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Terror Attack in Jerusalem; Pentagon Responds to Times Square Explosion; Double Bombing in Baghdad; Ongoing Democratic Battle for the White House

Aired March 6, 2008 - 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: I'm Wolf Blitzer. You're in THE SITUATION ROOM.
We'll have election news in just a moment.

But we begin with the breaking news from Jerusalem. A stunning new escalation of violence even as the Bush administration tries to put the lid back on the overall situation in the Middle East.

A gunman broke into a Jewish seminary, spraying automatic weapons fire. At least eight people are dead. Many, many more are taken to Jerusalem hospitals. Authorities are calling it a terrorist attack.

Let's go straight to CNN's Atika Shubert. She's in Jerusalem with the very latest.

It's been a long-time since we've seen this kind of situation unfold in Jerusalem -- Atika, what exactly happened?

ATIKA SHUBERT, CNN CORRESPONDENT: Well, what we know is that the attacker apparently walked into this front gate behind me and began opening fire. He had an AK-47 and a pistol.

He had time to change his clip as he moved inside the school and continued to open fire. He killed at least eight people, injured scores of others. Most of them were students in this religious seminary between the ages of 18 and their early 20s.

Now, we don't know exactly who he was. What we do know is that an off-duty army officer at the scene apparently shot the attacker and killed him. Police are now trying to identify who he was and how he managed to get in here.

Nobody has claimed responsibility for this attack. But as you can tell here, it's a very emotional scene. Religious -- young religious young men have gathered here from the neighborhood, are demanding justice, are demanding revenge for this attack.

BLITZER: Atika, I guess a lot of people are not only bracing for that kind of immediate response,, but the Israeli government is going to have to make a major decision right now -- what's happening in Jerusalem, what's been happening in Gaza over these past several weeks and months.

Is the Israeli cabinet about to meet? Are we going to be hearing from the prime minister, Ehud Olmert, any time soon?

SHUBERT: We should be hearing from him very soon with a response. The Israeli police now trying to find out exactly who carried this out. And that will determine a lot about what the government's response to this will be.

As you point out, there's already also been a response to those daily rocket attacks coming from Gaza. There have been military actions happening inside Gaza. We'll have to find out more about where this attacker came from and what the Israeli government will do.

What this definitely does is put more pressure on the Olmert government to take a tougher stand and possibly to stop negotiations, to stop that peace process. One person we spoke to said this attack happened precisely because of the peace negotiations that are going on.

BLITZER: Atika Shubert watching this in Jerusalem.

Stand by, Atika. We'll be checking back with you.

The Jerusalem attack comes just a day after the secretary of state, Condoleezza Rice, announced the resumption of Israeli- Palestinian peace talks. Those talks were derailed by violence across Israel's border, as we said, with Gaza, as rockets fired by Islamic militants rained down on Israeli towns in the southern part of the country.

Israel's military has retaliated with strikes that have killed dozens of Palestinians. The peace talks were put into motion in November, when President Bush launched an international conference in Annapolis, Maryland. His stated goal -- a peace agreement by the end of this year. That's looking increasingly unlikely, with Hamas militants controlling Gaza.

The U.S. and Israel deal only with the government of the Palestinian Authority, President Mahmoud Abbas on the West Bank. And at this point, even the U.S. is not even calling for a cease-fire. We're watching this story very, very closely.

We're also watching another bombing today, this one in Times Square. Authorities are hunting for a person seen riding a bicycle shortly before a pre-dawn bombing at a military recruiting station right in the heart of Manhattan.

It was all caught on surveillance video. No one was hurt. And New York's major says his city will not be intimidated. But the U.S. military is concerned.

Let's go to our Pentagon correspondent, Jamie McIntyre. He's watching this story for us.

What's been the immediate reaction from the Pentagon -- Jamie?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, the U.S. Army says that this attack has not hampered its recruiting activities in New York. And, of course, coming when it did, at 3:40 in the morning, they were no recruiters there, nor were there any prospective recruits. And they simply moved operations to their Union Square station.

Again, as you said, authorities are looking for that bicyclist who dropped -- who put a bomb down. As bombs go, it wasn't very big -- a small explosive in a military style ammunition container, about the size of a lunchbox.

It appears intended to send some sort of a message, particularly at the hour and the type of explosive. But the Pentagon saying it can't confirm that this was a deliberate anti-military message.

But it's under investigation. There was a small amount of damage to the facility, which will be repaired by the Army Corps of Engineers. And, meanwhile, the Army did send out an e-mail to all of its other 1,600 recruiting stations nationwide, telling them to be extra vigilant -- Wolf.

BLITZER: All right. Jamie McIntyre, thanks very much.

What's happening in Jerusalem, a terrorist incident there, a bombing in New York. Now we're learning of a huge terrorist bombing in Baghdad, as well -- 50 people dead, hundreds injured.

We're going to go to Baghdad and report on what's going on -- a horrific, horrific day in the Iraqi capital. That's coming up, as well.

We're following the latest developments in the race for the White House, including growing concern among some Democrats that a prolonged battle could actually hurt both the candidates and the party's chances in November.

Let's go back to Brian Todd. He's picking up this part of the story for us.

Brian, how concerned are the Democrats?

BRIAN TODD, CNN CORRESPONDENT: Well, there is some real concern among Democrats, Wolf, but not enough to change what we're hearing from the candidates. Today, Hillary Clinton kept up a line of attack she has often pressed against Barack Obama.

(BEGIN VIDEOTAPE)

TODD (voice-over): Hillary Clinton shows no signs of letting up on her criticism of Barack Obama over experience.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Senator McCain will bring a lifetime of experience to the campaign. I will bring a lifetime of experience. And Senator Obama will bring a speech that he gave in 2002. I think that is a significant difference.

TODD: It's an issue that Senator Obama has been trying to push back on. SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I have not seen any evidence that she's better equipped to handle a crisis.

TODD: And with the race a dead heat, the Democrats have plenty of time to continue attacking each other.

JIM VANDEHEI, POLITICO: You're looking at several weeks, if not months now, of these two candidates going at each other's throats. They know what their weaknesses are. They also know the only way to really get an advantage is to expose those weaknesses, to really pounce on them.

TODD: But going negative can carry a risk. Hillary Clinton already has a high unfavorable opinion rating -- 13 points worse than Obama in CNN's February poll. And as for Obama...

DAVID GERGEN, SENIOR POLITICAL ANALYST: If he starts throwing punches that don't land well, he's going to be -- they're going to come right after him -- wait a minute, I thought you were the new kind of politics.

TODD: Meanwhile, John McCain has wrapped up the Republican nomination and has time to work on uniting his party.

VANDEHEI: I mean this is a godsend for John McCain. He can spend the next couple of months just pounding on Democrats relentlessly, raising money, putting together an organization, getting a head start into the general election, while the two people -- one of whom he's going to be competing against -- are doing the dirty work for him.

(END VIDEOTAPE)

TODD: And both Democrats certainly have the money to continue. Obama raised $55 million last month and Clinton reports raising $3 million just since her Tuesday night victories. But the attack lines they use on each other now could come back to bite them in November -- Wolf.

BLITZER: Brian, could Democratic officials try to intervene if it gets too ugly, shall we say?

TODD: Indicating they may be getting ready to do. Howard Dean, the Democratic party chairman, said this morning that if it does get too nasty, there will be discussions about what to do with that.

BLITZER: Brian, thanks very much. Brian Todd watching this story.

Let's go back to Jack. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: If you're John McCain, the good news is you've been endorsed by the president of the United States, George Bush. That may also be the bad news. Once bitter enemies, these two staged a virtual love-in at the White House yesterday.

While Bush sand McCain's praises and promised to do anything he could to help him -- whether that means showing up or staying out of the picture. Mr. Bush insists the election will be a referendum on McCain, not on him -- really?

Not everybody feels that way. Bush is highly unpopular. He's tied, much like McCain, to an unpopular war. He's presiding over an economy that, according to billionaire investor Warren Buffett, has already slipped into recession. Allan Chernoff reporting a few minutes ago 900,000 Americans now are losing their homes.

So just how closely does McCain want to be identified with President Bush? Some Democrats are already calling McSame and referring to him as George Bush Lite. McCain's campaign suggests they'll use President Bush for fundraising and at events in heavily Republican parts of the country. But it doesn't sound like there will be a lot of joint appearances.

The campaign insists this has nothing to do with the president's low approval ratings, but rather because McCain needs to stand in the sun on his own. This is more straight talk from the McCain camp.

The Democrats are giddy about all this, being able to tie McCain to the president. The DNC has already posted a video clip of Mr. Bush's endorsement on their Web site, saying that McCain has "worked hard over the last eight years to throw away his maverick image and morph into the ultimate Bush Republican," ergo the nickname, McSame.

When McCain was asked if the endorsement might hurt him among Independent voters, he answered that he's on the same page as the president when it comes to the party's principles, along with their shared conservative philosophy -- which was not an answer to the question that he was asked. Even more straight talk.

Here's the question: What will President Bush's endorsement mean for John McCain?

Go to CNN.com/caffertyfile. You can post a comment on my blog -- Wolf.

BLITZER: Jack, thank you.

They'll fight some key skirmishes, but the next big state battle -- battleground for the Democrats is Pennsylvania.

(BEGIN VIDEO CLIP)

SEN. BOB CASEY (D), PENNSYLVANIA: I don't think people in Pennsylvania will have any patience for a real nasty campaign.

(END VIDEO CLIP)

BLITZER: As the candidates fight for every single delegate, Pennsylvania's patience may be sorely tested. We're going to speak with Senator Bob Casey.

Also, Bill Clinton under wraps -- he was talking freely on the campaign trail, but his wife's campaign now keeping the former president away from the news media.

And it's known for its safety record, but now Southwest Airlines is hit with a huge fine for allowing planes to fly in violation of safety regulations. A special report from CNN -- our special investigations unit. Drew Griffin watching this story.

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

(COMMERCIAL BREAK)

BLITZER: In the next huge battleground for Hillary Clinton and Barack Obama -- that would be Pennsylvania -- 158 Democratic delegates are up for grabs. So what does it mean for the candidates and for the state?

And joining us now, Senator Bob Casey, Jr. , the Democratic Senator from Pennsylvania.

Senator, who knew that April 22nd, when Pennsylvania is about to hold its primary, that this would be such a great date to try to determine who the Democratic nominee is going to be?

CASEY: Well, Wolf, I wish I could have said I would have predicted it, but I didn't. But I think it is -- it's going to be a great debate in our state. And the think that I'm most concerned about at the end of this is that we can bring our party together. And, also, in the State of Pennsylvania, I want to make sure that both candidates -- both candidates, Senator Obama and Senator Clinton, speak to the issues that people in Pennsylvania are most concerned about.

BLITZER: Why can't you decide who you like better?

CASEY: Well, because I'm concerned about unity at the end of the road. I think we've got to have senators and elected officials in the middle who can bring our party together, because we have an opportunity this year not just to win the presidency, but win it with a mandate.

And if we can bring together a mandate at the presidential level, with more senators on the Democratic side, I think we can bring about the change that we've been trying to bring about, but has been blocked in the Congress. But we need a president to help us.

BLITZER: You like both of these candidates, I assume.

CASEY: They're great candidate.

BLITZER: But you've been reluctant to endorse one of them.

CASEY: I have.

BLITZER: Because Governor Rendell, as you know, has endorsed Hillary Clinton. What would be wrong -- are you thinking about endorsing one of these candidates?

CASEY: I said that I'm going to stay neutral through our primary and I think that's the right decision, for a variety of reasons. But the principle reason and the overwhelming reason is that we've got to bring our party together. We have to unify. And it's not going to be easy in the context of this race.

You've got two very strong candidates, the likes of which we haven't seen ever, that I can remember. And, secondly, they're both historic figures. It's going to be difficult to bring them together. I think we can, but we're going to need people in the middle to do that.

BLITZER: How worried are you that the tension between now and April 22nd between these two candidates is going to get really ugly and going to poison the atmosphere and eventually hurt whoever does get the nomination?

CASEY: I am concerned about it. I hope that the candidates would focus on -- we've got about 725,000 kids under the age of five. They need health care and early education. We've got 1.2 million people with no health insurance in our state.

We need them to speak to those concerns and not get into a petty and divisive primary. I don't think people in Pennsylvania will have any patience for a real nasty campaign. I think it will hurt both candidates.

BLITZER: So it could boomerang against them if they...

CASEY: I think it could.

BLITZER: ...if they get into little sort of side issues.

CASEY: I think it could.

BLITZER: What about Hillary Clinton? She campaigned for you. She helped you get elected.

CASEY: She did.

BLITZER: And there's some sense, you know, why aren't you responding in kind?

CASEY: Well, that's part of the problem that I think a lot of elected officials have. Both Senator Clinton and Senator Obama helped me enormously in my campaign. And I'm grateful for that.

But I think I can also help whoever is the nominee in the fall. Because, as you know from your experience, Pennsylvania is barely blue in the gees. It's going to be very close and we're all going to need to work together to elect a Democratic president.

BLITZER: As Ohio goes, the saying goes, so goes the nation. But as Ohio goes, so goes Pennsylvania, because she won in Ohio...

CASEY: Maybe.

BLITZER: ...like 54 to 44 percent, which is a pretty decisive win. Some of the issues -- at least a lot of the issues, I should say, that are affecting voters in Ohio are affecting voters in nearby Pennsylvania.

CASEY: There are some parallels. But there are some dissimilarities, as well. Pennsylvania --

BLITZER: What's the biggest issue, as you see it, in Pennsylvania, besides children's health care?

CASEY: Oh, I don't think there's any question the economy is the number one domestic issue.

BLITZER: Bigger than Iraq?

CASEY: Well, I think Iraq is very close. But the reason Iraq will continue to be an issue in our state is we've lost 182 Pennsylvanians, over 1,200 wounded -- some of them grievously, permanently, irreparably wounded. The war will continue to be an important issue, as well as people's economic future.

BLITZER: Who is a stronger candidate going into the fall against John McCain?

CASEY: Oh, I don't know. It's -- I don't know the answer to that question. Yet I think the results of Pennsylvania's race will tell us more about that. But I don't think we'll really know that for a while yet. That's why it's important that this debate continue to be on the issues. But we've got to unify. If this goes into the summer, I think that's against the interests of electing a Democratic Party.

BLITZER: Do you believe whoever wins in Pennsylvania -- especially if it's a decisive win -- is best suited to be the Democratic presidential nominee?

CASEY: I think it will tell us a lot. I'm not sure it's going to be determinative. But I've learned not to predict in this business. I think everyone is out of predictions for this year. Because it's going to be -- there will be a lot of factors. But I think Pennsylvania can tell us -- tell us a lot.

BLITZER: Because if Hillary Clinton does win in Pennsylvania -- and right now she's ahead in the polls. We don't know what it's going to be like...

CASEY: That would be a significant win.

BLITZER: ...April 20th -- Pennsylvania, New York, California, Texas, Ohio -- these are big states out there. Forget about Florida and Michigan, which have their own problems right now.

Do you think, by the way, they should redo the primaries in Florida and Michigan in June?

CASEY: Well, we'll see about that. I don't profess to be -- to be knowledgeable enough to know how that should play out. I'm not an expert on the rules. But I do know that in our state, the benefit of having a contested primary that stays focused on the issues and doesn't get nasty and negative is not just great for the process, but it's also very good for the people of Pennsylvania.

We've got a lot of small towns and cities and communities between Philadelphia and Pittsburgh. And I think they're looking for a vigorous debate on these issues.

BLITZER: It's a great state. We'll be spending a lot of time there and pumping a lot of money into that state.

CASEY: We appreciate it, Wolf.

BLITZER: You're pretty happy about that, as well.

CASEY: Thank you.

BLITZER: You can think -- think of this as an economic stimulus package for the people of Pennsylvania.

CASEY: We certainly appreciate it.

BLITZER: Senator, thanks for coming in.

CASEY: Thank you, Wolf.

BLITZER: Hillary Clinton back in the game -- but can she win the next big contest? We've been talking about it -- Pennsylvania. And what will it take for her to secure the Democratic nomination?

Also, one lawmaker calls it one of the worst safety violations he's ever seen. A major airline allowed to fly unsafe planes for months.

And he's called a merchant of death -- one of the world's most notorious arms dealers. We're going to show you why he may soon be coming to the United States.

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

(COMMERCIAL BREAK)

BLITZER: A Baghdad shopping area turns to deadly chaos after two bomb attacks in a crowded area. More than 50 people are dead.

CNN's Kyra Phillips is in Baghdad. She just filed this report.

(BEGIN VIDEOTAPE)

KYRA PHILLIPS, CNN ANCHOR: It happened in the Karradah District. This is a very popular place here in Baghdad for the Iraqi people. There's lots of shopping, restaurants, art galleries. This is where people like to gather. They feel safe in this area -- lots of checkpoints within the area.

But two bombs went off in this specific district today. We're told now dozens of people killed, up to 125 people injured.

First, it was a roadside bomb. Not long after that, a suicide bomber walked into the crowd -- a crowd of people trying to help those injured from the first bombing -- and exploded with his suicide vest.

I don't know if you've seen inside those suicide vests before, but many times hundreds of small ball bearings -- when those explosives go off -- will spread out and that's what kills people, injures people. And today we saw not only an explosive vest go off, but also a roadside bomb.

In the Karradah District now, dozens of people being reported killed, up to 125 people injured.

Kyra Phillips, CNN, Baghdad.

(END VIDEOTAPE)

BLITZER: Carol Costello is off today.

Fredricka Whitfield is monitoring some other important stories incoming into THE SITUATION ROOM right now.

Fred, what's going on?

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello again, Wolf.

The parents of a nine-year-old autistic girl are saying the government's decision to compensate them proves the connection between the disease and vaccines. As a toddler, Hannah Poling received five routine childhood vaccines at once, covering nine diseases.

Her parents say within 48 hours her health declined severely. A federal program has agreed to compensate the family, saying Hannah's predisposition to autism symptoms had been aggravated by the vaccines. An actual dollar amount, however, has not been set.

And take a look at this rare photo. It is thought to be the only picture of Helen Keller cradling a doll and the earliest one of her with her teacher, Anne Sullivan. "Doll" was the first word Sullivan taught the blind and deaf girl when they first met back in 1887. The photo was hidden in a family album of the woman who actually played with Helen Keller when she was eight-years-old.

Hard to believe -- Wolf.

BLITZER: Fred, thanks very much.

We're seeing a lot of him out on the campaign trail, but we're not hearing much from former President Bill Clinton as he campaigns for his wife. We're going to show you why he's being kept under wraps, as some are suggesting -- at least from the national news media.

Also, will Obama supporters be alienated if he doesn't get the nomination and what would that mean for Democrats in November?

Plus, he helped arm insurrections from Africa to South America. Now a notorious arms dealer is under arrest and may be coming to America. Barbara Starr working this story.

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

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, at least eight people killed in a shooting at a Jewish seminary in Jerusalem. Police report the lone gunman dead, as well. Hamas is praising the attack, although not claiming responsibility. The Palestinian Authority president, Mahmoud Abbas, is condemning it.

Also, new tension right now in Latin America. Nicaragua is breaking diplomatic ties with Colombia its deadly cross-border attack on rebels in Ecuador. The Nicaraguan president, Daniel Ortega, accusing his Colombian counterpart of practicing -- and I'm quoting now -- "terrorist policies."

And new fallout from that undercover video of sick cows being abused at a slaughterhouse -- video that led to a massive beef recall. The Agriculture Department is re-examining recommendations to put cameras in some 800 meat processing plants nationwide.

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

We haven't been hearing much lately from Bill Clinton. He's still out there campaigning for his wife, but access to him by the news media has been sharply curtailed.

Let's go to CNN's Deborah Feyerick. She's watching this story for us.

Deborah, what is going on? Why are reporters being kept as far as away as possible from the former president?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, it's pretty simple. You know, reporters usually want unlimited access to candidates and their emissaries. Campaigns want to make sure access is controlled so that it's the right kind.

And that really might answer the question -- where is Bill Clinton?

(BEGIN VIDEOTAPE)

FEYERICK (voice-over): Once not long ago, before the South Carolina primaries, journalists assigned to Bill Clinton say they could get close enough to ask questions.

UNIDENTIFIED MALE: Mr. President?

UNIDENTIFIED MALE: Mr. President?

UNIDENTIFIED FEMALE: Mr. President?

FEYERICK: But that was before his answers started making news -- the kind that draws attention away from the candidate. BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: They're feeding you this because they know this is what you want to cover. This is what you live for.

FEYERICK: So the press went from standing here to standing here -- a distance safe enough to keep the press from the president or the president from the press.

CNN's Brad Hodges covered the former president.

BRAD HODGES, CNN SENIOR PRODUCER: They were plenty of incidents when we were prevents from leaving the pen either to get sound or to get a better shot of Mr. Clinton.

FEYERICK: The pen or cage is an area designated for the media. Break the rules and leave and you risk getting shut out. Political insiders like John Edwards' former communications director said it's a way for campaigns to set the agenda and define the candidates message as opposed to the other way around.

CHRIS KOFINISH, EDWARDS COMMUNICATIONS DIRECTOR: You don't want to be responding to what a surrogate may or may not have said. You want to be hammering your message to create that echo effect to influence as many voter as possible. To help frame that message in the most advantageous position for you.

FEYERICK: President Clinton's communication director says the media has plenty of access and that nothing has changed.

(END VIDEOTAPE)

FEYERICK: Now, of course, there's always the security issue and how that is handled by local police, keeping people away. The campaign says the famous first husband focus is talking to voters and local reporters. That's where the votes are. His spokesman expressing frustration at the media for he sees as not covering the issues Mr. Clinton talks about at dozens of campaign stops each week -- Wolf.

BLITZER: Deb Feyerick. Thanks very much.

While Barack Obama is still in the lead in the delegate count, Hillary Clinton is now the candidate on a roll with wins in two big states. That would be Texas and Ohio. But is there enough ground left for her to conquer?

Let's discuss this and more with Clinton supporter James Carville, Obama supporter David Wilhelm. They both work to get the first President Bill Clinton elected back in '92. They worked very closely together. They're working for different candidates supposedly right now.

Guys, thanks very much for coming in.

James, first of all, your quick reaction to that report from Deb Feyerick. I we seeing a new effort to in effect keep Bill Clinton away from the press right now?

JAMES CARVILLE, CLINTON SUPPORTER: I saw in the '"New York Times" this morning, a big story about how he said reporters picked up on the fact he said that Senator Clinton had to win Ohio and Texas. People were questioning and that and saying he went too far. He turned out to be exactly right.

I said the same thing on CNN. So when he won hear. I was kind of laughing where they had this place they caged the reporters. I think about 80 percent of the public would like to see reporters caged more. Pretty funny. But I think he's out there campaigning. And he wants his wife to be front and center here. And I think that's what happened here. And for the good.

BLITZER: David. Is Bill Clinton helping or hurting his wife right now?

DAVID WILHELM, OBAMA SUPPPORTER: I think he helped in Ohio. He was part of what I think was a pretty smart rural strategy in this state. And a lot of people wondered why is he going to all these small towns? Well, it paid off. So I think in Ohio he was definitely a help.

BLITZER: He was a well-known figure in Chillicothe, Ohio as we all know by now. Let's talk about your prediction, James. You said here in THE SITUATION ROOM that if Hillary Clinton can win Texas and Ohio and then Pennsylvania she's going to be the democratic presidential nominee. But walk us through how that happens. Give us your strategy. Give us your sense of how she does that, how she gets to the nomination.

CARVILLE: Well, first of all, perceptions are changing already as a result of the big wins that she had in Ohio and Texas. If she goes do Pennsylvania and wins then perceptions will start to solidify. Then we have to go to Florida and Michigan. And, of course, we're going to have as open a primary as we possibly can.

We're going to have a wide open primary there. And I think she will be well positioned to win those two states. If she wins the last five victories are Ohio, Texas, Pennsylvania, Florida, and Michigan, I don't think there's any doubt she's going to be the nominee.

BLITZER: Even if she's behind right now in delegates?

CARVILLE: Let's finish the game. I think we ought to count votes. Then let's go to the delegates are. But I think the entire perception of momentum of the campaign is switching if she wins five big states in a row. Let's let them play out. We don't know if Senator Clinton is going to win Pennsylvania. Senator Obama may win it. If he does then he's going to be the nominee of the party.

BLITZER: Wait a minute. You think flatly whoever wins Pennsylvania will be the nominee?

CARVILLE: Well, no. I said if she wins Pennsylvania then we go to Florida and Michigan. BLITZER: But if he wins Pennsylvania.

CARVILLE: That will be very difficult. That would be a huge win for Senator Obama. Absolutely.

BLITZER: Let me get David's perception. If she wins Pennsylvania she's ahead in the polls. She did win Ohio which has a lot of similar demographics, economic problems like Pennsylvania. What do you think? Will she be the nominee.

WILHELM: Pennsylvania is going to be an uphill climb for us. There's a poll out today that has us 15 percentage points behind. We're going to try to get every last vote in Pennsylvania. They are 13 more primaries to be held. Every state is important. Every primary is important. Every caucus is important.

Let's let this thing roll out. We, in the Obama campaign, have nothing to fear from a contest that goes from here to the very end. We're going to battle for every vote. And one thing to consider is that Mississippi and North Carolina combined represent as many delegates as Pennsylvania.

So I think it's very important to let this process pay out. The processes exist for a reason. And I'm absolutely confident at the conclusion of this process that Barack Obama is going to have a lead in pledged delegates.

BLITZER: You already assume as James does, David, that there will be a redo in Michigan and in Florida, another round of primaries in June after Puerto Rico there.

WILHELM: I hope see. I'm confident that the Democratic National Committee and the state parties of Michigan and Florida will come up with some sort of plan that will allow those delegates to be counted, and to be counted in a fair way.

As long as there's a level playing field, as long as we all abide by the same set of rules let's go. Let's have a battle. And I think that the primary campaign can be good for the process and good for the party.

BLITZER: Bill Nelson called for a redo of that primary, James. Who should pay for those primaries if they redo them in June in Michigan and Florida?

CARVILLE: Well, I think the governor of Florida said that he would. That the state of Florida would.

BLITZER: I just interviewed him a little while ago. He says he won't. He wants another primary like Bill Nelson like others. But he says that given the state's economic problems they're not going to pay for it.

CARVILLE: Well, we might be able to figure something out. We want a primary. We want the maximum number of Democrats in Florida, which is wrecked by this housing crisis. In Michigan which the economy has been wrecked by this administration in ways somebody like David could really understand.

And we're going to be able to do that. We're going to have primaries and get these Democrats out there voting. I completely agree with David. Nobody has to fear people voting. Let's let them vote. At the end of this process. Then we'll see where we are. And we'll move on from there -- But I do think. Go ahead. I'm sorry.

WILHELM: No, I was just going to say I think the important thing is let's all play by the same set of rules. The thing about Michigan and Florida was that they tried to jump to the front. They did it in contravention of the rules of the Democratic National Committee. And all the candidates signed a pledge not to compete there. So let's start over. Let's figure this out. I think we can do the right thing.

CARVILLE: Well, let's have a competition.

WILHELM: Yes.

CARVILLE: The legislature does nothing. They hold people accountable then everybody in Louisiana would be in jail. Let's let these people vote. Let's just let them vote.

BLITZER: I think this is -- I think it's fair to say that train is leaving the station. It looks like Michigan and Florida, one way or another they're going to have their primaries, presumably in June. You know what? This race will continue. Let's see what the voters think when all is said and done.

Guys, thanks very for coming in.

WILHELM: Thank you.

CARVILLE: Thank you, David. Thank you, Wolf.

BLITZER: The government reacting to a story CNN first reported just this morning. A major airline flying unsafe planes. We're going to have the latest fallout.

Plus, you've heard by now about the dilemma over seating those Florida Democratic delegates. But did you know it's a direct result of the 2000 election debacle?

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

(COMMERCIAL BREAK)

BLITZER: A while ago the FAA announced it will impose the biggest fine ever against Southwest Airlines, the $10.2 million penalty coming after CNN first broke the story this morning that the airline knowingly flew unsafe planes.

Let's turn to our correspondent Drew Griffin. He's watching this story for us of our CNN special investigations unit. This is a pretty shocking story, Drew. What are you learning?

DREW GRIFFIN, CNN CORRESPONDENT: It's a shocking stair, Wolf. And we first need to say all of Southwest planes are now in compliance with the law. But congressional investigators are telling us what happened in 2006 and into 2007 is possibly the worst air safety violation they've ever seen. And don't expect this to end with just a fine.

(BEGIN VIDEOTAPE)

GRIFFIN (voice-over): Southwest Airlines flies more passengers than any domestic air carrier. For at least 10 days last year dozens of Southwest planes were kept flying in direct violation of a federal order that grounded them until they could pass mandatory inspections.

And that's only the beginning. Some of the aircraft actually operated unsafely and illegally for as long as 30 months before they were pulled from service to be checked for cracks in the airframe or for rudder problems.

And what's worse? Documents prepared by FAA safety inspectors for Congress and obtained exclusively by CNN allege managers after the FAA, the agency responsible for commercial air safety knew the planes were flying illegally and did nothing about it. Why were safety concerns ignored? According to the documents, so the airline would not have to interrupt normal operations.

REP. JAMES OBERSTAR, (D) TRANSPORTATION CHAIRMAN: This is the most serious lapse in aviation safety at the FAA that I've seen in 23 years.

GRIFFIN: The inspection orders allegedly ignored by Southwest were put in place after three fatal incidents. All involving the Boeing 737, which is only plane in the Southwest fleet.

In 1994 a U.S. Air 747 crashed in Pittsburgh, killing 132 people. Three years earlier a United 737 crashed this Colorado Springs, killing 25. Both accidents were blamed on the 737's rudder controls and that led to the FAA demanding regular checks of the 737's rudder system.

But documents show 70 Southwest jets were allowed to fly past the deadline for the mandatory rudder inspections. The documents also show 47 more Southwest jets kept flying after missing the deadline to be inspected for cracks in the plane's body. That mandatory inspection came after a 1988 incident involving an Aloha Airlines 737, where the top peeled back in midair, killing a flight attendant.

When the Southwest Airlines planes were finally inspected, the congressional document showed six were shown to have serious cracks in the skin or fuselage. Southwest has one of the best safety records in the industry, with only two significant incidents in the airline's history. Both blamed on pilot error.

(END VIDEOTAPE) GRIFFIN: And Wolf, a spokesman for the FAA says the supervisor at the FAA who allowed those Southwest planes to keep flying is now no longer in a supervisory position -- Wolf.

BLITZER: Do congressional investigators, Drew, think this problem may be industry-wide, beyond Southwest?

GRIFFIN: They really do. They're talking to FAA safety inspectors. And they do believe it goes beyond just one airline in the industry. They do plan to hold hearings on this, talk to the FAA about it. But to answer your question, Wolf, absolutely. They think there's a problem here where maybe FAA supervisors are too cozy with airlines.

BLITZER: Drew Griffin doing some excellent reporting for us. Keep up those investigations, Drew. Thanks, very much.

In news around the world an international manhunt. Let's go live to our Pentagon correspondent Barbara Starr.

What's going on, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, one of the world's most wanted men, Viktor Bout has finally been caught.

(BEGIN VIDEOTAPE)

STARR (voice-over): Viktor Bout, one of the world's most notorious arms dealer who allegedly sold weapons used in civil wars from Africa to South America now in custody in Thailand facing extradition to the U.S.

MICHAEL GARCIA, U.S. ATTORNEY: Today's arrest marked the culmination of a long term D.E.A. undercover investigation that spanned the globe. And it marks the end of the reign of one of the world's most wanted arms traffickers.

STARR: In 2002 Bout told CNN he was just an honest businessman living openly in Moscow.

VIKTOR BOUT, ACCUSED ARMS DEALER: I'm not afraid. I haven't done anything in my life for what I should be afraid.

NICOLAS CAGE, ACTOR: I supplied every army but the Salvation Army.

STARR: Nicolas Cage's performance in the 2002 movie "Lord of War" is said to have patterned on Bout's life. Law enforcement officials say Bout is a real world merchant of death, long accused of supplying weapons used in Liberia, Rwanda and Sierra Leone where thousands were massacred in civil wars.

Viktor Bout was finally snagged Thursday in one last arms deal. U.S. officials say he thought he was selling arms to the FARC, the Revolutionary Armed Forces of Colombia. In reality the U.S. Drug Enforcement Administration used confidential informants to get inside the Bout organization. Undercover operatives enticed Bout to Thailand to finalize the deal.

The Treasury Department in 2005 mapped out Bout's worldwide network of air cargo shippers and front companies. In fact, U.S. officials say the Pentagon inadvertently paid Bout's cargo companies to bring arms into Iraq for Iraqi security services.

DAVID ISENBERG, SECURITY AFFAIRS ANALYST: The smart money seems to be that some of the arms originally in Bosnia have been diverted to some corner of the earth, probably in the hands of people who shouldn't have them.

(END VIDEOTAPE)

STARR: The group may be out of business but security services around the world are already are worried about who may be out there ready to step into his shoes -- Wolf.

BLITZER: Barbara, thank you. Barbara Starr reporting.

Florida was the scene of what Democrats view as the 2000 election fiasco. Democrats now say they're being punished for trying to prevent another fiasco.

And a political fundraiser with ties to Barack Obama now in trial in Chicago. Will the candidate feel any fallout?

Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Now to the standoff over whether Florida and Michigan delegates will actually be seated at the Democratic National Convention.

Let's go to CNN's John Zarrella. He is in Miami watching this story.

John, where is this all heading?

JOHN ZARRELLA, CNN CORRESPONDENT: Who knows, Wolf? At this point we know that Florida and Michigan both knew that they might be penalized by the Democratic Party if they move the primaries up. Now the question is, should they be entitled to mulligans?

(BEGIN VIDEOTAPE)

HOWARD DEAN, DNC CHAIR: The fact of the matter is you cannot violate the rules of the process and expect to be forgiven for it.

ZARRELLA (voice-over): So what did Florida and Michigan actually do wrong? Eighteen months ago all the states parties were told, Iowa, New Hampshire, South Carolina and Nevada would hold the first early primaries. The other states couldn't go before February 5th.

Michigan's Democratic controlled legislature passed a bill anyway, and its Democratic governor signed it into law, moving the state's primary forward to January. In Florida it was a Republican controlled legislature that pushed through the bill. Florida wanted to be more relevant.

GOV. CHARLIE CRIST, (R) FL: We exercised our state's right to move up our primary to January the 29th. That is a right that we have as a state. The Florida House and the Florida Senate, Republicans and Democrats alike supported that.

ZARRELLA: Well, sort of. The primary date change was actually attached to a bill that mandated a verifiable paper trail for voting machines. Given what happened in 2000, state Democrats insisted there was no way they could vote against it.

They tried amending it, eliminating the early primary provision. They were defeated. And are being penalized by the DNC for something they say they could not stop.

STEVE GELLER, FLORIDA STATE SENATE: Still as I sit here today don't understand what it is that they think we should or could have done differently.

ZARRELLA: Correcting a problem from the 2000 election created a new one. Attorney Kendall Coffey represented Vice President Al Gore back then.

KENDALL COFFEY, 2000 RECOUNT ATTORNEY: It is mind boggling that democrats championing the right to make every vote count in 2000 are now hearing that their own party is saying that their own votes aren't going to count. From thousands of voters and hanging chads, we've now gone to literally millions of voters who are being hung out to try.

(END VIDEOTAPE)

ZARRELLA: The option, a new caucus, a new primary, but who is going to pay for it Wolf? The secretary of state's office here in Florida told us a new primary in this state, $20 million -- Wolf.

BLITZER: Jack - John, thanks very much.

I want to go to Jack. Jack Cafferty has got "The Cafferty File" -- Jack.

CAFFERTY: I've seen a bunch of interviews with Governor Charlie Crist from Florida in the past couple of days about this delegate thing down there. He's the guy who signed the bill that moved the date of the primary up. Knowing full well having been told by the Democratic National Committee if you do this there will be consequences. He did it.

Now there are consequences. Now he's going around wringing his hands and crying about voters being disenfranchised. That's hypocritical where I come from. If you were concerned why did you sign the bill to change the date of the primary when you were told in advance there will be consequences?

Question this hour is: What will President Bush's endorsement mean for John McCain?

Bob writes: "I think this will certainly hurt McCain. I plan on voting for a Democratic president, but if John McCain aligned himself with a moderate to liberal Republican as vice president, then there might be a horse race. In summary, I think if the American people get a hint of Bush from McCain's campaign, it will be a landslide Democratic victory."

Chris writes: "I think it will help McCain. It will bring in droves of cash. In the final analysis this matters a lot. McCain's major strength that he is putting forward is national security and by extension the war in Iraq. Bush's unpopularity will not wash on McCain."

Bill writes from Alabama: "With the president's approval rating being the same as that of a bubonic rat, McCain needs to distance himself from this failure of a president and his policies. He needs to address what he should change about this administration's policies."

Lance writes: "The endorsement has about the same value as Roger Clemens using Barry Bonds to get a new pitching job."

Bill writes: "Jack it will mean money, lots and lots of campaign money and it means McCain has integrity and respect for the office. He is not running away from the president just because he is unpopular."

And finally, Debbie in Arizona writes this: "It was a lovely photo op yesterday. Kind of reminded me of the pictures of Putin and Medvedev. Same story, different continent. It's true many Democrats are all ready calling him John McSame. And it's also true that many Republicans are referring to him as Juan McCain. But the two together and you have Juan McSame, and that, my friends, is a scary, scary prospect" -- Wolf.

BLITZER: Jack, see you in a few moments. Thank you.

Attacks in Jerusalem and Baghdad. Which presidential candidate could best deal with a terror attack? We're going to be talking to Lou Dobbs in a moment.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Lou. His show comes up in one hour.

Lou, horrific terrorist bombing in Baghdad. Fifty people dead. Hundred injured. A terrorist incident in Jerusalem led to students killed. Times Square, not far from where you are there was some sort of incident early this morning.

As you look at these presidential candidates, this will remind the viewers out there who is best qualified to deal with a national security crisis if it emerges. LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Since they occurred, we'll have to say that will remain an open question. As you know there is no more secure, open society in the world than Israel. And yet the devastating violence goes on in Israel and has for 60 years.

The idea that we can control the violence itself is probably wishful thinking. We are going to have to come to terms with the fact that this war on radical Islamist terrorism is going to require stronger stuff than we have expended so far.

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