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The Situation Room

Russia Troops' Stranglehold on Georgia; Identifying Remains in Spain; Awaiting Obama's V.P. Pick; Why Building 7 Collapsed; Soldiers Instantly Killed in Bloody Afghan Ambush; Pilot on Terror Watch List; State of Emergency in Florida

Aired August 21, 2008 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening now, they control the port, the pipelines and the highways -- Russian troops have a chokehold on the Republic of Georgia right now.
And as the price of oil jumps, can they also put the squeeze on the West? We're watching this.

Investigators try to find out the cause of Spain's worst air disaster in decades. And they begin the grim task of trying to identify the victims.

And there was a Third World Trade Center building that collapsed on 9/11. No one was certain why -- until now.

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

Russia says its forces will pull back to a buffer zone in the Republic of Georgia by tomorrow evening. But those troops are still seen on the roads outside of key cities. They've also dug in near Georgia's main port. And they can control the flow of oil -- giving Russia potential stranglehold over the country.

And given a $5 jump in the price of oil only today, that helps Russia put the squeeze on the West.

CNN's Michael Ware is outside the Georgian city of Gori.

(BEGIN VIDEOTAPE)

MICHAEL WARE, CNN CORRESPONDENT (voice-over): Like in this mess of iron and concrete on a rail bridge that regularly bore millions of barrels of oil headed to port, Georgia and its economy have been crippled by Moscow's occupation. Whilst Russian units dominate just a third of the country, says Georgia's president, and mostly in pro- Russian enclaves the Kremlin says it invaded to protect from Georgian military assault.

The Russian soldiers' deployment inside undisputed Georgian territory has given them command of the core of the country's infrastructure, rendering Tbilisi's pro-American government unable to function as it wants. Its police and army units like these no match for Moscow's might; its financial lifeline damaged -- reducing a country the size of America's South Carolina to a nation divided, which Georgia's national security adviser alleges was orchestrated for strategic economic effect.

ALEXANDER LOMAIA, GEORGIAN NATIONAL SECURITY ADVISER: They're trying to gain control of alternative pipelines and energy routes delivering central Asian and Azerbaijani gas and oil to the European markets through Georgia.

WARE: It's a claim Moscow would surely deny, asserting, as it has done since the conflict's beginning, that its military invaded for humanitarian reasons in defense of Russian civilians and the Georgian assault in small northern enclaves. But what cannot be denied is that Russian checkpoints and armor beyond those enclaves has Russian commanders in control of Georgia's principal highway and able to disrupt the Georgian seaport of Poti on the Black Sea coast and threatens Georgia's transit of oil.

(on camera): And key to that transit is this oil pumping station just west of the capital -- a facility essential to the Georgian economy. From here, the crude oil courses through underground pipelines that skirt South Ossetia and the heart of the conflict zone.

(voice-over): Just a short distance up this valley sit Russian tanks and what is currently the front line of the Russian occupation. Further south from that front line, far from the combat, this line of craters marches across the pipelines buried in the soil beneath. And while the bombings have stopped, the impact of the invasion persists -- with promised withdrawal yet to eventuate.

(on camera): The Russian military's occupation maintains its stranglehold on Georgia's economic infrastructure. Those checkpoints keep the road severed and the oil pipelines are still not operating at full capacity. But the Georgians are fighting back.

When this rail line carrying oil to the port was blown less than a week ago, these workers moved in, laboring feverishly to lay new lines on an old bridge. But with all the work being carried out under the gaze of Russian armor on the ridge behind us, there's no suggestion that any of this is going to change any time soon.

Michael Ware, CNN, on the outskirts of Gori.

(END VIDEOTAPE)

BLITZER: President Bush is declaring a state of emergency in Florida -- in Florida, where Tropical Storm Fay has made landfall for the third time, drowning some areas under more than -- get this -- two feet -- two feet of rain.

Let's go to our CNN meteorologist and severe weather expert, Chad Myers.

This is about the strangest storm I've seen in a long time -- Chad. But you know a lot more about this than I do.

CHAD MYERS, CNN METEOROLOGIST: The third time, Wolf, in history that one storm has made landfall three times. And they've been keeping track for over a hundred years. This one hit the Florida Keys. It then moved on up and hit Cape Romano, right there, just near Marco Island, then moved offshore and today moved back onshore, right there at Flagler Beach.

Winds 60 miles per hour. It is still a 60-mile per hour storm. But the biggest number on this map is that one right there. It is moving now -- moving West at five miles per hour. It had not moved for almost 24 hours, dumping all of that rain that you talked about, mainly down in Brevard County near Melbourne and in the Atlantic Beach, just flooding like we haven't seen in years; Port Saint Lucie the day before.

Now we have this big hole in the radar. And if it was a hurricane we'd call it the eye. That's essentially what it is -- an area where there isn't any weather. But that's from Marineland down through Flagler Beach. But to the south and to the north, where that eye isn't, that's where the weather is -- from Lake County all the way up to Jacksonville.

Then where does it then go? Well, it continues to move to the west. It gets very close to Tallahassee, down to about a 40, maybe 35- mile per hour storm by then, and then over Pensacola and into a very dry Mississippi and Alabama. We'd love to also see it make a big turn and get some rain down into the Carolinas and also Georgia, because it's been very dry there. But maybe -- maybe, Wolf, now that this storm is moving, the -- really, the worst of the flooding will be over.

If you get two or three inches in Florida, you can handle that. You get like this, where that picture right there, you get 26 inches of rain in 48 hours, it just has to go up. It can't run off in time.

BLITZER: Yes. We spoke to the governor of Florida, Charlie Crist, earlier in the week. He said, you know, the state could really use some rain because it's been a pretty dry summer so far. But this is going way overboard. They certainly can't -- they don't need this.

MYERS: Yes. This is kind of ridiculous. Even the sandy soil that is Florida -- because most of Florida at some point in its life was a beach -- that sandy soil still can't absorb all of this rain coming down. And you'd like to get it to the aquifer, because we're pumping the water out of Florida to water things -- lawns and all that. And that's actually allowing some of the salt water to get into the aquifer. And you can't drink saltwater, so we don't want that. We want fresh water pressure to push this saltwater away. And that's what we've got now -- at least for a couple more weeks, we have saltwater pressure getting pushed away -- Wolf.

BLITZER: Chad, stand by. We're going to get an update from you later.

Meanwhile, a grim and very difficult task is underway right now in the Spanish capital. Experts are trying to identify the badly burned remains of 153 people killed in that crash at the Madrid airport. CNN's Al Goodman has one family's story.

(BEGIN VIDEOTAPE)

AL GOODMAN, CNN MADRID BUREAU CHIEF (voice-over): Close by Madrid's airport, one could call it the unexpected destination. The city's Convention Center now a huge morgue. A steady stream of funeral vans.

In the overnight hours following the accident, family members came and went, keeping a soul-wrenching vigil here or at nearby hotels. This psychologist stayed up trying to help them get through the night.

CRISTINA LAGUARTA, SPANISH RED CROSS: Yes, because their families are going into holidays and suddenly. So they say I can't believe it.

GOODMAN: But the sad truth is beginning to sink in.

(on camera): Is there anger? Are they beginning to accept? What else are you seeing?

LAGUARTA: They're beginning to accept more or less. I feel that now are very, very sad and very...

GOODMAN: They're very tired.

LAGUARTA: Very tired. So they're waiting for some information.

GOODMAN (voice-over): Which was slow in coming, as officials painstakingly tried to identify the charred remains, resorting to DNA matches in many cases.

King Juan Carlos and Queen Sophia arrived to pay their respects. Out of respect, cameras were not allowed inside.

(on camera): The king and queen spent about two hours at the makeshift morgue, trying to help console people anxiously awaiting definitive word about their loved ones. At Madrid's hospitals, just 19 survivors from the crash. In this one, a doctor recovering. She survived with her boyfriend. Both work for the city's emergency rescue service.

ALFONSO DEL ALAMO, EMERGENCY SERVICES DIRECTOR (THROUGH TRANSLATOR): Someone from our team recognized them. They had to be pulled out, but finding them alive was really emotional for the entire rescue team. He's unconscious, but with her, we know she's sad about the crash, but thankful to survive. She is conscious and talking.

GOODMAN: They were in row nine of the plane -- the only section that didn't burn, he says. No such luck for those at the expected destination.

Al Goodman, CNN, Madrid.

(END VIDEOTAPE)

BLITZER: Senator Barack Obama now says he has decided on a running mate. The announcement could come literally at any moment. We're looking at clues as to who it might be.

Also, a 9/11 mystery solved -- why this World Trade Center building collapsed hours after the Twin Towers.

Plus, elite paratroopers killed in Afghanistan -- now NATO responds to a report of a friendly fire tragedy. We'll update you right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Only four days until the Democratic Convention in Denver and Barack Obama's vice presidential announcement could come literally at any time. All eyes are open for possible hints and clues.

Let's turn to Mary Snow. She's watching the story for us -- Mary, what are you picking up?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, as you know, there's no shortage of speculation, with different answers depending on who's reading the tea leaves. We checked in with people who have been involved with the process in the past to get a sense of what's going on behind-the-scenes.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Barack Obama's every word is being scrutinized for clues about his running mate.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: My vice president -- also, by the way, my vice president will be a member of the executive branch. He won't be one of these forth branches of government where he thinks he's above the law.

SNOW: Did the fact Obama didn't mention a she give anything away?

Will his body language provide hints?

What does it mean when potential choices downplay their chances?

SEN. JOSEPH BIDEN (D), DELAWARE: I'm not the guy. See ya.

SNOW: Former vice presidential candidate Geraldine Ferraro says don't read too much into it. She laughed about her own experience with CBS' Harry Smith, saying shortly after Walter Mondale called her, she had to give a speech and take questions.

(BEGIN VIDEO CLIP)

GERALDINE FERRARO (D), FORMER VICE PRESIDENTIAL CANDIDATE: One of the questions was, do you think that Fritz Mondale will pick a woman for vice president?

I said, oh, well, you know. I didn't tell the truth, either. So do you expect for others to tell the truth?

(END VIDEO CLIP)

SNOW: Campaigns do their part to avoid dropping hints. In 2004, a former aide to Democratic Senator John Kerry says the staff anticipated various scenarios and covered their tracks.

STEPHANIE CUTTER, KERRY CAMPAIGN COMMITTEE DIRECTOR: We had four different signs made up with four different names on them. We had confidentiality agreements, four different speeches written, four different backdrops done. So we had done enough planning to throw people off the trail that I thought we could continue to hold this.

SNOW: "The New York Post" cover story printed the wrong choice -- declaring Richard Gephardt as Kerry's running mate. An airport worker scooped everyone when he noticed a John Edwards decal going up on the plane, spread the word on a blog, throwing the Kerry team a curve ball.

CUTTER: You try not to panic and you make sure that nobody confirms that piece of information.

SNOW: 2000 brought a twist, when Dick Cheney, who was in charge of leading the V.P. search for George W. Bush, wound up being the choice.

(on camera): And as for the nominees, sometimes their running mates aren't waiting by the phone. Former Democratic presidential candidate Michael Dukakis tells what happened when he called the late Lloyd Bentsen to ask him to run with him.

MICHAEL DUKAKIS (D), FORMER PRESIDENTIAL CANDIDATE: I made a decision and I called him at about 11:30 at night. And he took his phone off the hook. So I couldn't get through to him until about 6:30 in the morning, when he was shaving.

(END VIDEOTAPE)

SNOW: Now, former Massachusetts Governor Michael Dukakis told us that the late Senator Bentsen accepted after consulting with his wife and the Dukakis/Bentsen team was out campaigning only hours later -- Wolf.

BLITZER: Mary Snow with a fascinating report. Thank you for that.

Let's take look back at the timing of some past vice presidential picks.

Back in 1988, Bush 41 tapped Dan Quayle in mid-August, one day after -- after the GOP convention actually had begun in New Orleans. And that's the latest announcement of a running mate in the past 20 years.

The earliest V.P. announcement in recent history came back in 2004. That's when John Kerry named John Edwards in the -- in early July. That was a full 20 days before the Democratic Convention. Most vice presidential recent choices have been revealed within a week or so before the convention. George W. Bush took that route back in 2000, tapping Dick Cheney in late July. That was six days before the Republican Convention.

Al Gore named Joe Lieberman in early August, also six days before their party's Democratic Convention.

Let's get a little bit more on what we like to call the veep stakes.

For that, we'll turn to CNN senior political correspondent, Candy Crowley.

She's watching all of this about as closely as anyone -- Candy, some are say they've already succeeded to a certain degree, the Obama campaign, by managing to keep it a secret for this long.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Absolutely. I mean they have turned out to be -- and we have seen this over the course of the primary -- the masters of the slow roll and the surprise.

If you look back on this, this V.P. sweep stakes began in earnest before Barack Obama went on his Hawaiian vacation. So we have now been discussing this for more than two weeks every day in the headlines. It gins up exactly the kind of excitement that Obama wants to have as they go into this convention.

So they are loving this. They are putting out little tidbits. We learned about the text message, that kind of thing. This is the sort of twist they love over there. And I can guarantee you that here in Chicago, sitting at the Obama headquarters, are a lot of happy people.

BLITZER: We're all looking closely at a lot of those tea leaves. But there's a very significant event scheduled for Saturday in Springfield, Illinois. That's where Barack Obama launched his campaign for the White House. And we assume that's where he's going to roll out, to a certain degree, his vice president.

CROWLEY: Yes, absolutely. We will know before we get there, because we are told that, of course, that they're going to do the text message.

But what we're looking at here when we're trying to figure out the clues is OK, what else is in the itinerary?

I can tell you that the only thing on his schedule right now for that day is Springfield, Illinois. It's not but about an hour to where Evan Bayh grew up, but it's a plane ride toward anybody that has been in this sort of V.P. sweepstakes, as we say.

So we know that on Sunday and on Monday he'll be going to Wisconsin. He'll be going to the quad cities, which is basically Iowa and Illinois. He'll be going to Missouri. He'll be going to Montana. So he's looking at the Interior West. He is also going to those battleground states.

But none of those states are home to any of the people we believe have been seriously considered. So again, not even a clue in the schedule. We've seen that sort of parade of possible vice presidential people that Obama has been visiting, but nothing there that gives you any definitive clue.

We've been chasing around talking to sheriffs' offices in vicinities where we think it might happen. So far, they have been very, very good at keeping this under wraps.

BLITZER: And he's now said, within the past couple of hours or so, Candy, he said publicly what we've all suspected -- he's made up his mind. He knows what who this vice presidential running mate is going to be. He says he wants somebody "who is prepared to be president, who will be a partner with me in strengthening this economy for the middle class and working families." And then he says he doesn't just want a partner, he wants a sparring partner. "I want somebody who's independent, somebody who could push against my preconceived notions and challenge me so we have got a robust debate in the White House."

I guess that description could fit the bill for a lot of folks.

CROWLEY: Absolutely. And it's something that most presidential candidates say -- oh, I want to hear voices of dissent. I want people to challenge me.

It doesn't actually ever quite work that way when they get to the White House, except if they had some very strong people that have been close to them.

But, absolutely. It fits Joe Biden, who voted for the war. It fits Evan Bayh, who was a Hillary Clinton supporter, also for the war. So there are a number of people out there that obviously have disagreed. I mean, obviously, the highest profile wanted Hillary Clinton. If you're looking for someone who disagreed with Barack Obama, that would be Hillary Clinton.

There are -- there is no other sign anywhere that we can find that it will be her, but nonetheless, these are the sorts of things that we are parsing from the beginning to the end of the sentence.

BLITZER: And you heard Paul Begala say here in THE SITUATION ROOM just a little while ago, he thinks it's going to be Joe Biden. But then again, you know, a lot of people are guessing right now and only one person seems to know...

CROWLEY: Absolutely.

BLITZER: ...and that would be Barack Obama. We'll wait to hear from him directly.

Candy, thanks very much.

Tropical Storm Fay -- it's not letting up by any means. It's punishing Florida right now. Some places getting more than two feet of rain. We also have some I-Report pictures of the damage and the misery. We're going to share those with you.

Plus, conservatives may make hay out of Barack Obama's ties to a former '60s radical. Now they're claiming a cover-up.

And the mugging that was caught on camera and outraged the nation. Police now say they have a confession. This was awful and we're glad they apparently caught the guy. We'll have details right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Carol, what's going on?

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, beginning tomorrow, some of the fresh produce you buy in the supermarket may have been zapped with radiation. Regulators approved a technique to kill dangerous bacteria on leafy greens like spinach and lettuce. Irradiated meat, by the way, has been on the market for years.

The Coast Guard is opening two new stations in order to help patrol formerly frozen parts of the Arctic Ocean. Rapidly melting ice off of the coast of Alaska is opening the formerly unnavigatable waters to oil tankers, fishing vessels and even cruise ships. Scientists say due to global warming, there is now half as much polar sea ice each summer than there was four decades ago.

Most states still don't recognize same-sex marriage, but now Hallmark does. The country's largest greeting card company is introducing same-sex wedding cards. Hallmark says the move is in response to consumers' demand and is not a political statement. California and Massachusetts are the only states to recognize gay marriage, while a handful of other states recognize same-sex civil unions.

And New York police say they have solved the case that caused outrage across the city. According to police, a 36-year-old man has confessed to mugging an 85-year-old woman in an elevator and stealing, among other things, her cane. The suspect was reportedly on parole at the time of the attack and has been convicted of similar crimes in the past. They got him -- Wolf.

BLITZER: Yes. I remember that video was awful. He was choking her. And, you know, remember, we reported that a couple of days ago. We hoped they would catch the guy and we hope, obviously, this is the guy.

COSTELLO: Police say it is the guy. They got him.

BLITZER: All right. Good. Thanks, Carol, for that.

Barack Obama fending off charges of a political cover-up as an old controversy heats up over some secret documents. We'll tell what you we know.

Also, years of conspiracy theories -- now the case is closed on the collapse of a third building at the site of the World Trade Center on 9/11.

Plus, an airline pilot on the government's terror watch list -- his fight to keep his job.

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, 100 people killed in twin suicide bombings in Pakistan, with the Taliban now claiming credit. Also, a mounting humanitarian crisis as the country allegedly forces out thousands of Afghan refugees. We're on top of this story.

Barack Obama facing new questions about ties to a formal radical. Critics are crying cover-up over secret documents.

Plus, it's the 9/11 collapse that had conspiracy theorists buzzing. Now the final word on what really happened.

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

The Twin Towers of the World Trade Center weren't the only things that crumbled on September 11th, 2001. A neighboring building, the World Trade Center building, number seven, also came down but no one was sure why, until now.

Let's go to Deborah Feyerick. She's working the story for us. Deb, what are the experts now saying?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well Wolf, there's a new report and the findings come after three years of studying the collapse of building seven just across from the north tower. This was done using complex computer models, detailed analysis and eyewitness accounts. Why doesn't everyone buy it?

(BEGIN VIDEOTAPE)

FEYERICK (voice over): It has been a mystery since 9/11. Why did World Trade Center building seven collapse nearly seven hours after the Twin Towers fell? Was it diesel fuel in the building? Or planted explosives? A controlled demolition of government offices, as conspiracy theorists allege in films like "Loose Change"? A team of scientists and engineers authorized by Congress say there's only one answer and it's conclusive.

SYHAM SUNDER, LEAD INVESTIGATOR, NIST: The collapse of World Trade Center seven was primarily due to fires. This is the first time that we're aware of that a building over 15 stories tall has collapsed primarily due to fire. FEYERICK: Syham Sunder, the study's lead investigator, said the fires ignited by falling debris from the towers burned so hot they created a phenomenon in which steel and concrete floors failed, causing floors to buckle and a key column to cave.

SUNDER: For the first time, we have shown that fire can induce a progressive collapse.

FEYERICK: Fires burned out of control on six of ten floors in building seven where New York City's multimillion-dollar emergency command center had recently been built. And because the city's water main was cut when the towers fell, sprinkler systems in the building did not work. Still, conspiracy theorists and others were not swayed by the new findings.

UNIDENTIFIED MALE: I hear it quoted in a number of bare assertions.

FEYERICK: Investigators say they did consider certain so-called conspiracy theories but none held up.

SUNDER: Alternative theories are really none of them have been found to be credible.

FEYERICK: Fire expert Glenn Corbett analyzed the Trace Center collapse and says the new report could be used to make high-rises safer.

GLENN CORBETT, JOHN JAY COLLEGE: I'm hoping the next steps will be to make changes to buildings to improve them for the future and that's really what the most important thing out of this whole investigation is.

(END VIDEOTAPE)

FEYERICK (on camera): The lead investigator said if someone like a conspiracy theorist were to step forward with genuine science to support any other conclusion, they'll consider it but right now these men and women are confident they have their answer. -- Wolf?

BLITZER: All right. Good, thanks very much, Deb.

Meanwhile, word continues on the World Trade Center site. So far foundations have been completed for the freedom tower, and the two other buildings. Plans called for a total of five new skyscrapers, along with a 9/11 memorial, and a museum. Work is scheduled to be completed by 2012, with a current budget of $15 billion.

There's new information coming into THE SITUATION ROOM right now on the devastating ambush in Afghanistan, which took the lives of ten allied troops and NATO is answering allegations that friendly-fire was involved.

Brian Todd has been working the story for us. Brian, what are you learning? BRIAN TODD, CNN CORRESPONDENT: Wolf, we've been speaking all day with NATO and French officials. They deny this report of friendly- fire but they've given us some compelling new details about what happened in the incident and we've likely not heard the final word on this.

(BEGIN VIDEOTAPE)

TODD (voice-over): Public tries to absorb the sudden loss of ten elite paratroopers in Afghanistan. New details emerge of the vicious ambush that killed them. By all descriptions a grinding, bloody encounter. Top NATO and military officials tell CNN two French platoons and two Afghan units were patrolling together in a dangerous jagged region about 30 miles northeast of Kabul on Monday when insurgents leveled a barrage of gunfire on them. We are told the attackers heavily outnumbered the French and Afghan force. At a news conference the French army chief called this a well-planned ambush and described what happened to the lead platoon.

GEN. JEAN-LOUIS GEORGELIN, FRENCH ARMY CHIEF OF STAFF (through translator): First there was an ambush, which hit the group of soldiers in the front, and it instantly killed nine soldiers and neutralized the entire 22 soldiers in the front.

TODD: NATO and French officials tell us the lead commander of that platoon and his radioman were among the first hit. The radioman killed. That initially compromised communication with the other units, but they were quick to engage.

Officials say this firefight started Monday afternoon and lasted about ten hours. The area wasn't brought under control, they say, until about 2:00 Tuesday morning. The fighting was so close, officials tell us, that NATO planes brought in for air cover could not drop bombs. A-10 warthogs scraped the insurgents with more than 1,300 rounds but did they hit their mark? The French newspaper quotes wounded soldiers saying fire from the NATO planes hit the French force by mistake. French and NATO officials have a strong response.

BRIGADIER GENERAL RICHARD BLANCHETTE, ISAF SPOKESPERSON: We have no information to this effect at this time. We would conduct an investigation if we had grounds to conduct an investigation, but right now, we have no signs that this would be the case.

TODD: French officials tell us there will be questions about friendly-fire in their overall review of the incident. Combat veterans say it's too soon to reach conclusions.

COL. PATRICK LANG (RET.), MILITARY ANALYST: In the confusion of an ongoing action like this, it's often hard to tell where or what particular fire elements came from, and now, if somebody's shooting at you with 30 millimeter cannon on an A-10 the impacts would be good enough you'd have an idea that wasn't small arms fire from guerrillas.

(END VIDEOTAPE)

TODD (on camera): He also quotes the wounded French soldiers saying they took fire from Afghan troops who were with them in the fire fight. NATO and French military officials tell us they have no evidence of that, Wolf.

BLITZER: Why are they being seemingly definitive only a few days after this horrible incident?

TODD: NATO officials say that the wounds suffered by those killed and wounded were not consistent with what they called air- delivered ordinance but you can bet we'll hear more about this in the days ahead.

BLITZER: All right. Brian, thanks very much, bad incident in Afghanistan, as we see.

Meanwhile an airline pilot on a government terror watch list.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You were in the military for 13 years, serving in this country.

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: Now this country says apparently you're some kind of a risk.

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: What does that feel like?

UNIDENTIFIED MALE: Not very good.

(END VIDEO CLIP)

BLITZER: One thing may have triggered it and he's fighting to keep his job.

Plus convention protesters and a controversial plan what, Denver police say they have in store for trouble-makers.

(COMMERCIAL BREAK)

BLITZER: He's actually one of the last people you'd expect to find on the government's terror watch list, an airline pilot, a military veteran, someone who is now in danger of losing his job.

Let's go to our homeland security correspondent Jeanne Meserve. She's looking at this story.

Jeanne, how could this happen?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Well, Wolf, being on a government watch list usually means delay and inconvenience when you travel, but for one man, the potential impact is much more profound. He may lose his ability to make a living and he says the government is not giving him any explanation or a chance to clear his name.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): Erich Scherfen was an infantryman on the front lines in the Gulf War, even has a signed photograph of him with the first President Bush. He later became a National Guard helicopter pilot and after his discharge got a job as a pilot with a small commuter airline. Last April his employer told him he was on a watch list. He was banned from the cockpit and will lose his job September 1st, unless he clears his name.

ERICH SCHERFEN, SUSPENDED PILOT: My entire career depends on me getting off this list. I probably won't be able to get a job anywhere else in the world, having this mark that I'm on this list with this undetermined list.

MESERVE: Scherfen is a convert to Islam. His wife Rabinah Tarin (ph), an American citizen, was born in Pakistan. She sells Islamic books and DVDs.

RABINAH TARIN (ph), SCHERFIN'S WIFE: It's mainstream, it's a very moderate kind of perspective on Islam.

MESERVE: They have both been delayed at airport and borders, told by security personnel they are on a list.

(on camera): Are you guys terrorists?

TARIN: No.

SCHERFEN: No.

MESERVE: Do you associate with people who are terrorists?

TARIN: No.

MESERVE: Do you give money to any organization which might have terrorist links?

SCHERFEN: No.

MESERVE: Why do you believe you may be on a list?

SCHERFEN: At this time, we do not know. That's the problem.

TARIN: Maybe because I'm a Muslim, and because of my ethnicity.

MESERVE (voice-over): They have tried to find out. In May, they wrote to the department of homeland security. In June, to the Transportation Security Administration, traveler redress program. This week, after publicizing their plight by filing a lawsuit, they finally got a number to track their case.

WITOLD WALCZAK, ACLU OF PENNSYLVANIA: The TSA has set up a complaint system where you basically put your complaint and it goes into a black hole, and you get no response. You get nowhere, and bottom line is, it is not the kind of effective process that the constitution demands when the government is going to take away your life, liberty or property.

(END VIDEOTAPE)

MESERVE (on camera): The Justice Department will not say if Scherfen and Tarin are on a watch list but the TSA says it is trying to resolve their complaint and a judge is looking at the case. Late this afternoon we learned that the judge asked that Scherfen's termination date be moved back to October 1st. It has been. Giving everyone a little bit more breathing room -- Wolf?

BLITZER: All right. Stay on top of this, Jeanne and update us when we get more information.

Barack Obama's ties to a former '60s radical, some critics are trying to make hay out of that connection, and they're talking about a cover-up. We'll update you.

And if there are mass protests at the Democratic convention in Denver, authorities are ready for mass arrests, with the detention center that's being called Gitmo.

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

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BLITZER: An old controversy is back heating up for Barack Obama. Critics on the right are crying cover-up, saying documents detailing his ties to a former radical are being kept secret.

Let's go back to Carol. She is working the story. What is this one all about, Carol?

COSTELLO: Well you know Wolf, it's become a political tit-for- tat. At the core this is about a man with a radical past and a push to tie him to Barack Obama.

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COSTELLO (voice-over): Call it the heir's card. McCain's camp is playing it big. It dealt it after an attack ad linking McCain to former lobbyist and convicted felon to Jack Abramoff. After that, out comes the Ayers card. "If Barack Obama wants to have a discussion about questionable associations, let's start with his relationship with unrepentant terrorist William Ayers."

William Ayers and his wife were part of the Weather Underground, a terrorist group responsible for bombing government targets, including the pentagon, back in the '60s. They avoided conviction on a technicality, and today, Ayers is a college professor at the University of Illinois at Chicago. Today, they are community activists who once served on the same charitable fund as from 1999 to 2002, from the woods fund. In the mid 90s, Ayers hosted a gathering at his home when Obama first ran for the Illinois senate. That's according to the "Chicago Sun Times." In 2001, Ayers donated $200 to Obama's campaign. Obama insists, though, they are not close.

OBAMA: The notion that somehow as a consequence of me knowing somebody who engaged in detestable acts 40 years ago when I was 8 years old is somehow reflects on me and my values, doesn't make much sense.

COSTELLO: National review writer Stanley Kurtz is questionable. He questions the work on the board from the University of Illinois at Chicago and was denied access by the school's library, allegedly at the behest of Chicago's Democratic mayor, Richard Daley.

STANLEY KURTZ, ETHICS AND PUBLIC POLICY CENTER: I can't know for certain why I was blocked but it's hard not to suspect some sort of politically-motivated cover-up.

COSTELLO: Kurtz's column about the records further stirred the pot. Conservative bloggers lit up the web with comments like "Obama's connections to Ayers aren't phony or tenuous at all. They're real and substantial."

Whether the records say otherwise is conjecture but Mayor Daley told a Chicago newspaper of Ayers, "People keep trying to align themselves with Barack Obama. It's unfortunate. They're friends. So what? People do make mistakes in the past. You move on. This is a new century, a new time. He reflects back, and he's been making a strong contribution to our community."

But McCain's camp is not letting up, using the document controversy to play politics. "The question now," says his campaign, "Will Barack Obama immediately call on the University of Illinois to release all of the records they are currently withholding."

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COSTELLO (on camera): Now the university library says it does not have ownership rights to the do you want but is working aggressively to release them. The Obama camp told me today Senator Obama does not have control over the records or the ability to release them, but is policed that the university is pursuing an agreement that would make the records publicly available -- Wolf?

BLITZER: All right. Carol, thank you. Carol's going to be back shortly.

More now about the Weather Underground, the group that Ayers helped lead. It was formed back in 1969 and was originally called the Weathermen, from a Bob Dylan lyric qualify "you don't need to be a weatherman to know which way the wind blows." Its goals included ending the Vietnam War and overthrowing the U.S. government. The group claimed responsibility for more than 20 bombings in the early 1970s, including a botched attack that killed three members. The Weathermen eventually changed their name to the gender neutral, weather underground.

Up to 100 dead, dozens more wounded. Pakistani police now say that's the toll from twin suicide bombings outside a military factory today. CNN's Reza Sayah is in Islamabad -- Reza?

REZA SAYAH, CNN CORRESPONDENT: Wolf, this was one of the deadliest suicide attacks ever on Pakistan soil. The Pakistan Taliban have claimed responsibility for it. Payback they're calling it for the military offense launched against them in Pakistan's tribal region along the Afghan border.

Here's what we know about the attacks. Police tell CNN two suicide bombers blew themselves up outside the gates of a military arms factory about 30 kilometers outside of the federal capital of Islamabad. This facility, the biggest arms factory in Pakistan. More than 20,000 people work there. Police tell CNN the suicide attackers hit around 2:40 p.m. during a shift change. Indications are they wanted to inflict maximum damage. Based on the death toll, they did just that.

U.S. President Bush calling Prime Minister Yousuf Gilani of Pakistan to express his sympathies according to a White House spokesperson. The president expressed to Prime Minister Gilani the United States' strong commitment to working with the prime minister and the government of Pakistan to address the ongoing battle against extremists. During the past week, the Pakistani Taliban had promised payback. Payback came in the form of one of the deadliest suicide attacks ever in Pakistan -- Wolf?

BLITZER: All right. Reza, thanks very much. Reza's in Islamabad for us watching this horrible story.

Barack Obama's lead down to two points. Our political contributor James Carville says that if the Democrat candidate wants to win, he needs to get mad. James Carville, he's standing by live to join us right here in THE SITUATION ROOM.

Plus, Tropical storm Fay through the eyes of people dealing with the aftermath. Your I-Reports and a lot more coming up.

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BLITZER: As we've been reporting, a federal state of emergency is now declared in Florida as tropical storm Fay moves ashore in the northeastern part of the state. This is the third time Fay has made landfall in Florida. It's causing severe, severe flooding.

Let's bring in our internet reporter, Abbi Tatton. You're getting lots of reaction from our I-reports. What are we seeing?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, we're getting them from up and down the coast of Florida. People sending in their images saying, look at what we're dealing with right now. We can show you the scope of this by starting off at Port St. Lucie here in Florida. This really got hit on Tuesday.

John Schellenger sending in these pictures, venturing out to deliver bottled water to his parents. He said that this is ten inches he's experiencing in his neighborhood. That's getting off lightly compared to other areas.

Going north now to Melbourne, Florida. 26 inches in that area. This is Rich Carron's pictures. He was showing us people were kayaking along to deal with this. His house elevated. He says he could deal with the water because they were up a little hill. But he said elsewhere, you can take a look at this video you'll see people delivering sandbags to other houses to try to save their property.

If we can just advance that as well. We'll show you this is from a helmet camera, someone cycling through this area. You can see the vehicles all around him abandoned in more than two feet of water.

If we go further north as well, just like this tropical storm has been heading, right now to Cape Canaveral. This is Louise Mills, the picture from her balcony of her condo. She says she's not going anywhere. She can't. She's lucky she's got canned food in the apartment. She's lived there for 43 years, dealt with all kinds of storms. She says she has never seen flooding like this.

BLITZER: It's amazing what's going on. It wasn't even a hurricane. It was a tropical storm. It's causing so much devastation.

TATTON: It's moving so slowly and all these pictures are here at ireport.com.

BLITZER: Sean Callebs is on the scene. We'll go there shortly for an update on what's going on. Abbi, thank you.

Anti-war activists who staged massive protests at the Democratic convention could face mass arrest. Local law enforcement is placed to put the detainees, it's stirring up somewhat of a controversy.

Joe Johns is joining us now live from Denver.You had a tour of that makeshift jail. Joe, what did you see?

JOE JOHNS, CNN CORRESPONDENT: That's right, Wolf. Well you know the conventions come every four years. Just as predictably so, so do the protesters. This year, authorities in Denver feel their jails could be overwhelmed. They have come up with that controversial plan.

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JOHNS (voice-over): You're looking at a sheriff's department dress rehearsal. They're practicing how to lock up law-breaking protesters at a Denver warehouse set up as a makeshift jail for the Democratic National Convention. The authorities call it an arrest processing center but critics it something else. Platte is a reference to the Denver geography. You get the rest. That's right. People who want to demonstrate during the convention are comparing the lock-up in Denver to the U.S. military prison at Guantanamo Bay, Cuba.

JORDAN HILL, ALLIANCE FOR REAL DEMOCRACY: This is America. We have a system in place so why aren't we using it? Why are we using warehouses?

JOHNS: But the sheriff's department says, hold on. MARIE KEILAR, DENVER SHERIFF'S DEPT.: They're typical cells. They'll have the ability of water any time, phone calls colorful free phone calls, food and medical attention.

JOHNS: The warehouse can hold up to 400 people. I got a brief tour and would describe the place as Spartan. Then again, it's very temporary. No one is expected to sleep here. The overarching question is whether all of this is actually necessary, or are the authorities going overboard? They say absolutely not.

UNIDENTIFIED MALE: To my right, you'll see a sign that says medical.

JOHNS: They're gearing up for the worst case scenario, anywhere from 20,000 to 50,000 protestors and there's always concern about violence, though they expect the vast majority of the activity to be peaceful.

Hundreds of protesters were arrested at the 2000 and 2004 national political conventions. This year's protesters will be voicing their displeasure against several government policies. For the record, there has been one protest against the lock-up itself.

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JOHNS (on camera): Now, demonstration organizers we've spoken to say everything they're planning is lawful. However, the authorities here say they simply have to plan for the worst - Wolf?

BLITZER: See you in Denver, Joe. Thank you.