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THE SITUATION ROOM

Book: White House Faked Iraq Letter; Cheney Convention Snub; Interview With Tom Daschle

Aired August 5, 2008 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, shocking allegations about the president's determination to invade Iraq. A brand new book claims the White House forged a key piece of evidence and turned a blind eye to another. This hour, the book's bombshells and the administration's adamant denials.
Also, a big-time snub of an unpopular vice president. The McCain camp apparently wants to keep Dick Cheney far away from the Republican convention.

And the presidential race goes nuclear. John McCain and Barack Obama trade more harsh words over energy, driving home one of their starkest differences on policy.

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

A controversial new book is giving President Bush's critics new reasons to believe he went to disturbing lengths to justify the Iraq War, and it's prompting the president's defenders to issue stern denials.

Brian Todd is working this story for us.

And it's got some powerful accusations. The Pulitzer Prize- winning author Ron Suskind delivers a lot of material in there.

BRIAN TODD, CNN CORRESPONDENT: There's a lot of material in this book, Wolf, and we've got some very powerful pushback from the White House, from the CIA, and from the agency's former director.

(BEGIN VIDEOTAPE)

TODD (voice-over): Two bombshells on the Iraq War from a controversial author that the White House issued a fake document and that the administration knew well in advance that Iraq had no weapons of mass destruction. In his new book, "The Way of the World," Pulitzer Prize winner Ron Suskind writes that in 2003, the White House concocted a fake letter from former Iraqi intelligence chief Tahir Jalil Habbush to Saddam Hussein, backdated to July 1, 2001. "It said that 9/11 ringleader Mohammed Atta had actually trained for his mission in Iraq."

In an interview with NBC's "Today Show," Suskind said former CIA director George Tenet got the order to fabricate the letter.

RON SUSKIND, AUTHOR, "THE WAY OF THE WORLD": The CIA folks involved in the book and others talk about George coming back -- Tenet coming back from the White House with the assignment on White House stationery and turning to the CIA operatives who are professionals, saying, you may not like this but here's our mission, and they carried it through step by step.

TODD: Contacted by CNN, White House spokesman Tony Fratto said, "The notion that the White House would concoct such a letter is absurd."

Tenet issued a statement saying there was no such order from the White House to him. And he said the idea that he'd plant false evidence is ridiculous.

CNN contributor Fran Townsend was Condoleezza Rice's deputy for counterterrorism at the time.

FRAN TOWNSEND, CNN CONTRIBUTOR: It's just patently ridiculous. I mean, I will tell you that when you think about it, there were 17 U.N. Security Council resolutions that Saddam was flagrantly in violation of. There were reasons that we went to war.

TODD: Suskind also writes that months before the Iraq invasion, Habbush had relayed to the Americans through British intelligence that there were no weapons of mass destruction in Iraq. He quotes a former U.S. intelligence official as saying, when that information was passed to President Bush, "He said, 'F it. We're going in."

(END VIDEOTAPE)

TODD: Now, the White House didn't respond to that specific quote, but again pushed back hard on the idea that they knew there were no weapons of mass destruction. White House spokesman Tony Fratto said U.S. and foreign intelligence estimates at the time said Saddam did have such weapons, and Fratto said Saddam had already used them to murder his own people -- Wolf.

BLITZER: And this former Iraqi intelligent chief, they are also casting doubt on his credibility, what he was saying apparently to British intelligence.

TODD: That's right. The White House is doing that and George Tenet is doing that as well.

Tenet says, look, the British themselves had lost faith in this man's credibility. And Tenet says they cut off relations with him. So that -- you know, in Tenet's mind, that shoots down any credibility that Tahir Habbush had in this regard.

BLITZER: All right, Brian. Thanks very much. I know you're working on other material from this book as well.

TODD: Right.

BLITZER: Here is some more information on Ron Suskind. He's a journalist who won the Pulitzer Prize back in 1995 for a series of articles he wrote for "The Wall Street Journal." "The Way of the World" is the latest of his three books he's written, all critical of the Bush administration. Suskind says he spoke to more than 150 sources for his new book, including many of them mentioned by name.

Suskind, by the way, will join us tomorrow live here in THE SITUATION ROOM for a one-on-one interview. That's coming up tomorrow.

Right now, a very different kind of bombshell involving the Bush administration. Dick Cheney, the Republican vice president now for almost eight years, apparently is not welcome at his own party's political convention next month. Republican officials cite a desire by John McCain's campaign to turn the page on the Bush/Cheney years.

Let's go to our senior political analyst, Bill Schneider. He's working this story for us.

It's a reminder that there are some in the administration even less popular than the president.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Yes, there is. One man.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): It's an eyebrow-raiser. Vice President Dick Cheney is said to be unlikely to attend the Republican convention.

GOV. BILL RICHARDSON (D), NEW MEXICO: Well, it would be a little bit surprising because he is the vice president of the United States.

LARRY KING, HOST, "LARRY KING LIVE": Yes.

RICHARDSON: It could be that they don't want him out there.

SCHNEIDER: You think? In June, 31 percent of Americans had a positive opinion of President Bush. And Vice President Cheney? Twenty-three percent. Cheney may be the only non-incarcerated politician in America who is less popular than President Bush.

It doesn't sound like a big draw if the convention is going for ratings.

GOV. HALEY BARBOUR (R), MISSISSIPPI: I will have to admit, if somebody wants the convention to be entertaining and funny, that Cheney wouldn't be in the first 400 names that you would come up to for entertaining and funny.

SCHNEIDER: Cheney is in an unusual situation for a vice president. He's not running for anything.

Normally, a sitting vice president is either running for re- election, like Walter Mondale in 1980, or George Bush in 1984, or Dan Quayle in 1992, or Cheney in 2004. Or, after a president has served two terms, the vice president is running to succeed him, like Richard Nixon in 1960, or George Bush in 1988, or Al Gore in 2000. The last time a vice president was not running for anything? That was Nelson Rockefeller, Gerald Ford's vice president in 1976. Rockefeller spoke at the Republican convention. We checked.

This guy look familiar? That's Charles Dawes, Calvin Coolidge's vice president. He was the last vice president who wasn't running for anything and didn't show up at his party's convention in 1928.

(END VIDEOTAPE)

SCHNEIDER: Now, if he's not at the Republican convention next month, where will the vice president be? At a secure, undisclosed location, we assume -- Wolf.

BLITZER: Bill Schneider, thanks very much. That could be quite a snub if he's not invited to speak at the convention.

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

JACK CAFFERTY, CNN ANCHOR: Barack Obama has a new ad out that tries to tap into Americans' anger over rising gasoline prices. Obama's target is John McCain.

(BEGIN VIDEO CLIP)

NARRATOR: Every time you fill your tank, the oil companies fill their pockets. Now big oil's filling John McCain's campaign with $2 million in contributions, because instead of taxing their windfall profits to help drivers, McCain wants to give them another $4 billion in tax breaks. After one president in the pocket of big oil, we can't afford another.

(END VIDEO CLIP)

CAFFERTY: Factcheck.org says the actual number is $1.3 million, not $2 million, and the claims about those tax breaks for big oil are a little fuzzy. But the fact is, both Obama and McCain have flip- flopped on the issue of offshore drilling, and both men have been quarreling rather childishly about which one wants to solve America's energy problems more.

Obama points on out that for 26 of the 30 years that it took for America to develop its addiction to foreign oil, John McCain was a part of the Washington establishment that simply looked the other way and allowed that addiction to happen. McCain's camp says Obama's ad is misleading, that it doesn't mention the $400,000 he, Obama, got from employees of oil companies, and they say McCain voted against the 2005 bill that provided billions in tax breaks for energy producers, while Obama voted for it.

Voters have to remember that politicians will and do say anything in order to be elected. That's one of the rules. Whether this latest blustering amounts to any more than just another big political wind remains to be seen.

Here's the question: As president, which candidate would be more sympathetic to the big oil companies: John McCain or Barack Obama?

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

BLITZER: All right, Jack, thanks very much.

Jack Cafferty with "The Cafferty File."

Why is Barack Obama changing positions in the debate over lowering gas prices? I'll speak with the former Senate majority leader and Obama supporter, Tom Daschle. He's standing by live right here in THE SITUATION ROOM.

Plus, a death row inmate's startling claim. He says he's too fat to be executed.

And this was part of the greeting President Bush received in South Korea today. It wasn't very pretty.

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

(COMMERCIAL BREAK)

BLITZER: One of Senator Barack Obama's sharpest lines of attack against Senator John McCain, that he would simply be another George W. Bush if elected president of the United States. The McCain camp is going to new lengths to try to shed the "He's like President Bush" label.

Joining us now, a very prominent Obama supporter, the former Senate majority leader, Tom Daschle. Also widely considered potentially to be on the vice presidential short list.

I'll ask you a question about that later.

Here's the new ad that the McCain camp is putting out, trying to distance Senator McCain from the Bush White House. Listen to this.

(BEGIN VIDEO CLIP)

NARRATOR: Washington's broken. John McCain knows it. We're worse off than we were four years ago. Only McCain has taken on big tobacco, drug companies, fought corruption in both parties.

(END VIDEO CLIP)

BLITZER: All right. It's an interesting line of attack. Trying to defuse the criticism coming from Senator Obama that he would simply be another Bush four more years.

TOM DASCHLE (D), FMR. U.S. SENATOR: Well, Wolf, it's impossible to separate yourself from the record, and the record is very clear when it comes to energy in particular, but a lot of the issues. On 90 percent of the votes taken in the Senate over the course of the last eight years, John McCain and Barack Obama -- I mean, John McCain and George Bush have been together. He has voted against... BLITZER: But a couple years ago in an energy bill that the president supported, Senator McCain opposed it because he thought there was too much fat in there. Senator Obama supported the president's energy bill.

DASCHLE: Well, that's because, in large measure, it included for the first time some of the alternative energy developments that this country so badly needs. It included some of the conservation methods that we have been trying to get in the books for a long period of time. John McCain opposed that bill, Barack...

BLITZER: But it had a lot of -- it had a lot of benefits, though, for big oil, that legislation.

DASCHLE: Well, it's had some benefits for energy overall, but clearly if we're ever going to change course, we've got to understand the importance of alternative energy. We have to understand the importance of taking more of...

BLITZER: But how are you going to fight this notion? Because Senator McCain did disagree with the administration over the past almost eight years on several key issues, even though he's changed his mind later.

He opposed the Bush tax cuts back in 2001 and 2003. He was pretty outspoken in saying the Bush strategy in the war, that there weren't enough troops, the U.S. needed more troops. He was outspoken in his criticism of Rumsfeld and Cheney, for that matter.

So he does have a history.

DASCHLE: Well, Wolf, I think there are some exceptions to the general rule. But the general rule cannot be disputed.

The fact is that he has supported George Bush over and over again. On tax policy, he's flip-flopped. On Iraq, to a certain extent, he's flip-flopped. First he said 100 years, now he said, well, maybe 16 months' presence would probably be appropriate.

He's flip-flopped on energy. He's flip-flopped on a number of issues that, in my view, really causes people to be concerned about, who is the real John McCain? We know this, from a historical point of view, he has been with George Bush 90 percent of the time.

BLITZER: Here's Senator Obama less than a month ago on the sensitive issue of the Strategic Oil Reserve. Listen to this.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I do not believe that we should use the Strategic Oil Reserves at this point. I have said and, in fact, supported a congressional resolution that said we should suspend putting more oil into the Strategic Oil Reserve. But the Strategic Oil Reserve, I think, has to be reserved for a genuine emergency.

(END VIDEO CLIP)

BLITZER: All right. Since then, the price per barrel has gone down. The price for a gallon of gas has gone down. But he's changed his mind. He now supports using the Strategic Oil Reserve.

DASCHLE: Well, he has come to the conclusion that if we're going to find compromise necessary to move this ball forward, Wolf, we've got to put all the cards on the table. We've got to work with those who have opposed other things that Barack has supported.

So, in an effort to find that bipartisan compromise, in an effort to try to move this whole policy forward, not simply take positions for which there is no -- no compromise and be intransigent about it, he wants to work with the other side to get the job done. That's what this is about.

BLITZER: Including allowing offshore oil drilling off the coasts of Florida and California.

DASCHLE: That's right. Well, to that point, though, he has always said the 68 million acres that we do have available to us should be used first. That would allow us to double the amount of oil production, increase natural gas by 75 percent.

So, clearly, he has always been supportive of efforts offshore. What he's prepared to do now is to take it to the next step in an effort to find the compromise that this country so badly needs.

BLITZER: We're out of time, but a very quick question on the anthrax investigation. All of us remember the letter that was addressed to you and what happened back in 2001. Federal authorities now say they believe the case is effectively closed, that the individual who was responsible killed himself.

First of all, have you been briefed on the details yet?

DASCHLE: Well, Director Mueller called me yesterday, Wolf, to offer a briefing. And I'm sure I'll be briefed in the next couple of days. We haven't set a time yet, but that offer was made.

Secondly, I would simply say, I hope they're right. They've been wrong on several occasions over the course of the last seven years. Hopefully this time they get it right. Hopefully this time we've got more answers than we have questions.

BLITZER: Take a look at that letter addressed to you behind you, right over there. You see where it says "Senator Daschle."

Did he say anything that the handwriting that was on that letter and another letter to Senator Leahy and to Tom Brokaw matched the handwriting of this scientist who killed himself?

DASCHLE: Well, that's one of the questions we hope we can have answered. I don't have any of the answers yet. He hasn't given me any of the details about the briefing. We hope to have that sometime very soon. BLITZER: Well, we hope that the case is closed and there isn't another mistake. But we remember the mistake that was over the past seven years with Steven Hatfill, the original person of interest, as he was called.

DASCHLE: Exactly.

BLITZER: Senator Daschle, thanks for coming in.

DASCHLE: My pleasure, Wolf.

BLITZER: Now John McCain in his own words. He's in Michigan today after appearing at a rally of motorcycle enthusiasts in South Dakota yesterday.

Listen now to what McCain has been saying.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I thank you all very much for that unique Sturgis welcome.

As you may know, not long ago, a couple of hundred thousand Berliners made a lot of noise for my opponent. I'll take the roar of 50,000 Harleys any day! Any day, my friends!

(APPLAUSE)

This is my first time here, but I recognize that sound. It's the sound of freedom. And thank you for it. Thank you.

May I -- may I say -- may I say to you, is there anybody that's tired of paying $4 a gallon for gasoline? Is there anybody that's sick and tired of it? Is there anybody that wants to become energy independent?

Well, I'm telling you right now, we're sending $700 billion over a year, and your Congress just went on vacation for five weeks. Tell them to come back and get to work! Tell them to get to work!

When I'm president of the United States, I'm not going to let them go on vacation. They're going -- they're going to become energy independent, and we're not going to pay $4 a gallon for gas, because we're going to drill offshore and we're going to drill now. And we're going to drill here, and we're going to drill now.

My opponent doesn't want to drill. He doesn't want nuclear power. He wants you to inflate your tires.

My friends, we need a commander in chief -- we need a commander in chief who will end the war in Iraq, but will win it the right way, and that's by winning it. And we're not going to be defeated.

And my opponent -- my opponent wants to set a date to come home. I want us to come home with victory and honor so we will never go back again. And we won't go back! Thank you. Thank you.

And we owe -- my friends, we owe victory to the courage and love of this country by people who are here. You're the heartland of America. You're the heart and soul of America. You provide the men and women who serve our military.

I'm honored. I'm honored to be in your company.

(END VIDEO CLIP)

BLITZER: Senator McCain speaking earlier.

One of the most notorious alleged mob figures now nabbed. John "Junior" Gotti arrested and indicted. He's accused of being a ruthless mob leader bent on murder and crime.

And Barack Obama is asked if older politicians should get out of office so younger ones can get in. Wait until you hear him respond to what he called a tricky question.

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

(NEWSBREAK)

(COMMERCIAL BREAK)

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

Happening now, a Pakistani woman whose face you may have seen at the airport or a post office now facing justice. Once among the FBI's most wanted, she allegedly wanted to kill Americans.

Is she simply an American-educated scientist or an al Qaeda terrorist. Stand by. We have details.

Fear unfolds on an American Airlines' plane. An alarming scene of a passenger flight forced to land. Everyone on board evacuated because of an emergency.

We have details of that as well.

And an astonishing discovery of animals in danger of all-out extinction. One expert is calling it, and I'm quoting now, "... the highest known density of gorillas that's ever been found."

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

Barack Obama's among the youngest presidential candidates seen in recent memory and he's running against one of the oldest. So, naturally, many of you have questions about that in this presidential race. It's a question Barack Obama was confronted with just today.

CNN's Jessica Yellin is standing by. She's joining us.

Jessica, he was speaking mostly about energy, but then there were some questions, as there always are at these town hall meetings.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: That's right, Wolf. Barack Obama was giving his planned pitch on energy policy and he was hitting John McCain on the same issue when he unexpectedly took questions that made age an issue.

(BEGIN VIDEOTAPE)

GOV. TED STRICKLAND (D), OHIO: Hello, Youngstown!

YELLIN (voice-over): Ohio Governor Ted Strickland was the first to bring it up, repeatedly describing Barack Obama as young.

STRICKLAND: This bright, young, energized, compassionate, intelligent, committed young man...

(CHEERING AND APPLAUSE)

STRICKLAND: ... by the name of Barack Obama!

YELLIN: An audience member picked up on the message.

UNIDENTIFIED MALE: When I turn the TV on, I see these congressmen and senators and that, that are 80 and 85 years old. And they're making decisions for the next generation of Americans. That kind of bothers me. I mean, what is your opinion -- not being disrespectful to the elderly, but what is your opinion as far as setting term limits or age limits on these people, so that we get younger people in there?

OBAMA: This is kind of a tricky question for me. You know, I have got colleagues in the Senate who are doing just outstanding work. And they are well into their 70s. And they have got incredible energy. I mean, one of my dearest friends in the Senate is Ted Kennedy, and that guy is still fighting.

YELLIN: The age question has been in the background of this race. But Obama did not take this question as an opening to draw a contrast with John McCain on the issue.

OBAMA: I do believe in one form of term limits. They're called elections. And, so my attitude is, I'm less concerned about what age folks are than, what are they doing? And, if they're not looking out for your interests, then it's time to throw the bums out.

(END VIDEOTAPE)

YELLIN: And, Wolf, two separate polls show that 75 percent of Americans believe that age does not make a difference when choosing the president. The "New York Times"' poll shows that 48 percent think that actually means more experience, so, that could be a good thing for John McCain -- Wolf.

BLITZER: Jessica, thanks very much -- Jessica Yellin working the story.

Today, Senator Obama also talked about groups many working-class Americans belong to that often help elect Democrats.

Here he is in Youngstown, Ohio.

(BEGIN VIDEO CLIP)

OBAMA: Let's talk about unions for a second.

(CHEERING AND APPLAUSE)

OBAMA: I'm a...

(APPLAUSE)

OBAMA: I believe in unions. I believe in unions, because, if you look -- if you look at the history of this country, things we take for granted, 40-hour workweek, minimum wage, overtime, health care benefits, paid leave, paid -- child labor laws, those -- those were union fights.

(CHEERING AND APPLAUSE)

OBAMA: Unions put their shoulder behind the wheel and made life better for working people when they were being taken advantage of.

And, even today, even if you're not in a union, you're still benefiting from the fact that there's a union out there putting pressure on employers to do the right thing.

(CHEERING AND APPLAUSE)

OBAMA: The problem is, we have had the most anti-administration -- anti-union administration in memory under George Bush, although a lot of the problems started before Bush, you know, with the PATCO strike and dating back to the 1980s.

So, what we have to do is figure out how can we strengthen unions and thereby give workers a little more leverage. So, there are a couple -- there are a couple things that I think we can do. Number one, I think that we should pass the Employee Free Choice Act.

(CHEERING AND APPLAUSE)

OBAMA: That will make it easier for unions to organize, make it harder for companies to block unionization.

Number two, it's not the Department of Management. It's the Department of Labor, which means that we need to have people in the Department of Labor who believe in labor standards, who are going to enforce labor standards, who are -- we need somebody on the National Labor Relations Board that will rule when -- in favor of unions, when management is not negotiating in good faith and when they're engaging in unfair labor practices.

You know, what unions are looking for, they're not looking to drive employers away. And, in this current climate, where jobs can be moved overseas all the time, you know, workers understand that, if they're doing something that's bad for the company, that, ultimately, that could mean their jobs.

So, I think most unions are very responsible, in terms of wanting to see their employers succeed. But what they do expect is that, if a company's making billions of dollars of profits, that they will share some of those profits with the workers that made that wealth possible. That is a basic principle of American life.

(END VIDEO CLIP)

BLITZER: Senators Obama and McCain are dueling over who can best help Americans deal with an energy crisis, but their approaches are different.

Let's get the specifics from CNN's Ed Henry. He's watching this story for us.

More sharp edges today over this whole issue of energy, Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf.

After days of going negative on Barack Obama, John McCain tried to pivot and go a little positive about his record in a new ad. But he is still launching some attacks on Obama about energy.

(BEGIN VIDEOTAPE)

HENRY (voice-over): Touring a nuclear power plant in Michigan, John McCain expanded his assault on Barack Obama's energy plan.

MCCAIN: Senator Obama has said that expanding our nuclear power plants -- quote -- "doesn't make sense for America" -- unquote. He also says no to nuclear storage and no to reprocessing. I could not disagree more.

HENRY: This is one of the sharpest policy differences between the two candidates. McCain wants to go full speed ahead on nuclear, building 45 new power plants by 2030.

MCCAIN: Now, we all know that nuclear power isn't enough, and drilling isn't enough, and we need to do all this and more.

HENRY: Obama has a much more cautious approach to nuclear power. He does not want to build any new plants without first getting a better handle on safety and security.

OBAMA: It means finding safer ways to use nuclear power and store nuclear waste.

HENRY: In Ohio, Obama stepped up his own attacks on McCain, again charging, the Republican is in the pocket of the oil industry, and mocking his decision to embrace offshore oil and gas drilling.

OBAMA: This is what he talked about yesterday: I want to drill here. I want to drill now.

I don't know where he was standing. (LAUGHTER)

OBAMA: I think he was in a building somewhere.

(LAUGHTER)

HENRY: The McCain camp points out, however, Obama voted for the president's energy bill in 2005, which had billions in tax breaks for oil and gas interests. McCain voted against that bill, and has a new ad pointing out he has repeatedly taken on special interests.

(BEGIN VIDEO CLIP, MCCAIN CAMPAIGN AD)

NARRATOR: Only McCain has taken on big tobacco, drug companies, fought corruption in both parties. He will reform Wall Street, battle big oil, make America prosper again.

(END VIDEO CLIP)

(END VIDEOTAPE)

HENRY: Now, also interesting that, in that ad, McCain flatly says that the country is not better off now than it was four years ago.

It's very rare, obviously, for someone to say that, when a member of their own party is in the White House. But it's another sign that McCain realizes he really has to break from President Bush if he's going to win this race -- Wolf.

BLITZER: Interesting new development. And we are going to be discussing that more later.

Ed, thank you.

While Senator McCain wants 45 nuclear power plants to be built over the next 22 years, we asked experts if that's possible. The U.S. Energy Information Agency tells us that it takes at least four years to build just one nuclear power plant. That does not include possibly years of administrative work just to get the process going. Of course, several plants could be built at the same time.

We also looked at which countries have the most nuclear power plants primarily used to generate power. Japan comes in third with 55. France has 59. The United States has more than any other country, 104 nuclear power plants in the country. The last nuclear power plant in the U.S. to start up was back in 1996 in Tennessee.

At a time when gas prices are so high, what would happen if a crucial route for shipping oil were suddenly to shut down? That's exactly what Iran is threatening to do.

Plus, a heckler challenges Senator Barack Obama's knowledge of the Pledge of Allegiance. You will want to see what happens next. Dee Dee Myers and Tony Blankley, they're standing by live for our "Strategy Session." And NASA answers this question: Is there life on Mars?

(COMMERCIAL BREAK)

BLITZER: A new warning from inside the Iranian military, that it can shut down one of the world's most important shipping routes for oil, the Strait of Hormuz, this just days after a deadline for Iran to stop reprocessing and enriching uranium. It's a new round in the United States' long-running dispute with Iran over its nuclear program.

CNN's Reza Sayah is in Tehran -- Reza.

(BEGIN VIDEOTAPE)

REZA SAYAH, CNN CORRESPONDENT: Wolf, the U.S. and world powers telling Iran a fourth round of sanctions is coming, but Iran with some tough talk of its own.

The commander of Iran's Revolutionary Guard saying Iran has successfully test-fired a surface-to-ship missile. He's also boasting that Iran could block off, for an unlimited period, the Strait of Hormuz, a passageway along Iran's southern coast through which nearly 40 percent of the world's oil is carried.

Analysts say blocking off the Strait of Hormuz will certainly impact oil prices in the U.S. and throughout the world, but they say it is an unlikely scenario, because it would also badly damage Iran's economy.

The tough talk an indication that both sides are far from resolving this nuclear issue -- Iran says the nuclear program is for peaceful purposes. The world powers fear they will eventually use it to build bombs. On Saturday, Iran missed a deadline to respond to the latest proposal by the world powers.

On Tuesday, they gave a written response, but they did not give a clear-cut yes-or-no answer. They asked to talk some more, something the world powers say they have had enough of -- Wolf.

(END VIDEOTAPE)

BLITZER: All right, Reza, thanks very much.

Reza is in Tehran for us.

Let's take a look now at some of the "Hot Shots" coming in from our friends over at the Associated Press.

Look at these. In Germany, a damaged Piper aircraft sits on the ground after a crash landing.

In India, members of the Young Communist Party pay homage to their -- to the founder on the anniversary of his death.

And at Washington State University, the quarterback, Gary Rogers, stretches at the opening practice for this, the 2008 season.

Back in Germany, by the way -- look at this -- a first-grader waits for the beginning of the first day of school. They start school early there -- some of this hour's "Hot Shots." We will have more "Hot Shots" coming up in the next hour.

Some shouts from the audience today at Senator Barack Obama's appearance, and it leads to a spontaneous group moment.

(BEGIN VIDEO CLIP)

OBAMA AND AUDIENCE: I pledge allegiance to the flag of the United States of America, and to the republic for which it stands...

(END VIDEO CLIP)

BLITZER: Why the whole place broke out in the Pledge of Allegiance. We will discuss. That's coming up.

And John McCain's been distancing himself big time from George Bush. Is this a good strategy? What's going on? Our "Strategy Session," it's live, and it's next.

(COMMERCIAL BREAK)

BLITZER: Some of Barack Obama's detractors have tried to question his patriotism, often with wild false rumors.

Today, he confronted one apparent belief head on.

Let's discuss this and more in our "Strategy Session."

Joining us, Dee Dee Myers, the former press secretary in the Clinton White House, and Tony Blankley. He's a former spokesman for Newt Gingrich when he was in Congress. He's now with the Edelman P.R. group.

Guys, thanks very much for coming in.

It was a moment at a town hall meeting in Ohio. All of a sudden, Barack Obama was up there. He was getting ready to speak, when -- when someone said, why not just start the with the Pledge of Allegiance?

Listen to this.

(BEGIN VIDEO CLIP)

OBAMA: Wait, wait, wait, wait. I thought we already did the pledge. We didn't do the pledge yet?

You want to lead the Pledge of Allegiance? Go ahead.

All right. I pledge allegiance to the flag of the United States of America...

(END VIDEO CLIP)

BLITZER: All right. He thought, maybe before he was up there, and earlier speakers that introduce him, they usually do the Pledge of Allegiance. Didn't happen today. So, he confronted that head on.

What does that say to you?

DEE DEE MYERS, FORMER CLINTON WHITE HOUSE PRESS SECRETARY: I think it's smart.

I think, every time one of these issues has come up -- you know, he didn't wear the flag pin on his lapel -- the easiest thing for him to do is simply do it. You know, as soon as he started wearing the flag pin on a regular basis, the questions about whether or not he wore the flag pin went away.

I think, today, rather than let this become a simmering issue, just take it on. Say the pledge. He's said the pledge a million times in his life. He knows it. The whole audience knew it. Everyone stood up and joined in. End of issue.

BLITZER: End of issue?

TONY BLANKLEY, EDITORIAL PAGE EDITOR, "THE WASHINGTON TIMES": Well, I mean, look, this is a dog-bites-man story. Obviously, if he had refused to say the Pledge of Allegiance, we would have a different story.

Is it the end? The Internet chatter on both candidates is nasty, and will continue. It doesn't matter what they do. But, obviously, having the visual on national television of saying it certainly puts it back a ways.

BLITZER: But it's a lot nastier as far as the innuendo and the allegations against Senator Obama, as opposed to Senator McCain.

BLANKLEY: Well, I mean, the age stuff is pretty...

BLITZER: The age stuff about Senator McCain.

(CROSSTALK)

BLANKLEY: ... against ... against Senator McCain is pretty snarky. You know, you know, presidential candidates...

(CROSSTALK)

MYERS: The age...

(CROSSTALK)

MYERS: ... may or may not be fair, but it's based on fact. The difficulty for Senator Obama is that some of the snarky stuff going around on him is not based on fact. He's not a Muslim. He's never been a Muslim. He's -- he's a good patriotic American. He loves his country. He's -- some of these rumors are impossible to kill, because there was -- there's no -- they are not based in fact to begin with.

BLITZER: We did hear something pretty unusual.

And, Tony, you have been around for a while.

(CROSSTALK)

BLITZER: A new McCain ad that directly says, you know what, I disagree with the Republican incumbent in the White House. I'm not going to do what George Bush did.

Let -- let me play this little clip.

(BEGIN VIDEO CLIP, MCCAIN CAMPAIGN AD)

NARRATOR: Washington's broken. John McCain knows it. We're worse off than we were four years ago. Only McCain has taken on big tobacco, drug companies, fought corruption in both parties.

(END VIDEO CLIP)

BLITZER: All right, "We're worse off than we were four years ago," obviously playing on the old Ronald Reagan theme, are you better off now than you were four years ago? He used that very effectively, as all of us remember, against Jimmy Carter.

BLANKLEY: Well, look, it is an odd ad. But I measure an ad on two bases. Is it honest and is it effective?

And, certainly, for a conservative Republican like me, he's been a thumb in the eye to Republican...

(CROSSTALK)

BLITZER: McCain has.

BLANKLEY: McCain has. So, there's an honesty there. He has always -- he has opposed them all. He opposed Bush's first tax cut. He's -- you know, he's done a lot of stuff that Bush and the Republicans didn't like.

So, there's an honesty there. And I think it's useful for him, because given the fact that eight out of 10 Americans think the country is going down the wrong path, reminding the public that he wasn't for the stuff that got us here makes sense. I don't think this is a game-changer, but it's, I think, a good reinforcement of his brand as an iconoclast.

MYERS: Well, what struck me about it is that it's an ad that a Democrat could have run in almost every way. Are you better off than you were four years ago is the subtext, but he talks about how he took on big oil, big drug companies, Wall Street. Those are all kind of the bete noires of the Democratic Party, not the Republican Party. So, he really is running against type, against -- against the Bush administration in a subtle way. And the question is, what will that say to loyal Republicans who -- who like...

(CROSSTALK)

BLITZER: Because he needs that Republican base to really show up in big numbers, you know, the ones that Karl Rove used to always push for.

BLANKLEY: Well, his...

BLITZER: And if they feel that, you know, he's betraying them, to a certain degree, that could hurt him.

BLANKLEY: It's tricky.

But, I mean, as his mother said, most of us conservatives are going to hold our nose and vote for him. And -- and he's got to hope that that's the case. And, of course, most of us will.

You know, the turnout on the margin maybe, but he's got to get that independent. He's got to get the soft R's and the soft suburban D's. And this is a kind of a path that goes to appeal to those. Then he's got to hope the Republican conservatives will hold their nose and vote for the party guy.

BLITZER: Good point.

MYERS: This is clearly the strategy. I think Tony is exactly right.

And if you -- you know, "The New York Times" had a long piece today about how Republican registration has dropped by 1.4 million fewer Republicans than they were four years ago, and 200,000 additional Democrats.

There were 28 Republican governors four years ago. Now there are only 22. So, you have seen then, you know, a -- not a collapse, but a -- you know, a contraction of the Republican Party in a lot of places and sometimes in key swing states.

BLITZER: Dee Dee and Tony, guys, thanks.

MYERS: Thank you.

BLANKLEY: Thank you.

BLITZER: Hillary Clinton going on the road for Barack Obama, and she will be doing a campaign first for him. Stand by for details.

Also, an update on the investigation into the anthrax attacks. We have the latest information that might link a scientist to the actual letters. And an amazing find in Africa -- a huge new group of gorillas that no one knew existed. We have the pictures and how this exciting discovery happened.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: On our "Political Ticker" today: Hillary Clinton is now ready to venture out on her first solo campaign appearance for Barack Obama. The Obama camp says Senator Clinton will host rallies and voter registration events this Friday in Las Vegas and in South Florida later in the month.

Remember, for the latest political news anytime check out CNN.com/situationroom. That's also where you can also download our political screen saver.

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

CAFFERTY: The question this hour is: As president, which candidate would be more sympathetic to big oil, John McCain or Barack Obama?

David writes: "Even if McCain did want to distance himself from the present administration, they are handcuffed to the oil and gas industry. I live in Houston, Texas, and have worked with big oil, and I will tell you that they have celebrated every single day of the president -- present Republican administration. There is no way John McCain will escape that political gridlock."

Rhonda in Detroit writes: "Both McCain and Obama will take as many contributions as they can get from big oil. It is becoming funny now to watch which one of them can out-centrist the other. McCain opposed offshore drilling before he supported it. Now Obama has assumed the same position. Yesterday, Obama talked in Michigan about energy. Today, McCain came to Michigan to talk about energy. I don't think either of them has a plan that goes any further than the November election."

Mike in Minnesota writes: "Obviously, Obama. God made oil. Barack is Moses. Or the messiah. Or the Antichrist. I forget which one.

John writes: "I declare a tie. Big oil and big coal have both ruled over the podium in this election. In the end, offshore oil and clean coal will win the election, thanks to equal lobbying by both candidates. Thanks for the change, guys."

Gary writes: "It's absolutely John drill here, drill now McCain. I can't believe the GOP is getting mileage out of the August Congressional recess. It's been 30 years of inaction, and now we are led to believe that we will have an answer in five weeks? How stupid do they think we are?"

John writes: "Which candidate will be beholden to the oil companies? Why, the one who gets elected."

And Karl weighs in with this: "This question is right up there with, who is more likely to be Catholic, the pope or Osama bin Laden?"

If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile, or not -- Wolf.

BLITZER: Most people will, Jack. Thanks very much.

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

Happening now, a Pulitzer Prize-winning author drops a bombshell about the war on terror and the invasion of Iraq in his brand-new book. Did the Bush White House pass up an offer that could have led to Osama bin Laden himself?

Also, a dramatic emergency landing and a heart-stopping evacuation -- passengers forced to flee on inflatable slides. What happened on board this American Airlines plane?

And some Olympic athletes are wearing masks to guard against Beijing's notorious smog. But with China taking drastic action to try to clear the air, do they really need them?

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

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