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Fliers Warn Ukraine Jews to Register Their Property; Obama: Obamacare Debate Over; Search for Survivors in Capsized Ferry; Search for Flight 370; Flight 370 Search Could Cost Millions; Terror Trial Begins in New York

Aired April 17, 2014 - 17:00   ET


JAKE TAPPER, CNN ANCHOR: I now turn you over to Wolf Blitzer. He's in THE SITUATION ROOM. Thanks for watching -- Wolf.

WOLF BLITZER, CNN ANCHOR: Jake, thanks very much.

Happening now, breaking news. A deadly gun battle in Ukraine and a chilling warning to Jews. Is the country now a powder keg, about to blow?

Flight 370 mystery. We're awaiting the start of a fifth deep-water search, and now there are some new questions about the missing plane. Was it on autopilot when it went down?

And desperate search. Hundreds of people, mostly young students, missing in a disaster at sea. We're just learning of more confirmed deaths. Are some passengers trapped inside alive this capsized ferry?

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

ANNOUNCER: This is CNN breaking news.

BLITZER: We begin with the breaking news in the crisis in Ukraine, a development top U.S. officials are now calling intolerable, grotesque and chilling. Leaflets handed out by masked men in front of a synagogue during Passover, containing a disturbing warning to Jews in Eastern Ukraine. We're live this hour on four continents covering that story and more, including the search for Flight 370 and the Korea ferry disaster.

Our chief national security correspondent, Jim Sciutto, is beginning our coverage on the breaking news. Very disturbing information coming out.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: No question this is exactly the type of ethnic tension, ethnic hatred that many worried would break out as Moscow has stoked nationalists and ethnic divisions inside Ukraine. It's been stirred up for political gain but proving difficult to control, clearly empowering extremists on the ground and now exploding out into the open.

(BEGIN VIDEOTAPE) SCIUTTO (voice-over): On a single sheet of paper, a frightening threat to Ukraine's Jews. This leaflet showing up on the streets of the eastern city of Donetsk, orders Jews, ominously, to register themselves and document their property with the pro-Russian government. Secretary of State John Kerry in Geneva for talks intended to end the violence, expressed his disgust.

JOHN KERRY, SECRETARY OF STATE: After all of the miles traveled and all of the journey of history, this is not just intolerable; it's grotesque. It's beyond unacceptable.

SCIUTTO: News of the leaflets casts a shadow over a promising agreement reached between Kerry and Russian Foreign Minister Sergey Lavrov, calls for Russia to de-escalate, calling for pro-Russian protesters to leave public buildings they have occupied and the Kiev government to grant them amnesty.

President Obama warned, however, that words must be matched with follow-through by Russia and its supporters on the ground inside Ukraine.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We have put in place additional consequences that we can impose on the Russians if we do not see actual improvement of the situation on the ground, and we have to be prepared to potentially respond to what continue to be efforts of interference by the Russians in Eastern and Southern Ukraine.

SCIUTTO: So far, that progress is nowhere to be found. Three people were killed as Ukrainian forces attempted to retake one city, and today Russian President Vladimir Putin claimed the right to send Russian forces inside Ukraine if he decides.

VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): I can remind you that Russian's federation council granted the president the right to use armed forces in Ukraine. I very much hope that I do not have to use that right.

SCIUTTO: Today Defense Secretary Chuck Hagel announced nonlethal aid to Ukraine, though limited to power generators and border purifiers, even as he conceded that Russia's actions could be part of a broader strategy: to reclaim former Soviet territory for Russia.

CHUCK HAGEL, SECRETARY OF DEFENSE: I think we have to be alert to all possibilities. The actions of the Russians over the last two months is not only irresponsible and violates territorial integrity and sovereignty of a sovereign nation, but it's dangerously irresponsible.


SCIUTTO: The president laid out some details of this agreement in Geneva, this potential, as he called it, diplomatic path, and THAT includes assurances that ethnic Russians in Eastern Ukraine will have the full protection of the law. In fact, he said Ukrainian officials went out of their way to assure their Russian counterparts of that, but as he repeated many times, there are no guarantees, Wolf, that Russia this time will deliver on those promises. In fact, a number of times at his press conference he said that, you know, he has his doubts and he has to see action matched with these words.

BLITZER: It remains potentially very, very explosive despite maybe a bit of calming. A very, very dangerous situation. Jim, stand by for a moment.

I want to go right to the city in Eastern Ukraine where those anti- Semitic flyers were handed out. Our senior international correspondent, Nick Paton Walsh, is on the ground for us.

All right. So give us a perspective, Nick. What are you seeing, what's been the reaction, specifically from the local Jewish community?

NICK PATON WALSH, CNN CORRESPONDENT: This is a limited instance, from what we're hearing. The chief rabbi at Donetsk saying it happened once. He's not aware of it having happened in other towns, either, as you mentioned. Leaflets left outside or handed it out, as some Jews came out of the synagogue here during Passover.

But we heard from the chief rabbi, saying he believes it's provocation. He doesn't blame the pro-Russian, Celtic (ph)-led administration here led by a man called Denis Pushilin.

We spoke to Denis Pushilin, and said, "Look, that's not even my handwriting on that document or the title I use for myself. It's clearly a very badly done fake designed to provoke hatred here."

I have to point out, you know, we've heard a lot of claims and counterclaims putting pressure against ethnic Russians and Russian speakers here alleged by the pro-Ukrainian elements here. A lot of tension, even homophobia, racism you hear in the crowd sometimes here, but you don't hear much about anti-Semitism. So remarkable, I think, about the State Department choosing to focus so much on this one isolated incident when there are so many tensions here, and so many inside accusing each other of fascism, links to a Nazi past. Quite a volatile situation here. And hear rhetoric coming out of John Kerry, which sort of throws further potential flames into that.

BLITZER: It wasn't just the secretary of state. It was the ambassador to Ukraine, as well, sounding an alarm. As far as diplomacy is concerned, Nick, the Geneva talks that are underway, has that effectively, as far as you can tell, changed anything so far?

WALSH: Not really, no. I mean, I spoke to Denis himself, the kind of self-declared leader of these protesters and he wasn't really listening to Geneva, as it happened. He wasn't aware of that joint statement they put out: everyone has to leave the buildings they've illegally occupied, and put down the arms they illegally hold.

Bear in mind, if you're pro-Kiev, that sounds like the protestors here packing up and moving home. But if you're pro-Russian, that could refer to the guys in the middle of Kiev still, the far-right militants who work with them. So any side could misinterpret this at any particular time.

I think we're also tonight still hearing social media traffic chatter of continuing clashes around this region, potential for casualties. Nothing has really changed on the ground since that piece of paper came out -- Wolf.

BLITZER: Nick Paton Walsh, watching what's going on for us, as he always does. Thank you.

Let's talk a little bit about this with our chief national security correspondent. Jim Sciutto's still here. Julia Ioffe, senior editor of the New Republic and a former Moscow-based reporter. And the former NATO supreme allied commander, retired U.S. Army general Wesley Clark. He's now a senior fellow at the UCLA center. Joining us from Little Rock.

Julia, first to you about that pamphlet that was distributed. We don't know how. At the synagogue. That one synagogue in Donetsk during Passover. You wrote this. You posted it. Translated text: "All citizens of Jewish nationality over age of 16 living on territories of Donetsk Peoples Republic have to register. In case of noncompliance, the following will lose privileges of citizenship and will be deported."

Now, that sounds like a Nazi kind of statement there. What are you learning; what are you hearing about this?

JULIA IOFFE, SENIOR EDITOR, "THE NEW REPUBLIC": What I'm hearing, you know, this was circulating in the Russian language and Ukrainian language Internet for the last few days, but it's been widely debunked. It sounds like a few guys went to Kinkos, essentially, printed this thing up and were distributing it.

Some people are connecting it to the pro-Kiev forces in other parts of the region, because the Russian government, for example, has been accusing the new government in Kiev of harboring fascists, of harboring neo-Nazis and anti-Semites, and since there are anti-Semites on both sides of the barricades in this region, it historically has a lot of that, this is -- this seems like an attempt to smear the other side as having those kinds of ties, as well.

BLITZER: But still the secretary of state, the U.S. ambassador to Ukraine, they made a big deal of this today.

IOFFE: I'm sorry to interrupt. But the U.S. ambassador to Ukraine actually said, you know, "We don't know what the origins of these flyers are..."

BLITZER: But it's alarming. But we don't know what the origin is.

SCIUTTO: Listen, it is hard and as Nick Paton Walsh said on the ground there, as well, he's talked to people. He talked to the various officials involved, and they denied being involved.

But I think what it does show is that you have a lot of different sides trying to stoke these tensions, right, trying to take advantage and, frankly, cast aspersions on the other side. The difference is, once you do that, it's hard to put that genie back in the bottle. And that is a very dangerous mix already. You've already -- and this is very substantive -- you've already created these divisions between ethnic Ukrainians and ethnic Russians, and that's breaking out in violence. It's very easy to carry that to ethnic and religious divisions. And it shows that danger.

IOFFE: And you saw it happening in Crimea, as well. When things got really heated, there was a lot of graffiti popping up, anti-Muslim graffiti against the ethnic native Tartars in the region.

But yes, I mean, it's -- What you're seeing also is that the government in Kiev is very weak. They haven't been able to do anything about these thugs taking control of government buildings, and so this is kind of the stuff they're resorting to. They can take phone calls to show these guys talking and getting instructions...

BLITZER: Let me bring General Clark into this discussion. General Clark, you've got a lot of history in Europe, the supreme allied commander over there.

When the president of the United States says, as he did within the past hour or so, there really are no U.S. military options in dealing with this crisis, what say you?

GEN. WESLEY CLARK, SENIOR FELLOW, UCLA BURKLE CENTER: I think he's right. We're not going to send a delegation of U.S. forces there but, Wolf, I was in Ukraine a few weeks ago. I met with the government. I talked to some of the senior leaders there.

And I can tell you that -- that the Ukrainians will resist what Russia's trying to do. And honestly, the stronger their capacity to resist, the greater the likelihood that Russia will fall back on diplomacy in an effort to salvage something out of this, as opposed to launching its military in.

So what I was presented with when I was in Ukraine was the Russian plan, which was taken from Russian sources and shown to be by a member of the Ukrainian interim government. I was told that the interim government had captured 12 Russian Spetsnaz teams, which were released in order to be non-provocative to the Russians.

The minister of defense told me that he had called his Russian counterparts during the Crimea crisis and asked them, "Please do not use violence on our troops. We'll just pull them out."

The Ukrainian government had received a lot of initial guidance that it shouldn't provoke, and so it attempted to follow that guidance.

But what I saw in the people -- that I spoke to was a tremendous determination to resist what they see as a clear Russian strategy to take over Ukraine. Now, whether it's Crimea, eastern Ukraine, southern Ukraine, or all of Ukraine, remains to be debated.

At one point, the Ukrainian generals were called by former colleagues who are now in other forces, Belarusian and Russian, and given complete rundowns on the Russian plans. So that's a lot going on over there that is not being reported in the American media. I think the administration's policy is a smart policy. We want to drive this thing towards a diplomatic resolution; but this is not just finger pointing on the ground and both sides are not equal.

BLITZER: Let me bring Julia back in. Julia, Putin had this lengthy televised Q&A that we all got reports of. What is going through his mind right now? Is he really frightened by the prospect of tougher U.S.-led sanctions?

IOFFE: I doubt it. Whatever sanctions there are going to be, it seems that he's made the calculation that so far this is a cause he's willing to bear in order to expand Russia, to expand Russian influence and project a force of Russia that we're not somebody to be meddled with; we're not somebody to be taunted.

BLITZER: What about those oligarchs, those billionaires who are being sanctioned by the west right now? They're going to lose some money.

IOFFE: You overestimate their independence. They -- ever since the arrest in 2003 of oil tycoon Mikhail Khordorkovsky, they've been basically hostage to Putin. They need him to keep his money. So often they're called in in the service of the state, and Putin says, "Hey, Oligarch X, build this for me or donate X amount of money to this."

BLITZER: General Clark, quickly, is the administration right when it says it's not going to send lethal military equipment like weapons to Ukraine?

CLARK: Absolutely. The Ukrainians don't need lethal military equipment. What they need is the kind of diplomatic support that the United States is providing and that Ukraine's neighbors should provide along with their own determined r resistance. I think if Russia were deciding to come in, it would be a tough fight and that's -- that's the element of deterrence that's needed to drive this toward a diplomatic resolution.

BLITZER: General Clark, thanks very much.

Julia, thanks to you. Jim will be back later.

President Obama spoke out about Ukraine a little while ago during the White House news conference. He also released new numbers as far as Obamacare is concerned, and he declared the debate over the Affordable Care Act is now over.

Let's go to our White House correspondent, Michelle Kosinski. She's got details. Tell our viewers, Michelle, what the president's message was.

MICHELLE KOSINSKI, WHITE HOUSE CORRESPONDENT: Wolf, that's how we started this. And 8 million Americans now have signed up for insurance under the Affordable Care Act, many more than originally expected. And 35 percent of them are under age 35. That's important because analysts in the Congressional Budget Office say that 40 percent of the people within the system need to be young for it to function financially.

And, yes, the president did get into the politics, hitting out at critics who continue to call for a repeal, saying that this is working and the debate now should be constructive.


OBAMA: This does frustrate me. States that have chosen not to expand Medicaid for no other reason than political spite. You've got 5 million people who could be having health insurance right now, at no cost to these states. Zero cost to these states, other than ideological reasons they have chosen not to provide health insurance for their citizens. That's wrong. It should stop. Those folks should be able to get health insurance like everybody else.


KOSINSKI: And what we still have not heard from the administration is how many of those signing up are previously not insured and how many are not just signing up but paying their premiums, Wolf.

BLITZER: Michelle Kosinski, reporting for us from the White House, thank you.

Up next, a rising death toll, hundreds of people still missing, some possibly trapped inside a capsized ferry. We're going live to South Korea and live to Perth. What is the new data emerging from the deep- water searches?


BLITZER: We're following the desperate effort underway right now from off the coast of South Korea. The death toll has just risen to 25 in that ferry disaster. But hundreds of people, mostly students are still missing, and officials say some of them could still be alive and trapped inside. Kyung Lah is joining us from Jindo, South Korea, where survivors are trying to recover. What is the latest that you are hearing?

KYUNG LAH, CNN CORRESPONDENT: The latest that we are hearing is that this rescue is very much being treated as a rescue. They are operating under the belief that survivors are still aboard this capsized vessel, which is about 12 miles away from where I'm standing. You can't actually see it from where I am.

And there is this growing rage among the families that the captain somehow managed to survive, and he jumped off the ship while hundreds of passengers were sinking on this ferry.


LAH (voice-over): Images captured by the rescue team at the site of the sinking ferry give a glimpse of the tense moments in the rescue effort, passengers desperately clinging to the rails so they do not fall off the boat. Both the ship's captain and the ship's operator speaking Thursday for the first time. The captain, his head and face covered, broke down in tears when reporters asked him if he had anything to say.

JOON SUK LEE, FERRY CAPTAIN (through translator): I am sorry. I am at a loss for words.

LAH: But he offered no explanation as to what caused the ferry to collapse.

KIM YOUNG-SUNG, CHONGHAEJIN MARINE CORPS EXECUTIVE (through translator): We deeply apologize to the families, and I'm saying once again, we are really sorry. Our company will promise that we will do our best not to lose any more lives. We're sorry.

LAH: The ship's operator president admitting that they failed the passengers.

KIM HAN-SIK, CHONGHAEJIN MARINE CORPS PRESIDENT (through translator): Executives and employees of the Chonghaejin Marine Office have committed a grave sin.

LAH: The apologies and mea culpa offered little comfort to family members on the shore, many of them clutching their cell phones, hoping for a text from their missing loved ones, many of whom are high-school students.

The South Korean president got an earful from families, worried about the clock running out before hearing from their loved ones, who might be gasping for oxygen in the capsized ship's air pockets. She promised to add more resources to the rescue, saying that every minute is precious.

But rescue officials say they are at the mercy of the elements. It is drizzling, creating poor visibility. Water currents are powerful, making for dangerous operations, even more frustration for families.

CHANG MIN, FATHER OF ACCIDENT VICTIM (through translator): The civilian team went out there, but the tides made it too dangerous, so they came back. Then the government says it's too dangerous for them, too. Shouldn't I be angry at that? If the government cares for our people, please rescue our families and our children.


LAH: You can see how angry that father was. What you're looking at live now is the search area about 12 miles away. You can see these are the family members raising their fists in anger. Their grief and frustration becoming angry they are angry about the captain. There are a lot of questions about why this ship capsized, and they feel that there needs to be more done to try to save their children -- Wolf.

BLITZER: So far, no answer as far as why it did capsize. Is that right?

LAH: That's right. No answer. They are looking at whether or not the ship suddenly deviated off course, that that may be a high probability according to the maritime police as to why it capsized. But there's been no clear answer about exactly why the ship went underwater.

BLITZER: Kyung Lah on the scene for us, what a heartbreaking story that is. Thank you.

Up next, we'll go live to Australia for the latest on the search for Malaysian Airlines Flight 370. We're getting new information right now from a robotics sub's deep dives to the ocean floor.

And we're also getting a look at the cutting-edge technology being used in this plane search capable of capturing images like these.


BLITZER: New information from the search for Malaysian Airlines Flight 370. A high-tech U.S. drone now has completed four deep dives into the Indian Ocean. Its fifth expedition should begin any time now. But as its latest findings are downloaded and analyzed, searchers' frustration is clearly growing.

CNN's Erin McLaughlin is joining us, though, live from Perth, Australia. That's the headquarters of this coordinated multinational search effort.

What's the latest there, Erin?

ERIN MCLAUGHLIN, CNN CORRESPONDENT: Hi, Wolf. Well, they may be disappointed, but they're certainly not discouraged. Now, more leads may have been discounted, more dives may have turned up empty handed but officials here in Australia so far still saying they are confident they're looking in the right place.


MCLAUGHLIN (voice-over): The Bluefin-21's operator tells CNN, three dives to the depths of the Indian Ocean have not turned up any trace of Malaysian Airlines Flight 370. The fourth dive is now complete.

Adding to searchers' frustrations, preliminary analysis of samples from an oil slick discovered on Sunday failed to show aircraft engine oil or hydraulic fluid. Another possible clue scratched off the list.

So for now, the Bluefin-21 remains the searchers' best hope. Early today Malaysia's acting Transportation minister revealed a bit of what it's discovered.

HISHAMMUDDIN HUSSEIN, ACTING MALAYSIAN TRANSPORT MINISTER: Visuals that we managed to get from the Bluefin-21 were very clear. Not in finding what we were looking for but what the seabed looks like and that gives us a bit of relief as the next few days we are going to intensify the deepwater search.

MCLAUGHLIN: Another bit of hopeful news, the robotic sub's operators found a way around some of the problems that cut short its earlier missions. It decided there's only a small but acceptable risk in diving to the depth of the ocean floor. Even though it's deeper than the sub's 2.8 mile limit.

As for the cost of a prolonged underwater search, Australia's top air accident investigator puts it in the ballpark of $250 million. Even though the aerial hunt is supposed to wind down soon, the search area may expand again if operations on the ocean floor don't pan out. The Australians say searchers may go back to looking at the arc taken in by the partial digital handshake between the jet and an Inmarsat satellite. A strip of ocean at least 370 miles long and 30 miles wide.

No one is talking about giving up.

HUSSEIN: The search will always continue. It's just a matter of approach.


MCLAUGHLIN: Australian Prime Minister Tony Abbott saying that they will have exhausted their best leads within the week. If still no wreckage found, they'll need to rethink their approach -- Wolf.

BLITZER: Erin McLaughlin in Perth for us, thank you.

So even though the underwater search seems to be making some progress, are they in fact being looking in the right areas?

Joining us in THE SITUATION ROOM, our aviation analyst Peter Goelz, our law enforcement analyst Tom Fuentes also joining us on the phone, and "Wall Street Journal" reporter Andy Pasztor.

Peter, they are completing four searches already. So far we haven't been told they got clear pictures but they haven't spotted any wreckage. Are you surprised?

PETER GOELZ, CNN AVIATION ANALYST: No, I'm not at all. I think this was always going to take weeks. It's a pretty big area even though it's been narrowed down. I think we're at the very initial stages of it.

BLITZER: Andy, you've been speaking to your sources. Do investigators believe -- are they convinced they are looking in the right area?

ANDY PASZTOR, WALL STREET JOURNAL: I definitely think so. My colleagues and I have done a story which basically says that this is their best estimate, of course, after weeks and weeks of analysis and it's based on some really cutting-edge science which we could talk about a bit. It's based on really dogged analysis with the data that they had and sort of relooked at again and again and again, and there is a bit of luck at the end.

The reason that they are so convinced that this is the right area is because of -- for about two weeks ago they managed to come up with a really very arcane, unusual, and quite intriguing technique and that is they were being looking at the differences in frequency of the signals between the satellite and the plane as your viewers had heard about called the Doppler event but they really added one more angle to it and that is, they looked at the temperature of the satellite whether it was -- in equips or not. And the temperature of the signaling equipment on board the jet and they were actually able to use these very sensitive temperature variations to look at the difference in the returns of the way signatures, if you will, the lay signatures, that they received and then they look at several hundred other aircraft that flew using the same system, and that's why they are so convinced that with the latest analysis, they are very close to where they need to be.

BLITZER: Because, Tom, I raised the question if they are convinced they are even looking in the right place because the Malaysian Transportation minister, he had some intriguing comments today suggesting, you know what, they may have to, in his words, regroup.

Let me -- let me play the clip of what he had to say.


HUSSEIN: There will come a time when we may need to regroup and reconsidering but in any event the search will always continue. It's just a matter of approach.


BLITZER: Because when he says that, they may have to regroup and reconsidering, if they come up empty handed with all the Bluefin-21 searches, what are they going to do?

TOM FUENTES, CNN LAW ENFORCEMENT ANALYST: My opinion, he shouldn't even be saying that at this point. They're in their earliest stage of this Bluefin search. All of the experts and professionals have told them this is going to take a while. They need to dial down the emotion, dial down the rhetoric and just do their job and search.

BLITZER: And they're obviously trying their best right now, Peter, but are you 100 percent convinced that they're looking in the right area? And I asked the question because, as you know, this is the so- called black box, even though it's orange, the flight data recorder. This is the ping. It's supposed to emit those pings every second at, what, 37.5 megahertz. But the actual megahertz that were picked up over less than that, about 32 megahertz. Some are raising questions whether or not that two-hour ping was really from the black box.

GOELZ: Well, I think as Andy reported, I mean, they really have applauded the investigators from the NTSB, from the AAIB, some really cutting-edge work on this. This is their best estimate. Are there some assumptions built in, they are. But they are going to give the Bluefin six or eight weeks to conduct the search and I think they are going to be successful.

BLITZER: Andy, you've done some reporting on this plane that presumably it was on, what, autopilot when it disappeared and when it went into the Indian Ocean? Tell us precisely what you're hearing.

PASZTOR: Martin Dolan, the head of the Australian Investigations Bureau, told one of my colleagues that in fact they believe the plane may have been on autopilot and actually may have been headed for Perth but this was couched in a general way. They haven't been able to confirm this. So it's another theory that they are trying to work on.

But to get back to your main question, Wolf, the important point to remember is the Australian, the head of the Australian investigative agency calls this the sweet spot of the investigation and Angus Houston, the head of the search coordination committee, said this -- the data we've got is the data we've got. So I think what we're seeing here is the culmination of weeks and weeks of tweaking and analyzing and refining the data.

The upside is that if they are right, they'll be in the right place. They are close to the right place and we'll find it in a couple of weeks or maybe longer. The downside is that if their analysis is not correct, as they believe it is but if it turns out not to be correct, then I think we're looking for a much longer search because they really have given this their best shot. There is not much more analysis and further refinement of the data, either from the satellite or from the fuel consumption of the aircraft or from the speed of the aircraft or from the radar data that's available according to our reporting.

BLITZER: Andy Pasztor of the "Wall Street Journal", thanks very much, Tom Fuentes, Peter Goelz, thanks to you as well. Up next the price tag for the search. It's in the millions and it keeps climbing. Who's going to pay the bill?

And we'll also take a closer look at the cutting-edge technology that can capture images like these. It's being used right now in the deep sea search for Flight 370.


BLITZER: The search for Flight 370 has brought about an unprecedented amount of international cooperation with those ships, planes and underwater drones. They don't come free.

Brian Todd is taking a closer look at the price for this kind of search.

What are you finding?

BRIAN TODD, CNN CORRESPONDENT: Wolf, a sobering figure today from a lead official involved in this. Martin Dolan, Australian's top transportation official, said a prolonged undersea search for the missing plane could cost nearly $250 million if private companies are used. Dolan cited a figure of $234 million, saying that's a ballpark rough estimate of an extended search in salvage missions.

We know at least one private company, Phoenix International, is being contracted now to run that Bluefin-21 and the towed pinger locator on the Ocean Shield. Dolan said a later phase of the search could involve a search along a larger portion of the sea that was highlighted by the digital handshake between the plane and a satellite, and he said that arc could be about 370 miles long and 30 miles wide.

Now one expert we have consulted, Rob McCallum, an ocean search specialist from Williamson and Associates, he believes that figure is way too high. McCallum says in the area that Dolan is talking about, even with two deep towed submersibles working which gets down into the water much deeper and much longer, he thinks the price tag's much closer to about $15 million, Wolf. So you've got projections on the far end of the spectrum here but again when all is said and done, it's very hard to project these figures.

BLITZER: The U.S. Navy is projecting what it might wind up costing the U.S. Navy.

TODD: That's right. The Navy has told us that it has budgeted $3.6 million just for its portion of this particular phase of the operation. And that covers the deployment of the Bluefin-21, the towed pinger locator on board the Ocean Shield, it covers the cost for 10 operators which some of them are with Phoenix International on board the Ocean Shield. Plus transportation to and from the region.

Again, that's just the U.S. Navy's portion of this. That doesn't include what the Australians are paying every day, for the deployment of the Ocean Shield, which of course is going to run into the millions.

BLITZER: Yes. And let's not forget, one Boeing 777 costs about $200 or $250 million.

TODD: Right. And the towed pinger locator, that price tag, $3.5 million just to buy that.

BLITZER: Yes. One locator. All right, Brian, thanks very much.

Let's get some more insight now on deepwater searches. Joining us now, two guests, Colleen Keller is the senior analyst with Metron, a defense contractor who helped in the search for the Air France airliner that went down in the Atlantic back in 2009, and environmental consultant Gene Ralston, he's an expert in side-scan sonar. One of the technologies being used by the Bluefin-21 right now.

Colleen, even if the first four searchers by the Bluefin-21 emerge with nothing specific to show, no wreckage, it's still potentially beneficial as far as the overall search is concerned. Explain why.

COLLEEN KELLER, SENIOR ANALYST, METRON INC.: Well, Wolf, it's what we've been calling negative information. When you search an area and you don't find something, you've learned something about that area and about the search area as a whole. You move on to new search areas but you always keep in your back pocket that you looked in that first place and didn't find anything, which increases the probability that you will find the target in the remained to be search areas.

So it's good to keep marking these things off. The key thing here is that you want to be spending your time in the highest probability areas. They've got several different locations where they have detected pings from the beacons, supposedly, and so they should have some idea of what is the best area to put this thing in and it's not clear, kind of looks like they're starting in one area and just working their way across this area.

I would hope that they are trying to focus in the highest payoff areas first because as you know time is money and this thing is accumulating costs rapidly.

BLITZER: Certainly is. Gene, you were nice enough to send up some images and I'm going to show our viewers some of these images you sent us from the side-scanning sonar. The first one is a boat that was seen, a boat about 100 feet at the bottom of the lake. There you see it right now. That's a pretty precise image that the sonar will show.

The second one, a couple of cars found down, what, about 30 feet under water. There you see them right there. The third one was an F-18 that was found in the Columbia River that's about 40 feet under water.

Presumably, though, the wreckage in the Indian Ocean is going to be a lot deeper than that. Will that side-scanning sonar be as precise as the images we've just seen?

GENE RALSTON, SIDE-SCAN SONAR EXPERT: Yes, it will, Wolf. The images depend upon the nature of the bottom, how much clutter there is that will hide the images. The Bluefin-21 is programmed to fly at a certain altitude above the bottom and it will create as good of images if not better than what you are seeing there.

BLITZER: Are they using, Gene, the best technology available right now in trying to find wreckage from this airliner?

RALSTON: I believe they are. And the only thing that I would think would be somewhat better would be to have four, five, or six if they could afford them of the Bluefin-21s or other autonomous underwater vehicles searching their own designated grids so they can search the same area -- the target area much quicker. Only having one or two units makes it much more time consuming.

BLITZER: Colleen, once they bring up the Bluefin-21, it takes about four hours to review. Walk us through what they do to see if they have spotted something.

KELLER: Well, I would actually like to defer to Gene because you're talking about image interpretation and often these images don't look like a photograph. And that's -- that's the key thing to understand. You're looking at returns of sound that is bouncing off the object and coming back and there are big shadows behind the object where the sound doesn't go and there could be -- those shadows could be hiding something.

So what you have to do is you have to pick out something that looks manmade among natural objects and that's more art than science sometimes.

BLITZER: Is it that difficult, Gene?

RALSTON: It is, depending on the nature of the bottom, as I discussed before. If it's a hard, rocky bottom, things will tend to blend in as far as the deflected portion of the image. However, the shadows will -- should still be there. There should be greater shadow detail on the bottom of the ocean there depending on any natural rock-outcrops or that type of thing that may be the same size or larger than parts and pieces of the aircraft.

BLITZER: Gene Ralston --


BLITZER: I've got to cut you off because we're out of time. But thank you so much for joining us.

Gene Ralston, Colleen Keller, helping us understand what's going on beneath the waters of the Indian Ocean right now.

Up next, it's video seen first on CNN. A massive terrorist meeting shining a spotlight on al Qaeda and a major terror trial now getting under way in New York.


BLITZER: Disturbing video of a huge al Qaeda meeting seen first here on CNN. It's also drawing more attention to an extraordinary terror trial in New York City.

Our national correspondent, Deborah Feyerick, is there.


DEBORAH FEYERICK, CNN NATIONAL CORRESPONDENT (voice-over): Abu Hamza al-Mazri's one-eyed hook-handed appearance is distinctive. His hate- filled, anti-Western rhetoric, combative.

ABU HAMZA AL-MAZRI, SUSPECTED TERRORIST: The collapse of the two towers, nothing but a pure demolition.

FEYERICK: And his trial in New York may prove to be explosive.

Nicknamed the Hook, al-Mazri once led London's Finsbury Mosque, preaching to the likes of failed shoe bomber Richard Reid and convicted 9/11 terrorist, Zacarias Moussaoui.

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: At the time, he was referred to half joking as Londonistan. And he was one of the more prominent figures, you know, it's hard to forget him. He looks like a James Bond villain with a hook in his -- in place of a hand.

FEYERICK: When the mosque became more moderate, al-Masri was kicked out, taking his fiery sermons to the streets.

BERGEN: The fact that he -- you know, he literally had given parts of his body to the holy war, and I think for the younger man that sort of flocked to his sermons, this was -- he was the real deal in their view.

FEYERICK: The real deal now charged with eleven counts of terrorism, some before 9/11. Among them, a 1998 conspiracy to kidnap U.S. tourists in Yemen. Sixteen were taken hostage and later used as human shields during the rescue. Four were killed.

Mary Quin, an adventure traveler and former Xerox executive, told CNN how she escaped.

MARY QUIN, TERROR SURVIVOR: We were pulling at the gun and each screaming at the other, and then I just first tried to kick him and then I put my foot down on his head and it gave me enough leverage to get the gun out of his arms and make a run for it.

FEYERICK: Court documents say during the incident, al-Masri talked to the kidnappers on a satellite phone he gave them. Quin later wrote a book about the kidnapping. In it, she describes how she confronted the cleric in London, allegedly getting him to admit his role in the attack.

BERGEN: If she is, indeed, a witness, she'll be a very effective one.

FEYERICK: Al-Masri has pleaded not guilty and may himself end up on the witness stand. He says he wants to testify in his own defense.

DAVID KELLEY, FORMER U.S. ATTORNEY: They also might also welcome the opportunity to cross-examine him, because there's obviously a lot of material out there to impeach him and impeach his credibility and paint him to be exactly what they say he is.


FEYERICK: And Abu Hamza has been very involved in his case. He wanted to give the opening statement. The judge said no. He is expected to testify in his own defense. His lawyer acknowledging that today. Also on the stand, a man, a former colleague of the failed shoe bomber, Richard Reid -- Wolf?

BLITZER: Deborah Feyerick, thanks very much. We'll take a quick break. Much more news, coming up.