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The Situation Room

Showdown With Iran; Northwest Plane Diverted Due to In-flight Disruption; Interview With DNC Chairman Howard Dean; In the Footsteps of Osama bin Laden; Kidnapped Fox Journalists Appear in Hostage Video

Aired August 23, 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, the Bush administration says Iran's nuclear offer falls short of United Nations demands. Will the U.S. and its allies do anything about it?

It's 12:30 a.m. in Tehran. Are Iran's war games an ominous hint of what's to come?

We're inside Iran, only on CNN.

A midair incident involves air marshals, and a Northwest airliner is forced to turn around with a fighter escort.

It's 11:00 p.m. in Amsterdam, where Dutch police arrest a dozen passengers. What happened?

And a shy, quiet boy who played soccer and went to the local mosque, what turned him into the world's most wanted terrorist? A special preview of CNN's powerful new documentary, "In the Footsteps of bin Laden."

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

Not good enough. That's how the Bush administration today characterizes Iran's response to incentives aimed at halting its nuclear program. Iran's nuclear negotiator is offering more negotiations, but the State Department says that falls sort of U.N. demands. Is the stage now set for a showdown?

Our Aneesh Raman is standing by in Tehran. He'll join us live with a report you'll see only here on CNN.

But let's begin this hour with CNN's Brian Todd with a look at the possible Iranian threat -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, new details on that threat and some exasperation from leaders on Capitol Hill who put out the information.

(BEGIN VIDEOTAPE)

TODD (voice over): From key intelligence leaders in Congress, new warnings on Iran. While the regime weighs incentive packages and a deadline for suspending nuclear enrichment, they say, Tehran is also playing a familiar and dangerous game.

REP. MICHAEL RODGERS (R), INTELLIGENCE COMMITTEE: It's beyond a shadow of doubt for me that they are trying to stall for more time to continue their uranium enrichment and the building of their nuclear program.

TODD: Congressman Mike Rodgers says Western leaders have been duped by Iranian diplomacy for the past three years. Rodgers is a key player in House Intelligence Committee's new report on Iran's strategic threat to the U.S. and its allies.

RODGERS: These folks are absolutely up to no good. They're developing ballistic missiles, they're developing and trying to enrich uranium. They have chemical and biological weapons programs.

TODD: Information that's not new but does raise new questions about Iran's intentions at this crucial moment in diplomacy.

For instance, the report says the regime has produced enough of a compound called uranium hexafluoride to produce 12 nuclear bombs if it's enriched to weapons grade. Still, U.S. intelligence leaders and outside experts have repeatedly said Iran likely won't be able to produce a nuclear weapon for at least four years.

Ready now, a delivery system for any nuclear weapon, what the report calls the largest inventory of ballistic missiles in the Middle East. A capability that experts say is rapidly being developed further.

JOHN PIKE, GLOBALSECURITY.ORG: The Shahab 3, which is currently operational, has a range of 2,000 kilometers, can get to Israel. The Shahab 4, twice the range, 4,000 kilometers, can get to much of western Europe. The Shahab 5, also under development, could get all of the way to the United States, but they're years away from having that capability.

(END VIDEOTAPE)

TODD: Between four and 10 years for those two longer-range missiles, according to John Pike.

Now, after repeated calls and e-mails just a moment ago, I got off the phone with a top Iranian official at the United Nations. Who told us he needed more time to read the U.S. House report, but he also refuted the accusation that Iran is stalling for time on the nuclear issue and said his government is ready to begin negotiations at any time -- Wolf.

BLITZER: Brian, thanks very much.

Brian Todd reporting for us. Is there any room, though, for compromise? Is Iran ready to risk a showdown?

Our Aneesh Raman is the only U.S. television network correspondent in Iran right now. He's joining us live from Tehran.

Aneesh, is there a sense that you're getting speaking to Iranian officials that this is their bottom line, or what is the answer as far as August 31st, which is the real deadline for stopping enriching uranium?

ANEESH RAMAN, CNN CORRESPONDENT: Well, Wolf, I'm getting a much better sense on the Iranian strategy a day after that official response, given the fallout we're hearing. The U.S. saying it fell far too short.

Iran is not going to suspend its nuclear program by that U.N. deadline. That is the sense I get by every indication. What Iran did in this response is open up the possibility for new negotiations.

Why did they do that? Because at the U.N., when that deadline comes and passes with Iran not having suspended its program, there is no immediate trigger of action. Sanctions don't immediately come.

A debate has to take place within the U.N. Security Council. Russia and China, key Iranian allies on that Security Council, have already said they are open to the thought of new negotiations with Iran to find a new resolution. So Iran is preemptively, if you will, it seems, setting in place fodder for Russia and China, among, perhaps, others, to say let's slow down, let's not impose harsh sanctions, let's see if we can restart these dialogues and figure out a diplomatic solution -- Wolf.

BLITZER: Aneesh, when you speak to Iranians on the street in Tehran, and the word "sanctions' come up, if the United Nations Security Council were to impose some sanctions against Iran, do they understand the potential economic ramifications for the millions and millions of people that live there?

RAMAN: They do. Iran is a country that has and is enduring sanctions. And it endured an eight-year battle with Iraq. It's a people that are hardened. And when it comes to economic sanctions, specifically a people that are essentially used to them.

When I ask a lot of them, they say, it's really no big deal, we're already sanctioned. It could just get worse. So what does that matter?

What will have to happen in terms of the sanctions for it to hit the ground on the Iranian street, it's a (INAUDIBLE). First we might have travel restrictions on Iranian officials, then their assets frozen abroad. But if there come sanctions against gas imports -- Iran imports a lot of its gas, it doesn't have the refineries to make it on its own -- that is when gas prices will go up.

That is when the average person will start to feel a pinch. That is when jobs might get cut, and that is what they are starting to fear, very harsh sanctions that down the line could come. And that is when Iran's domestic for this program could come into doubt -- Wolf.

BLITZER: Aneesh Raman is the only television -- U.S. television network correspondent in Iran doing outstanding work for us.

Aneesh, thank you very much.

In CNN "Security Watch," another disruption and another passenger plain diverted. This time with a military escort. It happened in the Netherlands during a Northwest Airlines flight.

Let's get some details now from CNN's Homeland Security correspondent, Jeanne Meserve -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, 12 people are under arrest and facing preliminary charges in the Netherlands. Who they are, where they're from, still unknown.

(BEGIN VIDEOTAPE)

MESERVE (voice over): Northwest Airlines Flight 42 sat on the tarmac at Amsterdam's Schiphol Airport. The flight, which originated in Minneapolis-St. Paul, was turned around after taking off from Amsterdam for Mumbai, India.

PAMELA KUPYERS, SCHIPHOL AIRPORT PRESS OFFICER: It's standard procedure in the Netherlands to send an escort, a military escort. Two F-16 aircraft were sent to escort the plane back -- back to Schiphol.

MESERVE: Passengers were told the plane was going back for a security check.

UNIDENTIFIED FEMALE: It wasn't any conversation that you could hear. All I could see was the security police took a lot of people out and handcuffed a few of them and took them away.

MESERVE: An airline source in Amsterdam said the arrested passengers had been looking into bags and pulling out cell phones, which can be used to detonate bombs. A U.S. official said some had taken out cell phones during takeoff and tried to pass them around.

The official also says some of those arrested unfastened their seatbelts while the seatbelt sign was still illuminated. U.S. federal air marshals on board the flight broke cover, according to the official, and took control of security while the pilot headed back to Amsterdam.

UNIDENTIFIED MALE: I was afraid.

UNIDENTIFIED MALE: Yes? Why?

UNIDENTIFIED MALE: I was just (INAUDIBLE).

(END VIDEOTAPE) MESERVE: Officials say there was no intelligence indicating the flight was at risk and they are still evaluating how big a security threat the passengers posed.

Wolf, back to you.

BLITZER: All right, Jeanne. Thanks very much.

The war in Iraq, the war on terror, all stuff for political wins and losses. Stuff that political wins and losses are actually made of in elections.

Joining us now in Burlington, Vermont, is the Democratic National Committee chairman, Howard Dean.

Governor, thanks very much for coming in.

HOWARD DEAN, DNC CHAIRMAN: Thanks for having me on, Wolf.

BLITZER: We know that since 9/11, in 2002, in the elections, 2004, in the elections, the Republicans did very well with the issue of the war on terrorism. And in our latest CNN poll that's out this week, we asked, "Which party is doing a better job dealing with terrorism?" Forty-eight percent of the American people said Republicans, 38 percent said Democrats.

You've still got a 10-point spread here. You've got a major problem.

DEAN: I don't think so. It's essentially even. The poll numbers jumped after the British caught the potential bombers in the airlines.

But the fact is, for the last year and a half, the president hasn't had anything like the numbers that he had during the 2004 election. Fifty-four percent, same poll, don't believe the president is telling the truth. Sixty-one percent think the war is a mistake and we shouldn't be there.

So, I think this president is in deep trouble. Although, I have to say that the Iraq war is an issue that's getting him into deep trouble, but the issue that really got him into deep trouble, the anniversary is at the end of this week, and that's Hurricane Katrina.

BLITZER: You think that was a bigger problem for the president...

DEAN: I think the president...

BLITZER: ... the way his administration dealt with Katrina...

DEAN: Yes.

BLITZER: ... as opposed to the way the administration has dealt with the war in Iraq? DEAN: I do. I think Katrina -- the response to Katrina was effectively the end to the president's presidency in the sense that people all of a sudden saw the small man behind the curtain.

People in America and throughout the rest of the world for a long time have believed that Americans can fix anything, that we're better organized and better managed -- managed better than anybody, and that if something really awful happens, call on the Americans. And for the first time in our lifetime and in the world's lifetime, since World War II -- since before World War II -- we suddenly saw an American president just descend into failure. And I don't think he's ever recovered from that.

BLITZER: Here is what the president said earlier this week when it comes to the difference between what he said were Democrats' views on Iraq and what his position is.

Listen to what he said.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There's a fundamental difference between many of the Democrats and my party. And that is they want to leave before the job is completed in Iraq.

And again, I repeat, these are decent people. You know, they're just as American as I am. I just happen to strongly disagree with them. And it's very important for the American people to understand the consequences of leaving Iraq before the job is done.

(END VIDEO CLIP)

BLITZER: Now, that's translated by a lot of Republican politicians into charges of cut and run, that that's what you want to do and basically give up any hope for trying to deal with the situation in Iraq.

DEAN: This is exactly what was going on in Vietnam. And the president and the vice president are saying exactly what Richard Nixon and Spiro Agnew said again and again and again. It resulted in 25,000 more Americans being killed in Vietnam, and the result was the same as it would have been had we left earlier.

This is wishful thinking on the part of the president. They never thought this out.

I can remember the secretary of defense saying the whole world would be paid for by Iraqi oil. The vice president was saying we'd be greeted as liberators.

These folks are fundamentally out of touch with what's going on in Iraq and they're fundamentally out of touch with the needs of the American people. And we need a new direction in this country, Wolf, and we're going to have a new direction after November.

BLITZER: But as you know, a lot of Democrats, especially Democratic senators, are also saying the U.S. should try to finish the job and not set an artificial deadline for getting out.

DEAN: Finishing the -- the job was finished. We went in there to get rid of Saddam Hussein. We got rid of him. Then we decided we were going to occupy the country, and then we decided that we would try to mitigate a civil war, which we're now in.

The problem is, the job, as far as the president keeps defining it, is a moving target. He doesn't know what the job is. He doesn't know what the end point is.

The idea that we're going to have a democracy that looks like America was a ridiculous right wing intellectual idea from the beginning, and, you know, the neoconservatives. They're out of touch. Most of them have never served in the army and the ones that have rarely served abroad defending the country.

What they should have done is listened to the people that actually served abroad, listened to the military people, do what the military suggested. The difference between the Democrats and the Republicans is not that we're not both tough. We are. But the Democrats will be tough and smart, and that means we're going to listen to people who know what we're talking about before we commit troops.

BLITZER: When it comes to this issue, Senator Joe Lieberman clearly disagrees with you. And in part, that helped explain why he lost the Democratic primary in his home state of Connecticut.

I interviewed him here in THE SITUATION ROOM yesterday. Listen to this exchange I had with Senator Lieberman.

(BEGIN VIDEO CLIP)

BLITZER: Are you telling us -- can you look into the camera and tell the people of Connecticut once and for all you would not then join the Republican caucus?

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: That's absolutely what I've said. Are you representing the Republicans here?

BLITZER: I'm asking the questions.

LIEBERMAN: No. The answer is I have made that clear. I...

BLITZER: So there's no chance you would side with the Republicans...

LIEBERMAN: No.

BLITZER: ... even though you become a chairman potentially of a committee?

LIEBERMAN: No. I'm a Democrat, and I will remain a Democrat.

(END VIDEO CLIP) BLITZER: Now, you're a democrat, too, Governor Dean. It looks like there's a win-win potentially for the Democrats. If Ned Lamont wins, he's a Democrat. If Joe Lieberman wins, he says he's a Democrat.

DEAN: Look, I'm chairman of the Democratic Party. The Democratic voters in Connecticut chose Ned Lamont, who is a very capable, very smart guy who is moving forward and looking for a new direction in America. And I'm 100 percent supporting Ned Lamont and I'm going to campaign with him, we're going to help him in every way possible.

We believe that the voters have spoken. When the voters speak, you have to honor that in politics.

BLITZER: If he's elected, the senator, if he's reelected, would you like him to remain in the Democratic caucus in the U.S. Senate?

DEAN: Sure. We want to be a big tent. And Joe has served the country honorably.

But Joe is the past and Ned Lamont is the future. And we need a new direction in this country, and the voters in Connecticut have indicated that.

BLITZER: In this most recent "USA Today"-Gallup poll, the generic question among registered voters, your choice for Congress, it looks neck and neck, 47 percent Democrat, 45 percent Republican.

We had a poll earlier which did show a significant Democrat preference, 52-43 percent. But what do you make of this more recent "USA Today"-Gallup poll?

DEAN: Well, there was a "New York Times" poll that also showed that the gap was much wider than that. But, you know, in the end, as you very well know, the polls right now are relatively -- relatively unimportant.

And there's only one poll that really matters, and that's the one on November 7th. So, we'll see what the polls show then.

But I think if the election were held today the Democrats would win. But the election is not going to be held today and we've got a lot of work to do.

BLITZER: Governor Howard...

DEAN: Look, Wolf...

BLITZER: Yes, go ahead.

DEAN: ... the country fundamentally wants a different direction. The Republicans are just going to give us more of the same.

We want a new direction in the economy, we want a new direction in health care, we want a new direction in foreign policy, we want a new direction in Iraq, we want a new direction for gas prices. We need a new direction. You can't get that by voting for Republicans.

BLITZER: We'll have you back soon, Governor. Thanks very much.

DEAN: Thanks, Wolf. Thank you.

BLITZER: And equal time, that's what we call it. Tomorrow we've invited the Republican Party chairman, Ken Mehlman. He'll join us right here in THE SITUATION ROOM.

That's coming up tomorrow.

And coming up right away, he drove all the way from New Orleans to deliver a message to the president. Only a few hours ago he got his chance. We're going to tell you what he had to say.

Then, at 9:00 p.m. Eastern tonight, CNN will air a powerful new documentary about Osama bin Laden. We're going to have a special excerpt.

That's coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back to THE SITUATION ROOM.

I'm Wolf Blitzer in Washington.

Let's check back with Zain Verjee for a closer look at some other important stories making news.

Hi, Zain.

ZAIN VERJEE, CNN ANCHOR: Hi, Wolf.

The Hurricane Katrina survivor who invited President Bush to dinner in his trailer got coffee in the Oval Office instead. After meeting with Rockey Vaccarella this morning, the president said it was time to "recommit to helping residents on the Gulf Coast rebuild."

Vaccarella says he thanked the president for federal assistance but also delivered a message.

(BEGIN VIDEO CLIP)

ROCKEY VACCARELLA, HURRICANE KATRINA SURVIVOR: I just wanted to let the president know, please don't forget about us, that the rebuilding is taking a while. A year is sometimes a long time when you don't have your home and your life is interrupted. And the president assured me that he's not going to forget about us and he's going to do everything he can to do it.

(END VIDEO CLIP)

VERJEE: The administration says $44 billion has been spent to help the Gulf Coast in the wake of Hurricane Katrina and that $110 billion has been designated for the massive recovery effort. A new method of creating stem cells is being promoted as a potential solution to the contentious political and ethical debate surrounding stem cell research. A biotechnology company called Advanced Cell Research says the technique basically involves removing just one cell from a developing fetus, leaving the fetus otherwise unaffected. But a number of researchers and bioethicists say the method is not optimal from a scientific standpoint and will not end the ethical debate.

The National Weather Center says Tropical Storm Debby is gathering strength over the Atlantic Ocean. It proposes little threat to land. Weather center computers are projecting that the storm will turn to the north and then lose strength over the colder waters. A few of the computer models put the island of Bermuda in the storm's projected path. Debby is the fourth named store this year -- Wolf.

BLITZER: Zain, thank you very much.

It's almost five years since al Qaeda launched its devastating 9/11 attacks. Will the bin Laden network strike again?

In our latest poll, almost three-fourths of those responding say they believe Osama bin Laden is planning another significant attack on the U.S. Thirty percent think he'll succeed, 44 percent say he won't succeed.

In the poll conducted by Opinion Research Corporation, 58 percent say the U.S. is likely to capture or kill bin Laden, 40 percent do not believe the U.S. will manage to get the al Qaeda leader.

At 9:00 p.m. Eastern tonight CNN will air a powerful new documentary about the world's most notorious terrorist. In this special excerpt, our chief international correspondent Christiane Amanpour looks at Osama bin Laden as a boy. A shy and quiet boy.

(BEGIN VIDEOTAPE)

KHALID BATARFI, BIN LADEN'S CHILDHOOD FRIEND: I'm Khalid Batarfi, I met Osama bin Laden in the early 1970s when we lived in this neighborhood.

CHRISTIANE AMANPOUR, CNN SR. INTERNATIONAL CORRESPONDENT: This nondescript middle class jetta neighborhood is where Batarfi, then age 12 and Bin Laden, three years old, became neighbors and best friends. Going to the mosque together, playing together. Batarfi took us to the field where he and Bin Laden played soccer as teenagers.

BATARFI: Just looking at, bring a lot of memories. I enjoyed being a captain, really, you know, telling people what to do.

AMANPOUR: On the soccer field, Batarfi was the leader, Osama the follower.

BATARFI: But I would tell him what to do and he was a good soldier. He would follow orders. Usually because he was taller than most of us and older, he would play in the front, because this way he could use his head to score.

AMANPOUR: Batarfi says the teenage Osama would usually take the high road. He remembers a time his friend was being bullied.

BATARFI: So I went running to the guy and I pushed him away from Osama, and solved problem this way. But then Osama came to me and said, you know if you waited a few minutes, I would have solved the problem peacefully. So, this was the kind of guy who would always think of solving problems peacefully.

AMANPOUR: While Bartafi took the lead on the playing field, when it came to religion, there was no question, Osama was in charge.

BATARFI: That's the most, we used to play, yes, yes.

AMANPOUR: It is something of a mystery, why this son of a wealthy family was drawn to such rigid religious beliefs. Over time, Batarfi saw his best friend become even more of a fundamentalist, striving to live according to his ultra strict interpretation of the holy Koran.

BATARFI: No pictures, no music, and after that not even TV unless there's news.

AMANPOUR: Osama's religious devotion went beyond living a simple pious life. He had begun to believe it was his duty to prepare to one day fight for and defend Islam. Osama's training ground, the desolate Saudi desert. The son of a multimillionaire was now preparing for a life without luxuries or even basic essentials. A life as a holy warrior.

BATARFI: I hear from his brothers that when they go there, they sleep on the sand, there's no blanket, if it's cold and you know -- like soldiers.

AMANPOUR: Batarfi had no desire to join Osama's army, so the two friends began to drift apart.

BATARFI: I would prefer the beach, I was more romantic. I was thinking of love. He was thinking of love of God.

AMANPOUR: But how did Osama bin Laden's love of God become a mission to kill?

(END VIDEOTAPE)

BLITZER: "In the Footsteps of Bin Laden," a "CNN PRESENTS" special, two hour investigation airs tonight, 9:00 p.m. eastern only here on CNN. For more on the hunt for Bin Laden let's bring in our internet reporter Abbi Tatton -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, we want to go to CNN.com/binladen which has an interactive map which let's you follow Bin Laden's trail from the early years in Jetta, Saudi Arabia in the '60s and '70s. And this photo here, it's not given a date, it's not been verified, but it's believed to be that this was from a family trip to Sweden.

That is Bin Laden, second from the right. Back to the map it takes you from Pakistan to Afghanistan where in 1998 Bin Laden held his only news conference vowing to do jihad against crusaders and Jews. At CNN.com/binladen there are these maps, there are exclusive videos and also links to Al Qaeda documents -- Wolf.

BLITZER: Thank you Abbi for that. And coming up, Fox News Journalists appear in a hostage video 10 days after their kidnapping in Gaza. Tough demands from a previously unknown Palestinian group. We're going to have details. Also, Iran flexing its military muscle by shooting off missiles. What message is it sending with its latest war games. Stay with us.

(COMMERCIAL BREAK)

BLITZER: They were kidnapped on a street in Gaza last week, now two Fox News journalists have been shown in a hostage video released by a Palestinian news agency. In a leaflet accompanying the video, a group calling itself the Holy Jihad Brigades is demanding the release of Muslim prisoners held in the United States. CNN's Chris Lawrence has the story from Jerusalem -- Chris.

CHRIS LAWRENCE, CNN CORRESPONDENT: Wolf, this group, the "Holy Jihad Brigade" set a deadline of Saturday afternoon. The kidnappers said they would release their prisoners if the United States releases Muslim prisoners from the jails of America.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I guess I would add for myself ...

LAWRENCE (voice-over): Journalists Steve Centanni and Olaf Wiig appear on tape pleading for freedom.

OLAF WIIG, KIDNAPPED JOURNALIST: If you can apply any political pressure on the local government here in Gaza ...

LAWRENCE: Sitting on a floor mat with no militants in sight, Fox News reporter Steve Centanni said they're being treated well.

STEVE CENTANNI, KIDNAPPED JOURNALIST: We get lots of clean water, food everyday.

LAWRENCE: Their families have made public pleas for their release.

ANITA MCNAUGHT, WIFE OF OLAF WIIG: I know the people of Gaza are good people and you will bring my husband home to me.

LAWRENCE: Anita McNaught's husband spoke directly to his family.

WIIG: Please don't worry, I'll do all the worrying for us.

LAWRENCE: Over the past two years at least 26 foreigners have been kidnapped from Gaza, nine of them from the media. Hostages have usually been released within hours. But this kidnapping and threats of more to come cause some media to pull out of the area.

(on camera): For now we don't go beyond the check point. Palestinian security sources tell us an unnamed militant group has threatened to kidnap any foreign journalists caught in Gaza. The latest threat specifically targets those with U.S. or British passports.

DR. IYAD SARRAJ, PALESTINIAN ANALYST: The Palestinian authority and the government are in such hopeless situation today, they cannot control rule of law.

LAWRENCE (voice-over): Some Palestinian experts say this is a direct result of Hamas' election in January. Many countries cut diplomatic ties and financial aid. That created economic and social instability which stoked anti-western sentiment.

SARRAJ: They have opened the doors for Al Qaeda or even worse.

LAWRENCE: A previously unknown militant group called the Holy Jihad Brigades claimed responsibility for this kidnapping, and demanded the U.S. release Muslim prisoners from its jails within the next three days.

CENTANNI: I ask you to do anything you can to try to help us get out of here.

LAWRENCE: The kidnappers make no specific statement about what they'll do if their terms are not met.

(END VIDEOTAPE)

LAWRENCE: The U.S. State Department has called for the unconditional release of both journalists and says the United States will not negotiate with terrorists -- Wolf.

BLITZER: All right, Chris. Chris Lawrence in Jerusalem, thank you.

United Nations estimates that about 90 percent of the Lebanese who fled during the recent fighting are now back home. Officials say up to 6,000 people still crossing from Syria each day back into Lebanon. But Syria has vowed to close its border with Lebanon if U.N. peace-keepers are deployed there.

The U.N. has announced that the Secretary-General Kofi Annan will leave this week for a first hand look at the situation. Annan is expected to make 10 stops in the region to discuss implementing the cease-fire agreement between Israel and Hezbollah.

Still to come, Iran rattles some very loud sabers as its nuclear deadline approaches. We'll try to decipher the message written in these war games. And later, one year after the Hurricane Katrina disaster, Jack Cafferty asks this, how much importance should be placed on the first anniversary of Hurricane Katrina? We're taking your email. Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: As the standoff over Iran's nuclear program intensifies, the Islamic Republic is now showing off its military might in a rather ominous display. Let's bring in our Zain Verjee, she's got the story. Zain?

VERJEE: Wolf, Iran is playing games, war games. And the message that comes with it is a serious one.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): Multiple missiles, blasted out, aimed at targets on the high seas. Iran television broadcast video of this week's war games, above ground and under water.

KARIM SADJADPOUR, INTERNATIONAL CRISIS GROUP: Iran wants to send a very clear message to the international community that if they want to take an escalatory approach to Iran, it's going to be fought with risk.

VERJEE: Iran claims their missiles can strike Israel and even parts of Europe. They have a nuclear program that many fear could lead to a bomb. But even though Iran is facing the threat of sanctions by the U.N. Security Council, experts say Iran is in a powerful position. Iraq is bloodier and messier and oil prices are higher.

ROBERT LOWE, MIDDLE EAST ANALYST: Iran always retains a powerful card and its ability to cut off all supplies.

VERJEE: To some experts Iran appears to be emerging as a new regional power. And is warming to the idea of a new Middle East, but one where it is king.

SADJADPOUR: It's going to be reflected in their image, not the image of the United States. Meaning their friends in Lebanon and Iraq and Palestine are coming into power and the secular democrats, the friends of the United States are in retreat.

VERJEE: Iran is calling its war games the blow of (INAUDIBLE), after a sword that belonged to the revered Shia Iman Ali, the first cousin of the Prophet Muhammad who used it in battle.

(END VIDEOTAPE)

VERJEE: The war games are expected to last up to five weeks. Iran holds military exercises routinely though to test its equipment -- Wolf.

BLITZER: All right Zain, thank you. And up ahead with days to go until the anniversary of the Katrina disaster on the Gulf Coast, Jack Cafferty asked this. How much importance should be placed on the first anniversary of Hurricane Katrina? Jack will be back with your email in just a few minutes. Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: "In the Footsteps of Bin Laden" airs 9:00 p.m. eastern, just a little bit more than three hours from now. Jack Cafferty airs right now. Jack?

CAFFERTY: Not nearly as dramatic, though. The question we asked is how much importance should be placed on the first anniversary of Hurricane Katrina, which by the way is coming up next Tuesday.

Rosemary in Groton, Connecticut, "What makes it so special, is how little attention has been paid to this impoverished part of our country and how much of our resources, human and financial have been wasted in the fabricated war effort in Iraq. I'm sure if Bush had directed his attention toward the people he's supposed to be serving, we could have secure ports and borders and a thriving Gulf Coast instead of the crap we currently have. Shame on you, Georgie, shame on you."

John in Crescent City, California, "Who cares, what about parts of Florida? It's been years since the bad weather hit there. There are still empty homes in Homestead, roofs with blue tarps covering things. I think we've overdone New Orleans; hurricanes happen every year. Next year they'll want a holiday."

Scott in Washington writes, "We should reflect how the whole system failed and instead we have tried to just forget. They say we're ready this time for a new one, but I find that hard to believe when they're not even close to straightening out the last mess."

Matt in Amherst, New Hampshire, "What will be a real embarrassment will be visiting Lebanon a year from now to see how well Hezbollah has rebuilt after hurricane Israel."

Mike in Austin, Texas, "The list of failures in this administration goes on and on. Katrina's just one, Afghanistan, Iraq, the economy, gas prices. I wouldn't be surprised if some time between now and a few days after the anniversary of Katrina we'll have one more trumped up terrorism scare to yank Katrina off the front page."

Now Mike, you're such a cynic. If you didn't see your e-mail here, we invite you to go to CNN.com/CaffertyFile, you can read more of these online -- Wolf.

BLITZER: Thanks, Jack. Jack Cafferty in New York. Let's check back with Zain one more time for a quick look at some other stories making news. Hi, Zain.

VERJEE: Hi Wolf, more gruesome testimony in the genocide trial of former Iraqi leader Saddam Hussein. Kurdish villagers gave grizzly accounts of the alleged chemical attacks by the Iraqi military in the late 1980's. They described being pursued by helicopters even as they tried to flee. Tens of thousands of people are said to have died in the so-called (INAUDIBLE) campaign in northern Iraq. The trial has been adjourned now until the 11th of September.

The president of Venezuela touched down in Beijing earlier this morning for talks with the Chinese government and business leaders. Hugo Chavez is expected to formalize agreements to boost Chinese investments in various Venezuelan industries, including oil. China's increasingly been looking to Venezuela, the world's fifth largest oil exporter to help fuel its development boom.

Health officials in Canada say they've uncovered another case of mad cow disease. This time in an eight to 10 year old beef cow from Alberta. They say that no part of the animal made its way into human food supplies or animal feed systems. This is the eighth case of mad cow disease to be detected in Canada since May of 2003.

And the days of the smoke-filled French bistro bar may be numbered. France's health minister's calling for a ban on smoking in public places. In an interview with Le (INAUDIBLE) Newspaper, the minister says the ban is quote, "Going to happen." He says 5,000 deaths every year in France can be attributed to second-hand smoke -- Wolf.

BLITZER: No smoking in France, can you imagine Zain? Thank you. Coming up, welcome to the future, from bomb sniffing dogs to robotic first-responders. It could be the next wave of lifesaving search and rescue operations. It's coming up next, stay with us.

(COMMERCIAL BREAK)

BLITZER: Time now for our "Welcome to the Future" report. Today, robot technology that could help search and rescue missions across the United States with some important potentially dangerous missions. Here is our CNN Homeland Security correspondent, Jeanne Meserve. Jean?

JEAN MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, emergency workers already use robots to detonate bombs. Now the Department of Homeland Security is looking to the future, exploring other applications.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): A robotic "jaws of life" pries open a car door. The operators could be more than half a mile away. It's a demonstration of how this technology could save lives if rescuers can't reach victims. Already being used in Spain and the Middle East, it is one of many robot technologies being (INAUDIBLE) at a conference outside of Washington, D.C.

JOHN MAGIN, PRESIDENT, BOZ ROBOTICS: We had a chemical biological type of spill and you had people that were trapped in a car, instead of sending in fireman or a different type of dogs, what not, you need to get in there and get into that car, you could send this in remotely and do the same type of operation.

MESERVE: The event was organized by National Institute of Standards and Technology and the Department of Homeland Security, as they set the parameters that robots need to meet in order for teams to use federal grant money to buy them. First responders say the robots could be used in chemical, biological, radiological or nuclear attacks.

MIKE CONDITT, NEBRASKA TASK FORCE: One of the things that we're thinking about doing with them is putting hazmat sensors on them and sending them into a potential hazmat spill or even, you know God forbid something like a dirty bomb or something of that nature.

MESERVE: But some members of the team were not as impressed by the technology.

UNIDENTIFIED FEMALE: Until they get some treads on them that can actually work some of these piles, the dogs are much faster.

MESERVE: And that means Brutus can keep his job for now.

(END VIDEOTAPE)

MESERVE: DHS has not yet okayed the use of federal moneys to buy robots, that decision expected soon -- Wolf.

BLITZER: Thanks Jeanne for that. Let's close this hour with a closer look at some of the hot shots coming in from the AP, pictures likely to be in your hometown newspapers tomorrow. In Baghdad, Saddam Hussein sneers in court on the third day of his trial for genocide.

In Bangkok, government workers dress up like chickens to calm the public's fears of bird flu. Back to Baghdad were fuel shortages continue. Frustrated Iraqi drivers sit outside their vehicles while waiting for gasoline. This line of cars is over a mile long. And in Tyler, Texas, birds rest on a power line after a big rainstorm. Some of today's hot shots. Pictures often worth a thousand words.

We'll be back in one hour, much more in THE SITUATION ROOM coming up. Let's go to "LOU DOBBS TONIGHT," Kitty Pilgrim filling in. Kitty?

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