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The Situation Room

Target: Taliban; Hamas Gunmen Trade Fire With Palestinian Police

Aired May 22, 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 coming up in a few minutes we'll have much more on all these stories, including what's going on with the hurricane forecast. A new forecast has just come out today.
To our viewers, you're in THE SITUATION ROOM, where new pictures and information 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, target Taliban. A U.S. air strike kills dozens. Is it a comeback or a setback for Afghan militants?

Gaza gun battle. Chaos and confrontation. Are Palestinians heading toward a civil war of their own?

It's 5:00 p.m. in Miami. With hurricane season bearing down, forecasters see some rough weather ahead. Coastal residents are being warned right now to take a lesson from last year and start getting ready right now.

And it's also 5:00 p.m. here in Washington. They protected their country, but their country didn't protect their identities. A burglar walks -- walks off with the personal data of more than 26 million veterans.

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

It's been four and a half years since U.S. forces drove the Taliban out of power in Afghanistan, but recent days have seen some of the heaviest fighting since the Taliban were toppled. Now U.S. warplanes have been called into action in the Kandahar province with some devastating results.

We've got new details. Let's go live to our senior Pentagon, correspondent Jamie McIntyre. He's joining us from the Pentagon -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Wolf, the fighting in Afghanistan is resulting in an increasing death toll, but the U.S. military insists it's the Taliban that is dying, although it concedes some of those killed in the recent strikes could be innocent civilians.

(BEGIN VIDEOTAPE) MCINTYRE (voice over): For days now, U.S. troops have been involved in fierce fighting in southern Afghanistan, where U.S. commanders say the Taliban has come back stronger this year than last. And for the third time in a week, U.S. troops attacked and killed a large number of suspected Taliban fighters near the village of Azizi in Kandahar, one of three southern provinces where Taliban forces have been flooding in with money and weapons.

The U.S.-led coalition says a combination of attacks by Air Force A-10s and ground operations Sunday night and Monday morning resulted in the deaths of up to 80 suspected Taliban, including what it says were 20 confirmed Taliban fighters, as well as 60 other people with suspected terrorist ties. But local officials say some of the casualties, at least 16, were civilians caught in the fighting when Taliban forces took up positions on their roofs and in their houses.

This man says there were 24 victims among them. Two men were killed and one woman. The rest were all children.

The U.S. acknowledged some civilians might have been killed, but a statement issued by the U.S.-led coalition said, "The coalition only targeted armed resistance, compounds and buildings known to harbor extremists. Coalition forces must retain their ability to defend against fire emanating from known enemy positions."

The upsurge in violence comes as some 6,000 NATO troops prepare to take over responsibility for security in the south later this summer. But the U.S. will retain the lead in the hunt for Taliban and al Qaeda.

LT. GEN. KARL EIKENBERRY, COMBINED FORCES COMMANDER, AFGHANISTAN: The United States military will maintain its counterterrorism forces to strike al Qaeda and its associated movements whenever and wherever they're found.

(END VIDEOTAPE)

MCINTYRE: U.S. commanders insist the Taliban have suffered what they called extraordinary losses in the last three or four weeks. All part of an expected spring offensive in advance of the deployment of NATO troops, which take over responsibility for southern Afghanistan later this summer -- Wolf.

BLITZER: Is there a sense at the Pentagon that the NATO formation that's being formed right now to go into Afghanistan is going to make the situation easier to deal with? Because obviously the U.S. might have less direct responsibility.

MCINTYRE: Well, what it will do is, it will free up some of those U.S. forces from routine security duty to continue the hunt for Taliban and al Qaeda. What it probably won't do is allow the U.S. to have any big reduction in forces in Afghanistan -- Wolf.

BLITZER: Jamie, thanks very much.

Elsewhere in the region, are Palestinians on the brink of civil war? The power struggle didn't end with the recent election. Now there's been a major clash between Hamas militiamen and the Palestinian Authority security forces.

CNN's John Vause is in Gaza and has the story -- John.

JOHN VAUSE, CNN CORRESPONDENT: Wolf, the tension between the new Hamas army and forces loyal to the Palestinian Authority president, Mahmoud Abbas, erupted in gunfire and bloodshed here on the streets of Gaza.

(BEGIN VIDEOTAPE)

VAUSE (voice over): No one knows for certain who started shooting first. Each side blames the other. But caught in the crossfire and killed, the driver of the Jordanian ambassador.

For almost two hours, downtown Gaza City was a battlefield as the heavily armed gunmen from the Hamas militia launched rocket-propelled grenades and traded fire with the regular security forces loyal to the Palestinian Authority president, Mahmoud Abbas. It was chaos.

(on camera): The gunfire was coming from the second and third floor of the Palestinian parliament building here in Gaza City, so shooting in that direction. We don't know who is in that building. There was return fire coming from that direction as well. Once again, we don't know who has been shooting at who.

(voice over): Pinned down and scurrying for cover, Palestinian civilians. And with this clash, Gaza, it seems, is inching closer to civil war.

The Hamas army is growing by the day. These are the latest recruits, men once loyal to Mahmoud Abbas, but now they've changed sides. Hamas has deployed its forces throughout the Gaza Strip, facing off, often directly across the street from the regular security services.

Yousef al-Zahar commands the Hamas militia and says his men are volunteers maintaining law and order.

(on camera): Some people are worried that Hamas is putting an army on the streets to confront Mahmoud Abbas, to take power away from the president. Is this true?

UNIDENTIFIED MALE: No, we are not against the president. We are not against anybody.

UNIDENTIFIED MALE: The majority of the Hamas leaders are liars.

VAUSE: Abdul Aziz Shahin (ph) is a senior member of Mahmoud Abbas' Fatah political faction and accuses Hamas of laying the ground for civil war.

UNIDENTIFIED MALE: This is the worst act, the worst death Hamas has been done in all its life. VAUSE: Hamas and Mahmoud Abbas say they want to avoid a civil war, but on the streets both sides continue to shoot at each other and appear ready for a major confrontation.

(END VIDEOTAPE)

VAUSE: Hamas and Mahmoud Abbas both say they don't want a civil war, but on the ground the reality is their men are shooting at each other almost daily and appear to be preparing for a major showdown -- Wolf.

BLITZER: John Vause reporting from Gaza.

The Israeli prime minister, Ehud Olmert, is in Washington right now for talks tomorrow with President Bush over at the White House. We'll have extensive coverage of that coming up in THE SITUATION ROOM tomorrow.

Let's turn now to a startling revelation on Capitol Hill that involves a corruption probe. It also involves the FBI and some very cold cash allegedly found in a Democratic congressman's freezer. And all that just for starters.

Let's turn to our justice correspondent, Kelli Arena -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, it's all part of a bribery investigation involving Congressman William Jefferson. The congressman just spoke to reporters in the last hour. That investigation causing quite a stir on Capitol Hill because, for the first time ever, FBI agents searched the office of a sitting congressman.

(BEGIN VIDEOTAPE)

ARENA (voice over): FBI agents are examining materials they collected over the weekend from Congressman William Jefferson's Capitol Hill office. Their search lasted nearly 18 hours. Jefferson, a Louisiana Democrat, is under investigation for bribery. He denies any wrongdoing.

REP. WILLIAM JEFFERSON (D), LOUISIANA: I will simply say to you that there's two sides of this story, and we'll have a chance in the right forum to express our side of it, to say what it is. But there's -- this is a selective release of information which is incomplete and, therefore, we think not what it should be.

ARENA: According to newly unsealed court papers, federal agents found $90,000 in cash last year in Jefferson's Washington, D.C., home. It was allegedly stashed in a freezer and divided among several food containers. Agents told a judge the money was part of a $100,000 payment made by an FBI informant. The case is just one of more than 2,000 FBI public corruption investigations that are currently under way.

ROBERT MUELLER, FBI DIRECTOR: Corrupt public officials betray the trust of our society and threaten the foundation of our democracy. ARENA: Other highly visible cases include the investigation of lobbyist Jack Abramoff and the probe into associates of Congressman Randy Cunningham. Considering the huge amounts of money in play, government watchdog groups say the temptation for public officials is greater than it's ever been.

BILL HOGAN, CENTER FOR PUBLIC INTEGRITY: The opportunities for corruption on a grand scale I think are just sitting there. We have more than $2 billion a year spent on lobbying members of Congress.

ARENA: As part of the FBI's post-9/11 restructuring, more than 200 agents were shifted to public corruption units, an area where it was believed the FBI could have a greater impact.

MUELLER: Public corruption and protecting civil rights are the top criminal priorities for the FBI.

(END VIDEOTAPE)

ARENA: That investment seems to be working. In the last two years, Director Mueller says that more than 1,000 corrupt government employees have been convicted -- Wolf.

BLITZER: What are they saying at the Justice Department about this decision to go ahead and raid a congressman's office on Capitol Hill? Apparently, it's never been done before, the separation between the executive and the legislative branches of government.

ARENA: Attorney General Alberto Gonzales says that he will be explaining to some congressmen. He says that there's a lot of questions right now that need to be answered, but he said this was a very unusual step in a very unusual investigation. He would not go beyond that, but he said that once some more information gets out, he thinks that everyone will calm down.

BLITZER: All right, Kelli. Thanks for that.

Jack Cafferty once again is joining us from New York with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: What do you keep in your freezer?

BLITZER: I keep a lot of frozen meat, but no hard, cold cash.

CAFFERTY: Pork chops and stuff.

BLITZER: Yes.

CAFFERTY: President Bush is calling the formation of the new unity government in Iraq a watershed event. He says the United States will play more of a supporting role as the Iraqi leaders get their footing now. The new Iraqi prime minister says that Iraqi forces will be in charge of most of the country by this coming December. And a British official traveling with Tony Blair to Iraq said all foreign troops may be out of the country within four years. Meanwhile, though, the bloodbath continues. There's been a wave of deadly bombings since the new government was formed on Saturday. Sixteen Iraqis, including seven policemen and a judge, all murdered today. In addition, nine bodies were found around Baghdad in the last 24 hours, all showing signs of torture, all of them shot in the head.

Fifty-one U.S. troops have been killed the first three weeks of this month in Iraq, bringing the U.S. death toll to 2,455.

So here's the question. Does the formation of another government make you more confident about the future in Iraq?

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

BLITZER: Thank you, Jack, for that.

And to our viewers, if you want a sneak preview of Jack's questions, plus an early read on the day's political news and what's ahead in THE SITUATION ROOM, sign up for our daily e-mail alert. Just got to CNN.com/situationroom.

Up next, he's the latest congressman caught up in a corruption probe. Louisiana Democrat William Jefferson talked to reporters a little while ago. We'll have more on what he said in the case against him.

And he stunned the nation with a very public coming out. Now former New Jersey governor Jim McGreevey tells all about his former life as a closeted gay man. We're going to show you excerpts from his new memoir.

Plus, personal information about 26 million Americans stolen. Details of a data heist. We're going to show you who this impacts the most.

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

(COMMERCIAL BREAK)

BLITZER: Betty Nguyen is joining us once again from the CNN Center with a closer look at some other important stories making news.

Hi, Betty.

BETTY NGUYEN, CNN ANCHOR: Talk about important, Wolf, listen to this. Names, Social Security numbers, dates of birth all possibly in criminal hands. It's another breach of personal information. This time, on millions of U.S. veterans.

The Department of Veterans Affairs says the computer records on every living veteran from 1975 to the present have been stolen. That is more than 26 million veterans.

Apparently, the records were taken from the home of a data analyst, and what official say, it looks like a random burglary. Department officials say they have not seen any indication that personal information has been misused, and the records are said to not contain health records or financial information. But the department is saying that the analyst who took the records home should not have taken them home, and he's been put on administrative leave while the investigation is under way.

Now, anyone with questions can contact the agency. And I'm sure there are a lot of questions out there.

Here's the number. Take it down --1-800-333-4636, or you can visit the department's Web site at www.firstgov.com.

Twenty-six and a half million veterans -- Wolf.

BLITZER: Thanks, Betty, for that.

Betty Nguyen reporting.

Let's bring in our Internet reporter, Jacki Schechner. She has more on what possible victims of this data breach can do -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, here's that Web site, firstgov.gov. When you go to the site, you're going to see a box like this. It's smaller, on the right-hand side of the screen, but I blew it up so you can take a closer look at it.

Click on this, it will take you to a page that looks like this. It will give you more information if you think you've been affected. Again, as Betty said, there's no sign that any of this information has been misused as of yet. Keep an eye on your financial data and report any suspicious activity.

Now, we spoke to Beth Givens (ph), who works at the Privacy Rights Clearinghouse. They keep track of data breaches online. It's a good place to go and look and see if you've been associated with any data breach.

But they say a preemptive strike is to go to one of the credit agencies, put a fraud alert on your account. That lets them know they need to contact you before anyone can be extended a line of credit.

Now, one of the things you can do is go to CNN.com/situationreport. And we have put some of these links and more of this information online for you. It's one-stop shopping -- Wolf.

BLITZER: Thank you, Jacki, for that.

Coming up, hurricane season starts next week. We're going to get the latest details on what the government is forecasting. Max Mayfield, the director of the National Hurricane Center, he'll join us here in THE SITUATION ROOM.

Plus, a new Iraqi government finally in place. What will it mean for U.S. troops? We'll talk about that with our world affairs analyst, the former defense secretary, William Cohen.

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

(COMMERCIAL BREAK)

BLITZER: Welcome back.

As many as 10 hurricanes, six of them major, that is the prediction from the government scientists for the coming hurricane season, which officially starts next week. We'll be joined by the head of the National Hurricane Center. That's coming up.

First, though, CNN Homeland Security Correspondent Jeanne Meserve is joining us with the details of the forecast -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, scientists say we are in a very active period for hurricanes that could last 10 or even 20 years.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: NOAA is predicting an above normal hurricane season.

MESERVE (voice over): Thirteen to 16 named storms. Eight to 10 are predicted to become hurricanes, with four to six of those Category 3 or stronger. Forecasters blame warm sea surface temperatures and wind patterns that make for less wind shear, which ordinarily disrupts hurricane formation.

2005 delivered Katrina, Rita, Wilma, 28-named storms in all. Experts caution we shouldn't be lulled by the more modest projections for this year.

MAX MAYFIELD, DIR., NATIONAL HURRICANE CENTER: It's not all about the numbers. It just takes that one hurricane over your house to make a for a bad year.

MESERVE: Particularly worrisome, the Gulf Coast, where the last storm season continues to have an impact.

DAVID PAULISON, ACTING DIRECTOR, FEMA: Obviously, the infrastructure, particularly in Mississippi and Louisiana, to a lesser extent, Alabama and Texas, is very weak. A lot of damage.

MESERVE: In addition to stockpiling more supplies, FEMA says it has improved its delivery methods, its communications, and more. But emergency managers say citizens have got to prepare, too.

CRAIG FUGATE, FLORIDA EMERGENCY MANAGER: It is no longer something that you can look to somebody else to come in and save you if you haven't done everything you can to save yourself.

(END VIDEOTAPE)

MESERVE: But surveys show only about one-third of Americans have done anything to prepare for a disaster -- Wolf.

BLITZER: Jeanne, thank you very much for that.

Jeanne Meserve reporting.

Coming up in just a moment, we're going to be joined by Max Mayfield, the director of the National Hurricane Center. We'll ask him what's going on.

First, though, a new report just out today says that 80 percent of the flooding that ravaged New Orleans after Hurricane Katrina could have been prevented. Who's to blame for the failure of the levee system? Our Internet reporter, Jacki Schechner, has the details -- Jacki.

SCHECHNER: Wolf, bottom line, it's not one particular group or one particular person, but a combination of engineering failure and poor judgment, essentially. That from an independent report from the University California at Berkeley and the National Science Foundation.

They studied the flood protection system in New Orleans, and they said basically the search for a lower-cost solution led to some bad choices. For example, filling up underneath these levees with sand instead of clay, which would have better prevented against erosion.

Another thing they talked about was the canal system and how dangerous this was. They were basically like daggers pointing towards the downtown area, and that 80 percent of the flooding in the main basin was caused by a breach of the levee system in these canals.

Again, they say it's no one particular person or organization at fault, but a combination of engineering errors and poor judgment. The Army Corps of Engineers says it's not going to comment, Wolf, until it's had a chance to read the full report.

BLITZER: Thank you, Jacki, for that.

The new hurricane forecast is out, as we've been reporting, and it raises lots of new questions, especially in the wake of Katrina. For some answers, we turn the country's best known hurricane expert.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now is Max Mayfield. He's the director of the National Hurricane Center.

Mr. Mayfield, thanks, as usual, for joining us.

Let's just review some of the forecasts from last year, the 2005 hurricane season, which all of us remember. At that time, the National Hurricane Center predicted 12 to 15 named storms. There were 28.

The National Hurricane Center predicted seven to nine hurricanes. There turned out to be 15. This year, today, you're saying that there will be 13 to 16 named storms, 8 to 10 hurricanes, four to six Category 3 or higher, which are the most powerful.

How confident are you, given the track record from last year? Clearly, it was much worse than you assumed it was going to be.

MAYFIELD: Well, that's absolutely true, Wolf. As we look at all the seasonal forecasters, there are a lot of people that do this. Europeans make a seasonal hurricane forecast, our friends in Colorado State, the Cuban Forecast Office in Nevada, a lot of the universities. There are a lot of people making seasonal forecasts, and everybody was way below what actually happened last year.

This is the best -- our best shot this year, but those numbers are very significant. I certainly hope we're not low-balling the numbers this time. Those numbers are months above average, and people need to sit up and take notice and be prepared.

BLITZER: And people, hopefully, will be paying attention, more so this year than last year, because the last time around you guys were pretty much sounding the alarm bells before Hurricane Katrina, before Rita. Unfortunately, a lot of viewers out there, a lot of local officials, state officials were not paying as much attention.

MAYFIELD: And Wolf, one thing that really concerns me is we just had a Mason-Dixon poll taken that was released last week -- the people in coastal areas, Texas to Maine -- and 60 percent of the people surveyed said that they still do not have a hurricane planned. To me, that's almost unbelievable after the last two hurricane seasons and after Katrina.

BLITZER: It is unbelievable when you think about people are supposed to learn from mistakes.

There's a lot of speculation out there that global warming is causing a more intense weather pattern. And as a result, more hurricanes are more powerful hurricanes. What's your assessment?

MAYFIELD: Well, it's a very fair question, and the answer to that is not agreed to by all the scientists. From my perspective here at the National Hurricane Center, even without invoking the global warming arguments, the research, meteorologists are telling us that we're in this very active period for major hurricanes. That may very well last at least another 10 or 20 years. That's not good news and we need to be prepared.

BLITZER: So is this just perhaps not necessarily global warming, but just part of a cyclical pattern that occurs, warmer waters, and as a result, more hurricanes?

MAYFIELD: Well, that's what some people think. And I'm very aware of the studies that say we have more Category 4 and 5 hurricanes. I personally think that's due to better observations and the satellite technique that we use to estimate the intensity of the hurricanes.

That technique really was not even published until the mid 1980s, and a lot of countries didn't start using this until later in the 1980s. So, of course we have more Category 4 and 5 hurricanes on the record books since 1970, in part due to that. BLITZER: Is there any way when you make these forecasts for the season you can assess where these hurricanes might wind up, whether in the Gulf of Mexico, Florida, the East Coast, perhaps all the way up along the Eastern Seaboard region, up through New England? Is there any way of assessing where these hurricanes, tropical storms might wind up?

MAYFIELD: Wolf, the science is not there yet to do that with any accuracy. I mean, people can make a forecast. That's easy to do. But to have it mean anything, I personally think that it's a real disservice to target, you know, just specific areas. That's telling the other people they can let their guard down, and we don't want that to happen.

BLITZER: Well, what about, like, people in New York or New Jersey or Massachusetts? Should they be more relaxed than people in Florida or New Orleans?

MAYFIELD: Well, they can be a little bit more relaxed, but a big, big concern is up in the Northeast. Just because a hurricane is such a rare event up there -- you know, hurricanes don't happen very much. And the storm of record up there is the 1938 hurricane that hit Long Island and then went up into New England. Twenty-four hours before that hurricane hit Long Island, it was east of Daytona Beach, Florida. So, people up there in the northeast, you know, are not going to have too much time. History teaches us and has happened in the past and I can assure you it will happen again some time. I can't tell you if that's going to be this year or not.

BLITZER: Is there any way of knowing when Alberta, which is the first named storm for this coming season, when that might hit? June, July, August? Is there any way of being accurate in terms of that forecast?

MAYFIELD: We really can't say it like that, Wolf. I mean, typically, we have a June storm about every other year. We had -- last year was very active, and we had two in June and five in July. I don't think we'll see anything like that again. But, people need, if they possibly can, to be ready before the hurricane season start, which is on June 1.

BLITZER: Last year you ran out of names. You had to go to the Greek alphabet. Do you think you're going to do that again this year?

MAYFIELD: Well, I certainly hope we don't have to do that again. But, you know, that is the plan, and if we -- if we get through the 22 letters on our list, we'll use that again if we need to.

BLITZER: Here is what David Paulison, the acting FEMA director, said last month. He said, "We will be prepared for another active hurricane season in 2006. Americans want to know if we are ready for future disasters, and they are anxious and looking to us for reassurance, and that is reassurance we can give them."

In our most recent CNN poll we asked the American public whether they were very confident, somewhat confident or not confident that the federal government has the ability to handle hurricane damage. Twelve percent said they were very confident, 40 percent said they were somewhat confident, but 45 percent, almost half, said they were not confident at all.

How confident should the American public be that the federal government, based on everything you know, is ready to deal with this coming hurricane season?

MAYFIELD: Well, you know, Wolf, I'm a meteorologist, but I will tell you this. Let me say two things. One, Dave Paulison used to be the power (ph) chief here in Miami-Dade County during Hurricane Andrew. He's been in FEMA a number of years now. He certainly understands what hurricanes are all about. If anybody can do a good job up there, it's Dave Paulison.

And then I also don't just really think that it's reasonable to expect the federal government to solve everybody's problems for them. We really -- everybody take that individual responsibility and be as self-sufficient as we possible can for at least the first 72 hours.

BLITZER: Well, give us -- because we only have less than a minute left. What practical advice, Max Mayfield, should you give the American public right now as we head into this new hurricane season? Two or three of the most important things our viewers should be doing?

MAYFIELD: You need to know all (ph) the hazards. If you're in one of the storm surge, evacuation zones. You need to know exactly where you're going to evacuate to or seek shelter.

But even if you're outside that storm surge zone, though, you still need to have that hurricane plan. The storm shutters, the drinking water, the flashlights, the batteries, the radios, all those common sense things. You need to have those things on hand now before the season starts.

BLITZER: Max Mayfield is the director of the National Hurricane Center. Max Mayfield, thanks for your excellent work. We'll be speaking often. I guess that's unfortunate, but I enjoy always speaking with you. Thank very much for helping our viewers.

MAYFIELD: My pleasure, Wolf.

(END VIDEOTAPE)

BLITZER: And coming up, what would anybody be doing with $90,000 stuffed in the freezer? That's what one congressman from Louisiana is accused of. We're going to tell you what officials think he was doing with that very cold cash.

Plus, President Bush touts the new government in Baghdad, but will that lead to a reduction of U.S. troops in Iraq? Coming up, I'll speak live with the former defense secretary, William Cohen. He joins us here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back to THE SITUATION ROOM. I'm Wolf Blitzer in Washington.

Iraq's new government is getting a boost from its allies. The British prime minister, Tony Blair, was in Baghdad today to meet with the new Iraqi leadership. President Bush is calling the swearing in of Iraq's new cabinet a watershed event. He said the United States will start to play more of a supporting role in Iraq. Could the end be in sight for U.S. military forces?

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.

Mr. Secretary, here's how the president phrased it earlier today.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The new Iraqi government does not change America's objectives or our commitment, but it will change how we achieve those objectives and how we honor our commitment. And the new Iraqi -- as the new Iraqi government grows in confidence and capability America will play an increasingly supporting role.

(END VIDEO CLIP)

BLITZER: Is this a watershed event as the president suggests?

WILLIAM COHEN, FORMER SECRETARY OF DEFENSE: Well, it's a very significant event, I'm not sure if it amounts to watershed just yet. We have to wait and see how this is going to play out.

For example, even with the new cabinet that has been formed, we still haven't put in place a new ministry of defense, minister of interior and others, so, there are homeland security equivalent so to speak. They still have to put key people in those positions, people who will be seen as unifiers, those that will not be judged as being -- supporting any type of sectarian type of an agenda. Such much remains to be seen.

I think it's encouraging. I think it's consistent with what the president has planned and the military has planned. As the Iraqi government gets its act together, so to speak, and the military gets stood up and the police get stood up, we can start to stand down. So I expect that we'll see, if the situation on the ground warrants it, a rather systematic reduction coming in the next several months, but much will depend upon what's happening on the ground.

BLITZER: It's interesting. Tony Blair goes to Baghdad today, meets with the new Iraqi leadership. And then they announce he's coming to Washington probably on Thursday to hold talks with President Bush.

It would seem that both of these leaders would very much like to see a draw down of their countries' forces in Iraq.

COHEN: Both leaders are under enormous pressure, politically, to have some kind of a draw down. Tony Blair has been out front, way out front of his population, who does not support the war. So, he's been joined arm in arm with President Bush and with President Clinton prior to that time. And so he has a lot at stake.

And I think the two of them must stand together and to continue to be supportive of each other but also try to systematically reduce our presence in the region.

BLITZER: I interviewed the Israeli prime minister, Ehud Olmert, on "LATE EDITION" yesterday. He's now in Washington and meeting with President Bush tomorrow over at the White House.

He says that right now the Iranians, in his estimate, the estimate of the Israeli intelligence community, only months, in his words, months away from going ahead, having the expertise to build a bomb. Listen to how he phrased it.

(BEGIN VIDEO CLIP)

EHUD OLMERT, ISRAELI PRIME MINISTER (voice-over): The question is, when will they close the technological line that will allow them at any given time within six or eight months to have a nuclear bomb. And this technological threshold is nearer than we anticipated before.

(END VIDEO CLIP)

BLITZER: And I pressed him and he said only months away. Does that sound credible to you?

COHEN: I don't think we have any way of knowing. He may have more information, and he'll make that available to President Bush and to the security team and the Bush administration.

But I think we have to assume the worse case rather than the best case. The estimates are anywhere from one to ten years, and I think it's much closer than to the one than the ten. But nonetheless, assuming a very conservative estimate, we should take that as an incentive to try to really energize our policy in the Middle East.

He's coming here to talk about his so-called unilateral or convergence plan. President Bush has to be in a listening mode and not a deciding mode. This is not a plan yet, but rather a concept. I don't think we should take any action based upon his representation, particularly in view of what they would have as an impact upon King Abdullah in Jordan and the entire region. So he's going to make a presentation about his plans or ideas. We should be listening, but not taking any action.

BLITZER: We'll see if any decisions, any major announcements are made at the end of those talks tomorrow. Thanks very much, Secretary Cohen, as usual.

Lou Dobbs is getting ready, as usual, for his show that begins right at the top of the hour. Lou, what are you working on?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": As usual, Wolf, thank you. Coming up at 6 here on CNN, tonight we're reporting on the escalating wars in both Iraq and Afghanistan and President Bush's warning that more days of what he calls challenge and loss are ahead of us. We'll have complete coverage.

Also tonight, corporate America is destroying middle class American jobs by importing cheap foreign labor with the help of our own government. We'll have that report.

And disturbing new evidence that our criminal justice system is failing to tackle our illegal immigration crisis. Congressman Darrell Issa is furious. The Border Patrol is demoralized. Congressman Issa joins us.

And is making English the official language of this country un- American, unconstitutional and, as one senator said, even racist? My guest tonight is one for the most outspoken critics of the proposal. Hector Flores, national president of LULAC joins us. We hope you'll be with us, as well.

Wolf, back to you.

BLITZER: Thank you very much, Lou.

Still to come here in THE SITUATION ROOM, are Saudi schools teaching a curriculum of hate despite promises to remove those references from textbooks? There are some shocking lessons from student textbooks, and that's coming up in our 7 p.m. Eastern hour. Our John Roberts will have the story.

And he was a secretly gay governor who left the closet and then left office. Now, Jim McGreevey tells what life was like. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Let's check back with Betty Nguyen for some other important stories making news.

Hi, Betty.

BETTY NGUYEN, CNN ANCHOR: Hi there, Wolf.

Congressman William Jefferson says there are two sides to every story. And just this past hour the Louisiana Democrat spoke to reporters. He says he is eager to tell his side of what happened.

Now, at issue, court papers say last year federal agents found $90,000 in cash stashed in the congressman's freezer in his home. Agents have told a judge the money was part of a $100,000 bribery payment Jefferson accepted, and just yesterday the FBI searched Jefferson's office in Washington. We'll stay on top of this story.

Now, to eastern Kentucky. The brother of the sole survivor of Saturday's mine explosion says his brother's air pack did not work properly. Jeff Ledford is the brother of Paul Ledford, who survived the blast while five others did not survive. Jeff Ledford says his brother told him the air packs only worked for five minutes before failing. Those air packs were the same types as those used miners in the Sago mine tragedy -- remember that, back in January -- that killed 12 men in West Virginia earlier this year -- Wolf.

BLITZER: Thank you, Betty, for that.

Let's head to New York right now. Ali Velshi is standing by with "The Bottom Line". What is the bottom line, Ali?

ALI VELSHI, CNN CORRESPONDENT: The bottom line is hidden somewhere in this big report. It's a long awaited Federal Trade Commission report which says that there were some instances of price gouging at the pump in the wake of Hurricane Katrina, but the FTC says it didn't find widespread efforts on the part of the oil industry to illegally manipulate the marketplace.

Now the FTC only looked at companies that were already red flagged with multiple complaints and, of those, just seven refiners, two wholesalers and six retailers met Congress' definition of gouging.

Now, that definition basically reads that the average price of gas in September of 2005 had to be higher than it was in August of 2005 in the same area after accounting for any normal increases in cost or accounting for market trends.

The FTC tells us if you take into account local factors like pipelines that were damaged by the hurricanes, only one gas station across the country was guilty of gouging. And if you're looking to find that station to throw stones at it, don't bother. The FTC said very clearly, it is not releasing the location.

In the markets, Wolf, stocks fell again today. Looked hopeful at the end, but didn't make it. The Dow lost 18 points to 11,125. The NASDAQ gave up 21 to 2172. Oil prices were back up above $69 a barrel on a government report, which predicted a stronger hurricane season than usual -- Wolf.

BLITZER: Ali, thanks very much. Ali Velshi reporting.

A major lawsuit against AT&T over wiretapping. Plaintiffs say they have secret documents involving the telecom giant and NSA access to customer data. AT&T has tried to block the information from being used in court, saying the documents would reveal trade secrets. But now those documents may be showing up online. Our Internet reporter, Abbi Tatton, has the story -- Abbi.

ABBI TATTON, CNN CORRESPONDENT: Wolf, AT&T has been fighting to prevent the release of these documents. The Department of Justice and the director of national intelligence wants this entire case dismissed, saying it relates to state secrets.

Last week a judge ruled that key documents would remain under seal, but, today, several pages of documents that appeared to be related were published online at Wire.com, a technology news web site. They said that the public has right to know. Plaintiffs won't confirm whether these documents published today are those same documents currently under seal. And AT&T wouldn't comment on this disclosure, though they said in the past AT&T does not allow wiretapping without a court order. A judge will hear the government's motion to dismiss next month -- Wolf.

BLITZER: All right, Abbi, thank you.

Up ahead here in THE SITUATION ROOM, a former governor tells all about his once secret gay life and his very public coming out. CNN's Mary Snow will join us. She has a review of Jim McGreevey's memoir. A preview, that is.

Does the formation of another government make you more confident about the future in Iraq? It's our question of the hour. Jack Cafferty standing by with your e-mail.

(COMMERCIAL BREAK)

BLITZER: There are new developments in the very public saga of the former New Jersey governor, Jim McGreevey. Almost two years after announcing on national live television that he's gay he's putting a very personal memoir -- putting out a very personal memoir, detailing his life in the closet.

CNN's Mary Snow is joining us with the latest -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, some of those details are salacious, but gay activists say it's important to be fully honest.

(BEGIN VIDEOTAPE)

SNOW (voice-over): It is titled, "The Confession". Former New Jersey governor Jim McGreevey describes his life as a closet homosexual in politics saying, quote, "I was slowly marching into hell." Regan Books released an excerpt of the memoir, the first details of McGreevey's life since 2004, when he resigned from office with his wife and family by his side.

JIM MCGREEVEY, FORMER NEW JERSEY GOVERNOR: And so, my truth is that I am a gay American.

SNOW: Before admitting that truth, McGreevey paints a picture of a tortured soul. He doesn't mention his two marriages and children but talks about his double life, seeking out men on the side, saying, quote, "I settled for the detached anonymity of book stores and rest stops. A compromise, but one that was wholly unfulfilling and morally unsatisfactory."

Some gay political activists say McGreevey's story is not uncommon.

MATT FOREMAN, NATIONAL GAY AND LESBIAN TASK FORCE: I don't think it's uncommon for many, many elected officials. And I can tell you, having worked in the state capitol in Albany for many years, we all knew men in very similar situations to Jim McGreevey. SNOW: Others who worked to get gay politicians elected to office say McGreevey's story will raise questions.

CHUCK WOLFE, GAY AND LESBIAN VICTORY FUND: One of the things that the American public will be faced with is knowing that somebody has come out of the closet, does it alter your opinion on how they would be as an elected leader?

SNOW: Joan Garry, who writes about gay issues, says it's a risk for a gay politician to come out of the closet. She applauds McGreevey's honesty but says he was a minority.

JOAN GARRY, WRITER: If you think of the United States Senate, do we have a gay or lesbian senator? No, we do not. Do we have openly gay congress people? A very small, brave handful.

(END VIDEOTAPE)

SNOW: McGreevey and his spokesman declined any comment, saying that the memoir will be released in September. The excerpt was released at a book expo over the weekend -- Wolf.

BLITZER: Thank you, Mary, for that report.

Up next, does the formation of another government make you more confident about the future in Iraq? Jack Cafferty is standing by with your e-mail.

(COMMERCIAL BREAK)

BLITZER: Let's go right to Jack in New York -- Jack.

CAFFERTY: President Bush calling the formation of a new unity government in Iraq a watershed event. Meanwhile, the violence continues: 16 more Iraqis murdered today. Fifty-one U.S. troops have been killed there this month.

The question is, does the formation of another government make you more confident about the future in Iraq?

Don writes from Ukiah, California, 'No, Jack. There's no comfort in knowing the most secretive, conspiratorial and power craving government in American history has browbeat a bunch of Persians into following alone in a vein attempt to make us believe all is well, there and here."

Dale in Carmel, Indiana: "It's a positive step. It provides a framework for uniting the country and improves chances that anarchy will become an increasingly remote possibility."

Chris writes from Delmar, New York: "No, instead let's have Iraqi voters have a California' style referendum with one question. Do you favor the immediate withdrawal of all troops from Iraq? Then we'll really have the beginnings of a democracy."

Lou in Chicago: "I'll be satisfied with the war in Iraq when our troops are home. No government we prop up is going to rule there and make democracy work."

Rich in Columbia, South Carolina: "Absolutely not. Just a replay of Vietnam, where we also changed government several times. You'd think we would have learned something there. For those who say no matter what we're there now and can't quit, I say had we quit at 2,500 dead in Vietnam, we would have saved the next 56,000 that died there."

And Gordon in Sedwick, Maine: "Oh, my, the Green Zone has a new government. Can we have one, too" -- Wolf.

BLITZER: Thank you, Jack. See you in an hour.

We're here in THE SITUATION ROOM weekday afternoons 4 to 6 p.m. Eastern, back at 7 p.m. Eastern. Until then, thanks very much for joining us. Let's head up to "LOU DOBBS TONIGHT". Lou is standing by in New York.

Hi, Lou.

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