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CNN Late Edition with Wolf Blitzer

Interview With Colin Powell; Interview With Don Evans

Aired October 19, 2003 - 12:00   ET

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

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


WOLF BLITZER, CNN ANCHOR: It's noon in Washington, 9:00 a.m. in Los Angeles, 8:00 p.m. in Baghdad and 11:00 p.m. in Bangkok, Thailand. Wherever you're watching from around the world, thanks for joining us for LATE EDITION.
We'll get to my interviews on this program. The U.S. secretary of state, Colin Powell, will be joining us, as well as the U.S. commerce secretary, Don Evans.

First, though, let's go to CNN headquarters for a quick check of the hour's top stories.

(NEWSBREAK)

BLITZER: When President Bush and the world's Asian leaders open the APEC summit formally on Monday in Thailand, the fight against terrorism will be high on the agenda.

The secretary of state, Colin Powell, of course, is traveling with the president. And today he spoke with CNN's senior White House correspondent, John King, about the war on terror, Osama bin Laden and a nuclear North Korea.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT: Thank you, Mr. Secretary.

I want to start first with the president's new overture today in North Korea. He says, no, he will not negotiate one on one a bilateral nonaggression pact, but he is willing to put it in writing -- no hostile intentions, no intent to invade -- so long as it's a group document involving Russia, China, Japan and South Korea. And of course, North Korea would have to give up its nuclear-weapons program.

What if North Korea says no? Do you have to then go straight to the Security Council? Do you have to consider military options then?

COLIN POWELL, SECRETARY OF STATE: Well, there are a lot of ifs and a lot of questions there. But let me approach it this way.

The president has said all along he has no intention of invading North Korea. We don't want to attack North Korea. We have no need to attack North Korea.

We entered into six-party dialogue with North Korea because we believed it was important for its neighbors to be included. And the first meeting was held in Beijing a couple of months ago. And all six parties, including North Korea, agreed that it was in the interest of all six parties to have a denuclearized Korean peninsula. So we're trying to find a way forward.

We are not going to have a bilateral agreement with the North Koreans, because it involves more than just the United States and North Korea. And we saw what happened in the previous administration with a bilateral agreement. We're also not going to have a treaty or a nonaggression pact that requires Senate ratification.

But we believe that there are models that can be looked at from the past that will allow us to find the kind of security agreement that would contain the assurances that North Korea should find satisfactory.

Now, this will take discussion among the parties, and we hope that North Korea will not say no when we finally get into discussions with them.

The fact of the matter is that North Korea is not gaining anything by being the possessors, if they are, of nuclear weapons or developing nuclear weapons. It doesn't help an economy that's in need. It doesn't feed anyone, and it doesn't scare anyone.

We don't like to see nuclear weapons in that part of the world. But at the same time, we will not let the presence of these programs blackmail us or scare us into doing something that would not be appropriate to the situation.

KING: But if the North says no, it will only take a one-on-one bilateral agreement with the United States, nonaggression pact, at that point, do you have no choice but to go to the Security Council?

POWELL: Well, it's not necessarily related to the Security Council. The Security Council issue has to do with North Korea's violation of its obligations. So it not only violated the agreements it entered into with the Clinton administration, it's violated agreements it entered into with South Korea some 11 years ago, and it's violated its obligations under a number of international agreements supervised by the International Atomic Energy Agency.

So there are options available to us and to the international community in the presence of continued North Korean intransigence. I hope that the neighbors of North Korea, who perhaps have more influence in North Korea than we do, will be able to persuade North Korea that it is in their interest to find a solution to this problem.

The president is committed to a diplomatic solution, a political solution. And the presentation he made to the President Hu Jintao of China said to the president of China, please keep playing the essential role you have been playing in moving this along, serving as the convener of the six-party talks and participating in those six- party talks.

And the president said he is prepared to look at other ways, new ways, of providing assurances that have to be matched by a verifiable end of North Korea's program. So I think the president has taken a positive step forward, and we'll see how the other parties respond.

KING: You are here at the APEC summit, and the draft communique talks about an agreement between these economies and in this region to dismantle terrorist groups. Obviously, we have seen over the past year the problems in this region.

What are the teeth behind the words? They say they will dismantle. What specifically concrete steps will we see?

POWELL: Well, the concrete steps are being taken as we sit. The arrest of Mr. Humbali here in Thailand. We have seen such a response to our terrorist-counterterrorist initiatives over the past years because everybody now realizes it is not just a problem for the United States. What happened in Bali, what's happened in the Philippines, what's happened around the world makes it clear to everyone that this is an international problem, and we have to come together.

What's important at this meeting is that APEC, which has always been for the most part a trade and economic organization, is now going to extend its reach and start talking about security issues, whether it's proliferation of weapons of mass destruction or terrorist activities, because they are interlinked. You can't have a thriving economy, you can't have tourism, a robust tourist industry, if people are worried about terrorists, so security and a sound economy go together. And that's what I think is important about this APEC meeting.

KING: When you're in these conversations and on the eve of them, or during them, a new bin Laden tape comes out, and he says he will attack in Iraq, he says he will attack any countries that help the United States, does that discourage people from participating, whether it is as you seek financial commitments or troop commitments for Iraq or whether you seek commitments in this region to do more, does that scare people away?

POWELL: No, I think it now encourages them. It might have scared them in the past, but everybody now knows you're not immune. You can't hide from it. You can't walk away. He is a threat to all of us.

And when you see these kind of tapes, it just reminds us this kind of terror is still on the face of the earth, and we have to come together, and we have to do even more with the exchange of law- enforcement information, intelligence information, the use of our military forces.

We all have to come together, and that's going to be one of the messages coming out of this APEC conference.

(END VIDEOTAPE)

BLITZER: The secretary of state, Colin Powell, speaking earlier today with our senior White House correspondent, John King. John will be back in the next hour of LATE EDITION with a full report on what's going on at this summit in Thailand. Let's move to Iraq right now, where two more U.S. soldiers are dead and another wounded, victims of the latest ambush. CNN's Baghdad bureau chief Jane Arraf is standing by. She's following the story, and she's joining us now live from Baghdad -- Jane.

JANE ARRAF, CNN CORRESPONDENT: Wolf, according to the U.S. military, it was a patrol hit by rocket-propelled grenade and small- arms fire. At the end, as you mentioned, two U.S. soldiers dead and another one wounded. That wounded soldier said to be in stable condition.

And this attack took place in Kirkuk, the heart of the northern oil fields, a place that has seen some turbulence, fighting between Arabs and Kurds and fighting at times between U.S. forces and the local population. It had been settled, but it appears to be flaring up again.

Another ambush in Fallujah, west of Baghdad this time. And according to officials, this one took place this morning when a convoy was disabled, including an ammunition truck. Now, as they were waiting for maintenance, according to the officials, people opened fire on that truck. And you can see the plumes of smoke and the secondary explosions as the ammunition caught fire.

What you can't see in this, although you can hear a little about it, is rejoicing by the bystanders. Some of them, in this very religious time leading up to the holy month of Ramadan, asking God to damn the infidels, the Americans.

Now, U.S. officials point out, though, that, despite these attacks -- and today there were about 15 of them, lower than normal -- that the whole country is not like this, that it is essentially stable, according to officials, but with pockets of resistance. As we've seen, these are some pretty volatile pockets -- Wolf.

BLITZER: Is there any new development, Jane, on the overall morale issue affecting U.S. troops, with this nearly daily casualty count that's continuing?

ARRAF: You know, we're well enough into it that it seems to be almost a given that they realize now that they will be here for a long time. They've started the R&Rs, two weeks off for some soldiers back to the U.S., which has made a huge difference. At least it gives them something to look forward to and some link to their families. Communication here hasn't been so great.

But still, it is a situation where soldiers are generally very, very nervous. In places like Karbala and Najaf, the holy cities, they have tried to remain on the outskirts, although they can't always do that. Here in Baghdad, there's frequent gunfire still, frequent attacks, and you never know where it's coming from.

And, all in all, it doesn't help morale among the soldiers, certainly -- Wolf.

BLITZER: All right. CNN's Jane Arraf for us on the front lines in Baghdad.

Jane, thanks very much.

Up next, rebuilding Iraq, how much progress is the United States and its coalition partners making? We'll have an exclusive interview. The U.S. commerce secretary, the president's best friend in Washington, Don Evans, he's just back from Baghdad. He'll join me live.

Then, the $87 billion question: Can the U.S. afford the president's request for more funds for Iraq, Afghanistan and the war against terrorism? We'll ask two leading U.S. senators, Republican Mitch McConnell and Democrat Dianne Feinstein.

And later, Kobe Bryant is back in court, the NBA star. Is he headed to trial for alleged sexual assault? We'll get some legal insight in the case.

All that, much more. LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

Despite numerous attacks and the mounting death toll of U.S. troops in Iraq, President Bush maintains significant progress is indeed being made right now.

Joining us now with his assessment, the U.S. commerce secretary, Don Evans. He's just back from Iraq.

Mr. Secretary, welcome back to LATE EDITION. Good to have you back...

DON EVANS, COMMERCE SECRETARY: Thank you.

BLITZER: ... here in the United States.

EVANS: Thank you. Good to be with you.

BLITZER: I know what you're going to say, but let's put the numbers up on the screen. Two more U.S. soldiers killed overnight in Iraq. The numbers since the war started bring 338 American troops dead in both hostile and what's called non-hostile action in Iraq -- more than half since May 1st, when the president declared an end of major combat operations.

American public, at least a big chunk, according to our polls, want to know when is this going to end?

EVANS: Well, you know, Wolf, I'm not sure when it's going to end. But I must tell you that any death is tragic, and Iraq is certainly the central front of the war against terrorism.

But I went over there expecting to find a feeling of desperation, a frightening kind of environment, and I felt anything but that. I saw what the power of freedom was doing to transform lives, to transform a country.

I saw -- as I had a chance to sit down and talk to women entrepreneurs and young boys that were starting their own -- I stopped on the side of a road and bought some Coca-Colas from some young, budding entrepreneurs. It was not the kind of feeling that I expected to have when I went over there.

There is tremendous progress being made under the president's leadership. Ambassador Bremer is doing a fabulous job. Power is back up...

BLITZER: But do you have a sense how long the occupation -- are we talking about another year, two years, five years? How long is this U.S. military occupation going to be required?

EVANS: Wolf, all I can say is we're making a lot of progress. I mean, when you look at the progress today, I think it's quite remarkable.

And we've trained some 60,000 Iraqis now to be part of the police force, part of the security force. We're going to continue to train more and more.

One thing about freedom, Wolf, is the people really understand their country is their country. It's their responsibility. And they feel that responsibility.

And so I think you'll continue to see them take on greater and greater roles in providing for the security of that country.

BLITZER: Some military officers from the 4th Infantry Division suggesting this past week they seem to be getting closer in the hunt for Saddam Hussein.

When you were there, you were briefed by top military civilian planners. Are U.S. forces getting closer to finding the former Iraqi leader?

EVANS: Well, Wolf, I'm not sure about that. I did not get briefed on that.

But let me tell you one thing I sense. I sense that the terrorists see the great momentum and the great progress that is under way. And I think that could be one of the reasons we're seeing somewhat of an escalation in the isolated incidences that we've seen recently.

There's so much phenomenal progress taking place over there that I think that's concerning the terrorists, because they see the great power of freedom when you put it in the lives of over 50 million people.

BLITZER: Let's talk about the reconstruction funds for Iraq. As you know, the House and the Senate passed legislation in recent days this past week supporting about $86 billion in overall funds -- $20 billion of that supposed to go to rebuild Iraq, the rest for U.S. troops in Iraq, Afghanistan, elsewhere.

But the Senate version said that half, $10 billion, should be in the form of a loan, as opposed to all a grant, which is the House version. Now it goes to a conference committee. They have to reconcile, they have to reach a compromise on that.

Is the administration prepared to accept some of those $20 billion in the form of loans, which the Iraqi government someday would have to repay to U.S. taxpayers?

EVANS: Wolf, that's a decision for the president to make, and the president will make that decision.

But I think there's this great misunderstanding as to the wealth of the country of Iraq. I mean, we look at the oil production that can come out of Iraq over the next 12 months or so, and we forecast about $12 billion in revenues from oil production. That would be about enough to pay the interest on the debt that they owe in the world today.

And so, this is a country that's bankrupt. But what we're working toward is providing and building greater security in that country and more economic security in that country, which links back to America.

BLITZER: Well, let me...

EVANS: Americans are more secure because of the greater security environment, secure environment in Iraq.

BLITZER: That assessment of Iraq's oil wealth clearly differs from what the deputy defense secretary, Paul Wolfowitz, testified before the U.S. Congress on March 27th. Listen precisely to what he told members of Congress.

(BEGIN VIDEO CLIP)

PAUL WOLFOWITZ, DEPUTY SECRETARY OF DEFENSE: The oil revenues of that country could bring between $50 billion and $100 billion over the course of the next two or three years. We're dealing with a country that can really finance its own reconstruction, and relatively soon.

(END VIDEO CLIP)

EVANS: Well, I mean, you know, I could go through the numbers, and it's producing now about 2 million barrels a day...

BLITZER: He said $50 billion to $100 billion over the course of the next two to three years. He was clearly wrong.

EVANS: Well, I'm not saying he was clearly wrong. Look, if they're able to get the oil production up to 3 million to 4 million barrels of oil a day, and if oil prices go to $35, $30 or $35 a barrel, you can see numbers up in that kind of level.

But right now, they're producing about 2 million barrels a day, and at $20 a barrel or $22 a barrel, you just don't get to those levels yet.

BLITZER: All right.

EVANS: Maybe we'll get there.

BLITZER: You know, some Republicans decided they weren't going to be able to support the president's request for all $20 billion to be in the form of an outright grant. Lindsey Graham, Republican, South Carolina, spoke out very clearly on this specific point. Listen to what he said.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: It's very hard for me to go home and explain how you have to give $20 billion to a country that is sitting on $1 trillion worth of oil.

(END VIDEO CLIP)

BLITZER: All right. That's a pretty sensitive issue, the way he framed it.

EVANS: Yes, again, you know, you cannot have economic security without national security, and you cannot have national security without economic security.

What we need to do is continue to focus on what we need to do to create the conditions for economic prosperity in that country.

Because that means the people of America will be more secure, more safe. It means the people of the world will be more secure. It means that we will have a more secure environment in our own country for our economy to even be stronger.

So, you know, I just...

BLITZER: You think he's wrong?

EVANS: Well, you know, $2 trillion worth of oil resources, I mean, I'm not sure whether or not...

BLITZER: I guess what a lot of Democrats and certainly even some Republicans are saying, they don't want to see the day come, in a few years, that Iraq is rebuilt, they're exporting a lot of oil, they're making a lot of oil, and they're repaying France, they're repaying Germany, they're repaying Russia for debts accumulated during Saddam Hussein's era, but they're not repaying the United States, at a time when they could afford it.

EVANS: Well, you know, I don't know. That's all out in the future. I think the right approach is to continue to do what we can to create the conditions for economic growth in Iraq, and I don't think that is putting more debt on an already heavily debt-burdened country and basically a bankrupt country.

BLITZER: Now, this is becoming a very divisive issue, especially as the political season heats up here in the United States.

I want you to listen to what Senator Ted Kennedy said on the Senate floor this week as part of this overall debate, very tough words from him.

(BEGIN VIDEO CLIP)

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: We were told Iraq could pay for its own reconstruction. It cannot.

And we were told that the war would make America safer. It has not.

Before the war, week after week after week after week, we were told lie after lie after lie after lie.

(END VIDEO CLIP)

BLITZER: Now, even in Washington, that's pretty tough language, accusing the president of lying, in effect, to the American public.

EVANS: Yes, that is, Wolf. And I'm disappointed in what the senator said, because what I can tell you is, because of the president's leadership in Iraq and the war against terrorism, and in the coalition forces that have joined us, the people of America are more secure today, they're safer today, we have a better environment for economic growth in our country today, which means more jobs for Americans, all in the future. The world is a safer place today because of the president's actions.

If there's one thing this country stands for, it is freedom. We will do whatever it takes to expand it, to protect it and to preserve it.

And having spent two days over there, I've just got to tell you, I have never been prouder to be an American than having spent three days in Baghdad and one day in Afghanistan, where, when you look in the eyes of the children and you see the hope that they now have, you see the determination that they now have, it's just a phenomenal experience.

BLITZER: And we're almost out of time, but you did come back -- you were there ostensibly for the unveiling of the currency, the Iraqi currency that's come out. And I want to show our viewers...

(CROSSTALK)

EVANS: Well, it just occurred while I was there, but I have an old Saddam bill that has his picture on the face and the war memorial on the back. And then the new bill, that has a tractor on the front and a woman harvesting wheat in the field.

The women now have power over there, Wolf. I mean, I sat down with women entrepreneurs that they said...

BLITZER: So the fact that they have a woman on the currency, you're suggesting that this opens the door for a new Iraq?

EVANS: I think it's just a phenomenal symbol of freedom.

And the other phenomenal symbol of freedom I saw over there was 800 newspapers across Iraq, 130 in Baghdad. Before, they had one. I mean, freedom of press.

You know, what I see happening is we're opening the windows of the world to the people of Iraq. I think we really need to open the windows of Iraq to the people of the rest of the world, because I don't think they're getting a true picture of what is going on in that country.

BLITZER: We only have a minute left, but I want your reaction, because you're one of the president's closest friends: While you were there, in the Middle East, the prime minister, the outgoing prime minister of Malaysia, Mahathir Mohamad, made a very, very vicious speech at the Islamic summit on Thursday, the Organization of Islamic Conference (ph) summit, in which he made what I think is widely being seen as some classical anti-Semitic comments.

I want you to listen precisely to what Mahathir said.

(BEGIN VIDEO CLIP)

MAHATHIR MOHAMAD, PRIME MINISTER OF MALAYSIA: The Europeans killed 6 million Jews out of 12 million, but today the Jews rule this world by proxy. They get others to fight and die for them.

(END VIDEO CLIP)

BLITZER: Now, he's going to be attending the president's summit, APEC summit, in Thailand, and there's not a one-on-one meeting scheduled, but there's a group meeting.

You know the president well. You know him as well as anyone. You're his best friend here in Washington. What do you think he should say to this prime minister?

EVANS: Well, look, I don't know all of the details behind it, but let me tell you what I've learned, Wolf, traveling around the world, and that means to Iraq, and that means to Afghanistan and other parts of the world.

Everybody in the world wants the same thing. We all want to put a roof over our family's head. We all want to feed our children. We all want to educate our children, and we want them to live in a safe and secure environment.

So I think that he will be talking to him. I don't know what he'll say to him. But he will, no doubt, say to him that, you know, in the world, we all want the same thing. We all want to live in a world of peace and freedom and prosperity. And that's what the president is focused on.

BLITZER: All right. We're going to leave it right there. Secretary, welcome back to the United States.

EVANS: Thank you. Thank you, Wolf.

BLITZER: Good to have you on our program, as usual. Appreciate it.

EVANS: Great to see you.

BLITZER: Up next, we'll go back to CNN's Andrea Koppel. She's in Atlanta. And we'll provide a quick check of the hour's top stories, including that new audiotape believed to be from Osama bin Laden.

Then, paying the price for a new Iraq; should the United States foot the bill? Two key U.S. senators -- Republican Mitch McConnell of Kentucky and Democrat Dianne Feinstein of California -- they will weigh in on this debate.

And don't forget for you to weigh in on our Web question of the week: Will the approval of the U.N. resolution bring more international help to the coalition in Iraq? You can go to our Web page, cnn.com/lateedition, to cast your vote.

We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We're making good progress about improving the lives of the people there in Iraq.

(END VIDEO CLIP)

BLITZER: President Bush insisting this past week that good things are indeed happening in Iraq.

Welcome back to LATE EDITION.

The question, though, of how to pay for the rebuilding of Iraq is a very contentious issue here in Washington, on Capitol Hill.

We're joined now by two key members of the United States Senate. In Louisville, Kentucky, Senator Mitch McConnell, he's the Senate's second ranking Republican. And here in Washington, California Democratic Senator Dianne Feinstein, a key member of the Senate Intelligence Committee.

Senators, welcome back to LATE EDITION.

And, Senator Feinstein, I'll begin with you. You decided to vote against the president in favor of the amendment to divide in half the grants versus loans in the $20 billion reconstruction package for Iraq.

But is there a compromise that would be acceptable to you now, since the House of Representatives said it should be all grant?

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: Well, what we did was essentially compromise. Half of the $20 billion would be a loan. I think Lindsey Graham well described the rationale for this. I think it's really a good measure, and I think it keeps the United States in a very strong position to go to other nations and say, look, you know, if you forgive your loans, we'll forgive our loan. I think -- and there's a loan to forgive, so I think that makes some sense.

My own view is that we've now spent over $166 billion on this war. I really think that's enough. I think it's very important that the Pentagon husband this supplemental. I suspect in certain parts of it there may be things for R&D on this or that. But I think the Congress, particularly the Senate, the votes, if there's another supplemental request, will be very difficult to come by.

BLITZER: And Senator Feinstein, as you know, Senator McConnell, by no means alone. Other Democrats are even going further, like Senator Ted Kennedy, for example. Listen to what he said on the Senate floor this week.

(BEGIN VIDEO CLIP)

KENNEDY: The greatest mistake we can make in Congress, as the people's elected representatives, is to support and finance a go-it- alone, do-it-because-I-say-so policy that leaves young Americans increasingly at risk in Iraq.

(END VIDEO CLIP)

BLITZER: Senator McConnell, you were just there a week or so ago. You came back enthusiastic about what you saw, just like Secretary Evans.

But what do you make about this split over the funding, how the U.S. should pay for the reconstruction of Iraq, as even, as you know, some of your fellow Republicans think it should -- at least part of it should be a loan?

SEN. MITCH MCCONNELL (R), KENTUCKY: Well, as you know, the president had a very good week. People were criticizing him because he had no international support. He went to the U.N. and got a unanimous vote for a resolution that essentially confirms that the U.S. ought to play the lead role in Iraq. France voted for it, Germany voted for it, Russia voted for it, and even Syria voted for it. That was a big step in the right direction.

We did have a narrow defeat in the Senate that same day, but the House did the right thing, in my judgment. And I'm optimistic that at the end of the reconciliation process between the House and the Senate, the conference, it'll come out the way the president wanted.

And let me tell you why it ought to come out that way, Wolf. We can't go to the donor conference in Madrid next week and ask countries around the world to contribute in the form of grants if we have just decided to send a bill to Iraq, thereby encumbering their oil, which is their only resource to pay us back in the future. That's not the message we want to send.

BLITZER: Let's let Senator Feinstein respond to that.

What about that? The president is asking France, Germany, Russia, none of whom so far say they're ready to put up any money to help in the reconstruction of Iraq, but the Senator Mcconnell makes a fair point. Why ask these other countries for grants if the U.S. is willing not to make it all a grant?

FEINSTEIN: Well, we're making a $10 billion grant to reconstruction. We're making a $65 billion grant to keep our military there, to do what has to be done to secure the peace. And the total would be $166 billion.

Now, that may not be all in reconstruction, but we've also got military participating in reconstruction. I mean, I'm one that believes that our allied community and others should be brought into it.

And, you know, I must say one thing that I'm mostly -- very concerned with, serving on the Intelligence Committee, is that Iraq becomes the focus for a joining-together of terrorist groups.

BLITZER: Is that happening, though?

FEINSTEIN: I think that is happening, and I think it's very serious for the future. And I think when our allies and nations like France and Germany and others began to see this happening, that they will perhaps be more willing to join in this to help us. I think that's the huge danger signal that I see out there in the coming months.

BLITZER: There's another sense of criticism, Senator McConnell, that the president may not be coordinating his strategy, explaining his policy effectively. Listen to the criticism, rather biting, coming from your fellow Republican, Senator Hagel of Nebraska.

(BEGIN VIDEO CLIP)

SEN. CHUCK HAGEL (R), NEBRASKA: The president must take charge here. And when you have four administration officials out giving four variations of a speech last week -- some real tough, some not so tough, some kind of in the middle -- that doesn't develop confidence in a strategy, in a policy.

(END VIDEO CLIP)

BLITZER: Does he have a point, Senator Hagel?

MCCONNELL: Look, I think the strategy is clear. It's to rebuild Iraq, which is the way to get the troops home.

If you look at this supplemental that we just passed this week, the vast majority of it is for keeping our military over there. That's what is really expensive. And the way to get the military home is to get the reconstruction job done quickly and correctly. I met a general from the 101st Airborne up in Mosul, up in the north. He said we've made more progress in six months in Iraq than we have in six years in Bosnia.

A lot's going on that's very positive. Don Evans was talking about it, but it's worth repeating. A hundred and seventy newspapers -- that's more diversity than we have, certainly, in my hometown or in California. Thirteen thousand construction projects that have been completed. Fifteen hundred schools that have been renovated -- that's still under way. Sixty thousand people in the new Iraqi security force, which thwarted two attacks this week -- one in the Baghdad Hotel and the other on the Turkish Embassy.

Look, it takes a little while to get this job done, but the way to save money in the long run is get the reconstruction done right, get the democracy up and running, and then the troops can come home.

BLITZER: Senator Feinstein, you serve on the Intelligence Committee. Does the U.S. have good intelligence right now? You can look back and say, maybe we had bad intelligence going into the war, since they still haven't found the weapons of mass destruction, still haven't found Saddam Hussein. But right now, are you satisfied that the U.S. intelligence community knows what it's doing, knows what the situation in Iraq is?

FEINSTEIN: Not entirely. One of the things that's come through to me, based on reading and rereading the National Intelligence Estimates and the daily intelligence, is that a lot of the key judgments that were made were not correct judgments, in my view.

We have put a great deal of additional money into intelligence. The number is classified, but I can assure you, it is a lot of money.

One of the things that hasn't been done is any restructuring of the intelligence community, which, structure-wise, is still based on a post-Cold War kind of structure, not an asymmetrical world.

And although I think George Tenet and others have really made heroic efforts to recruit, and the president has announced the setting up of an Iraqi intelligence service, I think we have a long way to go in that regard.

BLITZER: I'm going to get back to this. We only have a few seconds before we have to take a commercial break, Senator McConnell, but I want you to respond to this notion out there that the American public was sold a bill of goods, presumably, the allegation, before the war, about the imminent threat coming from Saddam Hussein and Iraq.

MCCONNELL: Look, everybody agreed on the weapons-of-mass- destruction issue. The Germans, the French, the Russians -- we all believed he had weapons of mass destruction. That was not even in contention.

The fact that we've had some difficulty finding weapons, even though we've found programs, is disturbing. But if we were fooled, everybody else in the world was fooled. Everybody thought he had weapons of mass destruction, Wolf.

BLITZER: All right.

FEINSTEIN: Yes, but that's not the point. Let me just -- everybody didn't attack Iraq. Everybody didn't say one of the reasons for the attack is because we believe there's a threat in the area...

MCCONNELL: But, Dianne...

FEINSTEIN: ... and we believe there may be even a threat to the United States...

MCCONNELL: But, Dianne...

FEINSTEIN: ... and then to go in -- let me just finish -- and go to over 600 sites and find nothing. And I sat there, Mitch. I listened to David Kay's report, and there is basically nothing except, perhaps, a little botulinum (UNINTELLIGIBLE) in somebody's refrigerator. That's it.

And that concerns me greatly, because that was one of the reasons...

BLITZER: All right...

FEINSTEIN: ... that I voted to authorize use of force.

BLITZER: ... Senator McConnell, go ahead and respond.

MCCONNELL: Yes, look, that wasn't the only reason that we liberated Iraq. There were plenty of other reasons. This was just one of many.

It was still the right thing to do. I bet Dianne is not sad that Saddam Hussein is gone. Not many Americans are. This was clearly the right thing to do.

BLITZER: All right, we're going to...

FEINSTEIN: Let me just respond to that one point.

BLITZER: Right after the break. Right after the break...

FEINSTEIN: OK.

BLITZER: ... because we have to take a commercial break. You'll have a chance to respond. Senator McConnell will have plenty of opportunity to respond, as well.

More of our conversation with both of these senators when we come back. They'll also, by the way, be taking your phone calls. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We're continuing our conversation with two U.S. senators, Republican Mitch McConnell of Kentucky, Democrat Dianne Feinstein of California.

Senator Feinstein, Senator McConnell made a fair point. You're not sad that the U.S. went to war and removed Saddam Hussein from power?

FEINSTEIN: Look, Saddam Hussein was a pariah, let there be no doubt, pariah for his own people. And the things he did I think are legion. I think we all know that.

But the point was, is it our obligation, unless there is a real threat, to go in there and take down that government, with a view of taking out that leadership? And I think that's a very difficult question for this nation.

Maybe if we had the whole world with us, that's one thing...

BLITZER: Because you supported the president's -- the resolution...

FEINSTEIN: I supported it, absolutely.

BLITZER: But do you regret that now?

FEINSTEIN: I don't think I regret it yet, because I'm hopeful that weapons of mass destruction will be found. But the major reason that I voted was because of what I heard in intelligence about weapons of mass destruction, about chemical, about biological, about the fact that they've been deployed, that maybe the orders had been given to use them. That kind of thing.

That added the element of potential threat to it, which was not present without that.

BLITZER: We may have heard, Senator McConnell, in the last few days once again from Osama bin Laden, a new audiotape released by Al Jazeera, and I want to play an excerpt from that audiotape. Listen to this.

(BEGIN AUDIO CLIP)

OSAMA BIN LADEN (through translator): Any government that's formed by America will be an agent, a puppet government, just like all the other governments in the area, like Karzai or Mahmud Abbas, that were set up to shed the blood of Muslims.

(END AUDIO CLIP)

BLITZER: Now, the president was asked about that audiotape earlier today. I want you to listen to what he said in Bangkok.

(BEGIN VIDEO CLIP)

BUSH: The bin Laden tape should say to everybody, the war on terror goes on, that there's still a danger for free nations, and that free nations need to work together more than ever.

(END VIDEO CLIP)

BLITZER: Are you frustrated, are you as frustrated, Senator McConnell, as so many others are, that the United States, even now, more than two years after 9/11, has not been able to find Osama bin Laden?

MCCONNELL: Sure, we'd like to find him.

I also went to Afghanistan last week, and we're, you know, have a sense of where he might be, and we're certainly looking for him, and for Taliban, who are hiding over in Pakistan, who would like to try to get back into power.

Look, the war on terror is a difficult undertaking. We haven't gotten Saddam Hussein yet either, and we hope to get him.

Nobody said this would be easier, but the world is a lot safer as a result of the new regimes in Afghanistan, a free Afghanistan, a free Iraq. Both of these were havens for the kinds of terrorist thugs that have become the principal challenge to the United States and to the civilized world in the 21st century.

FEINSTEIN: May I say something on that?

BLITZER: Go ahead.

FEINSTEIN: One of the interesting things about the tape, I think, is the fact that he mentioned Mahmud Abbas, who, as I recall, resigned in early September. Now, whether this tape...

BLITZER: The Palestinian prime minister.

FEINSTEIN: Yes. Now, whether the tape was done prior to September, but it sort of puzzles me if it wasn't done prior to September, why he would mention that.

Essentially, I agree with what Mitch said. I think that's the correct assessment.

BLITZER: Is your bottom line -- I'm switching very briefly, we only have a few seconds left -- Senator McConnell, that the president could have a political problem in seeking reelection because of what's happening in Iraq?

MCCONNELL: No, I don't think so. I think the American people still support the policy. I think they're glad Saddam Hussein is gone. The man murdered 300,000 of his own people. This is a mission I think Americans can be proud of. And we're safer here at home because all of these gangsters are somewhere else in the world...

BLITZER: All right.

MCCONNELL: ... trying to do us harm.

BLITZER: And on the latest CNN-USA Today-Gallup poll, Senator Feinstein, had the president's job-approval rating going back up to 56 percent, which is a pretty hefty job-approval rating, even in the midst of some economic bad times and what's happening in Iraq.

Very briefly, California. Arnold Schwarzenegger, the governor of California, the governor-elect of California. Does this mean that California is in play in the presidential contest next November?

FEINSTEIN: California is always in play. California politically is a very volatile state.

And what was interesting to me to watch during the recall campaign was the amount of people that turned out to hear Schwarzenegger.

Now, the question is, can he deliver? Can he work with a Democratically controlled legislature? Can he resolve the structural imbalance of the deficit? Can he resolve the car tax, because the $4 billion goes directly for police, fire and local emergency employees. Cities and counties aren't going to like the loss of those dollars, I can promise you that.

BLITZER: We'll see how he does. We have to leave it, unfortunately, right there. Senator Feinstein...

FEINSTEIN: Thank you.

BLITZER: ... thanks very much for joining us.

Senator McConnell, welcome back from Iraq. Good to have you on our program, as usual, as well.

MCCONNELL: Thank you, Wolf.

BLITZER: Thank you.

And still ahead, new targets in this cycle of violence in the Middle East. Three Americans killed this week in an attack in Gaza. What will it take to resurrect the peace road map? We'll get Israeli and Palestinian perspectives, unusual perspectives.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Coming up on LATE EDITION, crisis in the Middle East. What path do Israelis and Palestinians need to take to get the road map back on track? We'll hear from both sides.

Plus, putting on a full court press in the Kobe Bryant case. Who has the advantage right now? We'll ask two legal experts.

And don't forget to weigh in on our Web question of the week: Will the approval of the U.N. resolution bring more international help to the coalition in Iraq? Go to cnn.com/lateedition to cast your vote.

LATE EDITION continues right at the top of the hour.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

We're standing by to speak live with the former head of the Israeli Shin Bet. That's the domestic secret service agency in Israel. Also, a former Palestinian cabinet member. We'll speak with them shortly.

First, though, let's go to CNN headquarters in Atlanta for a quick check of the hour's top stories.

(NEWSBREAK)

BLITZER: A key issue confronting the United States, as well as Asia, indeed the entire world, is a nuclear North Korea. As President Bush meets with the region's leaders at the APEC summit in Bangkok, Thailand, he's hoping to enlist their help in putting a lid on North Korea's nuclear ambitions.

Our senior White House correspondent John king is traveling with the president and filed this report.

(BEGIN VIDEOTAPE)

KING: At first glance, a tough line toward North Korea and its demand for a nonaggression pact with the United States.

(BEGIN VIDEO CLIP)

BUSH: We will not have a treaty, if that's what you're asking. That's off the table.

(END VIDEO CLIP)

KING: But after talks with Thailand's prime minister, Mr. Bush said he is willing to put in writing a promise not to attack the North, so long as it is part of a joint declaration involving other key partners.

(BEGIN VIDEO CLIP)

BUSH: We want to explore these options with our -- with China and Japan, South Korea and Russia, and that's what I intend to do.

(END VIDEO CLIP)

KING: Meeting later with Chinese President Hu Jintao, Mr. Bush said his new overture should advance diplomacy by giving North Korea the security assurances it says it must have before it agrees to permanently dismantle its nuclear-weapons program. The next step is negotiating language with China and other partners.

(BEGIN VIDEO CLIP)

HU JINTAO, PRESIDENT OF CHINA (through translator): I will continue to work to promote the Beijing six-party talks process, so as to strive for peaceful resolution of this issue.

(END VIDEO CLIP)

KING: But if North Korea says no and continues to insist on a bilateral treaty with the United States, aides say Mr. Bush would then consider asking the United Nations Security Council to impose sanctions.

(BEGIN VIDEO CLIP)

POWELL: There are options available to us and to the international community in the presence of continued North Korean intransigence.

(END VIDEO CLIP)

KING: Mr. Bush also thanked Thai troops for their help in Afghanistan and Iraq and said leaders gathered for the Asia-Pacific summit need to do even more to dismantle al Qaeda and other terror networks in active in Southeast Asia.

(BEGIN VIDEO CLIP)

BUSH: We must break up their cells, shut off their sources of money. We must oppose the propaganda of hatred that feeds their cause.

(END VIDEO CLIP)

KING: These careful steps at Bangkok's Temple of the Emerald Buddha offered a brief but stunning respite when Mr. Bush stepped back into his delicate diplomacy.

Senior Bush advisers say they hope the new White House initiative will lead to another round of six-party talks with North Korea before the end of the year, and they say Pyongyang should set aside any hopes of a two-way treaty with Washington.

It doesn't work, one senior official said of dealing one-on-one with the North. Said another sarcastically, "We've seen this movie."

John King, CNN, Bangkok.

(END VIDEOTAPE)

BLITZER: And turning now to the crisis in the Middle East, Palestinians fired rockets at southern Israel today as Israeli forces continued their crackdown in southern Gaza.

CNN's Chris Burns is monitoring developments. He's joining us now live from Jerusalem.

Chris, tell us what's happening today.

CHRIS BURNS, CNN CORRESPONDENT: Well, hello, Wolf. At least eight Qassam homemade rockets fired by the militants from northern Gaza Strip into southern Israel. Most of them handed harmlessly into the Negev Desert, but some of them landed perilously close to the town of Zdedusk (ph) in southern Israel.

This, even though it didn't cause any damage or injuries, at least none reported, it does seem to be a message from the militants, saying that no matter what Israel does to crack down on them inside the Gaza Strip, they will still fire those rockets.

Israel continuing its Operation Root Canal, as they call it, going after tunnels in southern Gaza, in the town of Rafah. More than a week old now, this incursion going in trying to find those tunnels. According to the Israelis, they have found now at least four, but they're looking for some dozen more that are used, they say, to funnel weapons from Egypt into the Gaza Strip to launch those attacks.

Now, the toll, however, on the civilian side has been very high. Fourteen Palestinians killed altogether. Some of them militants, some civilians, two children included. Dozens injured, more than a hundred homes have been destroyed, according to the United Nations. More than 1,200 Palestinians left homeless in that operation, drawing criticism from the U.N. secretary-general himself.

Also, continuing in northern Gaza, the investigation by FBI agents into what -- who was behind the bombing that killed three private security guards with a U.S. diplomatic convoy earlier this week. So far that has not been solved. It is believed, perhaps, it could have been some freelance militants who were not part of major militant organizations but acting on their own. Again, the Palestinians and the Israelis and Americans are working together to try to get to the bottom of that, that tragic incident.

Back to you, Wolf.

BLITZER: Chris Burns in Jerusalem, with the latest.

Chris, thanks very much.

That bombing in Gaza this past week, which killed three U.S. diplomatic security personnel was the first fatal attack on U.S. officials since the start of the three-year intifada, as it's called, the crisis in the Middle East.

With the road map all but in tatters right now, what will it take to resume the peace process? Is that even possible? Joining us here in Washington, two guests. Ami Ayalon is the former head of Israel's Shin Bet, the domestic secret service agency in Israel, and Sari Nusseibah is a former member of the Palestinian Cabinet.

Welcome to Washington. Good to have both of you on the program.

Mr. Ayalon, let's begin with the killing of these three American security officers this past week. Does that represent a new chapter in this war?

AMI AYALON, FORMER HEAD OF SHIN BET: I think, yes. I think that if the political situation will go on, we shall see more and more of this phenomena.

BLITZER: And what's behind it, in your assessment? Because, as you know, Palestinian terrorists have been going after Israelis for a long time, but now going after U.S. officials, this seems to have been a pretty sophisticated operation.

AYALON: Well, I don't have the exact information about it, exactly what happened in this case. But U.S. is seen as part of the Israeli policy in the Middle East, so I don't think that we should be surprised when we see that Palestinians are attacking U.S.

BLITZER: Sari Nusseibah, who's behind -- who was behind, based on what you know, that attack against those three U.S. diplomatic security officers?

SARI NUSSEIBAH, FORMER MEMBER OF PALESTINIAN CABINET: Well, I don't think it was necessarily planned. I'm not sure that it was planned against the officials of the U.S., actually. This was a bomb that was placed by the side of the road. It was not really a very sophisticated device. Nobody claimed it. A few people were immediately put in jail. Everybody denied that they had anything to do with it. It might well have just been an accident that this was actually targeting...

BLITZER: You believe they could have been going after Israeli personnel, but the American convoy...

NUSSEIBAH: Or they might have been going against U.S. officials, but that they were not necessarily part and parcel of the known and existing factions fighting at the moment.

BLITZER: Because, as you know, until this week it was never publicized, but there was a similar attack against some CIA officers who were traveling through Gaza about a year or so ago. They weren't injured, but it was a similar attack.

NUSSEIBAH: Well, I have no knowledge of that at the moment. But it's possible that there's this increasing -- as we just heard, I think there is an increasing sense of frustration of the American officials and so on, so this may perhaps reflect it.

BLITZER: Mr. Ayalon, you're familiar with that incident that occurred, the attack against the CIA in Gaza?

AYALON: I heard about it.

BLITZER: What can you tell us about that?

AYALON: Well, it's -- I was not at my past position at that time. But I know that during the last several years, we had some information about the fact that Palestinian terrorists are trying to attack American targets, so it shouldn't be a surprise.

BLITZER: Is it connected, possibly, as some are suggesting, to the Arab anger against the U.S. because of what's happening in Iraq? They see the U.S. potentially being a target, outside of Iraq, not only inside Iraq?

AYALON: Again, I don't have the intelligence information, but I don't think so.

BLITZER: Mr. Nusseibah, do you think so?

NUSSEIBAH: Well, I think there's a general resentment against U.S. policy, whether in Iraq or other places in the Middle East at large. And so there's a, you know, there's a kind of solidarity of feelings against the intervention, in some cases, that looks a bit rough of the Americans in those areas.

BLITZER: Now let's get to the business at hand. Both of you are traveling together; you're here in the United States.

You're the former head of the Shin Bet, which is sort of the equivalent of the U.S. FBI. The Mossad would be roughly the equivalent of the CIA. You're working together to try to restart the peace process.

How did this come about, Mr. Ayalon?

AYALON: It came about, I think, almost two years ago.

I see that, at least the way I see it, both of us analyze more or less the past and came to the same conclusions, that gradual process failed and will not work in the future. The collapse of Oslo process is due to the fact that it was a kind of a gradual process. And in a way, the road map is using the same method.

We came to the conclusion that, in order to go forward, we have to start from the future and to go backward.

BLITZER: And you're here in Washington, Mr. Nusseibah, trying to get what? U.S. support for some more aggressive U.S. policy to try to get the peace process going? Is that doable?

NUSSEIBAH: Well, I think that would be welcome, but both of us, I think, also believe that, while more engagement by the U.S. is encouraged, is needed, in fact, you know, our whole philosophy, if you like, is founded upon the principle that we should really go back to the people on both sides, the Israeli and the Palestinian people, and try to work from the grassroots up.

Our vision is to try and involve, engage the people themselves in trying to determine a peaceful vision...

BLITZER: You mean, to bypass the Palestinian-Israeli leadership, if you will?

NUSSEIBAH: Well, to create pressure, if you like, from the two publics...

AYALON: Or support.

NUSSEIBAH: ...or support, in order to get the leaderships to start negotiating.

BLITZER: Well, is this leadership, the leadership of the Palestinian Authority, Yasser Arafat clearly the leader, despite what the Israeli government wants, what the U.S. government wants, he's still the leader of the Palestinian Authority, and the leadership of the Israeli government, Ariel Sharon -- can these two leaders, Mr. Ayalon, based on your assessment, make peace?

AYALON: I'll tell you something as an Israeli. I think that Sharon is probably the only one who can make it, but he will not make it unless he will hear loud and clear from the Israeli people that this is exactly what we want and, in addition, that this is a very painful price that we are prepared to pay.

BLITZER: What about Yasser Arafat?

NUSSEIBAH: I think I'd say the same thing, that, you know, I think Yasser Arafat is the only person who can actually make the peace deal, but that again he needs only one hand, the people telling him they want to make it, they want him to make it, and he needs to feel also that he will be able to make it.

BLITZER: In the aftermath of the killing of the three Americans this week, the president, George W. Bush, put out this statement. Among other things, he said, "Palestinian authorities should have acted long ago to fight terror in all its forms. The failure to create effective Palestinian security forces dedicated to fighting terror continues to cost lives. There must be an empowered prime minister who controls all Palestinian security forces, reforms that continue to be blocked by Yasser Arafat."

That's the president of the United States.

NUSSEIBAH: Well, I think it's a discourse that actually one needs to look beyond, because what we need to do on the ground is to get people back to the peace process. And to get them back to the peace process, you need to have the sense on both sides that there's a commitment to an end game.

BLITZER: Well, the parties, Mr. Ayalon...

(CROSSTALK)

BLITZER: Let me just interrupt. The parties were very close to an agreement at the end of the Clinton administration.

AYALON: No, I don't think so.

BLITZER: Why do you say they weren't close? Because it looked like then Prime Minister Barak and then the Palestinian Authority President Yasser Arafat had a -- were very close, this deal.

AYALON: From Washington, this was the notion, but I don't accept it.

Let me tell you something about what should we do in order to fight terrorism. What I claim -- and this is after many years of fighting terrorism, in the Navy, in the Shabak (ph), wherever...

BLITZER: The Shabak (ph) is the Shin Bet...

AYALON: Right.

BLITZER: ... the domestic secret service.

AYALON: ... the Palestinians will not fight terror, no matter what orders we or the Americans will give them. The only way in which they will fight terrorism is if they will see the end game.

Why they are doing it for? If they will see exactly what they will get. And it is the same for us.

BLITZER: But don't...

AYALON: We shall not dismantle settlements unless we shall see -- it is very painful -- unless we shall see exactly what we shall...

BLITZER: The end game that you envisage...

AYALON: Right.

BLITZER: ... is obviously a two-state solution...

AYALON: Right.

BLITZER: ... Israel living alongside Palestine, but the details...

(CROSSTALK)

BLITZER: Obviously, the devil is in the details.

AYALON: But God is in the details too, you know...

BLITZER: Would you support Israel withdrawing from all of the West Bank and Gaza, and dividing Jerusalem?

AYALON: What we support is written on a one-page paper. You know, it's -- I think that the basis for negotiation should be '67 borders, and we shall have to swap land with the Palestinians.

BLITZER: And Jerusalem?

AYALON: Jerusalem should be an open city, but the capital for the two states.

BLITZER: Is that an acceptable deal to the Palestinians?

NUSSEIBAH: Absolutely. I think that, you know, it's time that the two sides actually face the facts. Both sides have to make very painful concessions. And I think, once they do make those concessions and once they do agree on the final endgame, then both sides will be able to fight terrorism. That's the only way to stop it. I think that it's high time today to try and push directly toward defining a destination to the road map. And actually, it is probably a condition for the success of the road map at this point in time to annex to it a destination.

BLITZER: We only have a few seconds left, but a lot of Israelis, as you well know, a lot of Israelis think Yasser Arafat is the problem, not the solution. What do you think?

AYALON: The Palestinian leadership is not my problem. It is their problem. I voted for my leadership. We have to deal with the Israeli leadership and let them deal with their leadership.

But one last sentence. After -- I mean, I say during the many years in the navy, the Israeli navy, and we used to say that a captain who does not know where he wants to sail, there is no wind on earth that will bring him there. We have to decide, where do we want to sail? That's it.

BLITZER: The final agreement and that would be that.

Ami Ayalon, thanks very much for joining us.

Ari Nusseibah, always good to see you, as well.

NUSSEIBAH: Thank you.

AYALON: Thank you.

BLITZER: Up next, the former House Republican leader Dick Armey is offering some new insights into everything from preemptive strikes to who will win the White House in 2004. We'll talk to him about his new book. It's called "Armey's Axioms." You'll want to hear this.

Then, Kobe Bryant. The case continues. Did the defense or the prosecution make a better case? Two prominent attorneys assess the situation.

And there's still time for you, our viewers in the United States and around the world, to weigh in on our Web question of the week. Will the approval of the U.N. resolution bring more international help to the coalition in Iraq? You can cast your vote at cnn.com/lateedition.

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. I'm Wolf Blitzer in Washington.

Although he retired from the U.S. Congress last year, the former House Republican leader Dick Armey is still making his voice heard on a number of important issues. He is the co-chairman of the group called Citizens for a Sound Economy. He's also the author of a brand- new book of life lessons entitled "Armey's Axioms." Dick Armey is joining us now live from Dallas, Texas.

Mr. Armey, welcome back to LATE EDITION. Congratulations on the new book. I'm sure a lot of our viewers will be interested in your axioms.

And let's get right to some of them, because they have some political practical value, even as we speak.

DICK ARMEY, FORMER HOUSE MAJORITY LEADER: OK.

BLITZER: Axiom Number 12: No one spends someone else's money as wisely as he spends his own.

And then you go on to say there are three identifiable groups of people who regularly spend other people's money. They are children, thieves and politicians, and they all need adult supervision.

I guess you could make the case that this is applicable in the debate unfolding in Congress right now, whether to give the Iraqis grants or loans, as far as their reconstruction is concerned?

ARMEY: Yes, that debate is kind of a comical event. It's really a political debate, and they usually are funnier, if you can at least rise to the -- looking at it that way.

Most of the people that are saying we ought to make these loans instead of grants are the same people that joined Bono and just about broke their legs trying to get in a picture with Bono in the Year of Jubilee to get debt forgiveness for poorer nations.

So, it's really -- this is a political event, this discussion in the Senate right now. And quite frankly, it should be beneath their dignity, and we ought to get focused on the more important work is rehabilitating Iraq, getting its back on its own feet, and getting our young men and women out of there.

BLITZER: But if I read your axiom right, the way I assumed you read it, if the Iraqis knew they would have to repay this money, they would spend it more wisely than if they just got an all-out gift from the United States taxpayer.

ARMEY: Well, there's probably some truth to that. But the supervision of that expenditure is going to be in the hands of American officials until such time as we can say to the Iraqis, all right, now we can turn you over to your own devices.

Also in that axiom, I like to remind each and every one of us on those occasions when we are the beneficiary of some system of third- party payment, we, too, ought to exercise a little discretion and discipline, such as in our use of insurance.

BLITZER: You have another axiom in your book, Axiom 15, to be precise: If you want the divorce, you give up the house.

Some might say if the U.S. doesn't -- wants to go it alone with preemptive strikes, not necessarily waiting for the United Nations to act, you got to just leave the U.N., forget about the U.N.

But now, the Bush administration, as you well know, is going back to the U.N., seeking support. You can't have it both ways, I guess.

ARMEY: No, you can't. But, you know, I was watching a discussion of this, that those people who are all pro-U.N. and just a year ago, six months ago, were saying, "Hey, we can't go forward without U.N. approval," are exactly those people who are now discounting the U.N. resolution of last week. Whereas those people who are today celebrating the U.N. resolution of last week were exactly the ones who say, "Oh, the heck with the U.N., we don't need their approval to go forward."

So, you know, this whole question of to what extent and to what way does the U.N. matter really gets tied back into what is your own position with respect to policy in America, as it drives from your party...

BLITZER: Well, what is your...

ARMEY: ... so once again, it gets very confused.

BLITZER: What is your position? Should the U.S. simply forget about the U.N.? Or should the U.S. seek to work with the U.N.?

ARMEY: Well, my own view is, you ought to try to seek with the U.N. insofar as the U.N. wants to work in some manner that is productive and useful and really contributes to resolving the problem.

But if insofar as you want the approval, disapproval or endorsement of the U.N. as a debating society, it really doesn't matter. Their resolutions don't put people in the street creating a more safe and peaceful environment. Their resolutions don't pay for the expense of that. And will their resolutions, in the final analysis, do anything to make it possible for our young men and women to complete their mission, be safe and come on home?

So, you know, when it comes to U.N.'s passing resolutions, I'm with Shania Twain: That just don't impress me much.

(LAUGHTER)

BLITZER: Axiom 20, you have involving insecurity. Among other things, you say this, "Nearly every hurtful or mean thing I ever did in my life was done while I was feeling insecure. It stems from that impulse to do unto others before they can do unto you."

I guess that would mean the preemptive-strike doctrine is the result of, what, insecurity after 9/11?

ARMEY: It really -- I don't think we would have had such a universal acceptance. I talked to the president about that. I pointed out to the president, Shakespeare says our doubts make us traitors, and I was so concerned about that, but we all felt so insecure. Same thing with the PATRIOT Act. Our insecurity may have caused us to give up too much authority to intrude into the privacy of our lives to the government in fear of danger following that attack.

I thought that was a very dangerous time for America, for the panicky behavior that could come out of it, and I think to some extent we did let ourselves get panicked into things that are not necessarily the best policies for the long run for America.

BLITZER: You have another axiom. I love this one. Axiom number 5, to be specific: You can't get ahead while you're getting even. This is obviously in the direct contradiction to Chuck Colson's old axiom, don't get mad, get even.

Who is right in this, Chuck Colson or Dick Armey? I'm going to guess you're going to say Dick Armey.

ARMEY: Well, I'm right, and I'll give you a very good current example. Somebody in the White House a week or so ago, two weeks ago, within the month or whenever, decided they needed to get even with Ambassador Wilson, leaked something on the ambassador's wife, caused all kinds of -- an uproar around here that's got the White House in bad trouble.

Now, there was no reason to tell the world about the ambassador's wife. It was just a short-sighted, self-centered, simple-minded cowardly act of revenge, and who's paying the cost? The Bush White House. This has not hurt the Wilsons. They get a best-selling book out of the matter. So they did not get ahead, while they thought they were getting even.

BLITZER: I was going to say that leak actually happened in July. And what would you do to that person or those people inside the White House? Obviously, they may have actually broken the law in revealing the identity of an undercover CIA operative.

ARMEY: That's exactly right. If they ever find them, they ought to just -- they ought to just kick them out of the White House and prosecute them, because the other point is tied back to another axiom, the greater the hypocrisy -- the greater the pretension, the greater the hypocrisy.

Bob Novak, who is so much dedicated to the public's right to know, knows exactly who this villainous coward is, and he should just step right up, as Jimmy Buffett says, show his age and tell who that person is, and let's deal with them.

This is a cowardly, dangerous act, and these kinds of people ought to be identified. I see no justification, even within the broad bounds of journalistic practice, for Bob Novak to withhold that person's name, especially when you realize that in the past he has revealed sources, thinking it was a matter of national security.

BLITZER: All right. On that note I'll let Bob Novak respond on his own behalf. Dick Armey's got a hot new book, "Armey's Axioms."

Thanks for joining us, Mr. Armey. We'll continue this conversation.

I didn't even have a chance to get so some of the political names. But we'll leave that for an upcoming discussion. People like Wesley Clark and Howard Dean, I'm anxious to know what you think about them, but we'll have an opportunity in the days to come.

Dick Armey, thanks very much for joining us.

ARMEY: Thanks for having me, Wolf.

BLITZER: And up next, we'll go back to CNN's Andrea Koppel -- she's in Atlanta -- for a quick check of the hour's top stories, including President Bush's trip to Asia.

Then, inside the courtroom in the Kobe Bryant case. Does the prosecution or defense hold the upper hand? Two prominent attorneys with very different perspectives will weigh in.

LATE EDITION will continue right after the headlines.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

Perhaps as early as tomorrow, a judge in Eagle, Colorado, is expected to issue a decision on whether basketball superstar Kobe Bryant will stand trial for alleged sexual assault. Explosive and graphic details were revealed in a preliminary hearing this past week.

Joining us now to help sort out where the case stands right now, two guests. In San Francisco, the former prosecutor, Kimberly Guilfoyle Newsom. She attended the preliminary hearing this past week. And in Denver criminal defense attorney Jeralyn Merritt.

Good to have both of you back on LATE EDITION.

Kimberly, you were there. Let me get your assessment first. Is it a slam-dunk -- you'll forgive the pun -- is this going to trial?

KIMBERLY GUILFOYLE-NEWSOM, FORMER PROSECUTOR: I think it's definitely going to go to trial. Keep in mind, because the standard of evidence for a preliminary hearing or probable-cause hearing is sufficiency of the evidence. That's why this case should go to trial, because it's a he-said/she-said. It's going to come down to what weight and credibility of the witnesses that the jury will determine.

BLITZER: Would you be stunned, Jeralyn, if the judge says, you know what, they did not show probable cause, no trial?

JERALYN MERRITT, CRIMINAL DEFENSE ATTORNEY: I'd be pretty surprised, because as Kimberly said, the standard of proof is really, really low. It's almost like, would an ordinary person entertain a reasonable belief that this happened?

So, on the other hand, you know, he's charged with a more serious sexual assault offense than is the ordinary one, because he's charged with using physical force to overcome her will. So it's possible the judge might bind it over on the lesser charge.

BLITZER: Based on these two days of preliminary hearings, Kimberly, who won and who lost?

NEWSOM: Well, I mean, it's tough to say. The defense definitely made some points, and I think there was a lot of miscommunication and misinformation out there, which is definitely troublesome.

I will say, in terms of lawyering, that the defense definitely had the upper hand over the prosecution which, I think, is unfortunate because both sides deserve to have the best and the brightest representing them.

And I think, honestly, that Mark Hurlbert should either take the case himself to do or give it to Ingrid Bakke (ph), who's very experienced, Denver prosecutor, head of the sexual assault unit there.

BLITZER: Let's listen to Mark Hurlbert. He's the prosecutor in this case. He spoke out after the second day of this preliminary hearing. Hear what he had to say.

(BEGIN VIDEO CLIP)

MARK HURLBERT, PROSECUTOR: I am confident that the judge will find probable cause and will bind this case over. And I am confident in the people's case versus Kobe Bryant.

(END VIDEO CLIP)

BLITZER: Jeralyn, is he way over his head right now?

MERRITT: Oh, I think he is, and I think the defense made some incredible points during this preliminary hearing.

Normally, what happens in a preliminary hearing is it's very routine, and a cop gets on the stand and just basically recites the evidence. And in this case, the defense was able to drop bombshell after bombshell, and they were bombshells, of things that would absolutely prove difficult for the prosecution to get a conviction at trial.

I think the prosecution ought to be rethinking whether they want to bring this case.

BLITZER: That's pretty tough. You think they'd be better off throwing it out right now, Jeralyn, as opposed to going through the whole trial and then losing?

MERRITT: I think so. I think so. I mean, I think that there are -- what we've seen so far, from the prosecution's own evidence, meaning the police reports -- we haven't even seen what the defense has put together yet -- and yet there seems to be such problems with the accuser's story.

So, unless the prosecution has some kind of bombshell of its own that they're not telling us, I think that there's a real question as to whether they can get a conviction, in which case they should drop it.

BLITZER: Well, Kimberly, the bombshell could be the alleged victim, the accuser in this particular case. We didn't hear directly from her. Once she takes the witness stand, presumably the prosecution believes she will be a very compelling witness.

NEWSOM: You're absolutely right. We heard from one witness in the prosecution side, Detective Winters, who, unfortunately, wasn't as well prepared as he should have been, admitted some confusion on his part. But, again, I think he did the best that he could do.

When the actual victim in this case takes the stand, I think, watch out.

Also, the prosecution was prevented from presenting Kobe Bryant's own statement, where, we're hearing, there are inconsistent statements that are damaging to him. That was not played in open court. That was done in chambers, outside the presence of all the members of the media.

Also, the D.A. was not able to go into certain areas, different statements that Kobe made during this alleged sexual encounter.

And in fact we didn't hear a lot of the most compelling evidence, I don't think, in this case. Mark Hulbert stated that. This was more of a sanitized version that was put on. So the public has not heard all the facts.

MERRITT: Kimberly, I predict we are never going to hear that statement, because they surreptitiously recorded that statement, they didn't advise him of his rights. And I think they can make a good showing that he was in custody in effect in his hotel room at that time, and a reasonable person wouldn't have felt free to leave, and that statement may never come in.

BLITZER: Well, you're referring to the statement, Jeralyn, where he denied having had any sex with her when he was originally questioned by the police, is that what you're talking about?

MERRITT: Well, I'm talking about -- if he made that statement. I don't know that he ever denied having sex with her, but that's what Kimberly is saying the word of mouth is up there. None of us have heard the statement, because the judge heard it behind closed doors.

But what...

BLITZER: If he said that, Jeralyn, and later, as we all know, he went public and insisted, yes, they did have sex, but it was consensual, how damaging would that be, an initial denial and then later a correction?

MERRITT: I don't think in this case it would be that damaging, because he's a married man, and I bet you most married men, if you knocked down their hotel room door at 11 o'clock at night, the next night, and said, did you have sex with this woman, they'd say no initially. BLITZER: All right. What about that, Kimberly?

NEWSOM: I think it is going to be damaging. If he's a man with nothing to hide, then why is he lying to the police? He's being accused of a forcible sex crime, rape. That's the time to start cooperating and telling the truth about the facts.

If he's lying about even having sex with her, what else is he lying about? And that's what the jury is going to be thinking. Right away his credibility is impaired, and that's what this case is going to come down to: Who do you believe?

MERRITT: I think they're going to focus on her actions. I think they're going to focus on the fact that she went to his room willingly, that she thought that he was going to put a move on her, that she put him in a room that was way out of the way, that she took a circuitous route to meet him back there, that she made out with him voluntarily, that she showed him her tattoo. I think they're going to focus on her behavior.

NEWSOM: Well, again, Jeralyn, I know you're familiar with these cases. Just because someone goes to a room, gives Kobe Bryant a tour, goes to the room, he goes to hug her, after she asks for an autograph, he says no, she says, come back and go in the Jacuzzi with me, she says, "I'm tired, I want to go home, it's the end of my shift," he goes, "can I have a hug," then he hugs her, starts kissing her, groping her. When he reaches under her skirt and tries to basically groping her private areas, she tells him no. When he has her bent over the chair, with his hands around her throat...

BLITZER: That's all...

MERRITT: But that's in doubt.

BLITZER: Hold on, Kimberly. I want to get to some issues that are apparently not in doubt. Two witnesses saw her emerge from the room. The first was the night auditor, a woman who says, presumably -- this is what we're hearing -- that she did not see any distraught woman emerge from that room, she seemed to be fine, she helped count the receipts, count the money last night.

But we get a different story from the bellhop, who said she was very angry, she was very nervous, very distraught, and he actually followed her home.

The police, of course, were highlighting the testimony from the bellhop, Kimberly, as opposed to the night auditor. What do you make of that, conflicting assessments immediately after the alleged encounter?

NEWSOM: That was a good point that the defense made, but I think what the evidence is going to bear out is, the person that in fact she did speak to, that she did confide to five minutes after the incident was the bellhop. And he is what's called in Colorado an "outcry witness," and you call it in California a "fresh complaint." That is very compelling. Her hearsay statements can come in for the truth of the matter in court, anything she told him and her demeanor. And I think he is going to have a very different story than the night auditor, who I don't think had as much interaction with her.

BLITZER: And, Jeralyn, the other point that could be very damning to Kobe Bryant, there was blood, her blood, found on his shirt. That's been submitted as evidence as well.

MERRITT: That's right. There is blood, and we don't know what that means yet.

What you can infer from that is, she may have bled during the sexual intercourse, but, again, the defense is saying here that the cause of her injuries are not a forcible rape. The cause of her injuries is repetitive sexual activity over a short period of time. And any expert is going to tell you, you can have injury with consensual sex, just like you can have a forcible sex with no injury.

So on that we're just going to have to wait and see.

BLITZER: All right. On that, we're going to wait and see and continue this conversation in the days and weeks to come.

Kimberly Guilfoyle Newson, Jeralyn Merritt, as usual, thanks to both of you for joining us.

NEWSOM: Thank you.

MERRITT: Thank you.

BLITZER: And the results are in on our LATE EDITION Web question of the week: Will the approval of the U.N. resolution bring more international help to the coalition in Iraq? We'll tell you how you voted, our viewers, when LATE EDITION continues.

(COMMERCIAL BREAK)

BLITZER: Our Web question of the week: Will the approval of the U.N. resolution bring more international help to the coalition in Iraq? The results are now in. Look at this. Eighteen percent of you say yes; 82 percent say no. Remember, this is not a scientific poll.

Let's get to some of your letters. A lot of people weighing in on the situation in Iraq.

Connie of Illinois asks this: "Exactly what will Iraq be getting from the U.N. resolution that has passed? The U.N. is giving nothing. It's just words."

David writes this: "In order to stabilize Iraq, American and allied officials must find Iraqi people who are willing to lead Iraq by assessing challenges and making decisions. By doing this, coalition governments will be helping Iraq move toward becoming an independent country." We always, of course, welcome your comments. We love hearing from you. Our e-mail address, lateedition@cnn.com. And if you'd like to receive our weekly e-mail previewing this program, go to cnn.com/lateedition. You can sign up right there.

Up next, Bruce Morton's last word.

(BEGIN VIDEO CLIP)

BRUCE MORTON, CNN CORRESPONDENT: The last time the Cubs won, a tavern owner named Billy Goat Sianis showed up at Wrigley Field for the fourth game of the World Series with his goat, Murphy.

(END VIDEO CLIP)

BLITZER: Lamenting the curse that lives on.

(COMMERCIAL BREAK)

BLITZER: Time now for Bruce Morton's last word. He grew up in Chicago and wonders whether his beloved major league team, the Cubs, will ever be baseball's world champions again.

(BEGIN VIDEOTAPE)

MORTON (voice-over): Last time the Chicago Cubs won a pennant, World War II had just ended. The Japanese surrendered after the United States used a powerful new weapon, the atom bomb.

The last time the Cubs won, the state of Israel did not exist. The American South was racially segregated and solidly Democratic. No blacks played baseball in the major leagues.

Last time the Cubs won, fans followed the game on radio. Television was just in its infancy. People crossed the country on trains often. You could fly, of course, but planes had propellers, and you probably had to change (ph) somewhere. There were 48 states.

Back then, they hadn't invented suburban sprawl, hadn't built the interstate highway system. There were no malls.

Thousands of World War II veterans were coming home to a G.I. bill of rights which would make many of them the first in their families ever to go to college, the first ever to own a home. A man named Levitt was thinking about building low-cost houses -- lots of them.

The last time the Cubs won, a tavern owner named Billy Goat Sianis showed up at Wrigley Field for the fourth game of the World Series with his goat, Murphy. The ushers wouldn't let Murphy in. Sianis laid a curse on the Cubs, saying Wrigley would never host another World Series. It never has. Billy Goat's tavern, by the way, remains a Chicago landmark.

The last time the Cubs won the pennant, the United Nations was just getting started. AIDS didn't exist. But smallpox, eradicated now, was a problem.

Vietnam was French Indochina on most maps. Nobody knew where Korea was. And no president had been impeached since the 1860s.

The last time they won the pennant, I was a boy in Chicago. It never occurred to me that I would live out my life without their ever doing it again. I'm an old man now, and it seems very possible. That fellow Sianis laid down a pretty good curse.

I'm Bruce Morton.

(END VIDEO CLIP)

BLITZER: Bruce Morton is not -- repeat, not -- an old man. Thanks very much, Bruce, for that report.

Let's take a closer look at what's on the cover of this week's major news magazines here in the United States.

U.S. News and World Report looks into big money on campus -- how taxpayers are getting scammed by student loans.

Time magazine, also focusing in on colleges, takes a look at the new SATs.

And Newsweek magazine has this: Design gets real; how it's changing the way we work and live.

And that's our LATE EDITION for Sunday, October 19.

For our international viewers, World News is next.

For our North American audience, stay with us. "PEOPLE IN THE NEWS" is up next. That's followed at 3:00 p.m. Eastern by "IN THE MONEY." And at 4:00 p.m. Eastern, "CNN LIVE SUNDAY."

Please be sure to join me next Sunday and every Sunday at noon Eastern for the last word in Sunday talk. I'm here Monday through Friday, twice a day, at both noon and 5:00 p.m. Eastern.

Until then, thanks very much for watching. Enjoy the rest of your weekend. I'm Wolf Blitzer in Washington.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired October 19, 2003 - 12:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: It's noon in Washington, 9:00 a.m. in Los Angeles, 8:00 p.m. in Baghdad and 11:00 p.m. in Bangkok, Thailand. Wherever you're watching from around the world, thanks for joining us for LATE EDITION.
We'll get to my interviews on this program. The U.S. secretary of state, Colin Powell, will be joining us, as well as the U.S. commerce secretary, Don Evans.

First, though, let's go to CNN headquarters for a quick check of the hour's top stories.

(NEWSBREAK)

BLITZER: When President Bush and the world's Asian leaders open the APEC summit formally on Monday in Thailand, the fight against terrorism will be high on the agenda.

The secretary of state, Colin Powell, of course, is traveling with the president. And today he spoke with CNN's senior White House correspondent, John King, about the war on terror, Osama bin Laden and a nuclear North Korea.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT: Thank you, Mr. Secretary.

I want to start first with the president's new overture today in North Korea. He says, no, he will not negotiate one on one a bilateral nonaggression pact, but he is willing to put it in writing -- no hostile intentions, no intent to invade -- so long as it's a group document involving Russia, China, Japan and South Korea. And of course, North Korea would have to give up its nuclear-weapons program.

What if North Korea says no? Do you have to then go straight to the Security Council? Do you have to consider military options then?

COLIN POWELL, SECRETARY OF STATE: Well, there are a lot of ifs and a lot of questions there. But let me approach it this way.

The president has said all along he has no intention of invading North Korea. We don't want to attack North Korea. We have no need to attack North Korea.

We entered into six-party dialogue with North Korea because we believed it was important for its neighbors to be included. And the first meeting was held in Beijing a couple of months ago. And all six parties, including North Korea, agreed that it was in the interest of all six parties to have a denuclearized Korean peninsula. So we're trying to find a way forward.

We are not going to have a bilateral agreement with the North Koreans, because it involves more than just the United States and North Korea. And we saw what happened in the previous administration with a bilateral agreement. We're also not going to have a treaty or a nonaggression pact that requires Senate ratification.

But we believe that there are models that can be looked at from the past that will allow us to find the kind of security agreement that would contain the assurances that North Korea should find satisfactory.

Now, this will take discussion among the parties, and we hope that North Korea will not say no when we finally get into discussions with them.

The fact of the matter is that North Korea is not gaining anything by being the possessors, if they are, of nuclear weapons or developing nuclear weapons. It doesn't help an economy that's in need. It doesn't feed anyone, and it doesn't scare anyone.

We don't like to see nuclear weapons in that part of the world. But at the same time, we will not let the presence of these programs blackmail us or scare us into doing something that would not be appropriate to the situation.

KING: But if the North says no, it will only take a one-on-one bilateral agreement with the United States, nonaggression pact, at that point, do you have no choice but to go to the Security Council?

POWELL: Well, it's not necessarily related to the Security Council. The Security Council issue has to do with North Korea's violation of its obligations. So it not only violated the agreements it entered into with the Clinton administration, it's violated agreements it entered into with South Korea some 11 years ago, and it's violated its obligations under a number of international agreements supervised by the International Atomic Energy Agency.

So there are options available to us and to the international community in the presence of continued North Korean intransigence. I hope that the neighbors of North Korea, who perhaps have more influence in North Korea than we do, will be able to persuade North Korea that it is in their interest to find a solution to this problem.

The president is committed to a diplomatic solution, a political solution. And the presentation he made to the President Hu Jintao of China said to the president of China, please keep playing the essential role you have been playing in moving this along, serving as the convener of the six-party talks and participating in those six- party talks.

And the president said he is prepared to look at other ways, new ways, of providing assurances that have to be matched by a verifiable end of North Korea's program. So I think the president has taken a positive step forward, and we'll see how the other parties respond.

KING: You are here at the APEC summit, and the draft communique talks about an agreement between these economies and in this region to dismantle terrorist groups. Obviously, we have seen over the past year the problems in this region.

What are the teeth behind the words? They say they will dismantle. What specifically concrete steps will we see?

POWELL: Well, the concrete steps are being taken as we sit. The arrest of Mr. Humbali here in Thailand. We have seen such a response to our terrorist-counterterrorist initiatives over the past years because everybody now realizes it is not just a problem for the United States. What happened in Bali, what's happened in the Philippines, what's happened around the world makes it clear to everyone that this is an international problem, and we have to come together.

What's important at this meeting is that APEC, which has always been for the most part a trade and economic organization, is now going to extend its reach and start talking about security issues, whether it's proliferation of weapons of mass destruction or terrorist activities, because they are interlinked. You can't have a thriving economy, you can't have tourism, a robust tourist industry, if people are worried about terrorists, so security and a sound economy go together. And that's what I think is important about this APEC meeting.

KING: When you're in these conversations and on the eve of them, or during them, a new bin Laden tape comes out, and he says he will attack in Iraq, he says he will attack any countries that help the United States, does that discourage people from participating, whether it is as you seek financial commitments or troop commitments for Iraq or whether you seek commitments in this region to do more, does that scare people away?

POWELL: No, I think it now encourages them. It might have scared them in the past, but everybody now knows you're not immune. You can't hide from it. You can't walk away. He is a threat to all of us.

And when you see these kind of tapes, it just reminds us this kind of terror is still on the face of the earth, and we have to come together, and we have to do even more with the exchange of law- enforcement information, intelligence information, the use of our military forces.

We all have to come together, and that's going to be one of the messages coming out of this APEC conference.

(END VIDEOTAPE)

BLITZER: The secretary of state, Colin Powell, speaking earlier today with our senior White House correspondent, John King. John will be back in the next hour of LATE EDITION with a full report on what's going on at this summit in Thailand. Let's move to Iraq right now, where two more U.S. soldiers are dead and another wounded, victims of the latest ambush. CNN's Baghdad bureau chief Jane Arraf is standing by. She's following the story, and she's joining us now live from Baghdad -- Jane.

JANE ARRAF, CNN CORRESPONDENT: Wolf, according to the U.S. military, it was a patrol hit by rocket-propelled grenade and small- arms fire. At the end, as you mentioned, two U.S. soldiers dead and another one wounded. That wounded soldier said to be in stable condition.

And this attack took place in Kirkuk, the heart of the northern oil fields, a place that has seen some turbulence, fighting between Arabs and Kurds and fighting at times between U.S. forces and the local population. It had been settled, but it appears to be flaring up again.

Another ambush in Fallujah, west of Baghdad this time. And according to officials, this one took place this morning when a convoy was disabled, including an ammunition truck. Now, as they were waiting for maintenance, according to the officials, people opened fire on that truck. And you can see the plumes of smoke and the secondary explosions as the ammunition caught fire.

What you can't see in this, although you can hear a little about it, is rejoicing by the bystanders. Some of them, in this very religious time leading up to the holy month of Ramadan, asking God to damn the infidels, the Americans.

Now, U.S. officials point out, though, that, despite these attacks -- and today there were about 15 of them, lower than normal -- that the whole country is not like this, that it is essentially stable, according to officials, but with pockets of resistance. As we've seen, these are some pretty volatile pockets -- Wolf.

BLITZER: Is there any new development, Jane, on the overall morale issue affecting U.S. troops, with this nearly daily casualty count that's continuing?

ARRAF: You know, we're well enough into it that it seems to be almost a given that they realize now that they will be here for a long time. They've started the R&Rs, two weeks off for some soldiers back to the U.S., which has made a huge difference. At least it gives them something to look forward to and some link to their families. Communication here hasn't been so great.

But still, it is a situation where soldiers are generally very, very nervous. In places like Karbala and Najaf, the holy cities, they have tried to remain on the outskirts, although they can't always do that. Here in Baghdad, there's frequent gunfire still, frequent attacks, and you never know where it's coming from.

And, all in all, it doesn't help morale among the soldiers, certainly -- Wolf.

BLITZER: All right. CNN's Jane Arraf for us on the front lines in Baghdad.

Jane, thanks very much.

Up next, rebuilding Iraq, how much progress is the United States and its coalition partners making? We'll have an exclusive interview. The U.S. commerce secretary, the president's best friend in Washington, Don Evans, he's just back from Baghdad. He'll join me live.

Then, the $87 billion question: Can the U.S. afford the president's request for more funds for Iraq, Afghanistan and the war against terrorism? We'll ask two leading U.S. senators, Republican Mitch McConnell and Democrat Dianne Feinstein.

And later, Kobe Bryant is back in court, the NBA star. Is he headed to trial for alleged sexual assault? We'll get some legal insight in the case.

All that, much more. LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

Despite numerous attacks and the mounting death toll of U.S. troops in Iraq, President Bush maintains significant progress is indeed being made right now.

Joining us now with his assessment, the U.S. commerce secretary, Don Evans. He's just back from Iraq.

Mr. Secretary, welcome back to LATE EDITION. Good to have you back...

DON EVANS, COMMERCE SECRETARY: Thank you.

BLITZER: ... here in the United States.

EVANS: Thank you. Good to be with you.

BLITZER: I know what you're going to say, but let's put the numbers up on the screen. Two more U.S. soldiers killed overnight in Iraq. The numbers since the war started bring 338 American troops dead in both hostile and what's called non-hostile action in Iraq -- more than half since May 1st, when the president declared an end of major combat operations.

American public, at least a big chunk, according to our polls, want to know when is this going to end?

EVANS: Well, you know, Wolf, I'm not sure when it's going to end. But I must tell you that any death is tragic, and Iraq is certainly the central front of the war against terrorism.

But I went over there expecting to find a feeling of desperation, a frightening kind of environment, and I felt anything but that. I saw what the power of freedom was doing to transform lives, to transform a country.

I saw -- as I had a chance to sit down and talk to women entrepreneurs and young boys that were starting their own -- I stopped on the side of a road and bought some Coca-Colas from some young, budding entrepreneurs. It was not the kind of feeling that I expected to have when I went over there.

There is tremendous progress being made under the president's leadership. Ambassador Bremer is doing a fabulous job. Power is back up...

BLITZER: But do you have a sense how long the occupation -- are we talking about another year, two years, five years? How long is this U.S. military occupation going to be required?

EVANS: Wolf, all I can say is we're making a lot of progress. I mean, when you look at the progress today, I think it's quite remarkable.

And we've trained some 60,000 Iraqis now to be part of the police force, part of the security force. We're going to continue to train more and more.

One thing about freedom, Wolf, is the people really understand their country is their country. It's their responsibility. And they feel that responsibility.

And so I think you'll continue to see them take on greater and greater roles in providing for the security of that country.

BLITZER: Some military officers from the 4th Infantry Division suggesting this past week they seem to be getting closer in the hunt for Saddam Hussein.

When you were there, you were briefed by top military civilian planners. Are U.S. forces getting closer to finding the former Iraqi leader?

EVANS: Well, Wolf, I'm not sure about that. I did not get briefed on that.

But let me tell you one thing I sense. I sense that the terrorists see the great momentum and the great progress that is under way. And I think that could be one of the reasons we're seeing somewhat of an escalation in the isolated incidences that we've seen recently.

There's so much phenomenal progress taking place over there that I think that's concerning the terrorists, because they see the great power of freedom when you put it in the lives of over 50 million people.

BLITZER: Let's talk about the reconstruction funds for Iraq. As you know, the House and the Senate passed legislation in recent days this past week supporting about $86 billion in overall funds -- $20 billion of that supposed to go to rebuild Iraq, the rest for U.S. troops in Iraq, Afghanistan, elsewhere.

But the Senate version said that half, $10 billion, should be in the form of a loan, as opposed to all a grant, which is the House version. Now it goes to a conference committee. They have to reconcile, they have to reach a compromise on that.

Is the administration prepared to accept some of those $20 billion in the form of loans, which the Iraqi government someday would have to repay to U.S. taxpayers?

EVANS: Wolf, that's a decision for the president to make, and the president will make that decision.

But I think there's this great misunderstanding as to the wealth of the country of Iraq. I mean, we look at the oil production that can come out of Iraq over the next 12 months or so, and we forecast about $12 billion in revenues from oil production. That would be about enough to pay the interest on the debt that they owe in the world today.

And so, this is a country that's bankrupt. But what we're working toward is providing and building greater security in that country and more economic security in that country, which links back to America.

BLITZER: Well, let me...

EVANS: Americans are more secure because of the greater security environment, secure environment in Iraq.

BLITZER: That assessment of Iraq's oil wealth clearly differs from what the deputy defense secretary, Paul Wolfowitz, testified before the U.S. Congress on March 27th. Listen precisely to what he told members of Congress.

(BEGIN VIDEO CLIP)

PAUL WOLFOWITZ, DEPUTY SECRETARY OF DEFENSE: The oil revenues of that country could bring between $50 billion and $100 billion over the course of the next two or three years. We're dealing with a country that can really finance its own reconstruction, and relatively soon.

(END VIDEO CLIP)

EVANS: Well, I mean, you know, I could go through the numbers, and it's producing now about 2 million barrels a day...

BLITZER: He said $50 billion to $100 billion over the course of the next two to three years. He was clearly wrong.

EVANS: Well, I'm not saying he was clearly wrong. Look, if they're able to get the oil production up to 3 million to 4 million barrels of oil a day, and if oil prices go to $35, $30 or $35 a barrel, you can see numbers up in that kind of level.

But right now, they're producing about 2 million barrels a day, and at $20 a barrel or $22 a barrel, you just don't get to those levels yet.

BLITZER: All right.

EVANS: Maybe we'll get there.

BLITZER: You know, some Republicans decided they weren't going to be able to support the president's request for all $20 billion to be in the form of an outright grant. Lindsey Graham, Republican, South Carolina, spoke out very clearly on this specific point. Listen to what he said.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: It's very hard for me to go home and explain how you have to give $20 billion to a country that is sitting on $1 trillion worth of oil.

(END VIDEO CLIP)

BLITZER: All right. That's a pretty sensitive issue, the way he framed it.

EVANS: Yes, again, you know, you cannot have economic security without national security, and you cannot have national security without economic security.

What we need to do is continue to focus on what we need to do to create the conditions for economic prosperity in that country.

Because that means the people of America will be more secure, more safe. It means the people of the world will be more secure. It means that we will have a more secure environment in our own country for our economy to even be stronger.

So, you know, I just...

BLITZER: You think he's wrong?

EVANS: Well, you know, $2 trillion worth of oil resources, I mean, I'm not sure whether or not...

BLITZER: I guess what a lot of Democrats and certainly even some Republicans are saying, they don't want to see the day come, in a few years, that Iraq is rebuilt, they're exporting a lot of oil, they're making a lot of oil, and they're repaying France, they're repaying Germany, they're repaying Russia for debts accumulated during Saddam Hussein's era, but they're not repaying the United States, at a time when they could afford it.

EVANS: Well, you know, I don't know. That's all out in the future. I think the right approach is to continue to do what we can to create the conditions for economic growth in Iraq, and I don't think that is putting more debt on an already heavily debt-burdened country and basically a bankrupt country.

BLITZER: Now, this is becoming a very divisive issue, especially as the political season heats up here in the United States.

I want you to listen to what Senator Ted Kennedy said on the Senate floor this week as part of this overall debate, very tough words from him.

(BEGIN VIDEO CLIP)

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: We were told Iraq could pay for its own reconstruction. It cannot.

And we were told that the war would make America safer. It has not.

Before the war, week after week after week after week, we were told lie after lie after lie after lie.

(END VIDEO CLIP)

BLITZER: Now, even in Washington, that's pretty tough language, accusing the president of lying, in effect, to the American public.

EVANS: Yes, that is, Wolf. And I'm disappointed in what the senator said, because what I can tell you is, because of the president's leadership in Iraq and the war against terrorism, and in the coalition forces that have joined us, the people of America are more secure today, they're safer today, we have a better environment for economic growth in our country today, which means more jobs for Americans, all in the future. The world is a safer place today because of the president's actions.

If there's one thing this country stands for, it is freedom. We will do whatever it takes to expand it, to protect it and to preserve it.

And having spent two days over there, I've just got to tell you, I have never been prouder to be an American than having spent three days in Baghdad and one day in Afghanistan, where, when you look in the eyes of the children and you see the hope that they now have, you see the determination that they now have, it's just a phenomenal experience.

BLITZER: And we're almost out of time, but you did come back -- you were there ostensibly for the unveiling of the currency, the Iraqi currency that's come out. And I want to show our viewers...

(CROSSTALK)

EVANS: Well, it just occurred while I was there, but I have an old Saddam bill that has his picture on the face and the war memorial on the back. And then the new bill, that has a tractor on the front and a woman harvesting wheat in the field.

The women now have power over there, Wolf. I mean, I sat down with women entrepreneurs that they said...

BLITZER: So the fact that they have a woman on the currency, you're suggesting that this opens the door for a new Iraq?

EVANS: I think it's just a phenomenal symbol of freedom.

And the other phenomenal symbol of freedom I saw over there was 800 newspapers across Iraq, 130 in Baghdad. Before, they had one. I mean, freedom of press.

You know, what I see happening is we're opening the windows of the world to the people of Iraq. I think we really need to open the windows of Iraq to the people of the rest of the world, because I don't think they're getting a true picture of what is going on in that country.

BLITZER: We only have a minute left, but I want your reaction, because you're one of the president's closest friends: While you were there, in the Middle East, the prime minister, the outgoing prime minister of Malaysia, Mahathir Mohamad, made a very, very vicious speech at the Islamic summit on Thursday, the Organization of Islamic Conference (ph) summit, in which he made what I think is widely being seen as some classical anti-Semitic comments.

I want you to listen precisely to what Mahathir said.

(BEGIN VIDEO CLIP)

MAHATHIR MOHAMAD, PRIME MINISTER OF MALAYSIA: The Europeans killed 6 million Jews out of 12 million, but today the Jews rule this world by proxy. They get others to fight and die for them.

(END VIDEO CLIP)

BLITZER: Now, he's going to be attending the president's summit, APEC summit, in Thailand, and there's not a one-on-one meeting scheduled, but there's a group meeting.

You know the president well. You know him as well as anyone. You're his best friend here in Washington. What do you think he should say to this prime minister?

EVANS: Well, look, I don't know all of the details behind it, but let me tell you what I've learned, Wolf, traveling around the world, and that means to Iraq, and that means to Afghanistan and other parts of the world.

Everybody in the world wants the same thing. We all want to put a roof over our family's head. We all want to feed our children. We all want to educate our children, and we want them to live in a safe and secure environment.

So I think that he will be talking to him. I don't know what he'll say to him. But he will, no doubt, say to him that, you know, in the world, we all want the same thing. We all want to live in a world of peace and freedom and prosperity. And that's what the president is focused on.

BLITZER: All right. We're going to leave it right there. Secretary, welcome back to the United States.

EVANS: Thank you. Thank you, Wolf.

BLITZER: Good to have you on our program, as usual. Appreciate it.

EVANS: Great to see you.

BLITZER: Up next, we'll go back to CNN's Andrea Koppel. She's in Atlanta. And we'll provide a quick check of the hour's top stories, including that new audiotape believed to be from Osama bin Laden.

Then, paying the price for a new Iraq; should the United States foot the bill? Two key U.S. senators -- Republican Mitch McConnell of Kentucky and Democrat Dianne Feinstein of California -- they will weigh in on this debate.

And don't forget for you to weigh in on our Web question of the week: Will the approval of the U.N. resolution bring more international help to the coalition in Iraq? You can go to our Web page, cnn.com/lateedition, to cast your vote.

We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We're making good progress about improving the lives of the people there in Iraq.

(END VIDEO CLIP)

BLITZER: President Bush insisting this past week that good things are indeed happening in Iraq.

Welcome back to LATE EDITION.

The question, though, of how to pay for the rebuilding of Iraq is a very contentious issue here in Washington, on Capitol Hill.

We're joined now by two key members of the United States Senate. In Louisville, Kentucky, Senator Mitch McConnell, he's the Senate's second ranking Republican. And here in Washington, California Democratic Senator Dianne Feinstein, a key member of the Senate Intelligence Committee.

Senators, welcome back to LATE EDITION.

And, Senator Feinstein, I'll begin with you. You decided to vote against the president in favor of the amendment to divide in half the grants versus loans in the $20 billion reconstruction package for Iraq.

But is there a compromise that would be acceptable to you now, since the House of Representatives said it should be all grant?

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: Well, what we did was essentially compromise. Half of the $20 billion would be a loan. I think Lindsey Graham well described the rationale for this. I think it's really a good measure, and I think it keeps the United States in a very strong position to go to other nations and say, look, you know, if you forgive your loans, we'll forgive our loan. I think -- and there's a loan to forgive, so I think that makes some sense.

My own view is that we've now spent over $166 billion on this war. I really think that's enough. I think it's very important that the Pentagon husband this supplemental. I suspect in certain parts of it there may be things for R&D on this or that. But I think the Congress, particularly the Senate, the votes, if there's another supplemental request, will be very difficult to come by.

BLITZER: And Senator Feinstein, as you know, Senator McConnell, by no means alone. Other Democrats are even going further, like Senator Ted Kennedy, for example. Listen to what he said on the Senate floor this week.

(BEGIN VIDEO CLIP)

KENNEDY: The greatest mistake we can make in Congress, as the people's elected representatives, is to support and finance a go-it- alone, do-it-because-I-say-so policy that leaves young Americans increasingly at risk in Iraq.

(END VIDEO CLIP)

BLITZER: Senator McConnell, you were just there a week or so ago. You came back enthusiastic about what you saw, just like Secretary Evans.

But what do you make about this split over the funding, how the U.S. should pay for the reconstruction of Iraq, as even, as you know, some of your fellow Republicans think it should -- at least part of it should be a loan?

SEN. MITCH MCCONNELL (R), KENTUCKY: Well, as you know, the president had a very good week. People were criticizing him because he had no international support. He went to the U.N. and got a unanimous vote for a resolution that essentially confirms that the U.S. ought to play the lead role in Iraq. France voted for it, Germany voted for it, Russia voted for it, and even Syria voted for it. That was a big step in the right direction.

We did have a narrow defeat in the Senate that same day, but the House did the right thing, in my judgment. And I'm optimistic that at the end of the reconciliation process between the House and the Senate, the conference, it'll come out the way the president wanted.

And let me tell you why it ought to come out that way, Wolf. We can't go to the donor conference in Madrid next week and ask countries around the world to contribute in the form of grants if we have just decided to send a bill to Iraq, thereby encumbering their oil, which is their only resource to pay us back in the future. That's not the message we want to send.

BLITZER: Let's let Senator Feinstein respond to that.

What about that? The president is asking France, Germany, Russia, none of whom so far say they're ready to put up any money to help in the reconstruction of Iraq, but the Senator Mcconnell makes a fair point. Why ask these other countries for grants if the U.S. is willing not to make it all a grant?

FEINSTEIN: Well, we're making a $10 billion grant to reconstruction. We're making a $65 billion grant to keep our military there, to do what has to be done to secure the peace. And the total would be $166 billion.

Now, that may not be all in reconstruction, but we've also got military participating in reconstruction. I mean, I'm one that believes that our allied community and others should be brought into it.

And, you know, I must say one thing that I'm mostly -- very concerned with, serving on the Intelligence Committee, is that Iraq becomes the focus for a joining-together of terrorist groups.

BLITZER: Is that happening, though?

FEINSTEIN: I think that is happening, and I think it's very serious for the future. And I think when our allies and nations like France and Germany and others began to see this happening, that they will perhaps be more willing to join in this to help us. I think that's the huge danger signal that I see out there in the coming months.

BLITZER: There's another sense of criticism, Senator McConnell, that the president may not be coordinating his strategy, explaining his policy effectively. Listen to the criticism, rather biting, coming from your fellow Republican, Senator Hagel of Nebraska.

(BEGIN VIDEO CLIP)

SEN. CHUCK HAGEL (R), NEBRASKA: The president must take charge here. And when you have four administration officials out giving four variations of a speech last week -- some real tough, some not so tough, some kind of in the middle -- that doesn't develop confidence in a strategy, in a policy.

(END VIDEO CLIP)

BLITZER: Does he have a point, Senator Hagel?

MCCONNELL: Look, I think the strategy is clear. It's to rebuild Iraq, which is the way to get the troops home.

If you look at this supplemental that we just passed this week, the vast majority of it is for keeping our military over there. That's what is really expensive. And the way to get the military home is to get the reconstruction job done quickly and correctly. I met a general from the 101st Airborne up in Mosul, up in the north. He said we've made more progress in six months in Iraq than we have in six years in Bosnia.

A lot's going on that's very positive. Don Evans was talking about it, but it's worth repeating. A hundred and seventy newspapers -- that's more diversity than we have, certainly, in my hometown or in California. Thirteen thousand construction projects that have been completed. Fifteen hundred schools that have been renovated -- that's still under way. Sixty thousand people in the new Iraqi security force, which thwarted two attacks this week -- one in the Baghdad Hotel and the other on the Turkish Embassy.

Look, it takes a little while to get this job done, but the way to save money in the long run is get the reconstruction done right, get the democracy up and running, and then the troops can come home.

BLITZER: Senator Feinstein, you serve on the Intelligence Committee. Does the U.S. have good intelligence right now? You can look back and say, maybe we had bad intelligence going into the war, since they still haven't found the weapons of mass destruction, still haven't found Saddam Hussein. But right now, are you satisfied that the U.S. intelligence community knows what it's doing, knows what the situation in Iraq is?

FEINSTEIN: Not entirely. One of the things that's come through to me, based on reading and rereading the National Intelligence Estimates and the daily intelligence, is that a lot of the key judgments that were made were not correct judgments, in my view.

We have put a great deal of additional money into intelligence. The number is classified, but I can assure you, it is a lot of money.

One of the things that hasn't been done is any restructuring of the intelligence community, which, structure-wise, is still based on a post-Cold War kind of structure, not an asymmetrical world.

And although I think George Tenet and others have really made heroic efforts to recruit, and the president has announced the setting up of an Iraqi intelligence service, I think we have a long way to go in that regard.

BLITZER: I'm going to get back to this. We only have a few seconds before we have to take a commercial break, Senator McConnell, but I want you to respond to this notion out there that the American public was sold a bill of goods, presumably, the allegation, before the war, about the imminent threat coming from Saddam Hussein and Iraq.

MCCONNELL: Look, everybody agreed on the weapons-of-mass- destruction issue. The Germans, the French, the Russians -- we all believed he had weapons of mass destruction. That was not even in contention.

The fact that we've had some difficulty finding weapons, even though we've found programs, is disturbing. But if we were fooled, everybody else in the world was fooled. Everybody thought he had weapons of mass destruction, Wolf.

BLITZER: All right.

FEINSTEIN: Yes, but that's not the point. Let me just -- everybody didn't attack Iraq. Everybody didn't say one of the reasons for the attack is because we believe there's a threat in the area...

MCCONNELL: But, Dianne...

FEINSTEIN: ... and we believe there may be even a threat to the United States...

MCCONNELL: But, Dianne...

FEINSTEIN: ... and then to go in -- let me just finish -- and go to over 600 sites and find nothing. And I sat there, Mitch. I listened to David Kay's report, and there is basically nothing except, perhaps, a little botulinum (UNINTELLIGIBLE) in somebody's refrigerator. That's it.

And that concerns me greatly, because that was one of the reasons...

BLITZER: All right...

FEINSTEIN: ... that I voted to authorize use of force.

BLITZER: ... Senator McConnell, go ahead and respond.

MCCONNELL: Yes, look, that wasn't the only reason that we liberated Iraq. There were plenty of other reasons. This was just one of many.

It was still the right thing to do. I bet Dianne is not sad that Saddam Hussein is gone. Not many Americans are. This was clearly the right thing to do.

BLITZER: All right, we're going to...

FEINSTEIN: Let me just respond to that one point.

BLITZER: Right after the break. Right after the break...

FEINSTEIN: OK.

BLITZER: ... because we have to take a commercial break. You'll have a chance to respond. Senator McConnell will have plenty of opportunity to respond, as well.

More of our conversation with both of these senators when we come back. They'll also, by the way, be taking your phone calls. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We're continuing our conversation with two U.S. senators, Republican Mitch McConnell of Kentucky, Democrat Dianne Feinstein of California.

Senator Feinstein, Senator McConnell made a fair point. You're not sad that the U.S. went to war and removed Saddam Hussein from power?

FEINSTEIN: Look, Saddam Hussein was a pariah, let there be no doubt, pariah for his own people. And the things he did I think are legion. I think we all know that.

But the point was, is it our obligation, unless there is a real threat, to go in there and take down that government, with a view of taking out that leadership? And I think that's a very difficult question for this nation.

Maybe if we had the whole world with us, that's one thing...

BLITZER: Because you supported the president's -- the resolution...

FEINSTEIN: I supported it, absolutely.

BLITZER: But do you regret that now?

FEINSTEIN: I don't think I regret it yet, because I'm hopeful that weapons of mass destruction will be found. But the major reason that I voted was because of what I heard in intelligence about weapons of mass destruction, about chemical, about biological, about the fact that they've been deployed, that maybe the orders had been given to use them. That kind of thing.

That added the element of potential threat to it, which was not present without that.

BLITZER: We may have heard, Senator McConnell, in the last few days once again from Osama bin Laden, a new audiotape released by Al Jazeera, and I want to play an excerpt from that audiotape. Listen to this.

(BEGIN AUDIO CLIP)

OSAMA BIN LADEN (through translator): Any government that's formed by America will be an agent, a puppet government, just like all the other governments in the area, like Karzai or Mahmud Abbas, that were set up to shed the blood of Muslims.

(END AUDIO CLIP)

BLITZER: Now, the president was asked about that audiotape earlier today. I want you to listen to what he said in Bangkok.

(BEGIN VIDEO CLIP)

BUSH: The bin Laden tape should say to everybody, the war on terror goes on, that there's still a danger for free nations, and that free nations need to work together more than ever.

(END VIDEO CLIP)

BLITZER: Are you frustrated, are you as frustrated, Senator McConnell, as so many others are, that the United States, even now, more than two years after 9/11, has not been able to find Osama bin Laden?

MCCONNELL: Sure, we'd like to find him.

I also went to Afghanistan last week, and we're, you know, have a sense of where he might be, and we're certainly looking for him, and for Taliban, who are hiding over in Pakistan, who would like to try to get back into power.

Look, the war on terror is a difficult undertaking. We haven't gotten Saddam Hussein yet either, and we hope to get him.

Nobody said this would be easier, but the world is a lot safer as a result of the new regimes in Afghanistan, a free Afghanistan, a free Iraq. Both of these were havens for the kinds of terrorist thugs that have become the principal challenge to the United States and to the civilized world in the 21st century.

FEINSTEIN: May I say something on that?

BLITZER: Go ahead.

FEINSTEIN: One of the interesting things about the tape, I think, is the fact that he mentioned Mahmud Abbas, who, as I recall, resigned in early September. Now, whether this tape...

BLITZER: The Palestinian prime minister.

FEINSTEIN: Yes. Now, whether the tape was done prior to September, but it sort of puzzles me if it wasn't done prior to September, why he would mention that.

Essentially, I agree with what Mitch said. I think that's the correct assessment.

BLITZER: Is your bottom line -- I'm switching very briefly, we only have a few seconds left -- Senator McConnell, that the president could have a political problem in seeking reelection because of what's happening in Iraq?

MCCONNELL: No, I don't think so. I think the American people still support the policy. I think they're glad Saddam Hussein is gone. The man murdered 300,000 of his own people. This is a mission I think Americans can be proud of. And we're safer here at home because all of these gangsters are somewhere else in the world...

BLITZER: All right.

MCCONNELL: ... trying to do us harm.

BLITZER: And on the latest CNN-USA Today-Gallup poll, Senator Feinstein, had the president's job-approval rating going back up to 56 percent, which is a pretty hefty job-approval rating, even in the midst of some economic bad times and what's happening in Iraq.

Very briefly, California. Arnold Schwarzenegger, the governor of California, the governor-elect of California. Does this mean that California is in play in the presidential contest next November?

FEINSTEIN: California is always in play. California politically is a very volatile state.

And what was interesting to me to watch during the recall campaign was the amount of people that turned out to hear Schwarzenegger.

Now, the question is, can he deliver? Can he work with a Democratically controlled legislature? Can he resolve the structural imbalance of the deficit? Can he resolve the car tax, because the $4 billion goes directly for police, fire and local emergency employees. Cities and counties aren't going to like the loss of those dollars, I can promise you that.

BLITZER: We'll see how he does. We have to leave it, unfortunately, right there. Senator Feinstein...

FEINSTEIN: Thank you.

BLITZER: ... thanks very much for joining us.

Senator McConnell, welcome back from Iraq. Good to have you on our program, as usual, as well.

MCCONNELL: Thank you, Wolf.

BLITZER: Thank you.

And still ahead, new targets in this cycle of violence in the Middle East. Three Americans killed this week in an attack in Gaza. What will it take to resurrect the peace road map? We'll get Israeli and Palestinian perspectives, unusual perspectives.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Coming up on LATE EDITION, crisis in the Middle East. What path do Israelis and Palestinians need to take to get the road map back on track? We'll hear from both sides.

Plus, putting on a full court press in the Kobe Bryant case. Who has the advantage right now? We'll ask two legal experts.

And don't forget to weigh in on our Web question of the week: Will the approval of the U.N. resolution bring more international help to the coalition in Iraq? Go to cnn.com/lateedition to cast your vote.

LATE EDITION continues right at the top of the hour.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

We're standing by to speak live with the former head of the Israeli Shin Bet. That's the domestic secret service agency in Israel. Also, a former Palestinian cabinet member. We'll speak with them shortly.

First, though, let's go to CNN headquarters in Atlanta for a quick check of the hour's top stories.

(NEWSBREAK)

BLITZER: A key issue confronting the United States, as well as Asia, indeed the entire world, is a nuclear North Korea. As President Bush meets with the region's leaders at the APEC summit in Bangkok, Thailand, he's hoping to enlist their help in putting a lid on North Korea's nuclear ambitions.

Our senior White House correspondent John king is traveling with the president and filed this report.

(BEGIN VIDEOTAPE)

KING: At first glance, a tough line toward North Korea and its demand for a nonaggression pact with the United States.

(BEGIN VIDEO CLIP)

BUSH: We will not have a treaty, if that's what you're asking. That's off the table.

(END VIDEO CLIP)

KING: But after talks with Thailand's prime minister, Mr. Bush said he is willing to put in writing a promise not to attack the North, so long as it is part of a joint declaration involving other key partners.

(BEGIN VIDEO CLIP)

BUSH: We want to explore these options with our -- with China and Japan, South Korea and Russia, and that's what I intend to do.

(END VIDEO CLIP)

KING: Meeting later with Chinese President Hu Jintao, Mr. Bush said his new overture should advance diplomacy by giving North Korea the security assurances it says it must have before it agrees to permanently dismantle its nuclear-weapons program. The next step is negotiating language with China and other partners.

(BEGIN VIDEO CLIP)

HU JINTAO, PRESIDENT OF CHINA (through translator): I will continue to work to promote the Beijing six-party talks process, so as to strive for peaceful resolution of this issue.

(END VIDEO CLIP)

KING: But if North Korea says no and continues to insist on a bilateral treaty with the United States, aides say Mr. Bush would then consider asking the United Nations Security Council to impose sanctions.

(BEGIN VIDEO CLIP)

POWELL: There are options available to us and to the international community in the presence of continued North Korean intransigence.

(END VIDEO CLIP)

KING: Mr. Bush also thanked Thai troops for their help in Afghanistan and Iraq and said leaders gathered for the Asia-Pacific summit need to do even more to dismantle al Qaeda and other terror networks in active in Southeast Asia.

(BEGIN VIDEO CLIP)

BUSH: We must break up their cells, shut off their sources of money. We must oppose the propaganda of hatred that feeds their cause.

(END VIDEO CLIP)

KING: These careful steps at Bangkok's Temple of the Emerald Buddha offered a brief but stunning respite when Mr. Bush stepped back into his delicate diplomacy.

Senior Bush advisers say they hope the new White House initiative will lead to another round of six-party talks with North Korea before the end of the year, and they say Pyongyang should set aside any hopes of a two-way treaty with Washington.

It doesn't work, one senior official said of dealing one-on-one with the North. Said another sarcastically, "We've seen this movie."

John King, CNN, Bangkok.

(END VIDEOTAPE)

BLITZER: And turning now to the crisis in the Middle East, Palestinians fired rockets at southern Israel today as Israeli forces continued their crackdown in southern Gaza.

CNN's Chris Burns is monitoring developments. He's joining us now live from Jerusalem.

Chris, tell us what's happening today.

CHRIS BURNS, CNN CORRESPONDENT: Well, hello, Wolf. At least eight Qassam homemade rockets fired by the militants from northern Gaza Strip into southern Israel. Most of them handed harmlessly into the Negev Desert, but some of them landed perilously close to the town of Zdedusk (ph) in southern Israel.

This, even though it didn't cause any damage or injuries, at least none reported, it does seem to be a message from the militants, saying that no matter what Israel does to crack down on them inside the Gaza Strip, they will still fire those rockets.

Israel continuing its Operation Root Canal, as they call it, going after tunnels in southern Gaza, in the town of Rafah. More than a week old now, this incursion going in trying to find those tunnels. According to the Israelis, they have found now at least four, but they're looking for some dozen more that are used, they say, to funnel weapons from Egypt into the Gaza Strip to launch those attacks.

Now, the toll, however, on the civilian side has been very high. Fourteen Palestinians killed altogether. Some of them militants, some civilians, two children included. Dozens injured, more than a hundred homes have been destroyed, according to the United Nations. More than 1,200 Palestinians left homeless in that operation, drawing criticism from the U.N. secretary-general himself.

Also, continuing in northern Gaza, the investigation by FBI agents into what -- who was behind the bombing that killed three private security guards with a U.S. diplomatic convoy earlier this week. So far that has not been solved. It is believed, perhaps, it could have been some freelance militants who were not part of major militant organizations but acting on their own. Again, the Palestinians and the Israelis and Americans are working together to try to get to the bottom of that, that tragic incident.

Back to you, Wolf.

BLITZER: Chris Burns in Jerusalem, with the latest.

Chris, thanks very much.

That bombing in Gaza this past week, which killed three U.S. diplomatic security personnel was the first fatal attack on U.S. officials since the start of the three-year intifada, as it's called, the crisis in the Middle East.

With the road map all but in tatters right now, what will it take to resume the peace process? Is that even possible? Joining us here in Washington, two guests. Ami Ayalon is the former head of Israel's Shin Bet, the domestic secret service agency in Israel, and Sari Nusseibah is a former member of the Palestinian Cabinet.

Welcome to Washington. Good to have both of you on the program.

Mr. Ayalon, let's begin with the killing of these three American security officers this past week. Does that represent a new chapter in this war?

AMI AYALON, FORMER HEAD OF SHIN BET: I think, yes. I think that if the political situation will go on, we shall see more and more of this phenomena.

BLITZER: And what's behind it, in your assessment? Because, as you know, Palestinian terrorists have been going after Israelis for a long time, but now going after U.S. officials, this seems to have been a pretty sophisticated operation.

AYALON: Well, I don't have the exact information about it, exactly what happened in this case. But U.S. is seen as part of the Israeli policy in the Middle East, so I don't think that we should be surprised when we see that Palestinians are attacking U.S.

BLITZER: Sari Nusseibah, who's behind -- who was behind, based on what you know, that attack against those three U.S. diplomatic security officers?

SARI NUSSEIBAH, FORMER MEMBER OF PALESTINIAN CABINET: Well, I don't think it was necessarily planned. I'm not sure that it was planned against the officials of the U.S., actually. This was a bomb that was placed by the side of the road. It was not really a very sophisticated device. Nobody claimed it. A few people were immediately put in jail. Everybody denied that they had anything to do with it. It might well have just been an accident that this was actually targeting...

BLITZER: You believe they could have been going after Israeli personnel, but the American convoy...

NUSSEIBAH: Or they might have been going against U.S. officials, but that they were not necessarily part and parcel of the known and existing factions fighting at the moment.

BLITZER: Because, as you know, until this week it was never publicized, but there was a similar attack against some CIA officers who were traveling through Gaza about a year or so ago. They weren't injured, but it was a similar attack.

NUSSEIBAH: Well, I have no knowledge of that at the moment. But it's possible that there's this increasing -- as we just heard, I think there is an increasing sense of frustration of the American officials and so on, so this may perhaps reflect it.

BLITZER: Mr. Ayalon, you're familiar with that incident that occurred, the attack against the CIA in Gaza?

AYALON: I heard about it.

BLITZER: What can you tell us about that?

AYALON: Well, it's -- I was not at my past position at that time. But I know that during the last several years, we had some information about the fact that Palestinian terrorists are trying to attack American targets, so it shouldn't be a surprise.

BLITZER: Is it connected, possibly, as some are suggesting, to the Arab anger against the U.S. because of what's happening in Iraq? They see the U.S. potentially being a target, outside of Iraq, not only inside Iraq?

AYALON: Again, I don't have the intelligence information, but I don't think so.

BLITZER: Mr. Nusseibah, do you think so?

NUSSEIBAH: Well, I think there's a general resentment against U.S. policy, whether in Iraq or other places in the Middle East at large. And so there's a, you know, there's a kind of solidarity of feelings against the intervention, in some cases, that looks a bit rough of the Americans in those areas.

BLITZER: Now let's get to the business at hand. Both of you are traveling together; you're here in the United States.

You're the former head of the Shin Bet, which is sort of the equivalent of the U.S. FBI. The Mossad would be roughly the equivalent of the CIA. You're working together to try to restart the peace process.

How did this come about, Mr. Ayalon?

AYALON: It came about, I think, almost two years ago.

I see that, at least the way I see it, both of us analyze more or less the past and came to the same conclusions, that gradual process failed and will not work in the future. The collapse of Oslo process is due to the fact that it was a kind of a gradual process. And in a way, the road map is using the same method.

We came to the conclusion that, in order to go forward, we have to start from the future and to go backward.

BLITZER: And you're here in Washington, Mr. Nusseibah, trying to get what? U.S. support for some more aggressive U.S. policy to try to get the peace process going? Is that doable?

NUSSEIBAH: Well, I think that would be welcome, but both of us, I think, also believe that, while more engagement by the U.S. is encouraged, is needed, in fact, you know, our whole philosophy, if you like, is founded upon the principle that we should really go back to the people on both sides, the Israeli and the Palestinian people, and try to work from the grassroots up.

Our vision is to try and involve, engage the people themselves in trying to determine a peaceful vision...

BLITZER: You mean, to bypass the Palestinian-Israeli leadership, if you will?

NUSSEIBAH: Well, to create pressure, if you like, from the two publics...

AYALON: Or support.

NUSSEIBAH: ...or support, in order to get the leaderships to start negotiating.

BLITZER: Well, is this leadership, the leadership of the Palestinian Authority, Yasser Arafat clearly the leader, despite what the Israeli government wants, what the U.S. government wants, he's still the leader of the Palestinian Authority, and the leadership of the Israeli government, Ariel Sharon -- can these two leaders, Mr. Ayalon, based on your assessment, make peace?

AYALON: I'll tell you something as an Israeli. I think that Sharon is probably the only one who can make it, but he will not make it unless he will hear loud and clear from the Israeli people that this is exactly what we want and, in addition, that this is a very painful price that we are prepared to pay.

BLITZER: What about Yasser Arafat?

NUSSEIBAH: I think I'd say the same thing, that, you know, I think Yasser Arafat is the only person who can actually make the peace deal, but that again he needs only one hand, the people telling him they want to make it, they want him to make it, and he needs to feel also that he will be able to make it.

BLITZER: In the aftermath of the killing of the three Americans this week, the president, George W. Bush, put out this statement. Among other things, he said, "Palestinian authorities should have acted long ago to fight terror in all its forms. The failure to create effective Palestinian security forces dedicated to fighting terror continues to cost lives. There must be an empowered prime minister who controls all Palestinian security forces, reforms that continue to be blocked by Yasser Arafat."

That's the president of the United States.

NUSSEIBAH: Well, I think it's a discourse that actually one needs to look beyond, because what we need to do on the ground is to get people back to the peace process. And to get them back to the peace process, you need to have the sense on both sides that there's a commitment to an end game.

BLITZER: Well, the parties, Mr. Ayalon...

(CROSSTALK)

BLITZER: Let me just interrupt. The parties were very close to an agreement at the end of the Clinton administration.

AYALON: No, I don't think so.

BLITZER: Why do you say they weren't close? Because it looked like then Prime Minister Barak and then the Palestinian Authority President Yasser Arafat had a -- were very close, this deal.

AYALON: From Washington, this was the notion, but I don't accept it.

Let me tell you something about what should we do in order to fight terrorism. What I claim -- and this is after many years of fighting terrorism, in the Navy, in the Shabak (ph), wherever...

BLITZER: The Shabak (ph) is the Shin Bet...

AYALON: Right.

BLITZER: ... the domestic secret service.

AYALON: ... the Palestinians will not fight terror, no matter what orders we or the Americans will give them. The only way in which they will fight terrorism is if they will see the end game.

Why they are doing it for? If they will see exactly what they will get. And it is the same for us.

BLITZER: But don't...

AYALON: We shall not dismantle settlements unless we shall see -- it is very painful -- unless we shall see exactly what we shall...

BLITZER: The end game that you envisage...

AYALON: Right.

BLITZER: ... is obviously a two-state solution...

AYALON: Right.

BLITZER: ... Israel living alongside Palestine, but the details...

(CROSSTALK)

BLITZER: Obviously, the devil is in the details.

AYALON: But God is in the details too, you know...

BLITZER: Would you support Israel withdrawing from all of the West Bank and Gaza, and dividing Jerusalem?

AYALON: What we support is written on a one-page paper. You know, it's -- I think that the basis for negotiation should be '67 borders, and we shall have to swap land with the Palestinians.

BLITZER: And Jerusalem?

AYALON: Jerusalem should be an open city, but the capital for the two states.

BLITZER: Is that an acceptable deal to the Palestinians?

NUSSEIBAH: Absolutely. I think that, you know, it's time that the two sides actually face the facts. Both sides have to make very painful concessions. And I think, once they do make those concessions and once they do agree on the final endgame, then both sides will be able to fight terrorism. That's the only way to stop it. I think that it's high time today to try and push directly toward defining a destination to the road map. And actually, it is probably a condition for the success of the road map at this point in time to annex to it a destination.

BLITZER: We only have a few seconds left, but a lot of Israelis, as you well know, a lot of Israelis think Yasser Arafat is the problem, not the solution. What do you think?

AYALON: The Palestinian leadership is not my problem. It is their problem. I voted for my leadership. We have to deal with the Israeli leadership and let them deal with their leadership.

But one last sentence. After -- I mean, I say during the many years in the navy, the Israeli navy, and we used to say that a captain who does not know where he wants to sail, there is no wind on earth that will bring him there. We have to decide, where do we want to sail? That's it.

BLITZER: The final agreement and that would be that.

Ami Ayalon, thanks very much for joining us.

Ari Nusseibah, always good to see you, as well.

NUSSEIBAH: Thank you.

AYALON: Thank you.

BLITZER: Up next, the former House Republican leader Dick Armey is offering some new insights into everything from preemptive strikes to who will win the White House in 2004. We'll talk to him about his new book. It's called "Armey's Axioms." You'll want to hear this.

Then, Kobe Bryant. The case continues. Did the defense or the prosecution make a better case? Two prominent attorneys assess the situation.

And there's still time for you, our viewers in the United States and around the world, to weigh in on our Web question of the week. Will the approval of the U.N. resolution bring more international help to the coalition in Iraq? You can cast your vote at cnn.com/lateedition.

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. I'm Wolf Blitzer in Washington.

Although he retired from the U.S. Congress last year, the former House Republican leader Dick Armey is still making his voice heard on a number of important issues. He is the co-chairman of the group called Citizens for a Sound Economy. He's also the author of a brand- new book of life lessons entitled "Armey's Axioms." Dick Armey is joining us now live from Dallas, Texas.

Mr. Armey, welcome back to LATE EDITION. Congratulations on the new book. I'm sure a lot of our viewers will be interested in your axioms.

And let's get right to some of them, because they have some political practical value, even as we speak.

DICK ARMEY, FORMER HOUSE MAJORITY LEADER: OK.

BLITZER: Axiom Number 12: No one spends someone else's money as wisely as he spends his own.

And then you go on to say there are three identifiable groups of people who regularly spend other people's money. They are children, thieves and politicians, and they all need adult supervision.

I guess you could make the case that this is applicable in the debate unfolding in Congress right now, whether to give the Iraqis grants or loans, as far as their reconstruction is concerned?

ARMEY: Yes, that debate is kind of a comical event. It's really a political debate, and they usually are funnier, if you can at least rise to the -- looking at it that way.

Most of the people that are saying we ought to make these loans instead of grants are the same people that joined Bono and just about broke their legs trying to get in a picture with Bono in the Year of Jubilee to get debt forgiveness for poorer nations.

So, it's really -- this is a political event, this discussion in the Senate right now. And quite frankly, it should be beneath their dignity, and we ought to get focused on the more important work is rehabilitating Iraq, getting its back on its own feet, and getting our young men and women out of there.

BLITZER: But if I read your axiom right, the way I assumed you read it, if the Iraqis knew they would have to repay this money, they would spend it more wisely than if they just got an all-out gift from the United States taxpayer.

ARMEY: Well, there's probably some truth to that. But the supervision of that expenditure is going to be in the hands of American officials until such time as we can say to the Iraqis, all right, now we can turn you over to your own devices.

Also in that axiom, I like to remind each and every one of us on those occasions when we are the beneficiary of some system of third- party payment, we, too, ought to exercise a little discretion and discipline, such as in our use of insurance.

BLITZER: You have another axiom in your book, Axiom 15, to be precise: If you want the divorce, you give up the house.

Some might say if the U.S. doesn't -- wants to go it alone with preemptive strikes, not necessarily waiting for the United Nations to act, you got to just leave the U.N., forget about the U.N.

But now, the Bush administration, as you well know, is going back to the U.N., seeking support. You can't have it both ways, I guess.

ARMEY: No, you can't. But, you know, I was watching a discussion of this, that those people who are all pro-U.N. and just a year ago, six months ago, were saying, "Hey, we can't go forward without U.N. approval," are exactly those people who are now discounting the U.N. resolution of last week. Whereas those people who are today celebrating the U.N. resolution of last week were exactly the ones who say, "Oh, the heck with the U.N., we don't need their approval to go forward."

So, you know, this whole question of to what extent and to what way does the U.N. matter really gets tied back into what is your own position with respect to policy in America, as it drives from your party...

BLITZER: Well, what is your...

ARMEY: ... so once again, it gets very confused.

BLITZER: What is your position? Should the U.S. simply forget about the U.N.? Or should the U.S. seek to work with the U.N.?

ARMEY: Well, my own view is, you ought to try to seek with the U.N. insofar as the U.N. wants to work in some manner that is productive and useful and really contributes to resolving the problem.

But if insofar as you want the approval, disapproval or endorsement of the U.N. as a debating society, it really doesn't matter. Their resolutions don't put people in the street creating a more safe and peaceful environment. Their resolutions don't pay for the expense of that. And will their resolutions, in the final analysis, do anything to make it possible for our young men and women to complete their mission, be safe and come on home?

So, you know, when it comes to U.N.'s passing resolutions, I'm with Shania Twain: That just don't impress me much.

(LAUGHTER)

BLITZER: Axiom 20, you have involving insecurity. Among other things, you say this, "Nearly every hurtful or mean thing I ever did in my life was done while I was feeling insecure. It stems from that impulse to do unto others before they can do unto you."

I guess that would mean the preemptive-strike doctrine is the result of, what, insecurity after 9/11?

ARMEY: It really -- I don't think we would have had such a universal acceptance. I talked to the president about that. I pointed out to the president, Shakespeare says our doubts make us traitors, and I was so concerned about that, but we all felt so insecure. Same thing with the PATRIOT Act. Our insecurity may have caused us to give up too much authority to intrude into the privacy of our lives to the government in fear of danger following that attack.

I thought that was a very dangerous time for America, for the panicky behavior that could come out of it, and I think to some extent we did let ourselves get panicked into things that are not necessarily the best policies for the long run for America.

BLITZER: You have another axiom. I love this one. Axiom number 5, to be specific: You can't get ahead while you're getting even. This is obviously in the direct contradiction to Chuck Colson's old axiom, don't get mad, get even.

Who is right in this, Chuck Colson or Dick Armey? I'm going to guess you're going to say Dick Armey.

ARMEY: Well, I'm right, and I'll give you a very good current example. Somebody in the White House a week or so ago, two weeks ago, within the month or whenever, decided they needed to get even with Ambassador Wilson, leaked something on the ambassador's wife, caused all kinds of -- an uproar around here that's got the White House in bad trouble.

Now, there was no reason to tell the world about the ambassador's wife. It was just a short-sighted, self-centered, simple-minded cowardly act of revenge, and who's paying the cost? The Bush White House. This has not hurt the Wilsons. They get a best-selling book out of the matter. So they did not get ahead, while they thought they were getting even.

BLITZER: I was going to say that leak actually happened in July. And what would you do to that person or those people inside the White House? Obviously, they may have actually broken the law in revealing the identity of an undercover CIA operative.

ARMEY: That's exactly right. If they ever find them, they ought to just -- they ought to just kick them out of the White House and prosecute them, because the other point is tied back to another axiom, the greater the hypocrisy -- the greater the pretension, the greater the hypocrisy.

Bob Novak, who is so much dedicated to the public's right to know, knows exactly who this villainous coward is, and he should just step right up, as Jimmy Buffett says, show his age and tell who that person is, and let's deal with them.

This is a cowardly, dangerous act, and these kinds of people ought to be identified. I see no justification, even within the broad bounds of journalistic practice, for Bob Novak to withhold that person's name, especially when you realize that in the past he has revealed sources, thinking it was a matter of national security.

BLITZER: All right. On that note I'll let Bob Novak respond on his own behalf. Dick Armey's got a hot new book, "Armey's Axioms."

Thanks for joining us, Mr. Armey. We'll continue this conversation.

I didn't even have a chance to get so some of the political names. But we'll leave that for an upcoming discussion. People like Wesley Clark and Howard Dean, I'm anxious to know what you think about them, but we'll have an opportunity in the days to come.

Dick Armey, thanks very much for joining us.

ARMEY: Thanks for having me, Wolf.

BLITZER: And up next, we'll go back to CNN's Andrea Koppel -- she's in Atlanta -- for a quick check of the hour's top stories, including President Bush's trip to Asia.

Then, inside the courtroom in the Kobe Bryant case. Does the prosecution or defense hold the upper hand? Two prominent attorneys with very different perspectives will weigh in.

LATE EDITION will continue right after the headlines.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

Perhaps as early as tomorrow, a judge in Eagle, Colorado, is expected to issue a decision on whether basketball superstar Kobe Bryant will stand trial for alleged sexual assault. Explosive and graphic details were revealed in a preliminary hearing this past week.

Joining us now to help sort out where the case stands right now, two guests. In San Francisco, the former prosecutor, Kimberly Guilfoyle Newsom. She attended the preliminary hearing this past week. And in Denver criminal defense attorney Jeralyn Merritt.

Good to have both of you back on LATE EDITION.

Kimberly, you were there. Let me get your assessment first. Is it a slam-dunk -- you'll forgive the pun -- is this going to trial?

KIMBERLY GUILFOYLE-NEWSOM, FORMER PROSECUTOR: I think it's definitely going to go to trial. Keep in mind, because the standard of evidence for a preliminary hearing or probable-cause hearing is sufficiency of the evidence. That's why this case should go to trial, because it's a he-said/she-said. It's going to come down to what weight and credibility of the witnesses that the jury will determine.

BLITZER: Would you be stunned, Jeralyn, if the judge says, you know what, they did not show probable cause, no trial?

JERALYN MERRITT, CRIMINAL DEFENSE ATTORNEY: I'd be pretty surprised, because as Kimberly said, the standard of proof is really, really low. It's almost like, would an ordinary person entertain a reasonable belief that this happened?

So, on the other hand, you know, he's charged with a more serious sexual assault offense than is the ordinary one, because he's charged with using physical force to overcome her will. So it's possible the judge might bind it over on the lesser charge.

BLITZER: Based on these two days of preliminary hearings, Kimberly, who won and who lost?

NEWSOM: Well, I mean, it's tough to say. The defense definitely made some points, and I think there was a lot of miscommunication and misinformation out there, which is definitely troublesome.

I will say, in terms of lawyering, that the defense definitely had the upper hand over the prosecution which, I think, is unfortunate because both sides deserve to have the best and the brightest representing them.

And I think, honestly, that Mark Hurlbert should either take the case himself to do or give it to Ingrid Bakke (ph), who's very experienced, Denver prosecutor, head of the sexual assault unit there.

BLITZER: Let's listen to Mark Hurlbert. He's the prosecutor in this case. He spoke out after the second day of this preliminary hearing. Hear what he had to say.

(BEGIN VIDEO CLIP)

MARK HURLBERT, PROSECUTOR: I am confident that the judge will find probable cause and will bind this case over. And I am confident in the people's case versus Kobe Bryant.

(END VIDEO CLIP)

BLITZER: Jeralyn, is he way over his head right now?

MERRITT: Oh, I think he is, and I think the defense made some incredible points during this preliminary hearing.

Normally, what happens in a preliminary hearing is it's very routine, and a cop gets on the stand and just basically recites the evidence. And in this case, the defense was able to drop bombshell after bombshell, and they were bombshells, of things that would absolutely prove difficult for the prosecution to get a conviction at trial.

I think the prosecution ought to be rethinking whether they want to bring this case.

BLITZER: That's pretty tough. You think they'd be better off throwing it out right now, Jeralyn, as opposed to going through the whole trial and then losing?

MERRITT: I think so. I think so. I mean, I think that there are -- what we've seen so far, from the prosecution's own evidence, meaning the police reports -- we haven't even seen what the defense has put together yet -- and yet there seems to be such problems with the accuser's story.

So, unless the prosecution has some kind of bombshell of its own that they're not telling us, I think that there's a real question as to whether they can get a conviction, in which case they should drop it.

BLITZER: Well, Kimberly, the bombshell could be the alleged victim, the accuser in this particular case. We didn't hear directly from her. Once she takes the witness stand, presumably the prosecution believes she will be a very compelling witness.

NEWSOM: You're absolutely right. We heard from one witness in the prosecution side, Detective Winters, who, unfortunately, wasn't as well prepared as he should have been, admitted some confusion on his part. But, again, I think he did the best that he could do.

When the actual victim in this case takes the stand, I think, watch out.

Also, the prosecution was prevented from presenting Kobe Bryant's own statement, where, we're hearing, there are inconsistent statements that are damaging to him. That was not played in open court. That was done in chambers, outside the presence of all the members of the media.

Also, the D.A. was not able to go into certain areas, different statements that Kobe made during this alleged sexual encounter.

And in fact we didn't hear a lot of the most compelling evidence, I don't think, in this case. Mark Hulbert stated that. This was more of a sanitized version that was put on. So the public has not heard all the facts.

MERRITT: Kimberly, I predict we are never going to hear that statement, because they surreptitiously recorded that statement, they didn't advise him of his rights. And I think they can make a good showing that he was in custody in effect in his hotel room at that time, and a reasonable person wouldn't have felt free to leave, and that statement may never come in.

BLITZER: Well, you're referring to the statement, Jeralyn, where he denied having had any sex with her when he was originally questioned by the police, is that what you're talking about?

MERRITT: Well, I'm talking about -- if he made that statement. I don't know that he ever denied having sex with her, but that's what Kimberly is saying the word of mouth is up there. None of us have heard the statement, because the judge heard it behind closed doors.

But what...

BLITZER: If he said that, Jeralyn, and later, as we all know, he went public and insisted, yes, they did have sex, but it was consensual, how damaging would that be, an initial denial and then later a correction?

MERRITT: I don't think in this case it would be that damaging, because he's a married man, and I bet you most married men, if you knocked down their hotel room door at 11 o'clock at night, the next night, and said, did you have sex with this woman, they'd say no initially. BLITZER: All right. What about that, Kimberly?

NEWSOM: I think it is going to be damaging. If he's a man with nothing to hide, then why is he lying to the police? He's being accused of a forcible sex crime, rape. That's the time to start cooperating and telling the truth about the facts.

If he's lying about even having sex with her, what else is he lying about? And that's what the jury is going to be thinking. Right away his credibility is impaired, and that's what this case is going to come down to: Who do you believe?

MERRITT: I think they're going to focus on her actions. I think they're going to focus on the fact that she went to his room willingly, that she thought that he was going to put a move on her, that she put him in a room that was way out of the way, that she took a circuitous route to meet him back there, that she made out with him voluntarily, that she showed him her tattoo. I think they're going to focus on her behavior.

NEWSOM: Well, again, Jeralyn, I know you're familiar with these cases. Just because someone goes to a room, gives Kobe Bryant a tour, goes to the room, he goes to hug her, after she asks for an autograph, he says no, she says, come back and go in the Jacuzzi with me, she says, "I'm tired, I want to go home, it's the end of my shift," he goes, "can I have a hug," then he hugs her, starts kissing her, groping her. When he reaches under her skirt and tries to basically groping her private areas, she tells him no. When he has her bent over the chair, with his hands around her throat...

BLITZER: That's all...

MERRITT: But that's in doubt.

BLITZER: Hold on, Kimberly. I want to get to some issues that are apparently not in doubt. Two witnesses saw her emerge from the room. The first was the night auditor, a woman who says, presumably -- this is what we're hearing -- that she did not see any distraught woman emerge from that room, she seemed to be fine, she helped count the receipts, count the money last night.

But we get a different story from the bellhop, who said she was very angry, she was very nervous, very distraught, and he actually followed her home.

The police, of course, were highlighting the testimony from the bellhop, Kimberly, as opposed to the night auditor. What do you make of that, conflicting assessments immediately after the alleged encounter?

NEWSOM: That was a good point that the defense made, but I think what the evidence is going to bear out is, the person that in fact she did speak to, that she did confide to five minutes after the incident was the bellhop. And he is what's called in Colorado an "outcry witness," and you call it in California a "fresh complaint." That is very compelling. Her hearsay statements can come in for the truth of the matter in court, anything she told him and her demeanor. And I think he is going to have a very different story than the night auditor, who I don't think had as much interaction with her.

BLITZER: And, Jeralyn, the other point that could be very damning to Kobe Bryant, there was blood, her blood, found on his shirt. That's been submitted as evidence as well.

MERRITT: That's right. There is blood, and we don't know what that means yet.

What you can infer from that is, she may have bled during the sexual intercourse, but, again, the defense is saying here that the cause of her injuries are not a forcible rape. The cause of her injuries is repetitive sexual activity over a short period of time. And any expert is going to tell you, you can have injury with consensual sex, just like you can have a forcible sex with no injury.

So on that we're just going to have to wait and see.

BLITZER: All right. On that, we're going to wait and see and continue this conversation in the days and weeks to come.

Kimberly Guilfoyle Newson, Jeralyn Merritt, as usual, thanks to both of you for joining us.

NEWSOM: Thank you.

MERRITT: Thank you.

BLITZER: And the results are in on our LATE EDITION Web question of the week: Will the approval of the U.N. resolution bring more international help to the coalition in Iraq? We'll tell you how you voted, our viewers, when LATE EDITION continues.

(COMMERCIAL BREAK)

BLITZER: Our Web question of the week: Will the approval of the U.N. resolution bring more international help to the coalition in Iraq? The results are now in. Look at this. Eighteen percent of you say yes; 82 percent say no. Remember, this is not a scientific poll.

Let's get to some of your letters. A lot of people weighing in on the situation in Iraq.

Connie of Illinois asks this: "Exactly what will Iraq be getting from the U.N. resolution that has passed? The U.N. is giving nothing. It's just words."

David writes this: "In order to stabilize Iraq, American and allied officials must find Iraqi people who are willing to lead Iraq by assessing challenges and making decisions. By doing this, coalition governments will be helping Iraq move toward becoming an independent country." We always, of course, welcome your comments. We love hearing from you. Our e-mail address, lateedition@cnn.com. And if you'd like to receive our weekly e-mail previewing this program, go to cnn.com/lateedition. You can sign up right there.

Up next, Bruce Morton's last word.

(BEGIN VIDEO CLIP)

BRUCE MORTON, CNN CORRESPONDENT: The last time the Cubs won, a tavern owner named Billy Goat Sianis showed up at Wrigley Field for the fourth game of the World Series with his goat, Murphy.

(END VIDEO CLIP)

BLITZER: Lamenting the curse that lives on.

(COMMERCIAL BREAK)

BLITZER: Time now for Bruce Morton's last word. He grew up in Chicago and wonders whether his beloved major league team, the Cubs, will ever be baseball's world champions again.

(BEGIN VIDEOTAPE)

MORTON (voice-over): Last time the Chicago Cubs won a pennant, World War II had just ended. The Japanese surrendered after the United States used a powerful new weapon, the atom bomb.

The last time the Cubs won, the state of Israel did not exist. The American South was racially segregated and solidly Democratic. No blacks played baseball in the major leagues.

Last time the Cubs won, fans followed the game on radio. Television was just in its infancy. People crossed the country on trains often. You could fly, of course, but planes had propellers, and you probably had to change (ph) somewhere. There were 48 states.

Back then, they hadn't invented suburban sprawl, hadn't built the interstate highway system. There were no malls.

Thousands of World War II veterans were coming home to a G.I. bill of rights which would make many of them the first in their families ever to go to college, the first ever to own a home. A man named Levitt was thinking about building low-cost houses -- lots of them.

The last time the Cubs won, a tavern owner named Billy Goat Sianis showed up at Wrigley Field for the fourth game of the World Series with his goat, Murphy. The ushers wouldn't let Murphy in. Sianis laid a curse on the Cubs, saying Wrigley would never host another World Series. It never has. Billy Goat's tavern, by the way, remains a Chicago landmark.

The last time the Cubs won the pennant, the United Nations was just getting started. AIDS didn't exist. But smallpox, eradicated now, was a problem.

Vietnam was French Indochina on most maps. Nobody knew where Korea was. And no president had been impeached since the 1860s.

The last time they won the pennant, I was a boy in Chicago. It never occurred to me that I would live out my life without their ever doing it again. I'm an old man now, and it seems very possible. That fellow Sianis laid down a pretty good curse.

I'm Bruce Morton.

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BLITZER: Bruce Morton is not -- repeat, not -- an old man. Thanks very much, Bruce, for that report.

Let's take a closer look at what's on the cover of this week's major news magazines here in the United States.

U.S. News and World Report looks into big money on campus -- how taxpayers are getting scammed by student loans.

Time magazine, also focusing in on colleges, takes a look at the new SATs.

And Newsweek magazine has this: Design gets real; how it's changing the way we work and live.

And that's our LATE EDITION for Sunday, October 19.

For our international viewers, World News is next.

For our North American audience, stay with us. "PEOPLE IN THE NEWS" is up next. That's followed at 3:00 p.m. Eastern by "IN THE MONEY." And at 4:00 p.m. Eastern, "CNN LIVE SUNDAY."

Please be sure to join me next Sunday and every Sunday at noon Eastern for the last word in Sunday talk. I'm here Monday through Friday, twice a day, at both noon and 5:00 p.m. Eastern.

Until then, thanks very much for watching. Enjoy the rest of your weekend. I'm Wolf Blitzer in Washington.

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