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THE SITUATION ROOM

Iran's Election Results Disputed; Obama Soeak on Health Care

Aired June 15, 2009 - 16:00   ET

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


WOLF BLITZER, CNN NEWS HOST: Rick, thanks very much.

Happening now, we're continuing our coverage of the breaking news. Anger over Iran's disputed election erupting into all-out shock. Amid protests for and against Iran's president, there's a disturbing scene of blood spilled into the streets.

President Obama says spiraling health care costs are a ticking time bomb threatening to wreck the entire economy. So, he writes doctors a prescription outlining controversial steps to fix the system now.

And as you enjoy summer in your backyard or your swimming pools, you might want to be aware of something. Something that's already killed could be stalking you at your house.

I'm Wolf Blitzer at CNN's Command Center for breaking news, politics, and extraordinary reports from around the world. You're in the "Situation Room."

Iran is erupting with protests and now death. We're following the breaking news.

Amid anger over the presidential election, we're now seeing shocking images. We must warn you, what you're about to see is very disturbing and certainly not suitable for children.

We've obtained this picture -- take a look at it -- from another news organization. It shows a man dead in the street. We cannot confirm how or why this happened, but we see the picture in all its gruesome detail right now.

What we do know is that these protests are getting far more violent. There are reports of gunfire, burnings, and inflammatory language more for and against President Mahmoud Ahmadinejad and his opponent, Mir Hossein Mousavi.

Mousavi addressed reporters today at a demonstration. Let's get the latest from our Chief International Correspondent Christiane Amanpour. She's joining us live from Tehran. What is the latest, Christiane?

CHRISTIANE AMANPOUR, CHIEF INTERNATIONAL CORRESPONDENT, CNN: Well, Wolf, this day was remarkably peaceful and totally different in tone than the previous two days.

The government took a decision to allow a massive pro-Mousavi rally even though it had been banned by the police. The government decided to let it go ahead and allow all the police and riot police simply to line the march route, but to let it go ahead, and to let Mousavi come and address the crowd.

And we were there, and we saw it. And it was a remarkable shift in what we've seen over the last several days.

And I was told that there was a deliberate effort to try to now let this process, this election dispute, try to resolve itself through the parameters of Iran's own democratic political system.

So, they were trying to do that. And we heard that Ayatollah Khamenei has urged Mr. Mousavi, if he had any complaints, to take those through the legal channel. That would be the Guardian Council, the religious vetting body for the elections.

And we also heard shortly thereafter a statement from the Guardian Council saying that they were taking up Mousavi's challenge and would be investigating issuing their results, quote, "soon."

But then, at the end of the day, we get these reports of some gunfire and, as you see in that picture, of at least one person dead.

And what we're hearing is that that could be at the hands of those hard-line militia who are the shock troops, if you like, of the more hard-line elements of the society aligned, many of them, with the president, but are really there to put down violence, which is apparently what may have happened.

We're still trying to confirm that, although it is difficult at this time. But that is the latest from here -- Wolf?

BLITZER: Christiane Amanpour, stand by. We're going to be getting back to you shortly. Christiane doing extraordinary reporting for us from on the scene in Tehran.

Joining us right now is Rob Sobhani. He formerly taught at Georgetown University here in Washington, D.C. He runs an energy company with clients in the Persian Gulf region. His parents are from Iran. You went to high school there, is that right, Rob?

ROB SOBHANI, CASPIAN ENERGY CONSULTING: Yep, Wolf.

BLITZER: So what do you think? Is this the beginning of a huge shift in Iran, sort of like what we 30 years ago in 1979, or will this sort of just peter out?

SOBHANI: It seems, Wolf, that the voters are voting not for Mousavi but against the system and against the regime. Mr. Mousavi is now the symbol, is now the tool in the hands of the people. And, yes, we could be seeing a repetition of 1979.

BLITZER: How would you see that unfold? Because right now we see demonstrations, as Christiane just reported, largely peaceful, although one individual, at least in the picture we saw, killed in one of these demonstrations. SOBHANI: Well, Mr. Mousavi has called for peaceful demonstrations. And to the extent that he can continue this and his supporters continue this, it might grow in numbers.

I've gotten calls from inside Tehran, from Isfahan and from Tabriz, the third largest city. People are ready to take to streets wherever Mr. Mousavi asks them to be.

BLITZER: Do you think he's going to be arrested, Mousavi, and taken off the streets? Because clearly he's become the symbol for a lot of those folks who just don't like the system.

SOBHANI: There's this conventional wisdom that the Ayatollah Khamenei is the supreme leader. Actually, that's 50 percent correct. I think what we're seeing the ascendancy of Ahmadinejad and the military security forces.

And with that in mind, it will be very difficult for Mr. Mousavi to sustain it without international support.

BLITZER: What's the relationship between the supreme leader and Ahmadinejad? We know it is pretty good, but we suspect the relationship with Mousavi is not good. They were rivals going back a few decades ago.

SOBHANI: Mr. Ahmadinejad has staked his claim as the one who's going to expose corruption. There is corruption throughout the system. And I think that's his blackmail, that's his card.

He's telling everyone if you challenge me, I will let everyone know that you're corrupt, and I will expose all this, and that's his trump card right now. He's using that.

BLITZER: Ahmadinejad?

SOBHANI: Absolutely.

BLITZER: So, he's got the support of the supreme leader.

SOBHANI: Absolutely. And he has the support of (inaudible). But more important than supreme leader, he has the support, as Christiane said, of the Basiege (ph), the vigilantes, the security forces --

BLITZER: Those are the guys riding around on the motorcycles with the batons.

SOBHANI: -- motorcycles, and they are very adept. Every intersection has an assigned group of Basiege (ph). You cannot gather in that intersection and not be confronted by the Basiege (ph).

BLITZER: Sort of like the secret police, if you will.

SOBHANI: Absolutely.

BLITZER: What should the U.S., President Obama be doing about this right now, because obviously a very fluid situation?

SOBHANI: It's very fluid. But I think if President Obama were to talk a little more about the rule of law, a little more about democracy, a little more about free and fair elections, it'll give some heart to those who are trying to sustain their movements, and give heart to Mr. Mousavi and the others.

But I think it's a very difficult position for President Obama right now.

BLITZER: Because the last thing that Mousavi needs is for him to be depicted as a puppet of the United States.

SOBHANI: Yes. But at the same time, the people of Iran historically have also looked for moral support. The people of Lebanon took to the streets after the U.S. and France gave it moral support.

So, there's a 50/50 dilemma here, whether you go ahead and really ratchet it up or not.

BLITZER: Because it's going to be much more difficult for the U.S. to have a dialogue with Ahmadinejad if, in fact, this entire election was a sham, as increasing numbers of people around the world are beginning to suspect.

SOBHANI: For your viewers, I think the best example is, if the Supreme Court of America decided who's going to run for office. And that's exactly what happened in Iran -- the council of guardians decided that Mr. Mousavi, Rezai, and Ahmadinejad were going to run.

So in essence, it is not democratic, but the process ends up being democratic. And that's the dilemma of the United States right now.

BLITZER: Rob Sobhani, thanks for coming in.

SOBHANI: Thanks a lot, appreciate it.

BLITZER: We'll be watching the story.

Let's Bring back Jack Cafferty right now. He has the "Cafferty File." I don't know if this is a repeat of 1979, Jack, and you and I are old enough to remember what happened when the Shah was kicked out, or if it's going to be a Tiananmen square, if it's going to be a coup in what was the Soviet Union. This is a real fluid situation right now.

JACK CAFFERTY, CNN CONTRIBUTOR: Well, we'll have to wait and see. And it's probably a day or two from developing in such ways to give us some indication.

I thought the observation about the Supreme Court was interesting. The Supreme Court obviously in this country doesn't decide who's going to be on the ballot, but in 2000 they decided who was going to be president. Remember that? BLITZER: I do remember.

CAFFERTY: Yes.

And a lot of people are not buying the outcome of these elections in Iran either, which had Mahmoud Ahmadinejad winning 62 percent of the vote.

Vice president Joe Biden says there's some real doubt about the results. Nothing gets past old Joe.

Experts point to many reasons why the elections could have been rigged. There's no independent monitoring. Many voters are illiterate, so officials help them fill out the paper ballots.

There are also no voting booths, so it's all done in public.

According to the official results, Ahmadinejad won in every region of the country and among all classes and ages, which is absurd.

For example, Ahmadinejad won in cities where he's unpopular. And the opposition leader, Mir Hossein Mousavi, lost among his own ethnic group. That would be like Barack Obama losing the African-American vote last November.

Also, there were 40 million votes cast, and two hours after the polls closed, Ahmadinejad's victory was announced. But in Iran, there are no voting machines. All the votes have to be counted by hand, 40 million of them.

Mousavi's supporters have take to the streets, as you've seen, to protest the results, often clashing with police. Iranian media, mostly ignoring the protests, and international journalists are being prevented from covering them.

Some reporters have been arrested. Others have been beaten by the police.

All this apparently enough for Iran's Supreme Leader Ayatollah Khamenei to allow an investigation into allegations of ballot fraud, a group of top clerics and judges expected to issue its findings within ten days. Can you spell whitewash?

Here's the question. Do you believe Iran's elections were honest? Go to CNN.com/caffertyfile, and you can post a comment on my blog.

There's a young population in that country, and as Tom Friedman pointed out over the weekend in his column in "The Times," they're busy Twittering and Facebooking and taking advantage of things like the Internet, Wolf.

And that is probably the biggest threat to the status quo in Iran as any other single thing. Young people are beginning to figure it out over there. BLITZER: Yes. I think you're right. What did he say, 70 percent of the folks in some of those countries like Iran are under the age of 30.

CAFFERTY: Yes. And they're the ones that are Internet savvy and are doing this stuff, you know, without the knowledge of the supreme rulers. So that can't be good.

BLITZER: Weren't you impressed, Jack, that they counted 40 million hand ballots within a couple hours? That's pretty impressive, wasn't it?

CAFFERTY: Well, you know what was -- I got an email that came in before this all started. And they said "If Iran can count 40 million ballots in two hours, why can't Minnesota figure out who won last November?"

BLITZER: Good question.

CAFFERTY: It's a valid question.

BLITZER: All right, Jack, stand by.

As we've mentioned, this election is for president of Iran. But Iran's president is not the top leader in the country. Mahmoud Ahmadinejad is the second highest-ranking government official. He sets economic policy, appoints and supervises the cabinet and sets the agenda for parliament.

But the real power rests in Iran's supreme leader, the Ayatollah Ali Khamenei. He controls the military, can even declare war, is in charge of the judiciary. He leads domestic and foreign policy, and controls Iran's state media, the ayatollah.

President Obama says spiraling health care costs are a ticking time bomb threatening the entire economy. So he writes doctors a controversial prescription.

Dick Cheney versus the head of the CIA. Why is Leon Panetta saying this about Dick Cheney, and I'm quoting now -- "It's almost as if Cheney's wishing that this country would be attacked again in order to make his point"?

And CNN's Christine Romans asked top leaders the questions you want answers for. For example, when will this economy recover? Wait until you hear their responses.

(COMMERCIAL BREAK)

BLITZER: President Obama today warned the nation's doctors America's health care system is a ticking time bomb. He said the health care system must be reformed or, in his words, "America may go the way of GM."

Our White House correspondent Suzanne Malveaux is in Chicago where the president spoke before the American Medical Association. A relatively tough crowd for him today, Suzanne.

SUZANNE MALVEAUX, WHITE HOUSE CORRESPONDENT, CNN: You know, this is a group that represents about a quarter of the doctors in the country, and we expected that they were going to be a tough group.

But, Wolf, they quickly melted. This is essentially the beginning of a courtship between the president and these doctors who he desperately needs to push forward health care reform.

(BEGIN VIDEO CLIP)

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES OF AMERICA: We are not a nation that accepts nearly 46 million uninsured men, women, and children.

(APPLAUSE)

We are not a nation that lets hardworking families go without coverage, or turns its back on those in need. We're a nation that cares for its citizens. We look out for one another. That's what makes us the United States of America. We need to get this done.

(APPLAUSE)

MALVEAUX: It was just what the doctors ordered.

OBAMA: We listen to you. We trust you. That's why I will listen to you and work with you to pursue reform that works for you.

MALVEAUX: A little bit of TLC while taking the bitter pill. President Barack Obama gave them both, going after those who overprescribe medications, tests, and procedures with a soft touch.

OBAMA: And a lot of people in this room know what I'm talking about. You didn't enter this profession to be bean counters and paper pushers. You entered this profession to be healers. And that's what our health care system should let you be.

(APPLAUSE)

MALVEAUX: A standing ovation. The docs took their medicine.

UNIDENTIFIED FEMALE: I was so, you know, pleased that he was so open about issues that are not very pleasing to our ears.

MALVEAUX: The president even briefly got booed for not setting a limit on how much patients can sue their doctors for malpractice. But the tense moment soon turned into another standing ovation.

OBAMA: This is going to be a priority for me.

MALVEAUX: Just addressing the issue was seemingly enough for some.

UNIDENTIFIED MALE: A patient comes into my hospital with indigestion, it could be a heart attack. If you evaluate the patient and you don't think it's likely, and yet you don't get a cardiology consultation and, god forbid, something bad happens, then somebody is going to be serving a subpoena on you or a lawsuit.

MALVEAUX: But the doctors were most skeptical about the president's government health care insurance plan, an alternative to private programs.

OBAMA: If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you'll be able to keep your health care plan, period.

MALVEAUX: For many doctors, just a start.

UNIDENTIFIED FEMALE: There are a lot of questions, and details are always questionable.

(END VIDEOTAPE)

MALVEAUX: And Wolf, among the details the doctors are looking for, how the president's going to pay for this $1 trillion overhaul. So far, the president has announced intended cuts to Medicare, Medicaid, and to hospitals -- Wolf?

BLITZER: He did outline a whole bunch of estimates, assumptions, how to get to $1 trillion dollars to pay for it. But a lot of economists are questioning some of those assumptions.

When do they think realistically that this could come up for a vote in the House and Senate? I assume sometime this year, as early as possible for them. I think taking into later this summer or the fall?

MALVEAUX: Well, Wolf, we know that President Obama certainly wants to push this in the next couple of months or so, that that is his goal.

And he has also said when you take a look at kind of the hard decisions that have to be made, a lot of what they're talking about in terms of reform really isn't going to happen until four or five years down the road.

BLITZER: All right Suzanne, thanks very much. Suzanne Malveaux traveling with the president in Chicago.

There are predictions the worst of the recession is over, but a rebound may take longer than expected. Our Christine Romans is in New York with some new information on where the nation's economy could be headed -- Christine?

CHRISTINE ROMANS, CNN HOST: Wolf, we had a rare chance here today to ask what's in store for your house, your job, your gas prices, and your money from the people who should know. When will the economy recover, and what does it look like?

(BEGIN VIDEOTAPE) ROMANS: U.S. Treasury Secretary Timothy Geithner said the economy will rebound, but it will take time as American families spend less and save more.

TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: As people get themselves back to the point where they're living within their means and have less debt and are less vulnerable in the future, and that's a healthy process for the economy. But it means probably you will see a slower recovery than what we'd normally see.

ROMANS: The consensus is a recovery is in sight, but it will be fragile.

NOURIEL ROUBINI, ROUBINI GLOBAL ECONOMICS: It's going to feel like a recession, even if we are technically out of it. Job losses are going to continue, so people are going to lose jobs. Incomes are not going to grow very fast. Even those who have jobs are going to worry about losing their jobs.

ROMANS: Nouriel Roubini is the economist who predicted this crisis and earned the nickname "Dr. Doom." A commercial real estate bust is coming, he says, and the bank stress tests were not stressful enough. More bank losses lie ahead.

He now predicts 11 percent unemployment by the end of the year and even lower housing prices.

Yale University economist Robert Shiller predicted the housing crash.

ROBERT SHILLER, ECONOMIST, YALE UNIVERSITY: We're not over. Even if we do see an end of the recession, we still have years of fixing to do.

ROMANS: After Japan's real estate bubble burst in 1991, he noted home prices fell each year for 15 years.

The new challenge, rising gas prices despite less demand. Billionaire oil investor Boone Pickens.

T. BOONE PICKENS, BP CAPITAL GROUP: If you don't think the price is going up, you know, you're kidding yourself. And it's going to.

ROMANS: The conundrum is oil prices on hopes the economic rebounds. But higher gas prices will hurt consumers and the recovery.

Still, the sense of panic that gripped the country is easing.

MEREDITH WHITNEY, MEREDITH WHITNEY ADVISORY GROUP: People got tired of being sick, tired, and scared. And so it's natural. You know, the government did, what I call, the great government momentum trade, and told everyone they should be confident. So they became confident.

(END VIDEOTAPE) ROMANS: The treasury secretary outlined plans for tighter regulations to provide stability to the financial system and prevent a collapse again down the road.

But Geithner says, make no mistake about it, there's much more work to be done -- Wolf?

BLITZER: Thanks very much, Christine. Christine Romans in New York.

Searching for answers, how the U.S. Navy is now helping international teams in a race against time to find the flight and data recorders from the Air France jet that crashed this month.

Also, President Obama's Kenyan half-brother lands a book deal. What will he say about his famous sibling and their shared passions?

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: The White House has a public response to what's happening in Iran, but what might it be thinking and doing privately? Listen closely, and you'll see the Obama administration is trying to strike the right tone.

And the former crown prince of Iran is here, the son of the Shah. What might he be hearing privately from his contacts back in Iran? I'll ask him. That's coming up.

(COMMERCIAL BREAK)

BLITZER: You're in the "Situation Room." Happening now, helping one of the poorest nations in the world. We'll tell you about former President Bill Clinton's new humanitarian mission, one that he calls a "formidable task."

An Oklahoma, a trooper stops an ambulance on its way to the hospital with a patient. What really happened? The dash-cam video has just been released. We're going to show you what it reveals.

And the first lady jazzes up the White House with a little American music 101.

I'm Wolf Blitzer. You're in the "Situation Room."

Iran is erupting with protests and now death. We're following the breaking news. The anger over Iran's disputed election -- shocking images are emerging of blood in the streets as well as the burnings and the reports of gunfire.

The White House is watching it all very, very closely. The stakes for the U.S., indeed, for the world, are enormous.

But how is the White House reacting?

Let's go to our White House correspondent, Dan Lothian.

Very, very carefully, I assume, Dan.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: They are. They're walking a very fine line here, the White House very concerned about the situation over in Iran.

Privately, some top aides saying they're waiting to see how the election will impact the diplomatic overtures.

(BEGIN VIDEOTAPE)

(APPLAUSE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you.

LOTHIAN (voice-over): Even as President Obama was selling doctors in Chicago on his health care agenda, the administration was doing its best to strike the right tone in its response to Iran's questionable elections, raising doubts...

IAN KELLY, STATE DEPARTMENT SPOKESPERSON: We are deeply troubled by the reports of violence, arrests, and possible voting irregularities.

LOTHIAN: ... but finding some glimmers of hope.

KELLY: The enthusiasm and robust debate these elections engendered captured the attention of the world. And the essential right of people to express themselves peacefully needs to be respected.

LOTHIAN: Aboard Air Force One, spokesperson Robert Gibbs said, "We continue to be heartened by the enthusiasm of young people in Iran."

The public message here, no Hollywood ending, but the U.S. will continue to engage the Iranian government.

"We will be dealing with the leader we have," said one senior administration official, "not with the one we wish we had had."

Iran's nuclear program, which it claims is for peaceful purposes, has placed it at odds with the U.S. and other allies. But Mr. Obama has been road-testing a kinder, gentler approach in his inaugural speech, in a New Year's message to the Iranian people, and in his address to the Muslim world.

With Iran's controversial election, critics say it's time to wield a big stick, along with the olive branch.

Jim Phillips is with the conservative Heritage Foundation.

JIM PHILLIPS, SENIOR RESEARCH FELLOW FOR MIDDLE EASTERN AFFAIRS, HERITAGE FOUNDATION: The Obama administration has a utopian view of international relations that I think this episode of repression should help to dispel. There is evil in the world. There are regimes that are evil. And it's not just a question of engaging them. The problem is not in Washington. The problem is in Iran.

(END VIDEOTAPE)

LOTHIAN: Some critics say that the Obama administration should publicly denounce the elections, call for an outside independent investigation, and also publicly embrace the demonstrations.

But, again, this administration really walking a fine line here, and, for the time, saying they're waiting and assessing the situation in Iran -- Wolf.

BLITZER: Dan Lothian, thanks very much.

Let's bring in our guest right now, Reza Pahlavi.

He's former crown prince of Iran. His father was the late shah, who was overthrown back in 1979.

Mr. Pahlavi, thanks very much for coming in.

REZA PAHLAVI, FORMER CROWN PRINCE OF IRAN: Thank you, Wolf, for inviting me.

BLITZER: First of all, do you believe this was a free and fair election?

PAHLAVI: Absolutely not.

There's definitely fraud going on. I think millions of Iranians are quite aware that we could have almost predicted this outcome. For many years, the regime has entertained us with the false idea that there are -- there is a true, genuine democratic process in Iran, which is not the case. It's much more of a selection.

But I think today, well beyond what we have seen, in the big picture, I think it's a referendum.

(CROSSTALK)

BLITZER: Because I know you're in close touch with a lot of folks back in Iran right now.

PAHLAVI: Absolutely.

BLITZER: What are you hearing about what is likely to happen in the coming days and weeks?

PAHLAVI: Well, first of all, my immediate -- one of my immediate most concern is the safety of -- of Iranian citizens.

I can tell you, based on all the reports I have received, that, unfortunately, not only the demonstrations, but the violence on demonstrators is much more widespread than the main cities. I have been trying to -- tirelessly to work with key elements within the system that -- to try to convince and to persuade the security forces not to crack down on Iranian citizens. There's a human drama along...

(CROSSTALK)

BLITZER: What about the -- the chief opposition leader, Mr. Mousavi? Do you think he's safe there right now?

PAHLAVI: I have no exact information that will verify this.

Most of the reports that we have heard are not dissimilar to what we have been hearing on -- on many medias, including on this network. The -- the escalation of militancy of this regime is something that, unfortunately, could be expected.

And the reason I say this is because I don't think that the supreme leader and his clique ever anticipated -- or perhaps I should say miscalculated. They never thought that people would be, to this extent, committed. Now they have to deal with the -- their situation.

(CROSSTALK)

BLITZER: But you seriously believe there could be a revolution in Iran right now, overthrowing the supreme leader, the ayatollah, overthrowing Ahmadinejad, and putting reformists in charge?

PAHLAVI: Well, the climate on the streets of Iran is today asking, ultimately, for the fundamental right that has been denied, which is their sovereignty. This is a regime, let's not forget, led by a person who claims to represent God on Earth, who controls every aspect of the country.

(CROSSTALK)

BLITZER: You're talking about the supreme leader, the ayatollah.

PAHLAVI: Khamenei, and whatever is the group behind him.

Today, the real challenge to the Iranian people and I think for the world at large is, who are we siding with today? This is a cause for sovereignty. This is a cause for justice, for people's right to elect their own candidates, as opposed to precycled, predetermined...

(CROSSTALK)

BLITZER: So, do you think there will be a revolution?

PAHLAVI: Well, I think the climate that we see in Iran today is not dissimilar to a few months that led to the advent of this regime back then.

But what we are appealing to -- and I would like to take this opportunity, as I have appealed to other leaders, but particularly to the U.S. administration and President Obama, a president that clearly came with a message of human rights and hope and especially in his recent address in his conference in Cairo.

(CROSSTALK)

BLITZER: Are you in touch with anybody in the Obama administration?

PAHLAVI: We're communicating with message by various channels to this administration.

But I would like to take this opportunity and tell the president, this is a crucial moment, on behalf of my compatriots and millions to have been turning to the outside world, particularly to this president, to say, don't let us down.

BLITZER: What do you want him to do?

(CROSSTALK)

PAHLAVI: I think it is time to really engage with the people. I think it is time to show solidarity with the people who have been clobbered by a regime that is denying their rights. I think any signal other than this will be a slap in the face of a nation if, under such circumstances, one could possibly assume that we have to deal with what the regime is trying to...

(CROSSTALK)

BLITZER: Because, only yesterday, we heard the vice president, Joe Biden, say that, you know, the U.S. is going to continue to reach out and try to establish a dialogue with the Iranian regime.

PAHLAVI: Well, I think it's a very tough diplomatic challenge for many governments.

But having heard what Chancellor Merkel had to say, what the British prime minister had to say, what President Sarkozy of France had to say, I think this is time for erring on the side of -- of caution, that, under such circumstances, recognizes this big fallacy that has taken place will be almost tantamount to legitimizing this regime once again, at the detriment of the people.

BLITZER: One -- one final question. Do you hope someday to go back to Iran and take charge?

PAHLAVI: You know, Wolf, I wanted to say that my body might be here in the studio with you, but my spirit has never left Iran, as I have always been there.

And I'm here committed to help my compatriot reach the status of complete, real freedom under a secular democratic system, when there's a true separation of religion from government.

I believe this is what most Iranians demand today. I think this is the best solution for our country. And I stand ready to serve my country in whatever capacity that my compatriot deem so. But my duty today is help my compatriot achieve that goal. And we are coordinating with all those who are committed to us to fight this regime, which is against the people, who has been every principle of human rights and democracy, so we can bring this, hopefully by peaceful means, but we do -- and I must stress this -- it is vitally important for free nations in this world today to show solidarity, as they did with Eastern Bloc countries, as they did in other cases.

BLITZER: A critical moment, potentially, in Iran right now.

(CROSSTALK)

BLITZER: Reza Pahlavi is the son of the late shah of Iran.

Thanks very much for coming in.

PAHLAVI: Thank you, Wolf, for having me. Thank you so much.

BLITZER: Thank you.

Why is the CIA director saying this about Dick Cheney, the former vice president -- and I'm quoting now -- "It's almost as if Cheney is wishing this country would be attacked again in order to make his point"?

And watch this disturbing video, and you decide. A trooper stops an ambulance rushing a patient to the hospital. What happens next is sparking major controversy?

(COMMERCIAL BREAK)

BLITZER: We want to warn you, this next report contains images some viewers may find hard to watch. It's about a growing controversy over military medical training involving animals.

Our Pentagon correspondent Chris Lawrence is joining us now live with more on this story.

All right, Chris, what is this all about?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Wolf, some doctors and nurses have come to Capitol Hill to demand that the military change some of its medical training, specifically how it uses live animals.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Drop in heart rate will occur, but it will be brief.

LAWRENCE (voice-over): This U.S. Army training video shows a monkey shaking from an injected drug that simulates a chemical weapon attack. Its heartbeat jumps, pupils dilate, muscles spasm.

(on camera): What are we seeing right here?

CHARLES ROSCIAM, FORMER U.S. NAVY MEDIC: They're -- they injected a drug into the (INAUDIBLE) monkey to simulate nerve agents.

LAWRENCE (voice-over): Charles Rosciam an ex-Navy medic opposed to the military's animal testing. He's working with a group trying to convince Congress to stop it.

ROSCIAM: You can call it -- say it's not torture, it's not cruelty, whatever else it is. I don't know of any other word, when the end result is that these animals are suffering.

LAWRENCE: The Army says it teaches medics how to treat those symptoms, because the monkey closely mimics how a human soldier would respond to a real nerve agent.

UNIDENTIFIED MALE: Let's do the procedure.

LAWRENCE: In this video, medics prepare to cut into a goat to learn firsthand how to stop the bleeding.

After medics learn to bind its wound, the goat is euthanized.

ROSCIAM: Because there's other ways, better ways to train.

LAWRENCE: Rosciam says the Army should use more simulators, not live animals.

But others disagree.

JAMIE CAMPBELL, FORMER ARMY MEDIC: Patients move. Arteries retract. The -- the feel of blood, the feel of muscle, the feel of different tissues, that's something that I don't feel a mannequin or a video or something of that nature can simulate.

LAWRENCE: Jamie Campbell is a former Army medic who had three of his soldiers hit with an Iraqi missile attack, their legs severed.

CAMPBELL: It's arterial bleeding, which is what we use the goats to train on.

LAWRENCE: And Campbell says it makes better medics.

CAMPBELL: Because I don't think anybody wants one of their loved ones being worked on by somebody that has never experienced this before.

(END VIDEOTAPE)

LAWRENCE: And, as for that simulated chemical training, the Army says all those monkeys are revived right after the test is over, and none have died.

An official told me that a vet is always present right there in the room. The monkeys suffer no permanent damage. And he says each monkey gets at least two months off before it goes through that process and the exercise again -- Wolf.

BLITZER: Sensitive issue. Chris, listen to this. We want to give our viewers an update on the number of troops wounded -- wounded -- in Iraq and Afghanistan. The Department of Defense numbers show 31,342 wounded military personnel in Iraq, and 2,979 wounded in the war in Afghanistan. That's U.S. troops wounded in both of these wars.

Leon Panetta vs. Dick Cheney -- the former vice president and head of the CIA makes some controversial remarks on national security.

And jazzing up the White House -- the first lady, Michelle Obama, puts the spotlight on music education.

(COMMERCIAL BREAK)

BLITZER: Let's get back to breaking news, the unfolding and very dramatic situation happening in Iran right now.

Let's bring in our CNN political contributors, the Democratic strategist Donna Brazile, and Bill Bennett, a national radio talk show host, joining us from his radio studio right now.

Bill, let me start with you.

I want to play what Joe Biden, the vice president, said yesterday on "Meet the Press" when asked whether what's happening in Iran right now -- and it's a very fast-moving situation -- is going to affect the Obama administration's desire to reach out and have a dialogue with the Iranian regime.

(BEGIN VIDEO CLIP, "MEET THE PRESS")

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: Look, the -- the decision has been made to talk. We -- we -- we have put -- the P5, plus one, have laid on the table a proposal to the Iranians saying, we are ready to talk. And we have indicated we will fully participate in that. We're ready to participate. We're ready to talk.

(END VIDEO CLIP)

BLITZER: All right. Is that the right strategy, Bill?

BILL BENNETT, CNN CONTRIBUTOR: I think sounds a little hollow, a little tinny now, Wolf, I think, given the events of the last 24 hours.

As your earlier guest said, Wolf, I think it would be much better for this president to reach out a little more to these people, to democracy, to the forces of democracy. People on all sides here, journalists from all over the world, are saying, there's something wrong with this election.

Let the president say, let our president say he speaks for freedom and democracy. I remember the campaign stuff about no preconditions, but now Ahmadinejad and the supreme leaders and all have shown what this country is about. We have got to be on the side of democracy. This is an Iran Tiananmen, perhaps, in the making. It's got to be clear where he is.

BLITZER: What do you think, Donna? Because this is a tough one for the Obama White House.

DONNA BRAZILE, CNN POLITICAL ANALYST: I think the United States must take its time, Wolf, to see what -- what happens on the ground there.

The Guardian Council, the so-called highest authority there, has been ordered to investigate the elections to see if there was any evidence of fraud. I think we have the luxury of time right now, especially given the popularity of the reform movement.

And, you know, Wolf, that, as a -- as a student of democracy, we should allow, you know, at least those are coming into the streets of Tehran and other cities to know that the United States will not immediately go and embrace the -- the current regime, without knowing the results of the -- the real results of the election.

So, I think United States should wait and see what happens with this investigation, and also to -- to let the reformists know that -- especially because many of them desire a greater relationship with the West, and they also desired some reforms there at home. We should let them know that, at least on those two issues, we agree with them.

BLITZER: You know, Bill, you said maybe this is like Tiananmen Square. That happened almost exactly 20 years ago. Others say, maybe this is a repeat of '79, when the shah was overthrown because of demonstrations, in part, on the street.

Maybe it's the beginning of the end of what we saw in the former Soviet Union leading up to the collapse of the Soviet Union. And maybe it's none of the above.

BENNETT: It could be.

And the problem with waiting is twofold, I think. I respect -- always respect what Donna says, but it's twofold: one, investigation. What kind of investigation will the supreme leader conduct, will the ayatollahs conduct, will the mullahs conduct?

Second, what -- time may not be on the hands of the people who are for democracy. We saw perhaps one man killed in the streets. It's -- it's -- it's pretty rough. It's pretty strong over there. So, we need -- the president the president, at least, needs to send a very clear signal.

BLITZER: I want -- I...

BRAZILE: He can send a signal, Bill.

BENNETT: But he's...

(CROSSTALK) BENNETT: ... say that this thing -- that this thing is unsettled.

BLITZER: I think we just -- your satellite, Bill.

(CROSSTALK)

BENNETT: ... this thing is rigged or stolen.

BLITZER: Your satellite was coming in and out. That's why we -- we had a technical glitch.

But, Donna, I want to move on and talk about this little exchange that Leon Panetta, the CIA director, is having through the media with the former Vice President Dick Cheney.

In this interview he gave to "The New Yorker" magazine, Panetta said this of Cheney and his speech: "I think he smells some blood in the water on the national security issue. When you read behind it," Panetta says, "it's almost as if he is wishing that this country would be attacked again in order to make his point. I think that is dangerous politics."

Did Leon Panetta go too far and suggest that the former vice president actually is hoping for another terror attack on the United States?

BRAZILE: I think the CIA has clarified that that was not the intent of Mr. Panetta's comments, and nor do I believe that Mr. Panetta needs to apologize.

What I do believe is that this will once again ignite a conversation over whether or not the vice president and his remarks have gone so far as to invoke fear, that, somehow or another, the president is not keeping his commitment to making sure that this country remains safe and secure, because I believe that is what President Obama is trying to do at this point.

And all of the policies, and as well as his speeches that he's given both here and abroad, it is to signal that the United States intends to improve its relations with its allies, and to, of course, open our hand to those who will not clench their fist.

BLITZER: All right.

What do you think, Bill?

BENNETT: Can you hear me?

BLITZER: Yes, we hear you.

BENNETT: If -- can you hear me OK?

BRAZILE: Yes, sir.

BENNETT: All right. Good. If -- if he did say it, he went too far. Dick Cheney said that, you know, he hopes that his friend Leon Panetta was misquoted. There's a difference about whether you agree the country is safer -- safer or less safe because of certain policies and saying that someone, a former vice president or a president, wishes in his heart that we would be attacked.

That's way over the line, very unlike Leon Panetta. It's hard for me to believe he said it, but, if he did say it, he does owe Dick Cheney an apology.

BLITZER: We will leave it on that note.

Guys, thanks very much. Donna Brazile, Bill Bennett, thanks to both of you for coming.

BENNETT: Thank you.

BLITZER: Did you know President Obama has a half-brother named George Obama? Did you know he's now writing a book? What's the president's half-brother writing about? Something provocative and inspirational. We will tell you.

And claims of a stolen election in Iran -- wait until you hear what the -- an administration source is telling us about possible fraud.

And, after you see this video, you will decide what you think happened -- an ambulance carrying a patient trying to get to the hospital, but stopped by a police trooper. What happened next is rather controversial.

(COMMERCIAL BREAK)

BLITZER: All right, meet Mr. Obama. We're talking about George Obama. He's the president's half-brother. He lives in Kenya, home to the family of the president's father.

The 27-year-old George Obama now has a book deal. It will be a memoir entitled "Homeland." It's due out in January. It will focus on George Obama's teenage experience with crime and poverty and way out of that lifestyle into community organizing.

George Obama and President Obama have the same father. They did not grow up together or meet as children.

Remember, for the latest political news any time, you can always check out CNNPolitics.com.

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

JACK CAFFERTY, CNN ANCHOR: We put this question up on CNN.com's main page. We're getting a ton of e-mail. The question is: Do you believe that Iran's elections were honest?

Mike writes from Canada: Whether the elections were honest is irrelevant. Who won is ultimately irrelevant. What matters is that the Iranians have the courage to stand up to what they perceive as an electoral injustice. We should never concern ourselves with what we perceive as the wrongdoings of foreign governments. It is the reaction of a nation's people to their government's actions that, ultimately, really matter."

Todd writes: "No. I would say it's clear that some mischief has occurred here. Mousavi lost among his own ethnic group? That is highly unlikely. He lost the young Iranian vote? I equally doubt that."

Allen in Idaho writes: "I think Americans are a little too judgmental when it comes to other country's elections. Maybe we should take a look at our own election process, see if we have it right, before offering to critique the rest of the world. My question is, if Iran can certify an election with 40 million paper ballots in two hours, why can't Minnesota certify the senate race from last November?"

Brittany writes from Palm Beach, Florida, "If America can not put together an honest election, Iran doesn't have a prayer."

Joe writes: "When it comes right down to it, it doesn't really matter who wins, when the legitimacy of that victory is in the hands of one man. The clerics run Iran, and, until that changes, the Iranian people really don't have any real freedom."

Brian writes: "The statistics would certainly question the honesty. And would the investigation be a real investigation or just an attempt to polish the lie? After all, a lie is like a wine. It needs time to ferment."

And Dennis in Minnesota writes: "I believe the Earth is flat. I believe french fries are health food. I believe snowboarding and waterboarding are recreational activities. And I believe Wolf is a good dancer. I also believe the Iranian elections were honest."

If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile, and look for yours there.

Are you a good dancer, Wolf?

BLITZER: Could -- maybe he's referring to when I was on the "Ellen" show? Is that what he's -- when he saw me dance on...

(CROSSTALK)

CAFFERTY: Oh, yes, I bet he -- I had almost forgotten that, a -- a moment in television history. I will bet that's exactly what he was referring to.

BLITZER: Yes.

(CROSSTALK)

CAFFERTY: And -- and -- and that clip... BLITZER: Dancing is fun, but it's not my greatest skill. I have to...

(CROSSTALK)

CAFFERTY: No. That clip answers the question. No, you're not.

(LAUGHTER)

BLITZER: Yes. That's correct. That is the correct answer.

(LAUGHTER)

CAFFERTY: OK.

BLITZER: But I had fun doing it. Thanks, Jack.

CAFFERTY: Yes, you -- it looked like you had fun.

BLITZER: Thank you.

And, to our viewers, you're in THE SITUATION ROOM.

Happening now, breaking news: a shocking image of violence and a massive show of solidarity. Iran's post-election protests turn deadly, as American officials -- American officials wonder if the vote could have been rigged.

Making the hard sell on health care reform -- President Obama gets a standing ovation as he tells doctors they trained to be healers, not bean-counters and paper-pushers.

And a stunning dash-cam drama, as a police officer pulls over an ambulance on the way to the hospital. You won't believe what happened next.

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

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