after. But we know where they are and it could happen.

ROBERTS: How deeply are they dug in?

And this is in the area which is just on the Pakistani side of the border from Tora Bora.

Any indication that they may be trying to reclaim that ground, as well?

MARKS: I'm not sure and I couldn't attribute anything to what the bad guys are doing in the vicinity of Tora Bora. But if you're to connect dots, it would make a lot of sense. They are familiar with this terrain.

ROBERTS: You know, somehow, Spider, this seems like a bad movie that we've seen before...

MARKS: That's right.

ROBERTS: ... and we're being forced to watch it again.

MARKS: That's correct. And we've got to maintain that relationship with the Pakistanis. It must be done well.

ROBERTS: All right, Spider, thanks very much.

MARKS: Thank you.

ROBERTS: Still ahead, the Shanghai surprise. China's newfound economic clout torpedoes Wall Street.

What is its growing military might capable of?

And up next, did they blow it again?

Was the intelligence on North Korea's nuclear program wrong?

But first, a look at some of the fallen in this week at war.

(COMMERCIAL BREAK)

ROBERTS: Did the United States make another policy blunder because of bad intelligence?

The U.S. went to war in Iraq over non-existent weapons of mass destruction. Now, officials are saying well, maybe North Korea didn't have a uranium enrichment program after all.

Joining us is the "New York Times'" Davis Sanger, who had a front page report on the revelations on Thursday, and David Albright. He's the president of the Institute for Science & International Security, also a former United Nations weapons inspector in Iraq.

A White House intelligence officer, Joseph Detrani, revealed that the administration's new assessment of North Korea's nuclear program on Tuesday.

(BEGIN VIDEO CLIP)

JOSEPH DETRANI, CHIEF INTELLIGENCE OFFICER: We had high confidence -- the assessment was with high confidence that, indeed, they were making acquisitions necessary for, if you will, a production scale program. And we -- we still have confidence that the program is in existence at mid-confidence level, yes, sir.

(END VIDEO CLIP)

ROBERTS: At the mid-confidence level.

David Sanger, did they get it wrong again?

DAVID SANGER, "NEW YORK TIMES": Well, they certainly have changed where their confidence levels were. Here's what they knew. They knew that A.Q. Khan, who was the Pakistani engineer, shipped a relatively small group of centrifuges, as has been widely reported, to the North Koreans.

But then they took a leap about how quickly the North Koreans could turn that into an operative uranium enrichment program. And it's that leap that they early on had high confidence in and now they have mid-confidence. And mid-confidence, John, means there are dissents, we're not quite certain.

And so it's possible this stuff is being used for enrichment. It's possible it's sitting in a warehouse.

ROBERTS: Very reminiscent of what happened in Iraq with the intelligence.

David Albright, you've been skeptical about this for a while. You wrote a paper recently, February the 23rd, in which you said, "Like the Iraqi high strength aluminum tubes used by the CIA to argue that Iraq was building thousands of gas centrifuges, the analysis about North Korea's program also appears to be flawed. The intelligence community conducted this assessment at the same time it produced a number of flawed assessments about Iraq's WMD program, which alone should trigger concern about past assessments of North Korea's centrifuge problem.

They get in trouble every time they talk about aluminum tubes.

DAVID ALBRIGHT, INSTITUTE FOR SCIENCE & INTERNATIONAL SECURITY: Yes, no, it's -- it was -- it's ironic. I mean it -- and it is -- and it could be -- we're worried that it could be some of the same people that were involved in extrapolating to a nuclear weapons program in Iraq were also involved in this assessment.

And the trouble is aluminum tubes are -- particularly the type North Korea got -- easy to obtain. And by themselves, they're not a good indicator of a jump to large scale production.

ROBERTS: And in Iraq, it turned out that it looked like they were the casings for rocket motors.

ALBRIGHT: That's right.

ROBERTS: But this intelligence assessment, David Sanger, in 2002, led James Kelly, the U.S. diplomat, to go to Pyongyang and say we caught you, you're cheating. A big confrontation.

Was that all for nothing now?

SANGER: Well, the big concern here, John, is whether or not the confrontation, not having been thought out, then led to a series of worse events. The U.S. cut off North Korea's oil. The North Koreans said oh, yes?

We're throwing out your inspectors. And, by the way, we're going to take the plutonium that they had in an existing program, a program everybody agrees exists...

ROBERTS: And with these spent fuel rods...

SANGER: The spent fuel...

ROBERTS: ... they were under lock and key.

SANGER: They were under lock and key, took them out and produced six, maybe more, nuclear weapons worth of fuel.

So the big question is, had we handled this differently and had we handled it better, would they not have turned those into weapons that we now have to figure out a way to get out.

ROBERTS: So what do you think the answer to that question is, David?

ALBRIGHT: No, I worry about it. And certainly I wouldn't want to see that kind of assessment ruin this new deal when -- when the administration and North Korea and the other powers are trying to put an agreement back together, to get back to the original goal of the agreed framework that was ended to get rid of North Korea's nuclear weapons program and to denuclearize the Korean Peninsula.

ROBERTS: Now, David Albright, let me ask you this question, because as a journalist, David may have to couch it just a little bit.

Does the White House have any more credibility when it comes to these weapons programs and your intelligence?

ALBRIGHT: I think you still have to be very skeptical. And it -- I think the intelligence community is doing better. I think the administration and the White House want a solution on North Korea. They do want a diplomatic solution. And I think they are partly backtracking on this now because they don't want to be bit by their own assessment of earlier years.

ROBERTS: So what does this mean, David Sanger, in terms of Iran?

We already had this bit of a dustup over intelligence as to where these EFP parts were coming from. Iran seems to be pretty up front with this idea that they're creating an uranium enrichment program.

But should we still question whatever intelligence the U.S. comes up with because they've been wrong twice?

SANGER: Well, the good news about Iran is that unlike in North Korea, we have inspectors that are still in there. There are limited in where they can go and I think one of the big concerns is are they seeing everything.

In North Korea's case, if the agreement goes through, inspectors will go back in and that's when we'll get a chance to tell whether the intelligence was right.

ROBERTS: All right, I'll tell you, it's just -- it's so surprising to hear this story repeated again and again and again.

David Sanger, David Albright, thanks very much.

From North Korea over the border into China -- the Shanghai Stock Exchange rattled markets around the globe this past week.

Is China emerging as America's greatest threat?

(COMMERCIAL BREAK)

ROBERTS: Five years ago, the Shanghai Stock Exchange was barely a blip on the radar screen. This past week, Shanghai's nosedive took Wall Street with it, erasing billions of dollars in investors' money.

President Bush once called China a strategic competitor.

But is it now becoming a strategic threat?

David Shambaugh is the director of the China Policy Program at George Washington University and Richard Phillips is a senior fellow at the German Marshall Fund, also the CEO of Pilot Freight Services, which does a lot of business in China.

David Shambaugh, it used to be said that if the U.S. sneezes, in terms of its markets, the world catches cold. Now it seems to be if Shanghai sneezes, the U.S. gets the flu.

DAVID SHAMBAUGH, THE GEORGE WASHINGTON UNIVERSITY: Well, Asia certainly would get the flu if the Chinese economy were to have a serious downturn. The rest of the world, the United States and the European Union, I might add, who is China's number one trading partner, would get a bad cold.

And it just shows the increased centrality of the Chinese economy to the global economy. The World Bank estimates that China accts for 20 percent of global GDP today. There are the -- they hold the world's largest foreign exchange reserves. They're the largest recipient of foreign direct investment. They're the fifth, I think, largest trading power in the world. So that's...

ROBERTS: They also hold a tremendous amount of our debt, $820 billion at last count, and our trade deficit with China, $232 billion.

Here's what an editorial in the "St. Louis Post Dispatch" said about it on Thursday. They said: "Some analysts already say that we have handed the Chinese an economic weapon that they could turn on us. By deliberately dumping their dollars" -- that's U.S. dollars -- "the Chinese could create economic turmoil in the United States."

Richard Phillips, how exposed are we?

RICHARD PHILLIPS, GERMAN MARSHALL FUND: The truth is whether China is a strategic threat or a strategic competitor or, as President Clinton once said, a strategic partner, is really up to us.

Is it true that we are exposed to the Chinese economy in that we are somewhat dependent on it now, and Tuesday was a good example of that.

ROBERTS: Yes, they make everything we buy.

PHILLIPS: And they make almost everything we buy. They also buy some of our things. But for the most part, they're sending things here. And the truth is if we treat the Chinese economy as a -- as a competitor, solely as a competitor and as a threat, then it -- then that's what it will be. If we take steps to integrate our economies, to take the lessons from Tuesday and help the Chinese economy learn from those mistakes and increase stability, increase market transparency, China could be a wonderful partner for us. ROBERTS: But everybody is asking this question, why are they building up their military so much? Why is -- why is so much of their GDP going into military growth?

Here's what Lieutenant General Michael Maples, who is the head of the Defense Intelligence Agency, had to say about China's military buildup on Tuesday.

(BEGIN VIDEO CLIP)

LT. GEN. MICHAEL MAPLES, DEFENSE INTELLIGENCE AGENCY DIRECTOR: DIA expects China's nuclear weapons stockpile to grow over the next 10 years, as new ballistic missile systems reach operational status. We also believe China has produced sufficient weapons grade fissile material to meet its military nuclear weapons requirements for the immediate future.

(END VIDEO CLIP)

ROBERTS: David Shambaugh, there's also reports that the Chinese are beefing up their fleet of nuclear submarines and some people say that China is going to be, in the years to come, the greatest threat facing the United States.

Agree? Disagree?

SHAMBAUGH: I disagree, profoundly disagree, actually. Certainly on the military level, the Chinese military is nowhere near American capabilities or NATO capabilities, or, for that matter, Japan's capabilities. They have only one nuclear submarine at the moment. The DIA chief is correct, they are building more. But getting them into the water and keeping them functioning is another story.

Nuclear weapons?

Yes, he's also right. They've got about 480 warheads compared to several thousand on our part.

They have no aircraft carriers. They have no power projection. They have no bases abroad. They can't put a fleet or soldiers more than a couple of hundred nautical miles...

ROBERTS: But could you put the caveat yet behind all that?

SHAMBAUGH: In 20 years the Chinese military will probably be able to patrol the Pacific Ocean, maybe down through the Indian Ocean, perhaps to the Persian Gulf. But not today.

ROBERTS: Yes.

And Richard Phillips, your company sees China as a tremendous economic opportunity. You were telling me off camera that you've had double digit growth there.

But it's still not a free country.

Whatever happened to this idea that free enterprise would lead to a free China?

PHILLIPS: I think what we see in China is, as the -- as the entire country sort of moves toward greater liberalization, the economic regulations have definitely been ahead of the -- the political reforms and social reforms.

You have to understand, this is a country with a 3,500 year history and not with great experiences with sort of social upheaval in the last 50 years. We've had the Cultural Revolution. We've had the, you know, Great Leap Forward. These did not end well.

China is -- I, you know, while I would love to see greater liberalization politically and -- and I think we all would -- China is understandably slow to make radical transforms, both politically and economically, at the same time.

ROBERTS: And there is this huge debate that's raging, particularly among conservatives now, believing that White House policy has created a giant that should have been kept in the bottle.

David Shambaugh, Richard Phillips, thanks very much.

Appreciate your time.

SHAMBAUGH: Thanks.

ROBERTS: Coming up, the new diplomatic push on Iraq, this week at war.

(COMMERCIAL BREAK)

ROBERTS: Well, here we go again. The administration is walking back intelligence that led the nation into confrontation. This time it's not Iraq, but North Korea. Officials announcing this past week that they only have mid-level confidence that Pyongyang was pursuing a program to enrich uranium for nuclear weapons.

Back in 2002, State Department officials and the White House sounded certain about it. They leaned hard on North Korea's leaders, accusing them of cheating, rallying world support for sanctions to bring them to their knees.

North Korean leaders saw this as a threat to their very existence, kicked United Nations inspectors out of the country, broke the seals on spent fuel rods and proceeded to extract enough plutonium to make a number of nuclear bombs. They tested one of them last fall.

Now, U.S. officials say they're not so sure.

So we're left to ask, if there had been no confrontation, no accusations of cheating, not threats, would inspectors still be in North Korea? Would those seals still be on the fuel rods? And would North Korea have had a nuclear bomb to test?

It's a fair question, but at this point kind of moot. In all of this, one thing is certain -- once the nuclear genie is out of the bottle, it's awfully hard to put it back in.

A quick check now on what we'll be looking for next week at war.

On Tuesday, a Senate hearing investigates care and conditions at the Walter Reed Army Medical Center.

Wednesday, King Abdullah of Jordan speaks to the U.S. Congress, sharing his concerns about the war in Iraq, refugees streaming into his country and unrest across the broader Middle East.

And Saturday, Iraqi Prime Minister Maliki will host a neighbors conference to discuss violence in Iraq and security across the region.

Thanks for joining us on THIS WEEK AT WAR.

I'm John Roberts.

Straight ahead, a check of the headlines.

Then, CNN Special Investigations Unit -- "Ambush At The River of Secrets."

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