Return to Transcripts main page

The Situation Room

United States Offers Iran Face-To-Face Talks; Did U.S. Marines Slaughter Civilians In Haditha; Insurgent Attacks Leave Another 22 People Dead, Dozens More Wounded In Iraq; President Bush Today Called The Afghan President To Discuss Incident That Triggered Rioting In Kabul; Interview with Condoleezza Rice; East Coast Prepares for Hurricane Season; Spellers Face off in National Bee

Aired May 31, 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 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 12:30 a.m. in Tehran. Will Iran take advantage of a stunning turnabout in U.S. policy? An offer of nuclear talks is now on the table, but so is the military option. My special one-on-one interview with the secretary of state, Condoleezza Rice, that's coming up this hour.

It's 5:00 p.m. here in Washington, where President Bush says he's troubled by allegations that U.S. Marines massacred Iraqi civilians. But what will be the impact of an already raging insurgency?

And it's 4:00 p.m. in New Orleans. The hurricane season starts only hours from now, and news reports raising new concerns for that stricken city.

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

They have been giving each other the cold shoulder for a quarter century, but now the United States is offering Iran face-to-face talks if Tehran turns off its nuclear equipment. President Bush says it's important to solve the nuclear standoff diplomatically, noting that the U.S. now will take a leadership position on the issue.

But in making the offer, the secretary of state, Condoleezza Rice, warned other options remain on the table. That could mean painful sanctions or even military strikes. No answer yet from Iran, which so far has refused to stop its nuclear activities, insisting they're all peaceful.

We get more now on the U.S. offer from our national security correspondent, David Ensor -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Wolf, the secretary of state made the announcement, saying the U.S. is ready to sit down next to its European allies and talk directly with Iran about the nuclear impasse. But she set some tough conditions. (BEGIN VIDEOTAPE)

CONDOLEEZZA RICE, SECRETARY OF STATE: As soon as Iran fully and verifiably suspends its enrichment and reprocessing activities, the United States will come to the table with our E.U. colleagues and meet with Iran's representatives.

ENSOR (voice over): Rice stressed the talks would not be bilateral, and Iran would first have to satisfy the world that it had stopped all uranium enrichment work. She said the U.S. and the other permanent U.N. Security Council members, plus Germany, are almost finished on a package of rewards and punishments offering Iran two roads.

RICE: One is a set of benefits should Iran agree to negotiate and negotiate in good faith, having suspended its program. But quite clearly, also, a set of penalties or a set of potential sanctions should Iran not be willing to act in good faith.

ENSOR: A senior administration official told CNN the initial sanctions, if Iran refuses the offer, would "hurt." But they would not include sanctions on Iran's oil and gas exports.

KEN POLLACK, BROOKINGS INSTITUTION: There's no question that this gesture is going to divide the leadership in Tehran and is going to provoke a major debate over how to respond. At the end of the day, it is likely to be Iran's supreme leader, Ali Khamenei, who makes the final decision. The key is that we don't really know what Khamenei is going to decide.

(END VIDEOTAPE)

ENSOR: Rice travels to Vienna, with aides saying she hopes to reach final agreement there with Russia, China, and the Europeans on the carrots and the sticks for Iran to choose from -- Wolf.

BLITZER: David Ensor, thank you.

Will Iran take the bait and suspend its nuclear efforts? Coming up, my one-on-one interview with the secretary of state, Condoleezza Rice. I spoke with her early today at the State Department. We'll talk about the offer of talks with Iran. Also, the situation in Iraq.

Did U.S. Marines slaughter civilians in the Iraqi town of Haditha? President Bush says he's troubled by reports of the alleged massacre as investigators try to piece together the events of the bloody day last November.

Let's go live to our senior Pentagon correspondent, Jamie McIntyre. He's watching this story -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Wolf, no sooner did military investigators begin to look into the circumstances surrounding the deaths of civilians in Haditha than did the official story begin to fall apart.

(BEGIN VIDEOTAPE)

MCINTYRE (voice over): A military source tells CNN it was evidence indicating many of the 24 civilians killed at Haditha had been shot at close range that in February kicked off a full-scale criminal probe into the alleged massacre. Corporal James Crossan was one of 12 Marines in a four-vehicle convoy that was hit by a roadside bomb, the incident that sent other Marines of his unit on a house-to- house hunt for the bombers. He told CNN Haditha was a dangerous place.

CPL. JAMES CROSSAN, U.S. MARINE CORPS: Like any other place in Iraq, the -- you can't tell who the bad guy is. We found the majority of them and we got rid of them, but the place is just crawling with insurgents and IEDs everywhere, still.

MCINTYRE: The IED blast killed T. J., a fellow Marine who Crossan called his right-hand man. Corpora. Crossan suffered a broken back and pelvis and was knocked unconscious. He said his fellow Marines were not the kind to snap.

CROSSAN: I don't know what happened, but they might have got scared or they were just pissed -- really pissed off and did it. But, like, just the person -- it just depends on the person. Like, after seeing so much death and destruction, pretty soon you just become numb and really don't think about it anymore.

MCINTYRE: CNN has learned the preliminary investigation was conducted by an Army colonel, Gregory Watt (ph), who sources say questioned officers, including battalion commander Lieutenant Colonel Jeffrey Chessani and Kilo Company commander Captain Lucas McConnell, as well as Marines at the scene of the killings, the most senior of which was a staff sergeant identified by "The New York Times" as Frank Wuterich.

Sources say Watt (ph) also confirmed that payments of $2,500 were made to each of 15 families. A total of $38,000 in compensation for the deaths of noncombatants.

(END VIDEOTAPE)

MCINTYRE: And Wolf, we should note that payment of compensation, while an admission that the civilians should not have been killed, is not an admission of guilt. Meanwhile, the Pentagon is promising full disclosure once the investigation is through. And President Bush said today, "If laws are broken, there will be punishment" -- Wolf.

BLITZER: Jamie McIntyre, thank you.

There's no let up in the violence in Iraq today. Insurgent attacks have left at least another 22 people dead, dozens more wounded. The U.S. military doesn't see a lot of light at the end of the tunnel either.

For more on that, let's bring in our senior national correspondent, John Roberts -- John.

JOHN ROBERTS, CNN SR. NATIONAL CORRESPONDENT: Hey. Good afternoon to you, Wolf.

This is the quarterly report that the Department of Defense provides to Congress. And three years after President Bush declared "mission accomplished," it contains some troubling revelations about what the future holds.

(BEGIN VIDEOTAPE)

ROBERTS (voice over): The Pentagon report paints a bleak picture for the prospect of good news anytime soon in Iraq, stating in frank times that the strength of the insurgency will likely remain steady throughout 2006. Compare that with this rosy assessment exactly one year ago.

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: I think the level of activity that we see today from a military standpoint, I think, will clearly decline. I think they're in the last throes, if you will, of the insurgency.

ROBERTS: The contrast couldn't be sharper, but it's no surprise to military experts, who saw no reason for such sunny optimism.

MICHAEL O'HANLON, BROOKINGS INSTITUTION: It was clearly wrong at the time. It's clearly still wrong. I thing he was careless, frankly, in his effort to put a positive face on some of the things that were happening in Iraq.

ROBERTS: And the report spells more trouble for Republicans whose political fortunes erode with each piece of bad news from Iraq.

STU ROTHENBERG, CNN POLITICAL ANALYST: Republicans need a change in the overall mood. They need the public to get more optimistic, hopeful, to believe that the administration is in some way succeeding. This report suggests otherwise.

ROBERTS: What's more, the Pentagon acknowledged for the first time in this report that Sunni insurgents have joined al Qaeda in recent months, increasing the terrorists' attack options.

O'HANLON: It's horrible. It's horrible news to see that Iraqi resistance fighters may be now adopting some of the tactics of al Qaeda: suicide bombings, mass casualty events.

(END VIDEOTAPE)

ROBERTS: Surprisingly, some Republicans, though, welcome the report. About time, they said, that official assessments match both the reality on the ground and voters' perceptions of Iraq. And they saw it as an opportunity to draw distinctions with Democrats.

They said, are you going to cut and run? Which the Democrats, they say, are expanding on. And are you willing to stay the course or at least stay in Iraq and see this right through to the end?

BLITZER: Is there any good news in this report? ROBERTS: There is a little bit, Wolf, right here on page number four. It says, "The number of Iraqi units able to take the lead in combat operations against the insurgency continues to increase."

So that is some good news that everyone is pointing to. However, there is nothing in this report about the withdrawal of large numbers of U.S. troops, which, of course, is something the voters are really looking for this year.

BLITZER: John Roberts, thanks very much.

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

JACK CAFFERTY, CNN ANCHOR: Remember Cynthia McKinney? She's the Georgia congresswoman who is accused of assaulting a Capitol Police officer last March. After making the TV rounds for a week, claiming the whole thing was "much ado about a hairdo," McKinney sort of apologized for the whole thing.

But that's almost two months ago. And since then, a grand jury has been investigating this case.

The U.S. Attorney's office has indicated a decision is likely to be announced within the next week or two. But officials insist no final decision has been made.

Meanwhile, the newspaper "Roll Call" reported police officials have expressed frustration over how long the process is taking and how the case is being handled. Jim Pasco, the executive director of the National Fraternal Order of Police, said this, "This is not the Manson murders, this is a simple assault case with numerous witnesses and the statement of a police officer. The only thing that distinguishes this case from cases all over the country every single day of the year was that the alleged perpetrator was a congresswoman."

So here's the question. Why is it taking so long to get a decision from the grand jury in the case of Congresswoman Cynthia McKinney?

E-mail your thoughts to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile -- Wolf.

BLITZER: Jack, thank you.

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

Up ahead, my interview with the secretary of state, Condoleezza Rice. I'll ask her about the sudden shift in U.S. policy toward Iran. Is the Bush administration making concessions to what it calls a terrorist state?

Also, a top expert puts out a new forecast on the eve of the hurricane season. It starts tomorrow. How many storms can we expect this year? And where will they strike?

Plus, the largest spelling bee in U.S. history. Our Internet reporters show you what's going on with the situation online.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Zain Verjee. She's at the CNN Center in Atlanta with a closer look at some other stories making news -- Zain.

ZAIN VERJEE, CNN ANCHOR: Wolf, he's already been on the job for a day, but CIA Director Michael Hayden got another swearing in today. This one purely ceremonial, with President Bush doing the honors. Hayden is a four-star Air Force general and the first active military officer to lead the agency in 53 years.

Police in Birmingham, Alabama, are looking for a woman who was kidnapped at gunpoint and forced to drive off in her own car. The abduction was captured by a surveillance camera, and police say the woman's ATM card was used three times shortly afterward.

Police say the victim is Sandra Gregory (ph), a 34-year-old attorney. Her car is a 2000 four-door silver Lexus SUV, Alabama tag 1C4850G.

Under a large white tent with Manhattan behind them, they belted out the national anthem in Spanish. Singers performed the controversial version, "Nuestro Hymno," for about 100 people on Ellis Island. There's been a public backlash over singing the anthem in Spanish. Last month, President Bush said it ought to be sung only in English.

Ellis Island was once the main gateway to the U.S. for more than 12 million immigrants.

Delta pilots are agreeing to a 14 percent pay cut, a move that will save the bankrupt airline $280 million a year. They deal also averts the threat of a strike, which could have grounded the troubled airline permanently. The union says 61 percent of Delta pilots ratified the pay cut. It's still got to be approved, though, by the bankruptcy court -- Wolf.

BLITZER: Zain, thank you very much.

Let's head up to New York. Ali Velshi is standing by with "The Bottom Line".

(BUSINESS REPORT)

BLITZER: Coming up, we're going to take a closer look at some of the major developments today in the nuclear standoff with Iran. I'll talk about them with the secretary of state, Condoleezza Rice. My full interview with her, that's coming up. Plus, just hours before hurricane season begins, disturbing news from one battered city. We're going to show you why New Orleans may be even more vulnerable than before.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: President Bush today called the Afghan president, Hamid Karzai, to discuss the incident that triggered rioting in Kabul, a deadly traffic accident involving a U.S. military convoy.

Our Pentagon correspondent, Barbara Starr, has more on this story from Afghanistan -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, Afghanistan's parliament has called for the prosecution of the U.S. soldier responsible for the traffic accident here on Monday that sparked the worst rioting in the capital since the Taliban fled. A U.S. military spokesman, however, indicated at a press conference that no U.S. military personnel, including the soldier responsible for the accident because the vehicle's brakes failed would be turned over to the Afghan government.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The soldier is not under arrest. We have no indications at this time that he acted inappropriately.

(END VIDEO CLIP)

STARR: At the same time, there was an acknowledgment that U.S. troops did more than just fire over the heads of the rioting crowd when the melee broke out.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Our initial investigation -- and again, I want to underscore this is very early in the process -- shows that fire came from the crowd. And our soldiers use their weapons to defend themselves. There's a lot we do not know.

(END VIDEO CLIP)

STARR: But U.S. and NATO commanders, as well as the Afghan government, are keeping a very close eye on the situation. There are Afghan military troops poised just outside the city, and Afghan police remain on high alert. Everyone is determined to keep this capital city calm -- Wolf.

BLITZER: Barbara Starr on the scene for us in Afghanistan.

Thank you, Barbara.

Let's get back to our top story now, a striking turnaround on Iran by the Bush administration. Secretary of State Condoleezza Rice today announced the United States will join European allies in talks with Iran over its nuclear program if Iran fully and verifiably suspends its enrichment and reprocessing activities. Huge "ifs".

I sat down with the secretary of state just a short while ago.

(BEGIN VIDEOTAPE)

BLITZER: Madam Secretary, thanks very much for joining us.

Let's talk about Iran. This is a country that supports terrorism, is that right?

RICE: It's absolutely right. It's a country that supports terrorism. It's a country that has a president who has said the most terrible things about the Israeli government. And it is -- about Israel. And it is indeed a country that does not give freedoms to its own people.

We are not by any means confused about the nature of this regime. In fact, the nature of this regime makes it even more urgent that the world's insistence that Iran not get a nuclear weapon be carried out.

BLITZER: Here is what the president said after 9/11 on countries that support terrorism. He said, "America has a message for the nations of the world. If you harbor terrorists, you are a terrorist. If you train or arm a terrorist, you are a terrorist. If you feed a terrorist or fund a terrorist, you're a terrorist. And you will be held accountable by the United States and our friends."

You were the president's national security adviser when he said that. Does this look like the United States is making concessions to what you would regard as a terrorist regime?

RICE: The United States is supporting an international consensus that has been developing for the last year and a half that Iran must not be allowed to get a nuclear weapon, that Iran has but one choice. And that is to abandon its nuclear weapons ambitions, or it can face the path of isolation. That's what the United States is supporting here.

BLITZER: But you understand your critics on the right will say that you blinked.

RICE: Let's be very clear, Wolf. The United States is holding to conditions that have been set for some time with Iran. Conditions that we have been supporting in the negotiations with the European 3, that Iran must first suspend verifiably and fully its enrichment activities.

We do not want Iran to continue its march toward a nuclear weapon, toward industrial capability, industrial production scale capability by the end of the year. We want Iran to come back to negotiations, negotiations that we have been supporting, and that we would now be prepared to join if Iran suspends.

But let me very clear what this is not. This isn't some sort of grand bargain. This isn't an offer of normalization of relations. This isn't an offer of, let's let bygones be bygones and we'll try to establish a new relationship.

This is a very specific choice that is being given to Iran: abandon your nuclear weapons ambitions or face isolation. And we need it -- and we need now to sharpen that contradiction and to make it possible to know whether Iran intends to negotiate seriously or not.

BLITZER: As you remember, American diplomats were held hostage by Iran for 444 days in 1979, 1980. And since then, the United States has avoided any direct diplomatic contact with Iran. Since then, in recent months, Iran has formally gone ahead and started to enrich uranium.

Why, once again, will the critics argue, are you rewarding Iran for what you yourself would regard as bad behavior?

RICE: I can only speak to the international consensus in which the United States is a part that Iran has a choice, a choice to abandon its nuclear weapons ambitions through negotiation and diplomacy, which the president has said that he fully supports, or to face the path of isolation. We are not going to engage in a grand bargain with Iran. We are not going to engage in bilateral talks with the Iranians to talk about improving the general relationship with the United States. We are not going to talk with the Iranians, negotiate with the Iranians somehow about the terms of terrorism.

Terrorism is wrong. There is nothing that can be said about that. But Iran needs to understand it is time to abandon its nuclear weapons ambitions. It is in everybody's interests, the interests of the United States, the interests of states in the Persian Gulf, the interests of the world, that we give diplomacy its very best chance so that Iran will abandon those nuclear ambitions.

BLITZER: What are the chances that Iran, the president, Ahmadinejad, will accept the condition that you put forward today that Iran stops enriching uranium? What are the chances that the Iranians will abandon its nuclear weapons program and then the U.S. would begin to participate in these multilateral talks with the Iranians?

RICE: Well, we're about to find out.

BLITZER: But what do you think the chances are?

RICE: We are about to find out if the Iranians are serious. They have said all along that, yes, they want a negotiated solution. Now they have a chance for a negotiated solution if they're prepared to suspend their enrichment programs and to negotiate seriously.

I can't judge what the Iranian regime will do. I hope that the Iranian regime will take this path that has been opened to them. But if they don't, it is also very clear that if they're not prepared to negotiate, that we're going to go to the Security Council, we are going to bring sanctions and isolation against Iran.

We're going to continue anyway to work with our friends and with like-minded states to protect ourselves from proliferation, to counterterrorism around the world. That continues regardless.

BLITZER: If the Iranians reject this overture and you go to the United Nations Security Council and seek sanctions against Iran, will the British, the French, the Germans, will the Russians and the Chinese support those sanctions?

RICE: We have an understanding, an understanding that, by the way, comes out of our meetings in New York a few weeks ago that this is a matter of two paths. And there will be a document that memorializes those two paths.

On the one hand, Iran can choose to negotiate, and there are certain benefits associated with that. On the other hand, Iran can chose to refuse to negotiate. And then we will go to the Security Council and we will seek sanctions.

We understand that. The Europeans understand that. Our other partners understand that. And this move by the United States to enhance the power of a negotiating track gives us a very strong ground from which to say to our partners Iran now faces a choice, it's a choice that they must make now.

BLITZER: And if in the end they continue to pursue a nuclear weapon, despite the sanctions, despite the pressures, what is the viability of a U.S. military option to destroy Iran's nuclear capabilities?

RICE: Well, the president is not going to take his options off the table, but we believe that diplomacy has plenty of room to go here, because Iran cannot tolerate the type of isolation the international community can bring against Iran in a unified fashion. But we don't want to let this go on any longer with Iran pretending that it might want negotiations. Saying one day, "Oh, we're interested in the Russian plan." The next day, "Oh, we'd like to go back to negotiations with the Europeans."

Let's find out. It's time to find out if the negotiating track is real. If it's real, we're prepared to negotiate. If it's not real, and Iran is not prepared to suspend -- by the way, a condition that the Europeans set, not the United States -- then it's time to pursue other means.

BLITZER: Well, describe what other means are?

RICE: We have sanctions that can be imposed, political sanctions, financial sanctions, economic sanctions that can be imposed. The Security Council can bring its weight to those sanctions.

But this is an opportunity. It's an opportunity for Iran to take the right step for its people, for the region, and for the international community. And that right step is to abandon its nuclear ambitions.

BLITZER: Have you forgotten about the 444 days when the Iranian regime held those Americans hostage? RICE: The United States of America and most certainly this administration will never forget what they did to our American diplomats. It will never forget the outrage of that. We will never forget that Iran is still a state sponsor of terrorism, in fact, the key state sponsor of terrorism. And we're never going to forget that Iranians themselves do not enjoy freedoms.

We are not in any way confused about the nature of this regime, but the nature of this regime makes it even more important that it not get a nuclear weapon. And so doing everything we can through diplomatic means to make sure that it does not get a nuclear weapon and that there is an international coalition that will do what is necessary to present that nuclear weapon from coming into being, is made even more important by the character of that regime.

BLITZER: Let me read to you what Ehud Olmert, the prime minister of Israel, told a German newspaper, "Bild", on May 1. "Ahmadinejad talks today like Hitler spoke before seizing power. We are dealing with a psychopath of the worst kind, with an anti-Semite. God forbid this man from ever getting his hands on nuclear weapons."

Is Ahmadinejad like Hitler, psychopath?

RICE: I certainly know THAT an Iranian president who talks about wiping Israel off the map and who talks about denying the Holocaust is certainly not dealing in any way that a reasonable and responsible president of a country would. It's simply unacceptable.

Again, the nature of this Iranian regime makes it even more important that it not get a nuclear weapon. We don't want to see the spread of nuclear weapons, period. But an Iranian nuclear weapon in the volatile Middle East would be particularly dangerous.

The president has said that he's going to do everything that he can through diplomatic means to prevent that from coming to -- coming to pass. And that is why he has made the decision that we are prepared to join negotiations if the Iranians are prepared to suspend their program. And by the way, if they suspend their program, they're not making progress on their nuclear weapons program. And that's also an important part.

(END VIDEOTAPE)

BLITZER: And coming up, more of my conversation with the secretary of state. Has she changed her mind about running for president? And what about Haditha? I'll ask her.

Also ahead, it takes money to fight terrorism. And now we know what cities will get how much money from the federal government. You just might be surprised at which cities will actually lose money and which cities will gain. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's go back to my interview with the secretary of state, Condoleezza Rice. This segment is on Iraq and the alleged slaughter of civilians last November by U.S. Marines.

(BEGIN VIDEOTAPE)

BLITZER: The president earlier today said he is troubled by the reports of what happened at Haditha, allegedly U.S. Marines massacring about 24 Iraqi civilians. Are you worried about the impact that this incident might have as far as U.S. -- the U.S. image in the Arab and Muslim world and around the world in general?

RICE: Well, first, we're all just worried because it's a deeply troubling report. Whatever the impact, it's a deeply troubling report that something like this might have happened.

There is going to be a full investigation of it. If the charges are proved, people will be punished. That's the way democracies react to circumstances like this.

But clearly, no one would want to countenance anything of the kind that is being said to have happened at Haditha. That's our first concern. And of course, it would be a terrible stain for the United States, were something like that to have been demonstrated. But our principle concern right now is to get to the truth.

BLITZER: As far as Iraq is concerned, are you confident that this new Iraqi government can get its act together, bring the real stable democracy there? So far, even as we speak, they have been unable to get a defense minister or interior minister in place who would be in charge of local police.

RICE: I'm confident that this is an Iraqi government that is now permanent, that has been democratically elected by the Iraqi government. They are people who are serious. They are people who are sacrificing themselves a great deal to bring their country this opportunity for freedom and for stability. And I'm confident that they're going to be able to do it. We have to give them a little time.

Now every time we have thought and said the Iraqis are not going to make it, they've actually done it. Whether it was elections that people said couldn't take place or a constitution that people said couldn't get written or a government that couldn't come into being, they've always more than exceeded our expectations. And I think they will again.

BLITZER: We're totally out of time, but I've got to ask you two little questions that you can answer very quickly. NFL commissioner?

RICE: If it's still open. I'd love to at some point. I'm a little busy right now, so I'll have to -- it will have to wait.

BLITZER: You're going to pass right now?

RICE: I think I'll have to pass right now.

BLITZER: You'll stay the secretary of state until the end of the term. RICE: As I said, Wolf, my ship has come in. I think I'll have to let it leave port without me.

BLITZER: And what about running for president in 2008?

RICE: I have no desire to be president of the United States. It's not what I want to do with my life.

BLITZER: What do you want to do?

RICE: I love being an academic. I love the world of ideas. I love teaching. I think when I'm done with this work, I'd love to go back and resume my life in the world of ideas.

BLITZER: Madam Secretary, thanks very much.

RICE: Thank you.

(END VIDEOTAPE)

BLITZER: And still to come, the government is out with its new list of which cities get what when it comes to money to fight terrorism. And it's adding some cities thought to have a higher risk for attacks. The cities may surprise you.

And it's the flap over an alleged slap. It concerns Congresswoman Cynthia McKinney and her scuffle with a Capitol Hill police officer. What do you think is holding up the grand jury's decision in the matter? Jack Cafferty with your e-mail still ahead.

(COMMERCIAL BREAK)

BLITZER: It's a story that will affect what some cities can and can't do to protect themselves against the threat of terror. Today in our "CNN Security Watch", which cities will get the lion's share of federal money to fund their counterterrorism operations, and which cities will be left wanting lots more?

Let's bring back Zain Verjee. She's joining us from the CNN Center -- Zain.

VERJEE: Wolf, New York Republican Congressman Peter King put it this way, quote, "The Department of Homeland Security and the administration have declared war on New York."

An angry reaction to the new announcement of how much various cities are going to get to fund their counterterrorism measures. Now the two cities hit on 9/11, New York and Washington, are going to receive less money in counterterrorism dollars this year. That's compared to last year.

New York is going to get almost $125 million. And although that's actually more than any other city will receive, that amount is actually about $83 million less than New York got last year.

Now, Washington is going to get $46 million in counterterrorism cash. And that's down about $31 million from last year.

Homeland Security Department, Wolf, is saying that the new criteria for allocating the funds looks less at the population and actually more at where there are risks and how well cities have actually used the grants in the past. The overall funding itself is also down to $757 million for cities.

Meanwhile, a few new cities are being given counterterrorism cash, ones that actually didn't get any before. Let's take a look at those. Among them are Memphis, Tennessee. It's getting $4.2 million. Fort Lauderdale in Florida, almost $2 million. And Orlando, Florida, $9.4 million -- Wolf.

BLITZER: All right, Zain. Thank you very much.

To our viewers, remember, stay tuned to CNN day and night for the most reliable news about your security.

Lou Dobbs getting ready for his program that begins right at the top of the hour. He's standing by with a preview.

Hi, Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Hi, Wolf. Thank you.

Coming up at 6 p.m. Eastern here on CNN, we'll have much more on the president's new diplomatic strategy to convince Iran to suspends its nuclear weapons program.

Also tonight, federal agents facing accusations of racial profiling for doing their jobs and arresting hundreds of illegal aliens on a highway in California. We'll have that special report and what's behind it.

And there's new outrage tonight over so-called anchor babies, babies born to illegal aliens who automatically become U.S. citizens. Should those babies have a constitutional right to citizenship as they do now? We'll hear from both sides of a highly emotional argument and an intense debate here tonight.

Three of the country's top political analysts join me, as well. We'll be talking about the failure of both Republicans and Democrats to tackle the outright crises racing through our country. We hope you'll be with us for that and a great deal more.

Wolf, back to you.

BLITZER: Thank you very much, Lou, for that.

Up ahead, one day before the start of the Atlantic hurricane season, there's a new storm prediction that's just come out. We're going to tell you how many hurricanes are forecast and which -- and where the experts think they could hit.

And can you spell win? That's what some cute but cutthroat kids are trying to do right now at the largest spelling bee in U.S. history. We'll show Y-O-U.

(COMMERCIAL BREAK)

BLITZER: Tomorrow marks the official start of the hurricane season. And there are some troubling new reports out about what we might be in for, especially the people in New Orleans, still reeling from Hurricane Katrina.

CNN's Tom Foreman is here in THE SITUATION ROOM. He's got the details -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: The No. 1 thing that people are in for all along the Gulf Coast is a lot of uncertainty and what looks like a lot more storms coming in.

I want you to take a look at this. This is all the hurricanes from last year. Look at all of the patterns that went in there, that swirled in across the Atlantic over here and up through the gulf. A big issue for folks down there.

And once again, the forecast for this year, we're expecting at least that much and a very tough summer.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): Seventeen named storms. Nine hurricanes, five of them major. An ominous forecast on the eve of the 2006 hurricane season. But there's good reason to heed this prediction.

William Gray and his Tropical Meteorology Project at Colorado State University predicted one of the most active hurricane seasons on record. Turns out it was the most active. And this latest forecast, identical to one he put out in April, is in line with the official government forecast.

Of the nine hurricanes Gray predicts this season, he says five of them will be Category 3 or above, with sustained winds of at least 110 miles an hour and storm surges of at least nine feet. Gray says there's a 69 percent probability one of those storms will hit the U.S. East Coast, including Florida, where a new campaign is urging residents to get a hurricane plan in place.

UNIDENTIFIED MALE: Hurricanes are a fact of life in Florida. The most important thing you can do to prepare for these storms is develop a hurricane preparedness plan for your family. Go to FloridaDisaster.org. There you'll find a planning tool to help you develop your plan. It takes just a few minutes, and you'll have a plan to better protect your family when a hurricane threatens.

FOREMAN: They're making lots of plans in New Orleans, too, having learned the lessons of Hurricane Katrina.

But even as the city struggles to rebuild, a new report is raising new concerns. Some parts of New Orleans, according to the study, are sinking faster than others and more than anyone realized, upwards of an inch a year. The report blames the sinking, called subsidence, on a combination of overdevelopment, drainage, natural seismic shifts.

Experts say it could help explain some of the levee failures during Hurricane Katrina. But it also raises some disturbing new concerns for a city struggling to rise even as it falls.

(END VIDEOTAPE)

FOREMAN: We can look a little bit closer at what we're talking about here if we zoom into New Orleans. The areas we're talking about right here, all the blue areas out here are the most vulnerable areas to this sinking. There are a lot of the areas that were hit very hard by the flooding in the last one.

But nonetheless, that's a big, long-term, 100-year problem. That's not what folks in New Orleans are worried about right now. All my friends down there, the folks I know, what they're worried about is this season, having a plan in place, having the levees in place, having all the things that they think they need to deal with another big storm hit.

Really, statistically, everybody is hoping it won't come right in there, but after last year, of course, everybody is afraid and hoping that these predictions turn out to be overly pessimistic and we have a somewhat better summer.

BLITZER: Let's hope. That's the only thing we can do. Thank you. And prepare, which is good advice for everyone.

Let's get a little more context now on these storms. Our Internet reporter, Abbi Tatton, has that -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, Dr. William Gray is predicting five major hurricanes this season. That's not unlike the prediction from the National Weather Service. Earlier on this month, they predicted four to six major hurricanes this season.

But Dr. William Gray's study goes into a little more detail about exactly where he predicts these might hit. This is the coastline of the United States. He had broken up by region, Dr. Gray, predicting a 20 percent chance that the New Orleans region will by hit by one or more intense storms. That's goes to 35 percent chance for South Florida. For the New York region, Dr. Gray says a 12 percent chance a major storm will hit.

You can see how your region fares. Go to CNN.com/SituationReport. We've put all of those resources there -- Wolf.

BLITZER: Thank you, Abbi.

Up next, why is it taking so long to get a decision from a grand jury here in Washington in the case of Congresswoman Cynthia McKinney? Jack Cafferty going through your e-mails. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Let's check back with Jack Cafferty. He's been going through your e-mail -- Jack.

CAFFERTY: Wolf, it's been over two months since Congresswoman Cynthia McKinney was accused of assaulting a Capitol Hill police officer. And ever since then, a grand jury has been investigating this case, trying to figure out whether or not to indict her. The question is why is it taking so long to get a decision out of this grand jury in the case of Congresswoman Cynthia McKinney?

Alex in North Carolina writes, "The grand jury is trying not to let policy, politics, race or the law get in the way of a just decision. So we may never be hearing back from them."

Theodore writes, "What's behind your bringing this up? Are you now looking into the affairs of all elected African-American officials in light of the William Jefferson case to make any and all African- Americans look bad?"

Get a life, Theodore.

Ron in Princeton, Minnesota: "Let's be honest. The case is being handled with kid gloves because the woman is black. End of investigation. In our quest to make all people equal, we've gotten around to the old 'some people are more equal than others,' with brownie points for past offenses to ancestors they don't even remember."

Mike in Pasadena, California: "People say there are two systems of justice: one for the rich, one for the poor. Well, there's a third: a criminal justice system for Democrats in the U.S. Congress, which looks the other way or drags its feet when a crime is committed. Just ask Ms. McKinney or Patrick Kennedy."

John in Dallas: "The reason for the delay in resolving this 'assault' case can be described by the two most obscene words in our culture today: political correctness."

And Alan in Charlotte, North Carolina: "The only possible reason for taking this long to charge Ms. McKinney is that the grand jury must also be considering charging her with impersonating a congresswoman" -- Wolf.

BLITZER: Jack, see you in an hour back here in THE SITUATION ROOM.

CAFFERTY: Yes, you will.

BLITZER: Right now, top spellers from around the world are duking it out here in Washington, D.C., at the largest spelling bee in U.S. history. Let's get the latest round of results from our Internet reporter, Abbi Tatton -- Abbi.

TATTON: Wolf, 274 kids were battling out -- battling it out here today. We just heard that only 46 are still standing after these initial first rounds.

From the web site, you can find some of the statistics about who these children are. Thirteen percent of them are home schooled. Compare that to a national average of about two percent.

There are some repeat offenders here who have been coming every single year for the last five years, like speller 99, John Louis Tandy Tamplin.

All of the information is here. Along with some information if you want to brush up on your spelling skills: 23,000 words, some of them more frequently appearing. Like porphyry. That one, an Egyptian rock, if you didn't know. And there's also some context so you can understand the words better: "Tasha carefully monitored the aneroid manometer," if that one helps you out.

All the results have been coming in all day with the correct spellings and the incorrect spellings. Tomorrow is the final day, and all the results are going to be posted online -- Wolf.

BLITZER: Good luck to all of those spelling bee champs. I love watching that on TV.

We're going to be back in an hour with more of THE SITUATION ROOM. Lou Dobbs getting ready to pick up our coverage right now -- Lou.

DOBBS: Wolf, thank you.

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