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The Situation Room

Civil War in Iraq?; Cyclone Slams Eastern Australia

Aired March 20, 2006 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM, where new pictures and information from around the world are arriving all the time.
Standing by, CNN reporters across the United States and around the world to bring you today's top stories.

Happening now, it's 1:00 a.m. in Iraq, where the war enters its fourth year. Is it now a civil war?

President Bush concedes Americans have been shaken by the bloodshed. Can he persuade the public to share his confidence?

Do American troops have a way out of Iraq? The answer may lie in a city called Tal Afar, where Iraqi troops hold the key.

And it's already Tuesday morning in eastern Australia, where a cyclone slams into the coast with winds -- get this -- up to 180 miles an hour. One official says the impact is like an atomic bomb.

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

We begin with another bloody day in Iraq, except it's the first day of the fourth year of the war. The grim anniversary found President Bush in Cleveland vowing, once again, to stay the course.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The last three years have tested our resolve. The fighting has been tough. The enemy we face has proved to be brutal and relentless.

We're adapting our approach to reflect the hard realities on the ground. And the sacrifice being made by our young men and women who wear our uniform has been heartening and inspiring.

The terrorists who are setting off bombs in mosques and markets in Iraq share the same hateful ideology as the terrorists who attacked us on September the 11th, 2001.

(END VIDEO CLIP)

BLITZER: In Baghdad, more bombings, more bodies found in the streets.

Our senior international correspondent, Nic Robertson, is in the Iraqi capital -- Nic.

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Well, Wolf, the violence in Baghdad has been continuing throughout the day. At the end of the day, just after sunset in a coffee shop in the north of Baghdad, a bomb went off, killing three people, wounding 22 others. And about the same time in south of Baghdad, a bomb went off in a restaurant, killing four people there, wounding 10 others.

Earlier in the day, in the center of Baghdad, a roadside bomb had gone off. It killed six people. Two of those people were Iraqi police commandos who are so often the targets these days.

The police also reported earlier in the day finding nine different bodies around the city of Baghdad. They say they had all been shot in the head. And the police say that brings the total to 186, the number of bodies found around Baghdad over the past week. All indications are that these bodies are the result of sectarian killings -- Wolf.

BLITZER: Nic Robertson in Baghdad.

Nic, thanks very much.

And coming up, as the war enters its fourth year, is Iraq also seeing the beginning of a civil war? I'll speak live with Michael Ware. He's the Baghdad bureau chief of "TIME" magazine. That's coming up shortly.

As we reported earlier, President Bush was on the road today defending the war in a question-and-answer session in Cleveland, as well as in a formal speech. Can his answers win back a skeptical public?

For more, let's turn to our White House correspondent, Elaine Quijano.

Elaine, what's the latest?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, the president's appearance today before the City Club of Cleveland was really part of the renewed push by the administration to shape public opinion on Iraq. The president today said he understood how the horrific images coming out of Iraq have shaken Americans' confidence, but he also cited the city of Tal Afar, in northern Iraq, as evidence, he said, that the U.S. strategy in Iraq is working.

He also blamed the civil strife taking place in that country on people he said are intent on blocking democracy.

(BEGIN VIDEO CLIP)

BUSH: The enemies of a free Iraq attacked the Golden Mosque for a reason. They know they lack the military strength to challenge Iraqi and coalition forces in a direct battle. So they're trying to provoke a civil war. By attacking one of Shia Islam's holiest sites, they hoped to incite violence that would drive Iraqis apart and stop their progress on the path to a free society.

(END VIDEO CLIP)

QUIJANO: Now, the president also reiterated his position that U.S. forces will not leave prematurely. He said that the United States will not abandon Iraq and said that when U.S. troops do leave, it will be from a position of strength, not weakness -- Wolf.

BLITZER: Elaine Quijano at the White House.

Thanks, Elaine.

Is there a way out of Iraq for American forces? As Elaine just mentioned, President Bush is pointing to one local success story as a possible answer.

Let's go live to our senior Pentagon correspondent, Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Wolf, for months the Bush administration has been saying things are going better in Iraq. And then a lot of people acknowledged today President Bush tried to answer the question, how will it all end?

(BEGIN VIDEOTAPE)

MCINTYRE (voice over): For Americans anxious to hear how U.S. troops will ever be able to leave Iraq, President Bush had two words: Tal Afar. Mr. Bush cited the northern Iraqi town of 200,000 as a microcosm of Iraq's churning ethnic cauldron and claimed that last May, U.S.-backed Iraqi troops effectively cleared the former insurgent stronghold, employing a new strategy dubbed Clear, Hold and Build.

BUSH: An example, Tal Afar gives me confidence in our strategy, because in this city we see the outlines of the Iraq that we and the Iraqi people have been fighting for.

MCINTYRE: President Bush credited an up and coming U.S. Army commander, Colonel H. R. McMaster, with effectively routing the terrorists in Tal Afar by putting large numbers of Iraqi forces out front and backing them with American military muscle and expertise. But the question is whether Tal Afar is the template for long-term success in other parts of Iraq or merely a short-term victory that will slowly slip away once the U.S. pulls out.

COL. H. R. MCMASTER, U.S. ARMY: What we have in Tal Afar now is a very secure situation because Iraqi security forces are established throughout the city. And the army and police are working extraordinarily well together, and this is permanent security for the people of Iraq.

(END VIDEOTAPE)

MCINTYRE: Wolf, Colonel McMaster is also the author of the seminal book about the Vietnam War "Dereliction of Duty," in which he cites the military's responsibility to speak up if the strategy is flawed. And McMaster in that interview with CNN insisted that in his candid opinion, the strategy in Iraq is working -- Wolf.

BLITZER: Jamie, any reaction at the Pentagon to the controversy that seems to have erupted over the past 24 hours, the controversial comments, I guess you could call them, that the defense secretary wrote in "The Washington Post" comparing a withdrawal from Iraq right now to a withdrawal from postwar Germany and a return of the Nazis, if you will? What's the reaction there?

MCINTYRE: Well, the Pentagon's been downplaying that, saying that it's an analogy that Rumsfeld has made many different times, comparing what's happening in Iraq to what happened after World War II, but it's given a lot of fuel to Rumsfeld's critics. Congressman Murtha, for example, called the comparison irresponsible, and pointed out that while Germany, after World War II, U.S. troops faced no real resistance. In Iraq, they're facing what Congressman Murtha says is a civil war.

BLITZER: Jamie, thanks very much.

Let's go up to New York once again. Jack Cafferty standing by with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Well, you'll be comforted to find this out, Wolf. Vice President Cheney has it all figured out. It's the media's fault.

In an interview yesterday, Vice President Cheney said most Americans have a negative perception about Iraq because news reports show daily violence happening there. You know, like when they find graves with 100 bodies in them, stuff like that, instead of reporting on the progress that's being made toward democracy.

There's more.

Bob Schieffer of CBS News asked the vice president about statements that he had made in the past about the U.S. being greeted as liberators in Iraq and about his statement 10 months ago that the insurgency was in its last throes in Iraq. In both cases, Cheney insisted his facts were right but the news media have created a different perception by its reporting of the violence.

So that's the question this hour. Are the media to blame for a negative view of what's going on in Iraq?

E-mail your thoughts to caffertyfile@cnn.com or go to cnn.com/caffertyfile -- Wolf.

BLITZER: It's always our fault, Jack, isn't it?

CAFFERTY: That's right. Well, it's your fault. I take no blame for any of it.

BLITZER: You're the media, too, I hate to tell you. It's not just me.

CAFFERTY: Yes, but you're the anchor. You're the Wolf man. BLITZER: Thanks, Jack.

Up ahead, we'll have much more on the Iraq war, now entering a fourth year. Is a new day dawning, or will this new milestone simply mark more violence? I'll ask a journalist who's been covering the war since it bee begun.

Michael Ware of "TIME" magazine, he's standing by live in Baghdad.

And some complain too many of Wal-Mart's products are actually made in China. We'll tell you why many might now be furious over the retailer's newest plans in the Asian nation. Stand by for that.

And it's the first day of spring. Perhaps someone should tell Mother Nature. Yes, spring, snow.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Iraqi police say another 186 bodies have been found in the streets of Baghdad. Apparent victims of sectarian violence.

After three years, has the war in Iraq become a civil war?

Let's turn now to someone who's been covering this war since it began. Joining us now live from Baghdad is Michael Ware, the Baghdad bureau chief of our sister publication, "TIME" magazine.

Michael, thanks very much for joining us.

Ayad Allawi, the former interim prime minister, says, you know what? A civil war is now under way already, no ifs, ands or buts about it.

You're there on the scene. What do you see?

MICHAEL WARE, BAGHDAD BUREAU CHIEF, "TIME" MAGAZINE": Well, I'd have to tell you, Wolf, many Iraqis would agree with him. In fact, many of them do. They tell me this daily. I mean, let's look at it.

There are dozens of bodies that are showing up on the streets and in the morgue every day. And it's been this way for over a year.

Another indicator is, let's have a look at the Al Qaeda in Iraq group of terrorist leader Abu Musab al-Zarqawi. In July last year, he felt there was enough public support amongst his constituency to publicly announce the creation of a Sunni death squad brigade.

So many people believe that we have been in an undeclared, covert civil war for a long, long time now. And what we're seeing is it escalate.

U.S. military intelligence disagrees. They say that the violence has not yet found its own momentum, it still requires prodding from people like Zarqawi. And until that changes, this is not actually civil war.

BLITZER: Listen to what General George Casey, the U.S. military commander in Iraq, told me yesterday. Michael, listen to this.

(BEGIN VIDEO CLIP)

GEN. GEORGE CASEY, U.S. ARMY: I do not believe that civil war in Iraq, one, has started. And then, two, nor is it imminent or inevitable.

(END VIDEO CLIP)

BLITZER: Is it a matter of semantics? Because everyone agrees the sectarian violence has escalated, but there's a lot of resistance to calling this a civil war.

WARE: Well, that plays directly, Wolf, into the propaganda game that all sides have been following in this war. I mean, that's a certain symbolic term.

It's a real trigger for this to be declared a civil war. I mean, that bears heavily on the state of the U.S. mission.

I mean, the fine details of the formula to be applied to determine civil war belongs in a political science class. But it's certainly true that a lot of people are dying here in Iraq every day for sectarian reasons.

When there is enough dying for whatever reason to make a civil war, that's hard to say. But for many people here on the ground, it feels like one, particularly given that right now, as I stand here in a darkened capital, there are death squads out there roaming the streets.

BLITZER: The president and top Bush administration officials say the U.S. will step down in Iraq as Iraqi troops step up and are ready to take over. Are you seeing tangible signs that the Iraqi military and police forces are getting ready to take over in order to enable U.S. troops to withdraw?

WARE: There are signs of steps forward. In some cases, it's one step forward, two steps back.

We're seeing more and more areas of Iraq battle space being given to Iraqi army units and Iraqi police units. However, even the Iraqi commanders will tell you, we cannot hold this ground without the massive support and infrastructure of the U.S. military.

So whilst they can maintain a certain veneer of control, they really cannot do it on their -- on their own. When the time comes that they can, that's really, really hard to say right now. And there's no pulling out for U.S. forces now. In for a penny, in for a pound.

If they stay, that perpetuates the anti-American support for the insurgency. If they leave, it just leaves the door open for the terrorists and those militias backed by Iran.

BLITZER: Well, what are the consequences? Elaborate a little on a quick U.S. withdrawal.

WARE: What we would see is a descent into absolute chaos. We would see real conflict. Civil war perhaps on a grander scale with real regional implications.

You would see Iran making a play, Turkey, Syria, perhaps even Jordan and others. This would provide the chaos that allows al Qaeda to thrive. In some parts of this country that would not be under Shia or Kurdish control, we would see al Qaeda and other terrorist camps flourish.

At the same time, we would see the consolidation of Iranian influence, a stated member of what President Bush called the axis of evil here in Iraq. It is definitely a failure for the U.S. mission if that situation occurs, and that is almost certainly inevitable if there was a quick and rapid withdrawal -- Wolf.

BLITZER: You've done excellent reporting on the insurgency. Is it your sense the insurgency is getting stronger, or is it getting weaker?

WARE: Look, one of the things about this insurgency, one of its most significant characteristics, is its enduring quality, its ability to regenerate. No one from military intelligence to Iraqi commanders disputes the fact that since the early stages of this insurgency, until now, they are able to put as many as 15,000 to 20,000 fighters in the field on any given day. That hasn't changed.

As quickly as insurgents are arrested or killed, they seem able to regenerate, to recruit again, or to import. That's from rank and file all the way up to top leaders.

BLITZER: Michael Ware back in Baghdad.

Be careful over there, Michael. We'll speak early and often. Appreciate your work. Thanks very much for joining us.

And coming up, getting Google's goods. The federal government wants them. Google is fighting the effort. Now a federal court makes an important ruling. We'll tell you what it is.

And this note. Coming up in our 7:00 p.m. Eastern hour, how will the Republican Party keep its grip on both houses of Congress? My conversation with Ken Mehlman, the Republican Party chairman. We'll have that for you.

That, lots more coming up.

(COMMERCIAL BREAK)

BLITZER: Wal-Mart may soon have some new jobs to fill. Ali Velshi is joining us with that.

There's a little controversy going on, Ali.

ALI VELSHI, CNN CORRESPONDENT: Yes, well there are lots of jobs being created by American companies. They're just not here.

Wal-Mart estimates that it's going to hire 150,000 new workers over the next five years in China. Now, these are not factory workers, Wolf. They're retail workers.

Wal-Mart, as we know, imports more than $20 billion worth of goods from China a year to the United States. But all those Chinese workers also want to spend their wages on good, cheap goods. And Wal- Mart wants to meet that need. It already has 56 stores in China and expects to open 20 more this year alone.

Now, after the Chinese save all that money shopping at Wal-Mart, they can spend it on a new Volvo. Ford, which controls Volvo, is going to start building the S40 in China. Now, that car will be for the domestic Chinese market, which is now the third largest car market in the world.

Volvo sold about 5,000 cars last year in China. Other western car makers have already moved into China.

And while China is known for manufacturing, India is known to many people to its call centers. Computer maker Dell already has four of them in India, and it apparently wants more.

Dell plans to double its Indian work force from 10,000 to 20,000 workers over the next three years. The jobs won't just be for the call centers. It will also be for Dell's product testing center and a possible manufacturing plant. By assembling computers in India, Dell will be able to sell them more cheaply by avoiding a high tax on computers that are fully imported.

Dell has 4 percent of the Indian computer market, Wolf, versus 18 percent worldwide. The Texas-based company has nine plants around the world, and six of them are outside the United States.

And let's take a look at the closing markets.

(STOCK MARKET REPORT)

BLITZER: Thanks very much, Ali.

Google is calling it a win for privacy online. A federal court has ruled the search engine must hand over just a fraction of information initially demanded by the government. The feds have said they need Google's goods to help protect minors online.

Let's get some more from our Internet reporter, Abbi Tatton.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, Google's calling this a clear victory. What they said initially was that they were facing a request of billions of documents that they keep, Web addresses that they keep on their databases. Now it looks like they're going to be turning over about 50,000 random Web addresses. The judge ruled and said he's not clearly clear how this is going to help the government. That's something Google has been saying all along.

Importantly for Google users, search queries, something that you and I might be searching on that could be potentially revealing, none of that will be turned over to the government. None of that is actually going over at all.

We tried to get a comment today from the Department of Justice and didn't receive one. We should mention that earlier this year, three other major search engines agreed to turn over some records, at least, to the government -- Wolf.

BLITZER: Abbi, thank you very much.

Coming up, U.S. businesses bracing for a bird flu pandemic. What happens if close to half the workforce calls in sick?

And is Secretary of State Condoleezza Rice ready to move on and claim her long-coveted dream job? We're going to hear what her spokesman had to say about it today.

All that coming up. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Zain once again at the CNN Center for a closer look at some other stories making news -- Zain.

ZAIN VERJEE, CNN ANCHOR: Wolf, the first day of spring is obscured by a big blanket of snow in Nebraska and other plains states. More than a foot came down in some parts of Nebraska, snarling roads and closing schools. Two people were killed in weather-related accidents. South Dakota got a foot and a half of snow.

In a story we brought you in just the past couple of hours, four people are dead. They're victims of a fiery crash of a small plane that went down in Branson, Missouri. The pilot and three passengers in the Piper Seneca were en route to Lubbock, Texas, from Point Lookout in Missouri. The plane crashed shortly after takeoff.

The Supreme Court will let stand a $15 million judgment against the cigarette maker Philip Morris USA. The judges -- the justices declined without comment to review the case brought by a smoker who eventually died of cancer. The original judgment was for $3 billion back in 2002. It was later reduced to $100 million, then cut by half by an appeals court.

In London, closing arguments are over in the copyright infringement case against the publisher of "The Da Vinci Code." Lawyers for the two writers suing Random House suggested that testimony from "Da Vinci Code" author Dan Brown was unreliable. The plaintiffs say Brown essentially stole their ideas for his popular novel. The judge in the case says he's going to rule before the current court term ends on the 13th of April -- Wolf. BLITZER: Thank you very much, Zain, for that.

With Republicans showing they're not afraid to revolt, with some Democrats whispering about impeachment, and with his polls at low ebb, this midterm election year is a crucial one for President Bush and for his Republican Party. Just a short while ago here in THE SITUATION ROOM I asked the Republican National Committee chairman, Ken Mehlman, if he's worried.

(BEGIN VIDEO CLIP)

KEN MEHLMAN, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: I certainly think that it is important for the American people to understand what folks would do if they, in fact, took control, and what they're thinking about.

And I think one of the critical questions is, do you believe the president ought to be -- whether it's censured, whether it's impeached -- should he be encouraged or should he be punished for using every tool, every legal tool, at his disposal to win the war on terror?

BLITZER: But how worried are you that this talk of impeachment could really get going?

MEHLMAN: I'm concerned that there are people who would like to be the leaders in Washington who believe that, rather than giving the president every tool he needs to win the war on terror, they're making comments like impeachment and like censure. I think the American people need to understand that choice on Election Day.

(END VIDEO CLIP)

BLITZER: And you're in THE SITUATION ROOM -- remember that -- where political news is arriving all the time -- CNN, America's campaign headquarters.

The war in Iraq entered its fourth year today, with more bodies in the streets and more bombings. As the death toll rises, is it evolving into an actual civil war?

Joining us now, a key member of the CNN Security Council, our world affairs analyst, the former Defense Secretary William Cohen. He's the chairman and CEO of The Cohen Group, here in Washington.

Ayad Allawi, the former interim...

WILLIAM COHEN, CNN WORLD AFFAIRS ANALYST: Right.

BLITZER: ... said this yesterday. He said: "We are losing each day, as an average, 50 to 60 people throughout the country, if not more. If this is not a civil war, then God knows what civil war is."

What do you think?

COHEN: Well, it -- it all depends on where you sit, in terms of how you see things. And the -- the former prime minister, obviously, is very close to the situation on the ground.

When people are dying in those numbers, then, it's hard to consider it anything but a -- a -- quote -- "civil war."

Senator Chuck Hagel, I think, called it a low-grade civil war. And we saw just a few weeks ago -- I think we were on the very edge of this tipping over into a major confrontation and conflict between the various sectarian elements involved.

So, they have backed away from that. And, so, it perhaps is back to the low-grade situation right now, but I think it's on a day-to-day basis. So, I was encouraged in looking at your report with Mr. McMaster, saying some very positive things. He is the author of "Dereliction of Duty."

And I think that what he said in that book is that military officers have an absolute duty to speak to -- the truth to their civilian authorities. Him saying that carries a lot of weight, in terms of what he has written, and how he's performed.

But, nonetheless, I think that we have to watch it on a day-to- day basis and see how it is unfolding.

(CROSSTALK)

BLITZER: Do you think these generals, whether it's Abizaid or Casey or any of the other generals who had -- Tommy Franks -- have had the guts to speak truth to the civilian leadership of the Defense Department?

COHEN: Well, I can't answer for that.

The people that I do know, I have a great deal of confidence in, in terms of, if they were convinced that this were really going in the -- completely the wrong direction, and didn't have an opportunity to succeed, that they would stand up and tell their civilian authorities they were going to the wrong direction. I think that General Casey and others are -- are certainly responsible in that -- in that fashion.

BLITZER: Listen to what your -- you mentioned Chuck Hagel, the Republican senator from Nebraska. Listen to what he said yesterday on the whole issue of Iran.

(BEGIN VIDEO CLIP)

SEN. CHUCK HAGEL (R), NEBRASKA: ... pleased that the administration has decided to finally talk to Iran. I think it should be expanded. I think it should talk in those conferences, as well, about the entire Middle East, including Iran's nuclear issue. I don't see how you can compartmentalize issues.

(END VIDEO CLIP)

BLITZER: The administration says they only want to talk to Iran in Baghdad about Iran and Iraq. They don't want to have bilateral talks on anything else...

COHEN: Right.

BLITZER: ... including nuclear weapons.

COHEN: And, of course, the Iraqis have suggested that the United States, by having such talks, is going to be interfering with their internal affairs.

Any time you have 130,000 American troops on the ground who are fighting and dying on behalf of the Iraqis, we have a vested interest in seeing to it that we have these talks. So, I agree with Senator Hagel that it's very important that we have face-to-face talks with the Iranians.

In terms of what kind of assistance they're providing, whether materiel, or, as I heard while I was in the -- the Gulf area, money going into the political system, buying up votes, as such, that's very important for us to try and determine. And I'm sure it will spill over into the issue of nuclear weapons and their program to try and develop it.

So, there's good news, in the sense that we are talking for the first time in some years. The down side, or the bad news, is that our European friends, who have been very critical of Iran, in terms of their development of nuclear weapons, the potential for it, they may see this as a sign to back off and be less supportive of coming down hard on Iran.

So, it's a mixed message. Certainly, we're there. We should be there, but it may also send a signal that they're going to defer any tough judgments on Iran for the for -- foreseeable future.

BLITZER: William Cohen, thanks for joining us.

COHEN: Pleasure.

BLITZER: And still to come here in THE SITUATION ROOM, it crashed ashore, with winds -- get this -- of up to 180 miles an hour. And it was compared to an atomic bomb. They're just not -- now taking stock of the destruction. We are going to tell what you happened and where.

And can U.S. businesses cope with a possible flu pandemic? What happens if half the American work force were to call in sick? We will tell you.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: In Australia, there were winds of rage and fury that eerily reminded many of us of America's most devastating storms.

Our Zain Verjee is joining us from the CNN Center with more on this story -- Zain. VERJEE: Wolf, what we call a hurricane is called a tropical cyclone in Australia and other parts of Asia.

Many Australians know how violent hurricanes can actually be. They watched in horror at the devastation brought on by Katrina here in the U.S.. And, today, that may be the reason why some Australians decided to get out, just before their own violent storm.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): Witnesses tell the media, it looks like the aftermath of an atomic bomb. Damage and devastation remained after a massive cyclone named Larry tore through northeast Australia.

The Category 5 storm unleashed its wrath today. Wind gusts topping 180 miles per hour nearly ripped trees from their roots, splintered wooden homes, tore metal roofs off structures, and tossed boats around like toys, sending even this boat into a garden.

Cyclone Larry is the most powerful to strike Australia in 30 years. One area hardest hit is Innisfail, a community of nearly 9,000 people. Local residents described the cyclone before and during its visit.

UNIDENTIFIED MALE: And those who went outside, there was just like a noise like a -- a train was coming. And the ocean was roaring. And the wind was just unbelievable.

UNIDENTIFIED MALE: Just really scared for our life, to the stage where, at one stage, we were starting to feel sick, just through the worry whether we were going to get through the night.

VERJEE: While just over two dozen people suffered minor injuries, and there are no reported deaths, officials say the economic disaster could be staggering.

Officials have declared a state of emergency, and schools, businesses and airports are expected to remain closed for another day. The affected area grows bananas and sugarcane. And the storm flattened large areas of those fields. One lawmaker estimated, the costs would cost over $100 million to farmers alone.

(END VIDEOTAPE)

VERJEE: And, Wolf, right now, about 50,000 are without power, and an unknown number of people are homeless. But many are saying that there were no deaths, because many residents closely watched what Hurricane Katrina did here in the United States, and that prompted most residents to evacuate to shelters well in advance of the storm -- Wolf.

BLITZER: Zain, thanks very much for that.

Congress torpedoed the Dubai Ports World. Now the United Arab Emirates may be coming under some further scrutiny for a charity that may funnel funds to some questionable causes. Let's get some details. CNN's Brian Todd is joining us -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, new questions are being raised tonight about whether the government of the UAE, perhaps unwittingly, is allowing some of the money it sends to Palestinian charities to fall into the hands of militant groups.

(BEGIN VIDEOTAPE)

TODD (voice-over): Gary Osen is a New Jersey attorney representing families of American citizens killed or wounded by Palestinian militants. Recently, while looking through documents from the Red Crescent Society, he says he found something startling.

GARY OSEN, ATTORNEY REPRESENTING FAMILIES OF AMERICAN CITIZENS KILLED OR WOUNDED BY PALESTINIAN MILITANTS: And certainly opens a window into how the radical Islamic groups are funded worldwide.

TODD: Osen says he found documents showing three to five wire transfers in the last four years from the Red Crescent arm in the United Arab Emirates to charities associated with Hamas, the ruling Palestinian party, which the U.S. considers a terrorist organization.

Osen says the documents indicate those charities, in turn, gave money to relatives of Palestinian militants killed in battles with Israeli forces. The UAE Red Crescent Society was founded by the country's former foreign minister. Officials there now call it a nongovernmental organization, but it still gets support from the ruling family.

Osen believes the UAE government indirectly -- perhaps unwittingly -- has supported Palestinian militants through its Red Crescent.

OSEN: This is a form of subsidy, from our standpoint, of the violence itself, and -- and, certainly, something which incentivizes the kind of activity that our government and many governments around the world frown upon.

TODD: Three officials of the UAE government and a spokeswoman for the Red Crescent say they take extensive measures to deny support to relatives of suicide bombers and other militants. They tell CNN, their vetting process includes top officials on the ground in the Palestinian territories.

REEM AL-HASHIMY, UNITED ARAB EMIRATES COMMERCIAL ATTACHE TO UNITED STATES: They would have to include, I think, the Israeli authorities, the Palestinian authorities, and all other entities, legal, financial. Those would have to be very much involved in this process.

(END VIDEOTAPE)

TODD: An Israeli official we spoke to said his government does monitor money coming from outside to Palestinian charities. After that, he would only say they do their very best to prevent money from falling into militant hands.

One important distinction that UAE officials gave us, while they try to make sure no money is given to the families of suicide bombers and other known militants, they say money can and has gone to families of Palestinian bystanders killed during battles with Israelis and the families of men killed while defending their homes during those battles -- Wolf.

BLITZER: Brian, thank you very much -- Brian Todd reporting.

Up next, Jack is back with his question of the hour: Are the media to blame for the negative view of what's going on in Iraq?

And, later, she says it's her dream job. Will Secretary of State Condoleezza Rice hang up her diplomatic post for another high-profile role? We are going to tell you what is going on.

(COMMERCIAL BREAK)

BLITZER: The very real threat of bird flu reaching U.S. borders soon has government officials working overtime. And the private sector is getting into the act as well.

CNN's Mary Snow is joining us with more on this important story -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, Bush administration officials today repeated a warning that bird flu is likely to reach birds in the U.S. within the year. And they expect it to mainly stay within birds and caution against panic.

But officials say people, especially businesses, need to be prepared for the possibility of a pandemic.

(BEGIN VIDEOTAPE)

SNOW (voice-over): When it comes to bird flu and the businesses it could affect, the poultry industry is on the front lines. But, across the boards, other businesses are bracing, if the deadly strain of H5N1 mutates and jumps from birds to humans.

MICHAEL LEAVITT, SECRETARY OF HEALTH AND HUMAN SERVICES: It's every business. They need to ask themselves the question, how would we continue to operate, to serve our customers, and the public in general, if 40 percent of our work force could not come to work for a two- to four-week period?

SNOW: If there is a pandemic -- and it's still a big if -- financial firms, for instance, are thinking about backup facilities, restrictions on travel, and one big factor, absenteeism.

Officials stress that, unlike a natural disaster, a pandemic would come in waves across a 12- to 18-month period. Some companies are looking to have employees work from home.

TOMMY THOMPSON, FORMER HEALTH AND HUMAN SERVICES SECRETARY: I have talked to some companies that are buying more P.C.s for their employees to take home and get set up, in case there is a pandemic.

SNOW: Former Health and Human Services Secretary Tommy Thompson is now consulting companies on getting prepared. He says he's advising them to stock up on inventories and things like Tamiflu for workers. A recent survey by his firm found that most companies are not prepared.

THOMPSON: I was surprised to find out that 66 percent of the businesses in America that we surveyed did not believe that they were prepared at all for a pandemic flu. But 73 percent said they would like to get prepared, which was a good sign.

(END VIDEOTAPE)

SNOW: Wolf, the Brookings Institution recently calculated that a mild pandemic could cost the global economy about $330 billion in lost output, a worst-case scenario, $4.4 trillion -- Wolf.

BLITZER: Mary, thanks very much -- Mary Snow reporting.

Let's go back to New York. Jack is standing by with "The Cafferty File" -- Jack.

CAFFERTY: Have you got your tuna fish and powdered milk under your bed at home, Wolf?

BLITZER: The...

CAFFERTY: Are you ready for this thing?

BLITZER: ... powdered milk, tuna fish, yes.

CAFFERTY: OK.

BLITZER: Got it.

CAFFERTY: Got to be prepared.

Vice President Dick Cheney says most Americans have a negative perception about Iraq because news reports show daily violence happening there, instead of the progress being made toward democracy.

The question this hour is: Are the media to blame for a negative view of what's going on in Iraq?

Terry writes from Indianapolis: "No. The media are to blame for the entire damned war. The media are to blame for the ongoing association in the popular mind of Saddam, Iraq, and 9/11. The media are to blame for the repulsive complacency of the general public."

Bill writes: "I believe the constant negative coverage has definitely influenced public opinion, unfairly."

Ross in Michigan: "The media has no access to the news in Iraq, because there's so much violence. I know there must be a happy story out there somewhere. Come on, boys. Put a smiley face on it." Shawn in Palo Alto: "The media are responsible for rolling over and playing dead in the run-up to the war. Their collective fear over being painted as unpatriotic caused them to silence their own questions. I don't recall Bush and Cheney complaining much then."

Christopher in the Bronx writes: "You would better believe it. I'm a cadet in the Army ROTC program, and I know quite a few officers who were actually there. From what I gather, the media only looks at what gets people's attention and further bashes Bush. But they don't see all the schools being built or the civilians who are helped by our soldiers."

And, finally, X in Wisconsin: "Yes. Don't you media people remember 'Mission Accomplished'? What part of 'accomplished' don't you understand?"

(LAUGHTER)

CAFFERTY: Wolf.

BLITZER: Thank you very much. Thanks to X from Wisconsin.

Up next, on the job in person, it may be, well, something that one day could be a thing of the past. Could holograms replace workers? The future is tapping us on the shoulder. Stick around. We are going to tell you what we're talking about.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: You're back in THE SITUATION ROOM.

Looking for a better way to balance the time you spend at work and at home?

In today's edition of "Welcome to the Future," CNN's Miles O'Brien shows us how technology might help.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I do get to work from home, but then I wind up having to leave for days at a time.

I work in a virtual company. Sure, it's cool that I'm always talking to my co-workers on the computer and being able to just shoot instant-messages out. But, at the same, there's something lacking about that.

To be able to effectively communicate, you need to be able to see people's reactions. So, it would be wonderful if I could just spin my chair around and suddenly be seeing everybody that I'm trying to communicate with. And, so, if I could do that without traveling, then, that would be fantastic.

MILES O'BRIEN, CNN CORRESPONDENT: So, what if Philip could beam himself to a meeting instead of having to travel to it? Is this the future, or has Philip seen one too many movies?

(voice-over): Hollywood has taken the hologram out of this word, like this scene from "Star Wars: Episode III."

(BEGIN VIDEO CLIP, "STAR WARS: EPISODE III - REVENGE OF THE SITH")

TEMUERA MORRISON, ACTOR: General Kenobi has made contact.

(END VIDEO CLIP)

O'BRIEN: But how close is this to reality?

MICHAEL KLUG, CO-FOUNDER, ZEBRA IMAGING: The vision of "Star Wars" is something that can be achieved, but the means by which to achieve it will be -- will not be what -- what's represented in the movies.

O'BRIEN: MIT grad and co-founder of Zebra Imaging, Michael Klug, has mastered art of creating these larger-than-life holographic images. Boiled down, they are three-dimensional pictures projected with a pair of lasers. But Klug says interacting with these 3-D figures still presents a challenge.

KLUG: The hologram is not something that can occupy space without having some piece of film somewhere between your eye and the holographic image.

O'BRIEN: However, Klug believes we could still see a version of holographic virtual meetings come to life within the next decade.

KLUG: Once we get those basic technologies out and demonstrated, the sky is the limit.

(END VIDEOTAPE)

BLITZER: How would you like to own an entire city? You could even name it, maybe even make yourself mayor. Prices start at $1.7 million. And the only place to buy it is online.

Let's get some more from our Internet reporter, Jacki Schechner -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, this is Bridgeville, California. And it's up for sale on eBay again. It was first auctioned off in 2002. But the seller didn't tell the buyer that it was dilapidated, and he backed out of the deal.

It was eventually purchased by a commercial mortgage banker by Bruce Krall. And he has fixed it up. And he is putting it back up for auction again, because he can't move from Southern California to Northern California to run the town.

You get 83 acres. Not only do you get beautiful views, but you also get a school. You get yourself a post office that has been around for 134 years. You get yourself a cafe that's vacant right now. So, if you cook, can you open that up. And you get to live in the main house. It has this beautiful deck.

Now, the starting price for this thing is $1.75 million. You have got to prequalify. The auction starts on April 4, and it runs for 30 days -- Wolf.

BLITZER: Thanks very much, Jacki, for that.

And an update now on a story we told you about earlier here in THE SITUATION ROOM -- wanted: a new NFL commissioner. We learned today that Paul Tagliabue will retire in July. We know someone who may want to jump on that job.

For years, Secretary of State Condoleezza Rice has made it abundantly clear she would love to be the NFL commissioner. She's a huge NFL fan. I asked her about her dream job a few years ago.

(BEGIN VIDEO CLIP, "LATE EDITION," FEBRUARY 3, 2002)

BLITZER: Dr. Rice, we have to leave it right there, but today being the Super Bowl here in the United States, a lot of speculation that, one day, when you leave government, you would like to be the commissioner of the NFL.

CONDOLEEZZA RICE, SECRETARY OF STATE: That's true. That's not speculation. That's fact.

(END VIDEO CLIP)

BLITZER: Over at the State Department today, her spokesman, Sean McCormack, was asked about Tagliabue's retirement and whether his boss might want the job. Listen to this.

(BEGIN VIDEO CLIP)

QUESTION: It looks like the secretary's dream job has finally opened up.

(LAUGHTER)

SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: I noticed -- I noticed that right before I came out here.

(LAUGHTER)

QUESTION: Are you worried that you might lose the secretary of state to the NFL?

(LAUGHTER)

MCCORMACK: Well, at this -- at this point, certainly, I have -- you know, I have seen the news reports about commissioner Tagliabue retiring. I haven't been able to confirm those reports.

And, at the moment, the secretary is enjoying being secretary of state.

(END VIDEO CLIP)

BLITZER: You see him reading that guidance, very carefully crafted diplomatic language, the State Department putting out today on this very sensitive subject.

We are going to keep following this story to see if Condoleezza Rice actually applies for the NFL job.

A final note -- speaking of dream jobs, somebody else has a new job, sort of. James Carville fans, take note. If you want to see more of him than you get here in THE SITUATION ROOM, you're in luck. Carville and his wife, Mary Matalin, have signed on to do a new reality show called "Election." It's on the Lifetime cable network. The Democratic and Republican odd couple will counsel candidates for president of their high schools.

That's it. We are here weekdays, 4:00 to 6:00 -- back in an hour.

"LOU DOBBS TONIGHT" starts right now.

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