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The Situation Room

Dems Drop Demands for Iraq Pullout Timeline; Middle East Hits Boiling Point

Aired May 22, 2007 - 19:00   ET

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

WOLF BLITZER, CNN HOST: Thanks, Lou.
Happening now, we're following breaking news. Democrats drop their demand for an Iraq pullout timeline. The majority leader spoke to reporters just moments ago. We're going to tell where you negotiations stand right now. This is a developing story.

Worst-case scenario, as the Middle East hits a boiling point. Tonight there are new fears of spreading civil war, terror breeding grounds and gas prices in the stratosphere.

And a new drive to try to clean up the air with thousands of cleaner running taxis. I'll ask New York City's Mayor Michael Bloomberg about that and if he's open to being a third-party candidate for president. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Tonight, a final push on Capitol Hill to try to strike a compromise over Iraq War funding, put a long-running dispute to rest, at least for now. Democratic leaders just revealed where those talks stand. This after word that they have dropped their demand for a withdrawal timeline. A demand President Bush was prepared to veto once again. Let's go straight to congressional correspondent Andrea Koppel.

Andrea, tell our viewers what's happening right now.

ANDREA KOPPEL, CNN CORRESPONDENT: Just a few moments ago, Wolf, Speaker Pelosi and members of the House Democratic leadership team announced they have the general outlines of an agreement on that president's war funding bill, that emergency money he says he needs for the wars in Iraq and Afghanistan.

They say that they are basically going to be offering two different votes, two different votes. One that would include the money that the president has asked for, about $94 billion, as well as benchmarks that the Iraqi government would have to meet and if they didn't, they would be tied to Iraqi reconstruction funds.

The other vote that would happen in the house would include a vote on minimum wage for the first time in about 10 years. A boost in the amount of federal minimum wage that workers would get, as well as about $20 billion in domestic spending.

Now according to one of the top Democrats in the House, Rahm Emanuel of Illinois, he said that believes it's the first step toward ending the war in Iraq.

(BEGIN VIDEO CLIP)

REP. RAHM EMANUEL, (D) CAUCUS CHAIRMAN: It ends the blank check on more troops, more money, more time and more of the same, and it begins the notion that we have to have a new direction to Iraq that has accountability, standards, that you can measure progress or not, and the notion that what we've done in the past does not work and that you have to find some other way to bring a conclusion to the Iraq War.

(END VIDEO CLIP)

KOPPEL: Now, obviously, neither one of these measures includes a timeline to bring U.S. troops home. Democrats say they plan to attach that to defense bills later this summer, but, Wolf, one headline that came out of this press conference is that Speaker Pelosi indicated that she may not vote to support the funding for the troops. She said she hasn't made up her mind yet, but she certainly did seem to suggest that she might not vote for either of these measures, or certainly the one that President Bush wants, the $94 billion, because it won't include a timeline.

BLITZER: Does that mean there are enough votes in the House of Representatives? If the speaker votes against it or doesn't vote at all, will there be enough Democrats that will support it, enabling it to go forward to the president's desk?

KOPPEL: There may not be enough Democrats but I spoke to House Democratic leadership aides today who say they fully anticipated that, but that they did believe they had enough Republicans in the House who would support this. And, remember, these negotiations have been taking place between Democrats and Republicans and the White house, so presumably they say if they have the outlines of the deal with details still being worked on, they know they their ducks in the row, Wolf.

BLITZER: And the deputy White House chief of staff, Joel Kaplan told me earlier here in THE SITUATION ROOM that the president would sign it into law, including a minimum wage increase if that's attached to it. Thanks very much. Andrea, we're going to stay on top of this story with you.

Meanwhile, the U.S. military reporting another American soldier died in Iraq today after his unit came under enemy fire; 3,423 American troops have now been killed in Iraq since the war began more than four years ago.

There are also major new developments as fighting rages between Lebanese Army troops and Islamic militants inside a Palestinian refugee camp in Lebanon. A United Nations humanitarian convoy was caught in the cross fire and a group of aid workers was trapped in the camp for several hours before escaping.

And to the south, new Israeli air strikes in Gaza, Palestinian sources report two such strikes. Israel confirms one that it says was on a launch site used to fire rockets from Gaza into Israel. Palestinian sources report at least four people injured. All of this on top of the war in Iraq, raising serious concern the entire region could be on the verge of a meltdown with the worst yet to come. Let's go straight to our State Department correspondent, Zain Verjee. Zain, what are you hearing?

ZAIN VERJEE, CNN ANCHOR: Wolf, the entire Middle East is on edge and there is a chance it could go over the edge.

(BEGIN VIDEO TAPE)

VERJEE (voice-over): The Middle East a cauldron threatening to boil over. Bloodshed in Lebanon, Iraq, Gaza. Mounting fear the region will spiral out of control.

SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: Oh, it's a real threat.

VERJEE: U.S. officials tell CNN they see Iran and Syria as the spoilers, using the militias under their control to light fires throughout the region, distracting the U.S. and its allies with chaos and conflict.

MCCORMACK: It's a struggle. And we see evidence of it on our television screens every single day.

VERJEE: And Bush administration officials worry if the sectarian bloodshed in Iraq gets worse, it could spill over and trigger even more Sunni-Shia confrontations in neighboring Gulf states.

FAWAZ GERGES, SARAH LAWRENCE COLLEGE: If Iraq does sink into all out war, I fear that the entire region might implode from within.

VERJEE: All out civil wars not just in Iraq, but in Lebanon and Gaza. Oil prices would shoot up, seriously jacking up the cost at the pump. A chaotic and radicalized region -- the perfect breeding ground for terrorists to thrive and plan attacks. U.S. officials also worry that if the U.S. pulled out of Iraq, Iran would dominate the region and create more trouble.

Mid-East experts say the U.S. needs an aggressive diplomatic strategy with Iran and Syria.

GERGES: I think the administration has boxed itself in. It has become a hostage of its own rhetoric. And that's why American diplomacy is not as effective as it should be.

(END VIDEO TAPE)

VERJEE: U.S. officials say the price of dealing with Iran and Syria may be too high. One U.S. official, Wolf, told us that would essentially amount to surrender. Wolf?

BLITZER: What would that price be? Elaborate a little bit, Zain, on what they are telling you. Because a lot of experts, including the Iraq Study Group, say if you want to try to resolve this, negotiations, diplomacy, that's the key and you've got to talk directly to the top officials in Syria and Iran and every place else for that matter.

VERJEE: Right. Exactly, Wolf.

Well, U.S. officials have said that dealing would essentially amount to firstly giving both Syria and Iran regime protection, giving Iran concessions on its nuclear program and also Syria doesn't want to a tribunal set up that's essentially going to investigate the assassination of the former prime minister, Rafik Hariri because Syria has been accused of being involved in that killing.

The U.S. wants that tribunal to go ahead. So those are some of the red lines the U.S. has and it doesn't want to cross it. Wolf?

BLITZER: Zain Verjee reporting for us from the State Department.

Lebanon's latest crisis, by the way, is putting the spotlight on its Palestinian refugee camps. There are 12 official camps registering some 215,000 registered refugees out of 400,000 refugees living in Lebanon, that's about 10 percent of the country's population. Some camps have been around as long as 60 years. Conditions in most of them are dismal, with the United Nations citing lack of proper infrastructure, overcrowding, poverty and unemployment among the most pressing problems.

Let's go to Jack Cafferty. He is in New York. He has got "The Cafferty File." Jack?

JACK CAFFERTY, CNN ANCHOR: Well, no shortage of problems to talk about tonight, Wolf.

The United States should not blame China for our huge trade deficit with this country. Hundreds of billions of dollars. That's what Chinese vice premier, Wu Yi, told members of the Bush administration today.

Wu has traveled to the U.S. for two days of talks with Treasury Secretary Frank Paulson and Commerce Secretary Carlos Gutierrez.

The United States argues the Chinese currency is grossly undervalued which makes Chinese goods artificially cheaper. This meeting comes amid growing anger in our Congress over China's huge trade surplus with the United States. Paulson said the U.S. is growing impatient for the Chinese to cut the trade deficit.

Through an interpreter, Wu responded by saying quote, "confrontation does no good at all to problem solving" unquote.

Wu is expected to meet with President Bush on Thursday. So here is the question. It is a little complex. But what can the United States do to improve its burgeoning trade deficit with China? E-mail your thoughts to caffertyfile@cnn.com. Or go to cnn.com/caffertyfile.

The long-term economic implications of the ever-growing deficit along with ownership, Wolf, of our treasury securities, the implications are not good down the road for this country.

BLITZER: A lot of people don't understand those implications either. It gets a little complicated. I'll be anxious to hear what viewers think.

Jack, thanks very much. Coming up. The New York City Mayor Michael Bloomberg.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG, NEW YORK CITY: I think all of these candidates should be held to the standard of, OK, don't just tell us you are in favor or against something. What are you going to do about it?

(END VIDEO CLIP)

BLITZER: He's challenging presidential candidates and taking his fight against global warming to the streets of new York. Michael Bloomberg, here in THE SITUATION ROOM.

And young Muslims in America. A new poll shows that one in four think suicide bombings can been justified.

Plus, Falwell funeral scare. A student is arrested at Liberty University allegedly with explosive devices in his car. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: What's on the minds of Muslims living here in the United States? Our fresh survey asked that question and in one case asked a very provocative question about attitudes toward suicide bombings. CNN's Brian Todd is joining us. Brian, what does this survey say of Muslims living in the United States?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, it paints a generally positive outlook among America's Muslim community. They are assimilated into the mainstream, they have a higher rate of satisfaction with things going on in the country than the average American does. But there is one finding in this poll that troubles Muslim leaders.

(BEGIN VIDEOTAPE)

TODD (voice-over): In one pocket of Muslims living in the U.S., an alarming poll result. Those under 30, asked by the Pew Research Center if suicide bombing of civilian targets can be justified to defend Islam, more than one in four say yes. That figure does include 11 percent who say it's rarely justified, but some Muslim leaders in the U.S. are disturbed.

SALAAM AL MARAYATI, MUSLIM PUBLIC AFFAIRS COUNCIL: I think those figures do surprise us and they should be a cause of concern for us. It is our task as Muslim Americans to educate one another about the true tenets of Islam in terms of the having absolutely no space for suicide, for terrorism.

TODD: Why those attitudes among the younger demographic? Muslim leaders point to a lack of leadership of young Muslims on college campuses and elsewhere, the inability to express political views in a healthy way. Some say it's a natural inclination for young people of any background to be more radical.

But they also say young Muslims in the U.S. are politically shaped by one conflict, and it's not Iraq.

HUSSEIN IBISH, FDN. FOR ARAB-AMERICAN LEADERSHIP: The notion that all Palestinians have to fight back against the Israelis is to turn themselves into human bombs, because they don't really have any other weapons. This is misguided, but I think this is the logic.

TODD: Still, Hussein Ibish doesn't think that will translate to more home-grown terrorists on U.S. soil.

He believes those that sympathize with suicide bombers will shrink in number as the Muslim political leadership in the U.S. gets stronger.

(END VIDEOTAPE)

TODD (on camera): Muslim leaders say another reason not to be too alarmed at those attitudes among their youth, the opportunities they'll have in the United States. The survey showed that fully 71 percent of all Muslims polled believe they can succeed in the United States with hard work.

Wolf?

BLITZER: Brian, what about any sympathy for al Qaeda in that new poll?

TODD: Well, it's there, Wolf, but it's minimal. Only five percent of all Muslims surveyed have a favorable view of al Qaeda. The total goes up to seven percent among Muslims in the U.S. but the percentages of very unfavorable views of al Qaeda are very high, between 58 and 78 percent, depending on the demographic.

BLITZER: Brian Todd reporting for us. Brian, thank you very much.

Just a short time ago, ABC News reported that President Bush had signed a finding permitting the CIA and other agents of the U.S. government to launch what's called a covert operation aimed to shape the Iranian regime politically and economically but not by using military force.

In a statement, the White House tonight said this, "We do not confirm or deny covert activity or presidential findings. That's the White House reaction to that ABC News report. Tonight, all this coming as an Iranian American scholar remains in a Tehran prison.

She is now charged with working against the Iranian government and her husband is speaking out about the charges and his fears. CNN's Jill Dougherty is covering this story for us. It's a very sad story involving Haleh Esfandiari. What are you hearing right now, Jill?

JILL DOUGHERTY, CNN CORRESPONDENT: Well, the latest, Wolf, is that there is a disturbing development and that is apparently the Iranian government is leveling charges against Professor Esfandiari.

(BEGIN VIDEOTAPE)

DOUGHERTY (voice-over): Her husband describes it as a very difficult and anxious time. His wife, Haleh Esfandiari, a prominent Iranian American scholar, held in a notorious Iranian prison. Not allowed to communicate with him or see her lawyer. Now he says, it's become even more frightening.

SHAUL BAKHASH, HUSBAND: I'm very concerned. Because these accusations, not yet formal charges are very serious. But they are vague, they are very general if you look carefully at that statement, it's very hard to make out what exactly it is they are saying.

DOUGHERTY: That statement from Iran's Intelligence Ministry, appeared Monday on an Iranian news agency Web site. It alleges that Esfandiari's employee, the Woodrow Wilson International Center for Scholars, along with other U.S. institutions, is trying to undermine Iran's national security.

"This U.S.-designed model, the ministry says is aimed at soft overthrowing of the system."

The Woodrow Wilson Center's director, former U.S. Congressman Lee Hamilton has written to Iran's President Mahmoud Ahmadinejad, urging him to release Esfandiari. He calls the charges outrageous.

LEE HAMILTON, WILSON INTERNATIONAL CENTER FOR SCHOLARS: There is, of course, not a shred. Not a scintilla of truth to the allegations against her. Iran is trying to turn a scholar into a spy.

DOUGHERTY: The 67-year-old Esfandiari flew to Iran in December to visit her 93-year-old mother. She was detained, interrogated, then arrested and imprisoned May 8th. The U.S. State Department is calling for her release and tells CNN, "Haleh Esfandiari is not a threat to this Iranian government or the regime as a whole. She is an academic and a voice for tolerance and people-to-people exchanges between the Iranian and American people. We can't imagine why she is considered a threat."

(END VIDEOTAPE)

DOUGHERTY: So the only information about his wife now comes from a one minute phone call that she is allowed to make to her mother, who then calls Esfandiari's husband. Wolf?

BLITZER: What are you hearing, Jill, about her physical condition? DOUGHERTY: Well, her husband doesn't believe that she has been physically abused, but he is concerned about the state of her mental health and the interrogation techniques in that Iranian prison, he says, can be brutal.

BLITZER: Let's hope she's out soon. Jill, thanks very much.

Still ahead here in THE SITUATION ROOM, Falwell funeral scare. A student arrested at Liberty University in Lynchburg, Virginia, allegedly with explosive devises in his car.

And Cuban television made in the USA. Find out how "CSI" and other American shows have become huge hits in Havana. We're going to take you there. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Our Carol Costello is monitoring stories incoming to THE SITUATION ROOM. Right now, Carol what do you have?

CAROL COSTELLO, CNN ANCHOR: Hi, Wolf. A couple of things to tell you about. There is word of an arrest related to the Reverend Jerry Falwell's funeral. A Liberty University student was arrested last night after several homemade bombs were found in the trunk of his car. He was identified as 19 year old Mark Ewell. Police say he told family members he made the bombs and attended Falwell's funeral.

Authorities say they don't know what he planned to do when he got to the funeral. Thousands attended Falwell's funeral today in Lynchburg, Virginia.

Big problems at B.P.'s Prudhoe Bay oilfield in Alaska. B.P. says it will shut down a quarter of its oil production there after discovering a leaky pipe at a processing facility. Industry analysts don't expect it to have an impact on oil and gas prices. That's what they say. Operations are expected to resume in a few day.

The male impotence drug Viagra may also be used for treating jet lag. Researchers in Argentina tested the drug on hamsters. The scientists manipulated the schedule turning the lights on and off simulating jet lag.

They Viagra helped hamsters recover 50 percent faster, but worked only when given before the equivalent of an eastbound flight. I'm kidding. The study is published in proceedings of the National Academy of Science. If you want to know more about Viagra, hamsters and jet lag.

BLITZER: All right. Thank you, Carol, for that. We'll check back with you shortly.

Just ahead, New York's mayor is fed up with the federal government when it comes to climate change.

(BEGIN VIDEO CLIP) BLOOMBERG: The people and their representatives are tired of the inaction in Washington and we're just not going to wait around anymore for Washington to try to do something about the air we breathe or about stopping global warming.

(END VIDEO CLIP)

BLITZER: The mayor, Michael Bloomberg taking his city's taxi fleet green. Will it have an impact? And does Bloomberg have plans to run for president? I'll ask him.

Plus the hurricane season now only days away. What are we in store for this season? We're going to have details of the forecast that's causing some serious concern. We'll tell you what is predicting. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you are in THE SITUATION ROOM. Happening now. A new birth control pill that can stop a woman's period indefinitely. It's been approved by the FBA. It's called Lybrel and is the first designed to be taken continuously. Taking it would allow women to suppress their period indefinitely, but officials say unexpected bleeding could still occur.

Also, how much money have you been paying amid ever-rising gas prices? A government survey says so far this year, every passenger car in the United States has paid about $146 extra. That's an extra $20 billion.

And people splattered with blood and body parts in the streets. That was the scene today in the capital of Turkey after a blast ripped through a shopping district filled with people. Five are dead, more than 60 people hurt. Turkey's prime minister calling the blast a terror bombing. I'm Wolf Blitzer. You are in THE SITUATION ROOM.

We're following the breaking news here in Washington, tonight, Democratic congressional leaders announcing only a short while ago they have reached the general outlines of a compromise with the White House over Iraq war funding. It will include $94 billion to pay for the war along with benchmarks for the Iraqi government to meet. It would not -- repeat not -- include a timeline for withdrawal.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, (D) HOUSE SPEAKER: It is I think a recognition that by the administration that a new direction was called for by the American people. And with the passage and signing of this bill, I think that a giant step will be taken in that new direction.

(END VIDEO CLIP)

BLITZER: Speaker Pelosi says she may not actually vote for the war funding bill herself, because it doesn't include that pullout timetable. The unfolding compromise is linked with a measure to boost of the minimum wage in an effort to win votes from antiwar Democrats eager for a withdrawal deadline. We're watching this developing story for you.

Other news we're watching. New York City's yellow cabs are going green. The mayor, Michael Bloomberg, is ordering that the city's entire fleet of taxis be replaced with hybrid cars within five years. It's all an attempt to improve the environment, stop global warming.

CNN's Mary Snow has more -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, this is part of the city's larger plan to cut down on carbon emissions. The mayor says because there are thousands of cabs out on the streets every day, he wants to make them environmentally friendly.

(BEGIN VIDEOTAPE)

SNOW (voice-over): They'll keep their hallmark yellow color, but from now on, New York's cabs will be greener. Mayor Mike Bloomberg is mandating that the city's entire fleet of cabs become fuel-efficient hybrids.

MAYOR MICHAEL BLOOMBERG (R), NEW YORK CITY: Anything we can do to reduce the pollution in the air and to reduce our dependence on outside energy sources, we're all better off.

SNOW: The city is phasing in the plan, requiring that within five years its roughly 13,000 cabs be hybrids, like the kind Gulzar Choudry drives.

GULZAR CHOUDRY, CAB DRIVER: I used to drive a regular car before. And I used to put like $35 to $40 of gas in every day. Now I am putting in like $12 to $15 every day.

SNOW: Choudry says he had to shell out $10,000 extra to buy a hybrid, but he says he's making back the money by saving about $1,000 a month in gas.

But that up front sticker price is making some drivers balk.

ABE CALDES, CAB DRIVER: It's going to have to come out of our pockets, and it's not right, because the mayor isn't giving us anything extra.

SNOW: Along with the costs, a group representing drivers says the car's durability is another concern.

BHAIRAVI DESAI, NEW YORK TAXI WORKERS ALLIANCE: What we're afraid of is that this is a new market and these cabs have not been fully tested, yet they're going to be made mandatory.

SNOW: To that, the mayor says...

BLOOMBERG: They're going to be using them for five years and they'll get a good chance to test them, and that will be great.

SNOW: The cars are being phased in since taxi drivers have to replace their cabs every five years. So it's expected by 2012, every cab will be a hybrid. And the city estimates that drivers will be saving thousands a year in fuel costs.

(END VIDEOTAPE)

SNOW: And environmentalists are applauding the move, saying that they hope other cities follow New York's lead -- Wolf.

Mary Snow in New York for us. And this, by all accounts, is indeed a very ambitious plan. What does New York City hope to get out of it? And how big of an impact will it actually have?

(BEGIN VIDEOTAPE)

BLITZER: And joining us now in New York City is the mayor, Michael Bloomberg, with the Brooklyn Bridge behind you.

All right, let's talk about driving in New York. This is a major decision involving, what, 13,000 cabs in New York City over the next five years. Is it really going to have a practical impact on the environment on global warming or are you simply trying to send a symbolic message out there that other people should take notice?

BLOOMBERG: Well, the message is always good, but this will make a real difference. We have 13,000 taxis. They get roughly 14 miles a gallon. The hybrids that they're going to be replaced with get better than 30 miles a gallon. And having the 13,000 hybrids is the equivalent of taking 32,000 cars off the roads in terms of pollution.

So it really makes a difference. Also, they are much more efficient, so the taxi drivers and owners will do better, as well as the -- all the rest of us breathing cleaner air.

BLITZER: What does it say, Mr. Mayor, when a mayor like you or a governor like Arnold Schwarzenegger, that you have to make these kinds of decisions within your own communities, as opposed to the federal government making these kinds of decisions that could impact global warming, the environment? What does it say to you as a politician?

BLOOMBERG: I think what you're seeing is that at the local level, the people and their representatives are tired of the inaction in Washington. And we're just not going to wait around anymore for Washington to try to do something about the air we breathe or about stopping global warming.

We're not going to sit around and let them play pork barrel politics with homeland security funds. We're not going to sit around and let them have all this inaction on immigration.

There are major issues facing the people that we represent as mayors or as governors. And we've got to go and do some things, because what we do is on the streets the next day. We can't just sit around and be on both sides of every issue and talk about it forever. We've got to do something.

BLITZER: One final question, we're out of time, Mr. Mayor. I just want your quick reaction to what your friend Chuck Hagel, Republican of Nebraska, said the other day after meeting with you amid speculation maybe there should be a third party team out there running for president.

He said: "It's a great country to think about a New York boy and a Nebraska boy to be teamed up leading this nation." What do you think?

BLOOMBERG: Well, maybe he was talking about somebody else from New York. Chuck Hagel is a good guy. He's very smart. He's independent. He says what he thinks. And I'm proud to have him as a friend.

BLITZER: I think he was referring to you, though.

BLOOMBERG: We don't know. You'll have to go ask Chuck. He's doing the right thing. He's out there trying to give the public more choice. And I think that is an interest. I'm not a candidate for president, and I don't know whether Chuck Hagel is, but the more candidates, the better the public will have as -- will be served.

BLITZER: It is time for a third party also?

BLOOMBERG: It depends. If the public comes up with candidates that they find acceptable from two parties, no, and if they don't find them acceptable, three or four parties.

There's nothing magical about two. The public wants people that have experience and that clearly state what they're going to do, and then are willing to have themselves held accountable after they get elected for delivering what they promised.

We tried that with a scorecard here. And I think all these candidates should be held to the standard of, OK, don't just tell us you're in favor or against something, what are you going to do about it?

BLITZER: Michael Bloomberg is the mayor of New York with a major announcement today involving a lot of cabs out there.

Mr. Mayor, thanks very much.

BLOOMBERG: Wolf, enjoy the good weather in Washington. It's great weather here in New York.

(END VIDEOTAPE)

BLITZER: And still ahead tonight here in THE SITUATION ROOM, look who is teaming up to make movies, the Hollywood actor, Danny Glover and the Venezuelan president, Hugo Chavez. We're going to tell you what this alliance is all about.

And hot television hits in Havana. Cuban viewers glued to American television. Find out how TV shows like "CSI" and "House" are taking over the airwaves of the communist country. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: Actor Danny Glover taking on a new project with an unlikely partner, Venezuela's fiercely anti-American president, Hugo Chavez. He's providing important financial backing for a new movie. Let's turn back to CNN's Carol Costello. She is watching this.

What exactly are these two guys teaming up to do, Carol?

COSTELLO: Well, you know, actually, Wolf, Danny Glover has been in Caracas talking to the Venezuelan government about filming a movie. And it looks like the Hollywood actor is going Hollywood, Caracas style.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): Hugo Chavez does it again, using his country's money to add a little Hollywood razzle-dazzle to his insistent effort to influence American culture. His lethal weapon? Actor Danny Glover.

DANNY GLOVER, ACTOR, "LETHAL WEAPON 3": And I would not make a stupid mistake.

COSTELLO: That's right. The star of "Lethal Weapon" and dozens of other films is taking $18 million from Chavez' Venezuela to make two movies.

The first about Dominique Toussaint L'Ouverture. That's him. He led a slave uprising in Haiti in the 18th Century.

And that's Danny Glover at a news conference in Washington today talking about debt relief for Africa. We tried to ask him about his partnership with Chavez, but we got very little.

GLOVER: I have no comment.

COSTELLO: We wanted to know why any American would take so much money from a country whose leader has called President Bush "an ex- alcoholic," "sick," "dangerous," "a menace," "a threat against life on the planet," and, oh, yes...

HUGO CHAVEZ, VENEZUELAN PRESIDENT (through translator): I think he's a devil.

COSTELLO: But Glover wasn't talking. Of course this isn't the first time Chavez has tried to influence American culture. Former Representative Joe Kennedy's Citizens Energy gets oil from a subsidiary of Venezuela's national oil company and sells it at a discounted price to poor Americans. Kennedy says the benefits outweigh anything political, like Chavez's close relationship with communist Cuba's Fidel Castro.

Chavez has been keeping in touch with the ailing American foe. As for Glover, he has long been a political activist. That's him being serenaded by admirers as he was arrested for disorderly conduct at a Darfur protest in Washington.

(END VIDEOTAPE)

COSTELLO: So what do we make of an actor activist, a Haitian slave and Hugo Chavez? Well, as the British newspaper The Guardian put it, "a movie to mobilize world opinion against Western oppression," something Hugo Chavez talks about all the time -- Wolf.

BLITZER: And talks and talks and talks. Carol, thank you.

When it comes to must-see TV, Cubans are tuning in to many of the same shows that are huge hits here in the United States. Our Havana bureau chief, Morgan Neill, shows us what they are watching -- Morgan.

MORGAN NEILL, CNN HAVANA BUREAU CHIEF: Wolf, here in Cuba, all movie theaters are run by the communist government and the only television available to most Cubans is also controlled by the state. That's why you might be surprised to see just what it is they are watching.

(BEGIN VIDEOTAPE)

NEILL (voice-over): In Cuba, when the subject of Americans comes up, one comment you will often hear is (SPEAKING SPANISH), "they are bad, but they make good things." Nowhere is that attitude more evident than in entertainment. Though the island's communist government constantly attacks American consumer culture, U.S.-made TV shows and movies are all over state-run media.

"They almost always show more American movies than Latin American ones," says this state TV worker.

Tickets for the movies cost just 2 Cuban pesos, or about 9 cents U.S. And theaters fill up every weekend. This week in Havana, offerings include Mel Gibson's Apocalypto," horror film "Hannibal Rising," and Robert De Niro's "The Good Shepherd," all American.

And it's not just the movies.

(on camera): Like all media, television in Cuba is controlled by the state. Satellite TV is illegal, with a very few exceptions. That means this is what Cubans see, four or five channels, all of them programmed by the state.

(voice-over): That's why it's so surprising that some of the most popular shows here are American. Right now, "CSI" is big, just like in the States. And on the weekend, medical drama "House" is king.

"It's a good show," says Janet (ph), "plus, it saves Sunday afternoon." Physical therapist Lele (ph) can't get enough. "Even though Dr. House is undisciplined," she says, he pays close attention to his cases."

(END VIDEOTAPE)

NEILL: So while angry criticisms of the U.S. government provide the daily political drama, that doesn't mean Cubans are cut off from the other dramas the U.S. has to offer -- Wolf.

BLITZER: Morgan Neill, our man in Havana, thanks. Good report.

Up ahead, hurricane season is about to begin and don't expect a season like last year. We're going to go live to New Orleans, find out what the forecasters are so concerned about right now.

Plus, a real life spy thriller threatens to become an international standoff. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Government weather experts are out with the forecast for this year's hurricane season, and what they are saying gives some serious cause for concern. Let's go to our Gulf Coast correspondent Susan Roesgen. She is in New Orleans where they are still struggling to recover from Hurricane Katrina.

What are they predicting for this hurricane season, which begins, what, in about a week?

SUSAN ROESGEN, CNN GULF COAST CORRESPONDENT: Just about a week from now, Wolf. And they are predicting another very active hurricane season. You have to remember that more than half of the people in this country, 53 percent of the U.S. population, live within 50 miles of a coastline. So this hurricane prediction is very scary.

(BEGIN VIDEOTAPE)

ROESGEN (voice-over): Before satellites and radar, no one could see a hurricane on the horizon or predict how many might be coming. But now the coastal U.S. has come to depend on and dread the yearly hurricane prediction.

VICE ADM. CONRAD LAUTENBACHER, NOAA: We are forecasting 13 to 17 named storms, of which seven to 10 will become hurricanes, and three to five of those hurricanes will be in the major category, or Category 3 strength and higher.

ROESGEN: That's an above-average season, part of a cycle forecasters say started back in 1995. But last year's dire prediction didn't pan out.

NOAA initially predicted as many as 10 hurricanes, but there were only five, and no major hurricane hit the U.S. last year. An unexpected El Nino stopped most hurricane development. But don't be lulled into thinking we'll get off easy this year.

GERRY BELL, LEAD FORECASTER: All of the conditions associated with the current active era were still in place last year as we had expected. Therefore, last year's activity should not be considered an indicator that this active era has ended. There is no indication that this active hurricane era has ended.

ROESGEN: In the end, no matter how many are predicted, one is all it takes to spell disaster. (END VIDEOTAPE)

ROESGEN: And also something else to consider, I mentioned that very active cycle that began back in 1995. The experts say that this cycle of an active hurricane season should last another 25 to 40 years -- Wolf. So it's very scary when you think that we're going to be dealing with this for so much longer and that does not even factor in global warming, which, as we know, can lead to rising sea levels which makes a hurricane in this part of the world so much worse.

BLITZER: Susan, you are in New Orleans. Are they ready, God forbid, for another hurricane, the levees, the infrastructure? People there, what is the story?

ROESGEN: Well, you know, God forbid is truly what we are thinking. We don't want another active hurricane season. We don't want another direct hit here in New Orleans. They are working on the levees, the Army Corps of Engineers is working on the levees. The city is trying to repair the infrastructure.

And they have had several hurricane emergency preparedness drills. They hope that they will be able to get people out sooner. And one more thing to consider, Wolf, there is only about half as many people living here this year and most of those people are here because they have been able to have their own transportation. They have their own cars, so there should not be, hopefully, so many people stranded if we were to get another hurricane this year.

BLITZER: All right. Let's hope that does not happen. Susan, thanks very much.

Let's go to Jack Cafferty. He is in New York.

Jack, you were just in New Orleans, what, a few days ago for your daughter's graduation.

CAFFERTY: Last weekend, and large parts of the city are rocking and rolling. The great food is back, the great music is back. The strange collection of creatures down on Bourbon Street in the French Quarter, those guys are all back. But there are parts of the city that are not back. And of course, the great unknown, the great variable is what happens if there is another storm? It has been a couple of years, but how effective have the repairs been? Are the levees ready? I'm glad I don't own property down there.

The question this hour is, what can be done to improve the United States trade deficit with China?

Joan writes from Red Bud, Illinois: "What we need is a big, gigantic, tariff on all goods coming from China. I bet some of our jobs will come home and roost and maybe our food would be a little safer too."

Wynn writes: "Make a trade zone in Mexico, start buying from there. Quit buying from China. If we had any sense, we'd use more carrot and less stick on immigration. Let's create jobs south of the border, who knows? Maybe we will get some yanks sneaking across the border into Mexico to do the jobs the Mexicans won't do."

Paul in Mystic, Connecticut. "Easy, Jack, look at the products you buy. If it says 'made in China,' don't buy it. I refuse to purchase anything made in China. One man can't change the world, but one man can start a revolution."

Mike in Riverside, California: "Close all the Wal-Mart Stores."

Harold in Illinois: "The thing to do with China is stop negotiating. The idea that China will act in an ethical and honest way is ridiculous and shows a misunderstanding of Chinese culture. The only response to China should be to start embargoing some of their products and impose stiff tariffs. They would understand that."

Andrew in Tampa, Florida: "Stop importing all the crap from China. Bring our factories back. Employ our own people. Start making our own crap again."

John in California: "Last week I bought a squeaky toy from my dog from China and by the time I got home, the squeaky noise was broken. What you do with trade deficits is have inspections of the junk that is sent to the U.S., then ship back the garbage they make there and have them take it off the bill. My dog Joey might be happy again."

If you didn't see your e-mail here, you can go to cnn.com/caffertyfile where we post more of them online. There are also video clips of the "Cafferty File" -- Wolf.

BLITZER: Jack, thanks very much.

Let's check in with Kyra Phillips to see what's coming up right at the top of the hour. She's filling in for Paula.

Hi, Kyra.

KYRA PHILLIPS, GUEST HOST, "PAULA ZAHN NOW": Hi, Wolf. "Out in the Open" tonight, a new poll exposes some disturbing extremes inside America's Muslim community. Who should calm down the young Muslims who think suicide bombing is OK?

We're also bringing you a story that critics of presidential candidate Rudy Giuliani say exposes his dark, ruthless side. Big headlines, ruined lives, and now the political fallout. All of this at the top of the hour -- Wolf.

BLITZER: We'll be watching, Kyra, thanks very much.

Still ahead here in THE SITUATION ROOM, a new twist in a real- life spy killer thriller. Investigators say they found their man. We are going to show you why they might not be able to get him though. Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: There are new developments in a real life spy thriller. The case of that former Russian agent who was killed in London with radioactive poison. British officials now think they know who did it, but can they get their man? Phil Black is in London with the latest -- Phil.

PHIL BLACK, CNN CORRESPONDENT: Wolf, it has been six months since Alexander Litvinenko was murdered here in London by radiation poisoning. He was an outspoken critic of the Russian government he once served. Now, Britain has named the man it wants to prosecute for his bold assassination.

(BEGIN VIDEOTAPE)

BLACK (voice-over): It was a slow, horrible death, a murder plot so intriguing, it has often been compared to a spy novel. Now, British officials have accused one Russian citizen of responsibility.

KEN MACDONALD, DIRECTOR OF PUBLIC PROSECUTIONS: I have today concluded that the evidence sent to us by the police is sufficient to charge Andrei Lugovoi with the murder of Alexander Litvinenko by deliberate poisoning.

BLACK: The day Litvinenko fell ill, he met with Andrei Lugovoi and another Russian at London's Millennium Hotel. A former KGB officer, now businessman, Lugovoi has always insisted he had nothing to do with Litvinenko's death.

ANDREI LUGOVOI, FORMER SECURITY SERVICE AGENT (through translator): I can say that I am absolutely calm, as I am absolutely innocent. The statement offered by the British prosecutors is no more than a version.

BLACK: But Alexander Litvinenko's widow welcomed news Lugovoi may face British justice.

MARINA LITVINENKO, WIDOW: I'm glad to say I'm very happy about all job what Scotland Yard done already.

BLACK: Alexander Litvinenko was a former Russian spy. He was granted British asylum in 2000, and later became a citizen. He persistently irritated the Russian government with criticism.

On his deathbed, Litvinenko said that Russia's president, Vladimir Putin, was involved in his poisoning. Putin rejects that. But Litvinenko's family and friends maintain the highest levels of Russian government played a part.

ANDREI NEKRASOV, LITVINENKO FRIEND: Alexander's whole point, and possibly the hatred he generated in his ex-colleagues, was that the FSB, the Russian secret service, is becoming like a criminal gang. So if it's true, he predicted his own murder.

(END VIDEOTAPE)

BLACK: Britain's foreign secretary has told the Russian ambassador she expects full cooperation from his government. But Russia says extradition is against its constitution. Relations between the two countries have grown very cold since Litvinenko's death, and they could get cooler still -- Wolf.

BLITZER: Phil, thank you. Phil in London. Let's get some fast facts now about the KGB. The agency was created back in 1954, responsible for domestic security and foreign intelligence. It was dissolved in 1991 by Boris Yeltsin after the collapse of the Soviet Union.

Today, Russian spying is done by the Federal Counterintelligence Service that is known as the FSB. The Russian president, Vladimir Putin, by the way, was a KGB agent for 17 years and later went on to head the FSB.

And that's it for us here in THE SITUATION ROOM. I'm Wolf Blitzer in Washington. Tomorrow, 4:00 p.m. Eastern, Democrats blink on a war timetable. Will they pay a price? Remember, we're on the air from 4:00 to 6:00 p.m. Eastern, back on the air for another hour at 7:00 p.m. Eastern. Until then, thanks very much for watching. I'm Wolf Blitzer. Kyra Phillips is in for Paula -- Kyra.

PHILLIPS: Thanks, Wolf.

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