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The Situation Room

Bush Declassifies National Intelligence Document; Hillary Clinton Defends Husband's Comments on Hunt For Bin Laden; Senator Allen Accused of Racial Insensitivity; Pervez Musharraf Interview; Campaign Money Race

Aired September 26, 2006 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Ali, thanks very much. 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, President Bush takes the wraps off the secret report on the link between Iraq and terror. It's 4:00 p.m. in Washington, where Mr. Bush met again with the Afghan president and responded to do a leak he claims was politically motivated.

Also this hour, is Pakistan's president doing all he can to find Osama bin Laden? I'll speak at length this hour with Pervez Musharraf about the war on terror and possible tensions with President Bush.

And race in the Virginia Senate race: Republican George Allen can't seem to contain his latest controversy. Did he use a slur word against blacks or not?

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

President Bush is going to new lengths today to defend his claim that America is safer because of the war in Iraq. He says he'll declassify key judgments of the national intelligence estimate that reportedly concludes the Iraq mission has made the terror threat worse.

Mr. Bush made the announcement during a news conference with a key ally on the war on terror, the Afghan President Hamid Karzai. That's not deterring Democrats from stepping up their attacks on the president's handling of the Iraq war heading into the final stretch before Election Day. Our congressional correspondent Andrea Koppel is standing by. First though to our White House correspondent, Elaine Quijano -- Elaine?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: And Wolf, the White House rebuttal really began over the weekend when leaked portions of this classified NIE showed up in the front pages of newspapers. Well today we saw President Bush himself forcefully engage in this debate in a sign of the high political stakes.


QUIJANO (voice-over): President Bush used the formal setting of the White House East Room to launch a full-throated political defense, attacking what he called the politically motivated leaking of a classified national intelligence estimate dealing partly with Iraq.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We'll stop all the speculation, all of the politics, about somebody saying something about Iraq. John Negroponte, the DNI, is going to declassify the document as quickly as possible. He declassified the key judgments.

QUIJANO: The report made headlines over the weekend and provided ammunition for Democrats who argue the war in Iraq has made the U.S. less safe.

JOHN MCLAUGHLIN, CNN NATIONAL SECURITY ADVISER: A leak like this, to me, is an example of a bad trend. And that is the use of intelligence for political purposes.

QUIJANO: President Bush noted the NIE was completed in April and leaked just weeks before congressional midterm. But he dismissed the notion he was declassifying it for political purposes.

BUSH: Because I want you to read the document so you don't speculate about what it says.

QUIJANO: The president was asked about comments from former President Clinton, critical of his pre-9/11 efforts to find Osama bin Laden. Mr. Bush side-stepped the question saying he didn't have time for finger-pointing, but took the time to define his opponent's view.

BUSH: But there's a difference of opinion. It will come clear during this campaign, where people will say get out, leave, before the job is done. And those are good, decent patriotic people who believe that way. I just happen to believe they're absolutely wrong.

QUIJANO: Afghan President Hamid Karzai, a crucial U.S. ally in the war on terror, stood shoulder-to-shoulder with President Bush.

HAMID KARZAI, PRESIDENT, AFGHANISTAN: Terrorism was hurting us way before Iraq or September 11. And how do we fight them? How do we get rid of them, other than going after them? Should we wait for them to come and kill us again?


QUIJANO: Now, that meeting with President Karzai comes ahead of another crucial meeting tomorrow. President Bush is going to sit down not only with President Karzai, but also with the president of Pakistan, Pervez Musharraf -- Wolf?

BLITZER: When are we going to see this declassified document, Elaine?

QUIJANO: They're saying within the hour, Wolf. That was about an hour ago so at any moment really we're expecting this to happen.

BLITZER: All right. As soon as we get it, we'll come back to you and we'll share it with our viewers. Elaine Quijano at the White House, thanks very much.

And still ahead, I'll speak at length with that other critical U.S. ally in the war on terror, the Pakistani president, Pervez Musharraf. I'll get his take on the Iraq terror connection, the hunt for Osama bin Laden and President Musharraf's relationship with President Bush and the Afghan leader Hamid Karzai. We will speak live in a few moments right here in New York.

On Capitol Hill, top Democrats are finding and taking every opportunity to try to hammer the president when it comes to the war in Iraq and on that national intelligence estimate on the war's impact on terror. Let's bring in our congressional correspondent, Andrea Koppel -- Andrea?

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: Wolf, this week especially, you don't need a calendar to know that we are just six weeks away from those congressional midterm elections. You've only just set foot on Capitol Hill.


KOPPEL (voice-over): An act of civil disobedience as dozens of anti-war protesters refused to leave a Senate office building. While, on the House floor...

REP. NANCY PELOSI (D-CA), MINORITY LEADER: I offer privileged motion calling for a secret session.

KOPPEL: The top Democrat tried, yet failed, to force the House into a highly unusual secret session to discuss a classified intelligence report on terrorism and Iraq. Both events staged examples of the highly charged political current surging from one end of the Capitol to the other on the same day Iraq's president paid a visit.

In press conference after press conference, Democrats worked to keep the focus on what they call the Bush administration's failed policy in Iraq using a recently leaked intelligence report called an NIE to bolster their case.

SEN. DICK DURBIN (D-IL), MINORITY WHIP: We want to make certain that what we're doing in Iraq and around the world contains and destroys the threat of terrorism. This national intelligence estimate suggests just the opposite, that our strategy in Iraq is adding to the problem and not diminishing the problem.

KOPPEL: Even after the president said he would declassify key findings, Democrats said it still wasn't enough.

SEN. HARRY REID (D-NV), MINORITY LEADER: We call for all of it, we Democrats. You can't release it piecemeal. It's another attempt by this administration to hide the truth from the American people.

KOPPEL: Senator Hillary Clinton said Republicans are trying to shift the focus away from the unpopular war in Iraq. SEN. HILLARY CLINTON (D), NEW YORK: They may not have a plan to complete successfully the mission in Iraq, but they do have a plan to win elections here at home. The stakes are too high to let them take such a low road.

KOPPEL: While the top Democrat on the House Intelligence Committee accused the Bush administration of playing politics with intelligence.

REP. JANE HARMAN (D-CA), INTELLIGENCE COMMITTEE: I have also learned that there is an NIE on Iraq, specifically on Iraq, that has been left in draft form at the National Intelligence Council. That is because some of our leaders don't want us to see it until after the election.


KOPPEL: But according to a U.S. government official, Congress only asked for that updated report on Iraq back in July and according to the same official, we're far from being in draft form. The research and the investigation into this -- putting this report together has only just begun and the final draft isn't expected for several months -- Wolf?

BLITZER: Andrea Koppel on the Hill, thank you Andrea for that.

And we're getting more reaction now to Bill Clinton's spat with the Bush administration over the war on terror. Senator Hillary Clinton today is praising her husband's performance in that feisty television interview. The former president criticized the current White House's failure to capture Osama bin Laden and defended his own attempts to find and kill the al Qaeda leader.


CLINTON: I think my husband did a great job in demonstrating that Democrats are not going to take these attacks. You know, all you have to do is read the 9/11 Commission to know what he and his administration did to protect Americans and prevent terrorist attacks against our country.

You know, and I'm certain that if my husband and his national security team had been shown a classified report entitled "Bin Laden Determined to Attack Inside the United States," he would of taken it more seriously than history suggests it was taken by our current president and his national security team.


BLITZER: A very different reaction from the Secretary of State Condoleezza Rice. She's firing back at the former president. She told the "New York Post" editorial board the notion that the Bush administration sat there for eight months before the 9/11 attacks and didn't address the al Qaeda threat, in her words, "just flatly false."

We're going to have a full report on the Rice/Clinton feud in our next hour right here in THE SITUATION ROOM. And remember, for political news at any time, can you check out the CNN Political Ticker. Go to

Zain Verjee is joining us now for a closer look at some other important stories making news. Hi, Zain.

ZAIN VERJEE, CNN CORRESPONDENT: Hi Wolf. It's been a violent day across Iraq. Iraqi police say gunmen opened fire on mosques and homes in Sunni neighborhoods in Baghdad. At least three people were killed. Seven people also died in bombings in the Iraqi capital. Shootings and explosions across Iraq left eight other people dead.

Another day, another angry exchange between Saddam Hussein and the chief judge in his genocide trial. The judge threw the former Iraqi president out of the courtroom for the second straight day when Hussein repeatedly interrupted a witness. The trial has been adjourned until October 9th.

Key figures in two major bankruptcy scandals are behind bars. Former WorldCom CEO Bernard Ebbers reported to a federal prison in Louisiana today to begin his 25-year sentence. He was convicted of securities fraud and conspiracy. And a federal judge today sentenced Enron's former chief financial officer, Andrew Fastow, to six years. Fastow had agreed to serve ten years, but the judge said he deserved a lighter sentence because he showed remorse and helped prosecutors.

And it will become easier for you to find out if an organization has received federal funding. The President Bush signed the Federal Funding Accountability and Transparency Act today that basically establishes a new more accessible Internet database of government contracts and grants . It's set to launch in 2008 -- Wolf.

BLITZER: All right, Zain, thanks very much. We had been following that story for some time here in THE SITUATION ROOM.

Let's check in with Jack Cafferty -- he's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: How you doing, Wolf? You mentioned Condoleezza Rice met with the editorial board of the New York Post, today, right?


CAFFERTY: The New York Post is owned by Rupert Murdoch, the same guy who owns the F-word network -- the Fox News Channel, right?


CAFFERTY: Just wanted to connect those dots for our viewers.


CAFFERTY: Support in the United States for the war in Afghanistan is at an all-time low. A new CNN poll conducted by Opinion Research Corporation shows that only 50 percent of Americans support the war in Afghanistan; 48 percent oppose it. At the beginning of that war in 2001, 90 percent -- 9 out of 10 Americans -- supported our efforts in Afghanistan. And as recently as 2003, two- thirds of Americans backed the operation.

Part of the reason for the decline in support may be because Afghanistan is beginning to look more and more like Iraq. Just today, 17 people died in an attack in Afghanistan by a suicide bomber. The Taliban making a comeback in many parts of the country.

There is a report today that in some places in Afghanistan, women are, once again, required to wear a burqa when appearing in public. That's progress. And Afghanistan's opium cultivation up 59 percent this year, over a year ago, contributing mightily to the world's heroin problem.

So here is the question: Why is support for the war in Afghanistan declining among Americans? E-mail your thoughts to, or go to -- Wolf.

BLITZER: Thanks, Jack. Jack Cafferty, here in New York.

And coming up, the search for Osama bin Laden. Is Pakistan's leader doing all he can to find him? I'll speak one-on-one with Pervez Musharraf about the war on terror and possible tension's with President Bush.

Plus, did Senator George Allen use a slur word against blacks or not? We'll spotlight the controversy and the political fallout on the campaign trail.

And later: in the battle for Congress, campaign cash could be crucial. Will the Republicans' war chest help them keep control of Capitol Hill? Our John Roberts standing by live. Stay with us.


BLITZER: We're standing by to speak live with the Pakistani president, Pervez Musharraf. That's coming up momentarily. But first, some other important news.

For the third time in recent weeks, Senator George Allen is getting a crash course in damage control. The embattled Virginia Republican is vehemently denying that he has used racial slurs against blacks or that he's a racist. But today the allegations persist. Our national correspondent, Bob Franken, is covering George Allen's latest controversy -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, Wolf, in the political jargon, the campaigns like to stay on message. I think it's fair to say that the Allen campaign is definitely off message.


FRANKEN (voice-over): Senator George Allen was doing his level best to stay out of the limelight. He's got plenty of wounds to lick: the macaca ones, the denying his Jewish ancestry ones and the newest one, the charge from some former football teammates from his days at the University of Virginia in the early '70s.

DR. R. KENDALL SHELTON, FORMER ALLEN TEAMMATE: I feel then, now, that George was a racist.

FRANKEN: Dr. R. Kendall Shelton, who is now a North Carolina radiologist, is one of two who says that Allen used the N-word often. Shelton claimed that Allen beheaded a deer in one incident in rural Virginia and asked where the nearest black house was.

SHELTON: George drove his van to that location, opened a large mailbox, and pushed the severed doe's head into the mailbox.

FRANKEN: This poisonous drum beat has transformed what was supposed to be an easy reelection for Allen. One of his top campaign officials tells CNN this race is competitive now. At their behest, other teammates have stepped forward to vigorously deny Allen was ever racist.

DOUG JONES, FORMER ALLEN TEAMMATE: Absolutely not. In all the time that I've known Senator Allen, I've never heard him use a disparaging word. I've never witness him act in a racially insensitive manner to anyone.

FRANKEN: Allen himself denies the charge.

SEN. GEORGE ALLEN (R), VIRGINIA: And it is completely false for them to say that that was part of my vocabulary, then or since then, or now.

FRANKEN: Allen has, for years, been criticized for the Confederate flag he once displayed in his office, but he also sponsored legislation that would officially apologize for slavery.

UNIDENTIFIED MALE: Jim Webb -- Jim, come up here, the next senator.

FRANKEN: As for his opponent, Democrat James Webb, his most notable comment has been a no comment, preferring to appear above the fray between Allen and Allen.


FRANKEN: And, Wolf, a new slogan for the Allen campaign might be, "No news is good news."

BLITZER: Bob Franken, thanks very much.

We will be speaking with Jim Webb in THE SITUATION ROOM next week.

On our political radar this Tuesday, Senator John McCain and the immigration war, as the Arizona Republican joined with some Senate colleagues today to make a final likely futile push for comprehensive reform this year. But later McCain told CNN he is inclined to vote for a far narrower bill now before the Senate to build a 700-mile security fence along the U.S.-Mexico border. A short while ago, Democrat Ted Kennedy went to the Senate floor to blast that security fence bill. McCain and Kennedy are sponsors of a farther reaching bill that has been stalled in the Senate because of opposition to a key position -- a path to citizenship for many illegal immigrants.

Singer Ricky Martin is making his debut on Capitol Hill today. The Latin pop star and UN Good Will ambassador appeared before a House committee as part of his campaign to protect children from pornographers and the sex trade. Martin urged lawmakers to write better laws and commit more money to preventing human trafficking.

The actor/director, George Clooney, has never been shy about expressing his political views, but he's shrugging off suggestions that he run for office. Yesterday Clooney appeared at an event where California Governor Arnold Schwarzenegger signed legislation aimed at stopping the slaughter in Sudan. But the focus shifted to Clooney's own political ambitions. His response -- let me quote, now -- "You don't want me in politics."

And for constantly-updated political news throughout the day, check out that CNN political ticker -- go to A lot of useful information for political news junkies out there.

Up next, he's a crucial ally in the war against terror. The Pakistani President Pervez Musharraf standing by to join us live, right here in the SITUATION ROOM. This is an interview you're going to want to see. And we'll talk in that interview about the hunt for Osama bin Laden, and I'll ask President Musharraf if he sees eye-to- eye with President Bush when it comes to tracking down the al Qaeda leadership.

Stick around. My one-on-one interview with President Musharraf, that's coming up in just a moment. We'll be right back.


BLITZER: Welcome back to the SITUATION ROOM. I'm Wolf Blitzer, reporting today from New York.

President Bush today brushed off suggestions that tensions between two of his critical allies in the war on terror are hampering the hunt for Osama bin Laden. Mr. Bush is preparing to host an extraordinary dinner involving the Pakistani President Pervez Musharraf and the Afghan President Hamid Karzai. That would be at the White House tomorrow night.

Right now President Musharraf is joining us here in New York for an in-depth interview.

Mr. President, thanks very much for coming in.


BLITZER: I want you to listen to this exchange I had with President Bush in New York last week on the hunt for Osama bin Laden and al Qaeda leaders. Listen to this.


BLITZER: If you had good, actionable intelligence in Pakistan where they were, would you give the order to kill them or capture them, to go into Pakistan.

BUSH: Absolutely.

BLITZER: Even though the Pakistanis say that they're a sovereign territory?

BUSH: Absolutely. We would take the action necessary to bring them to justice.


BLITZER: Very blunt words from President Bush. Irrespective of your sovereignty, if they knew where bin Laden was in Pakistan, they would go in there.

MUSHARRAF: Well, my comments are -- I have been giving my comments that this is a sensitive area. And our decision is that we operate on our side of the border and U.S. forces and allies operate on the other side.

Now, having said that, we are hunting Osama and Zawahiri together. We are on the hunt, we are on the lookout for him. When we locate him, we have to take action, we have to take effective action to do away with him.

BLITZER: What would be wrong if the United States tried to capture or kill bin Laden or Ayman al-Zawahiri, his number two, in Pakistan?

MUSHARRAF: Well, it is a very sensitive issue. We should not be discussing how and who is to deliver the blow, but whenever we locate him, we have to deal with him. And let's leave it at that and let's not get into the sensitivities of who and how it will be done.

BLITZER: But you've discussed -- you're a very candid, blunt president. You discuss many sensitive issues in your new book, which we'll talk about. I'm trying to get an understanding, if the United States has certain technical means, military means, special operations forces, Hellfire missiles from Predator drones or whatever to get the job done, perhaps talents that the Pakistani military or the intelligence community doesn't have, you're close allies with the United States. Why not let the U.S. do that?

MUSHARRAF: I can assure you that all of the weapons that you're talking of are available and we use them. And we use them effectively whenever we locate al Qaeda on our side of the border. And let it remain at that. We will use anything that is required to deal with the situation.

BLITZER: Why is it okay, Mr. President, for the U.S. to operate in neighboring Afghanistan and try to hunt for al Qaeda or Taliban leaders, but it wouldn't be okay to operate in Pakistan?

MUSHARRAF; Please don't compare Pakistan with Afghanistan. Pakistan is a very, very stable country. We have a strong government. We have a strong military. We have a strong intelligence system. And everything in Afghanistan had broken down. So how can you compare the two?

We don't want our sovereignty to be violated. Whereas, in Afghanistan, there was an issue of terrorism within Afghanistan after 9/11. And that law and order was totally broken down. It was warlordism going on. It was -- the situation in Afghanistan was various warlords were controlling different parts of Afghanistan. How can you compare that with Pakistan?

BLITZER: Because some U.S. officials -- and you know this very well -- they fully support you. They have total confidence in you as the president of Pakistan. But there's a lot of concern about others in Pakistan, especially in the intelligence service, even within the military, that there could be moles that would tip off al Qaeda or Taliban if the U.S. shared certain very sensitive information it could pick up. You're familiar with this?

MUSHARRAF: Yes, I am familiar, but I don't agree with that at all. Anyone who knows our intelligence services, anyone who knows our military, they will not say that. And in any case, we exchange the most sensitive issues, more sensitive information already. There is total coordination in the intelligence and the operational level also.

BLITZER: But even there have even been some threats against you from within your own military or your intelligence service. You're arrested certain people.


BLITZER: So presumably is there a threat there?

MUSHARRAF: No, no. That happened so many years back, and that happened at the very low level. And in a force which is about 600,000, if you combine Army, Navy, Air Force, if there are about five, six individuals who have done that, there is not such an alarming issue.

And that were lower ranks. No officer was involved. The armed forces of Pakistan are commanded by officers. Actions are taken by officers, decisions are taken by officers. So these were some people who got affected by what was happening around, and these were individual acts of terrorism.

BLITZER: Let me read to you a sentence from an article Peter Bergen, our CNN terrorism analyst, wrote in "The Washington Post" on September 10th.

"The key to the resurgent Taliban can be summarized in one word: Pakistan. The Pakistani government has proved unwilling or incapable (or both) of clamping down on the religious militia, even though the headquarters of the Taliban and its key allies are in Pakistan." MUSHARRAF: Now this is absolute, sheer ignorance of realities on the ground. This is not the reality. Taliban were created in '95 in Afghanistan. They took over the whole of (inaudible), 90 percent.

Who were they? Were they from Pakistan? It is the same Mullah Omar , his same coterie, the same people who are doing this.

BLITZER: There are people who are suggesting, Mr. President, that Mullah Mohammed Omar, the leader of the Taliban, is actually in a Quetta, in Pakistan.

MUSHARRAF: This is most ridiculous. In Quetta, in Pakistan, it's the provincial headquarters. There corps headquarters, there are two divisions. There is a provincial government functioning. And there is an intelligence set up of CIA and ISI. I must say this. Both of them are inefficient if they don't even know that Mullah Omar is there.

BLITZER: Well, let me press you on that. The CIA and ISI, the Pakistani intelligence service ...


BLITZER: ... they're together, working in Quetta right now?



BLITZER: ISI -- the ISI and the CIA are in Quetta right now?

MUSHARRAF: Yes, sir. Yes, sir. Exactly.

BLITZER: So, you are operating with the CIA in Quetta?

MUSHARRAF: Everywhere.

We -- whenever we track down terrorists, wherever they are, we get technical -- technical support from your people.

But I would like to -- this is a report of the United Nations. Very briefly, I will just take one minute. Twenty-four September, day before yesterday, report of secretary-general on the situation in Afghanistan, I just want to read out one -- a few.

Insurgency is being conducted mostly by Afghans operating inside Afghanistan's borders. Leadership appears to rely on support and sanctuary from outside the country.

Now, this is where Pakistan gets involved.


MUSHARRAF: But, more than that, let me...

BLITZER: Yes. MUSHARRAF: ... just state the report identifies five district leadership centers of the insurgency, appearing to act in loose coordination with each other, and benefiting from financial and operational links with the drug trafficking network, which I have been saying.

BLITZER: So, you're talking about what is happening in Afghanistan right now?



MUSHARRAF: Just one thing.

BLITZER: As you know, President Hamid Karzai is complaining about what is happening in your country.

MUSHARRAF: Just one second.

Now, they include the wing of -- now, this is what is happening there. Hezb-i Islami Party of Gulbuddin Hekmatyar is in Kunar. And Taliban Northern Command is in Nangarhar and Laghman provinces. Networks led by Jalaluddin Haqqani is in Khost and Paktia, Juana Shura (ph) for Paktika, Taliban Southern Command in Zabul, Kandahar...


BLITZER: These are all areas -- these are all areas of Afghanistan.


MUSHARRAF: Yes, sir.

BLITZER: Excuse me for interrupting.

MUSHARRAF: Just one more thing.

The foot soldiers of the insurgency are Afghans recruited within Afghanistan. That is what I want to read.

Now, I have been crying hoarse to the whole world, sir, this Taliban movement, let us not get it converted into a people's movement. And this is what is happening in Afghanistan.

If you keep going wrong, and thinking every one thing is in Pakistan, this is what will happen. Now, if everything is in Afghanistan, I must say Mullah Omar is damn crazy to be sitting in Quetta, when his people who are fighting, his army, is sitting in Afghanistan.

BLITZER: We have to take a short commercial break.

But, before we do, I just want to press you on this point. The last time you and I spoke was in March. And you said this. You said about President Hamid Karzai, the man you're going to have dinner with tomorrow night at the White House, with President Bush, you said then that President Karzai -- and I'm quoting now -- "is totally oblivious of what is happening in his own country."

And you just referred to a lot that is happening in Afghanistan right now. Question: Is he still oblivious to what is happening in Afghanistan, or do you owe him an apology?

MUSHARRAF: He is not oblivious. He knows everything. But he's purposely denying -- turning a blind eye, like an ostrich. He doesn't want to tell the world what is the fact, for his own personal reasons. This is what I think.

BLITZER: Whatever his own personal...

MUSHARRAF: Because the fact is, this...

BLITZER: Whatever his own personal reasons, why would he not want to be blunt and -- as you always are?

MUSHARRAF: There are -- in the governance in Afghanistan, there is a certain community which is feeling alienated. And this country has 50 to 60 percent representation of Afghanistan. And that is his problem. He has to balance out. And he is not being able to do that.

And, therefore, he is trying to hide that everything is happening from Pakistan. If he keep going wrong, I have been telling the world since three months, we are delaying. We are getting late. All this that I have read is what is happening in Afghanistan in all the provinces. This is a movement going on.

This is a Pashtun uprising by the people going on. If he doesn't understand this, he will keep going there, and we are going to lose in Afghanistan.

BLITZER: And dinner tomorrow night at the White House is going to be an exciting dinner.

MUSHARRAF: Very interesting.

BLITZER: Stand by, Mr. President. We have a lot more to talk about, including your deal with what are called Taliban leaders along the border between Afghanistan and Pakistan.

We're also going to talk about Pakistan's role in disseminating nuclear equipment around the world -- much more of my interview with the Pakistani president, Pervez Musharraf.

We're standing by. We're live here in THE SITUATION ROOM.

We will be right back.


BLITZER: Welcome back.

We're speaking with the president of Pakistan, Pervez Musharraf. He's here in THE SITUATION ROOM.

Mr. President, this deal that you worked out with these tribal elders along the border between Pakistan and Afghanistan, some describe it as, effectively, amnesty for al Qaeda and the Taliban. You reject that. You say this is part of the war against the Taliban and al Qaeda.

"The London Daily Telegraph," though, this past Sunday, wrote this: "The fugitive Taliban commander, Omar has emerged as the key player behind the movement's controversial peace deal with Pakistan. The Taliban's one-eyed spiritual leader, who has a $10 million price on his head for refusing to hand over Osama bin Laden after the September 11 attacks, signed a letter explicitly endorsing the truce announced this month."

Your reaction.

MUSHARRAF: No. I don't really know anything about what they are saying. I don't know whether they have proof of this. I would like to have the proof of Mullah Omar having supported the process.

But, however, I'm interested in the effects. They approached the governor themselves to reach this peace deal. And the peace deal is between, as you said, with the tribal elders. And the basic strategy, which we must understand, when I'm saying we want to avoid the greatest danger, the disastrous danger of this being converted, the Taliban getting converted into a people's movement.

We can only do that if we understand that all Pashtun are -- the Taliban are all Pashtuns, but all Pashtuns are not Taliban. We need to take away the Pashtun, the majority -- it is in majority -- I know that -- from the Taliban.

BLITZER: All right.

MUSHARRAF: And this deal is intended to take the majority away from the Pashtun, wean them away, and then utilize them with the force backup to counter the Taliban.


MUSHARRAF: This is the political strategy which is the right direction.


MUSHARRAF: Maybe it should be repeated, replicated in -- on the -- across the border, if we succeed.

BLITZER: You have written a new book, "In the Line of Fire: A Memoir," in which you make many explosive charges in this book, one of which that suggests, perhaps, Pakistan was a reluctant ally of the United States in the immediate aftermath of 9/11., the warning you supposedly got, denied by Richard Armitage, that the U.S. would bomb you back to the Stone Age if you didn't cooperate.

You know the denials from Richard Armitage. He insists he never told your intelligence director anything like that.

MUSHARRAF: Well, I have written whatever I heard. And my intelligence director did say that. Now, I would leave it at that.

He didn't contact me. He didn't say that to me.

BLITZER: Is that why you cooperated with the U.S. ...

MUSHARRAF: No, no. No.

BLITZER: ... because of the threat?


BLITZER: Because you also write about war games that you were engaged in, your military, to at least plan for the possibility of the U.S. and Pakistan engaged in military conflict against each other.

MUSHARRAF: No. This is not the case.

The first thing that came to my mind was Pakistan, Pakistani national interest, Pakistan's security. So, as far as Pakistan's interest is concerned, we ourselves were victim of terrorism. And we ourselves were against al Qaeda or any form of terrorism, whether it is Taliban.

We were against Talibanization of Pakistan. So, basically, it is in national interests, the right of the decision. However, we took into account, certainly, that we are a nuclear state. Destabilizing a nuclear state would certainly cause a lot of upheaval in the world. And, therefore, the decision, which was very balanced, based on realities, ground realities, that we took this decision.

BLITZER: You also write in the book this.

And I want to put it up on the screen, because it's a very sensitive point right now in the current debate in the United States. I will read to you what you write: "I never favored the invasion of Iraq, because I feared it would exacerbate extremism, as it has most certainly done. The world is not a safer place because of the war in Iraq. The world has become far more dangerous."

This is very different than what President Bush says, including today, in the aftermath of this debate over this latest U.S. national intelligence estimate of the impact of the war in Iraq on the war on terror.

Is there anything you want to revise or amend from this statement? Or do you stand by what you wrote in the book, as far as the war in Iraq and its effect on the global war on terrorism?

MUSHARRAF: Well, I stand by it, absolutely.

BLITZER: So, you disagree with the president of the United States?

MUSHARRAF: Well, I have stated whatever I had to, that this has -- it has made the world a more dangerous place.

BLITZER: So, you will have an interesting conversation with the president on that tomorrow, when you meet with him for dinner as well.

Pakistan is the first Muslim country that developed a nuclear bomb. From your perspective, is it OK if Iran follows your lead?

MUSHARRAF: We developed it because of our security perspective, because of our threat perception.

We don't believe that there should be any more nuclear proliferation. And we don't think that Iran has -- suffers from a perception that we suffered.

BLITZER: So, you would oppose Iran's going forward?


BLITZER: They deny they're doing this -- but going forward, enriching uranium, with the purpose of building a bomb?

MUSHARRAF: We are against it. We would be against it.

BLITZER: How far along are they? Because, as you know, A.Q. Khan, your nuclear scientist, did provide them with certain sophisticated technologies.

MUSHARRAF: Well, I can't say at all.

But I know for a fact that just giving (INAUDIBLE) of centrifuges, or parts of centrifuges, or even -- cannot -- well, centrifuges doesn't mean anything, because you need caskets of thousands of centrifuges to be able to enrich uranium to that level within a -- a span of time.

I really don't know whether they have caskets of thousands. And if he -- if they have them, they have got them from the West, because these are all available -- the metallurgy is available only in Europe and United States.

BLITZER: Let me read to you also from the book "In the Line of Fire."

You write this: "Those who habitually accuse us of not doing enough in the war on terror should simply ask the CIA how much prize money it has paid to the government of Pakistan."

We asked the CIA how much prize money they have paid to the government of Pakistan. They have no comment.


BLITZER: We asked former intelligence officials, who say that no such money was paid. They give rewards to individuals, but no prize money to Pakistan.


MUSHARRAF: I don't know whether this is to the government of Pakistan. I don't think I wrote the government of Pakistan.

BLITZER: The book says, on page 237, "the government," "paid to the government of Pakistan."

You want to revise that?

MUSHARRAF: Yes. I think that, if it is written "government of Pakistan," yes.

It has to -- these people, there are so many of them that had money of $5 million there, declared, had money. So, that has to be given.

Now, to whom it is given and how it is given, I don't even know the details. But, however, there is only -- there is not one person who is involved in these operations. There is a whole organization and a whole operation that goes on of intelligence and law enforcement agencies.

How the money gets distributed, it is distributed to people, certainly. So, I'm very clear that this money does get distributed. I'm not even involved in who distributes and who exactly gets.


BLITZER: The U.S. Justice Department does confirm they have given money to Pakistani citizens for help.



BLITZER: ... resulting in the arrests of certain high-level officials.


MUSHARRAF: Certainly not the government, and not the government. And I would like -- if I have written the government of Pakistan, no, government of Pakistan has not received anything.

BLITZER: All right.

Mr. President, always good to speak with you. "In the Line of Fire" is your memoir.

You are going to have a fascinating dinner tomorrow night at the White House with President Bush and President Hamid Karzai.

We would love to invite you and President Karzai to come here into THE SITUATION ROOM and discuss these issues jointly. If you're interested, we could certainly make that arrangement in Washington tomorrow. MUSHARRAF: We need to have the proper atmosphere and proper attitudes. Then only should we sit together, instead of showing the whole world what is happening.

I think this is a situation where we need to coordinate effort. We need to be harmony -- there needs to be harmony between Afghanistan, Pakistan, allied forces, especially United States.

And if there is disharmony, if there is disagreement, even on the environment, it is the most terrible -- and I think, at the moment, there is total misunderstanding of the environment by Afghanistan and Karzai. And I know Karzai knows the environment. But he is denying the realities, and putting all the -- he's finding it more convenient to throw the blame on Pakistan, that Mullah Omar is there. Headquarter of (INAUDIBLE) is there.

I read out the U.N. report. I have been saying exactly this since three months. Every one is telling Pakistan is supporting them financially. If Pakistan is supporting, then I am supporting, because I -- we are controlling finances. The prime minister, who was my ex- finance minister, he's -- must be giving the money to them.

All -- there is no philanthropist in Pakistan who is doing all this. The money is from drugs. And this is very clear.

BLITZER: Well, we have to, unfortunately, leave it there.

Mr. President, thanks very much...

MUSHARRAF: Thank you.

BLITZER: ... for coming in. Appreciate it very much.

MUSHARRAF: Thank you. Thank you very much.

BLITZER: And coming up here in THE SITUATION ROOM: Is the Bush administration on the same page as President Musharraf? We're going to get quick reaction to my interview.

The State Department Undersecretary Nicholas Burns, he is standing by to join us live in the next hour, here in THE SITUATION ROOM.

And the CNN Election Express, right here in the nation's capital, where Republicans are expecting to rake in lots of political cash tonight. Our senior national correspondent, John Roberts, is following the money trail in the battle for Congress.

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


BLITZER: Welcome back. Republicans and Democrats are counting the days until the November 7 congressional election. And they're also counting their dollars. As all politicians know, in campaigns, few things matter as much as money. Our national correspondent, John Roberts, is with the CNN Election Express in Washington, following the money race -- John.


Yes, we have got the big bus out in front of the National Building Museum, where Vice President Dick Cheney is headlining a fund-raiser tonight expected to raise $4 million for the Republican Senatorial Campaign Committee.

At the same time, President Bush has got another fund-raiser going in Washington tonight for the congressional delegations of Iowa, Arkansas, and Wisconsin.

So, how much money is there going to be in this election circle? The Center For Responsive Politics estimates that it's going to match or exceed 2002 $1.9 billion. And 2002 was back when they still allowed those massive corporate soft-money contributions. So, they're raising a lot of money from individuals. It's an indication, Wolf, of just how much is at stake on November the 7th.


ROBERTS (voice-over): The vice president hit a milestone this week, his 100th fund-raiser of the midterm election cycle -- not far behind, President Bush, with just under 70 now.

In total, Republican candidates and campaign committees have so far raised more than $870 million.

KEN MEHLMAN, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: I think it's an indication, first of all, that the commitment that this party and this president have to keeping our majorities in Congress.

ROBERTS: But it's also a sign, admits party chairman Ken Mehlman, of the challenge Republicans face.

Just look at this recent fund-raising appeal from Senate Campaign Chairwoman Elizabeth Dole. "Republicans are more at risk of losing our critical Senate majority than ever before," she writes.

THOMAS MANN, SENIOR FELLOW IN GOVERNANCE STUDIES, BROOKINGS INSTITUTION: I think it's a position of weakness. They would not be spending this money if they thought they were in good shape.

ROBERTS: And what is bad for Republicans appears to be paying off for the Democrats.

SEN. CHARLES SCHUMER (D), NEW YORK: We have set records already in what we have raised. We have raised more, as of now, than we raised in all of the last cycle. And we're going to significantly outspend what we spent last time.

ROBERTS: While Democrats are getting better, particularly under new fund-raising rules that outlaw so-called soft money, they still lag more than $100 million behind the Republicans.

Some analysts believe a rising Democratic tide might compensate for the deficit, but Senate Campaign Committee Chairman Chuck Schumer would rather have the cash.

SCHUMER: Well, it's not true that money isn't important. It always is. And, in this job, even though I have been in politics for 30 years, it is amazing how you put a couple of million bucks on TV, and it changes the election.

ROBERTS: And there is another issue for Democrats. Party chairman Howard Dean will spend just a fifth of what Republicans will on congressional races. The more urgent need, he says, is to rebuild the party apparatus on the state level.

HOWARD DEAN, DEMOCRATIC NATIONAL COMMITTEE CHAIRMAN: Look, I don't pretend, for a minute, that we have the kind of election machine that the Republicans have. We need to rebuild that. That's why I'm chair of the party.

ROBERTS: As Democrats bicker over Dean's tight pockets, Republicans will turn theirs inside out.

MEHLMAN: It's the most the RNC has ever spent.

ROBERTS: In politics, there is an old saying: Whoever spends the most wins. And even the most optimistic Democrats believe, despite all their political troubles, the Republicans' cash advantage will make a difference.

SCHUMER: How big a difference? We will have to wait and see on Election Day. We hope not enough of a difference.


ROBERTS: So, what can voters expect from all this money in the next five weeks? An ad and outreach blitz the likes of which has never been seen before in a midterm election.

The Republican strategy is going to be to define their Democratic opponents, which Democrats translates into an onslaught of extremely negative advertising -- Wolf.

BLITZER: All right, John, thanks very much.

John Roberts and, as we saw earlier, Bob Franken, they are part of the best political team on television.

Up next: A golfing great is gone. We will look back at Byron Nelson's legacy on the links.

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


VERJEE: I'm Zain Verjee in Washington, with a closer look now at other stories making news.

Golfing great Byron Nelson has died. He died today of natural causes at his home in Texas. Nelson had the greatest year in the history of professional golf, when he won 18 tournaments in 1945, including a record 11 victories in a row. He was known as "Lord Byron" for his elegant swing. Byron Nelson was 94.

And still to come: Why has support for the war in Afghanistan slipped? Jack Cafferty asks the question. Your e-mails are just ahead.



BLITZER: Let's check in with Jack Cafferty. He's here in New York -- Jack.

CAFFERTY: Indeed, as -- as you are. "The Cafferty File."

A new poll showing only 50 percent of Americans now support the war in Afghanistan -- that's down from 90 percent at the time that war started. The question we ask is: Why is support for the war in Afghanistan declining among Americans?

John writes: "Jack, the declining support for Afghanistan and Iraq are the same. The citizens of the U.S. don't want to be involved in a prolonged war. They don't believe the administration about the war. These wars did not capture Osama bin Laden, and only created more hatred for the United States."

Marco in Boise, Idaho: "Maybe it's because the Taliban is still strong in numbers; OBL is running loose; opium is the number-one export now, something the Taliban has all but eradicated; Karzai's government controls only Kabul; soldiers are still dying; al Qaeda still trains and recruits terrorists there; and Iraq has led us astray. Other than that, it's all good."

Steve in Oak Creek, Wisconsin: "Because the American people have finally begun to notice that this war doesn't seem to have an ending either. Why should it? Keeping it going for as long as possible gives Bush and his cronies an excuse to scare the hell out of us all. The same goes for the war in Iraq, the next one in Iran, and probably the one in Venezuela, too."

Chuck in New York: "Well, the cynic in me thinks it might be because the fickle public is just getting tired of it all. But the optimist in me hopes it's because Americans are finally waking up and focusing on the pervasive failure of this administration's policies throughout the entire Middle East."

And, finally -- I love this -- Thomas in Florida: "The answer to the question, Jack, is simple. We live in and are primarily a feel- good, on-demand society. I didn't watch 'Monday Night Football' last night, because I knew it would be just like the first 'Monday Night Football' game after 9/11: a lot of tear-jerking, emotional hype, accolades, and epitaphs that fade as quickly as our collective willingness to do the hard tasks. Is bin Laden still a free man? Is New Orleans rebuilt? No and no. It's too bad these problems simply don't fade, along with our willingness to deal with them" -- Wolf.

BLITZER: Good letter.

CAFFERTY: Good stuff, yes.

BLITZER: Thanks very much, Jack Cafferty.