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The Situation Room

System Used To Devise The No-Fly List Is Likely To Be Changed After The Failures In The Christmas Day Attack.

Aired December 30, 2009 - 17:00   ET

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

SUZANNE MALVEAUX, CNN ANCHOR: You're in THE SITUATION ROOM. Happening now, there is breaking news. A devastating attack on a U.S. base in Afghanistan; a suicide bomber wearing an explosive vest penetrates the defenses, and takes a heavy toll on American lives. We have the latest from Kabul.

Intelligence was available about the suspect in last week's airline bombing attempt. Why didn't U.S. authorities slam the door and keep him from flying into this country?

And chanting death to America, massive crowds turn out in support of Iran's hardline regime. Some calling for the execution of opposition leaders.

Wolf Blitzer is off today. I'm Suzanne Malveaux. You're in THE SITUATION ROOM.

President Obama is waiting for answers on last week's attempted airline bombing and investigators are scrambling to provide them against a very tight deadline. There are plenty of questions, clearly. Topping the list, since information was available on the suspect, why wasn't he put on a list that would have kept him out of the country?

Our CNN Foreign Affairs Correspondent Jill Dougherty has been looking into that aspect of it. Jill, it's a complicated story, isn't it?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORESPONDENT: Extremely, Suzanne.

You know, if you really want to understand what happened you almost have to sit down and diagram how this system works. And that's exactly what we did. One of the problems is there's a system in place for processing intelligence data, but - as one official told us - for the most part it's a passive system where people push on bits and pieces of information. And part of that process is based on individual judgment.

Now, Thursday, tomorrow, President Obama is going to be hearing preliminary reports on what went wrong, how the airline bombing suspect was able to board that airliner, and kill almost 300 people. The clues, he says, were there. So why didn't the security system already in place slam the door and revoke the suspect's U.S. visa? The bureaucratic maze begins in Nigeria when six weeks ago his father warns the U.S. embassy that his son is becoming radicalized. He gives him the son's name, birth date, and passport number, and that information is sent in a brief unclassified visa's viper cable to National Counterterrorism Center in Washington, the central clearinghouse for intelligence and planning. So the NCTC puts the suspect on the so-called TIDE list, along with 550,000 other possibly suspicious people, but that's where it stops.

MALVEAUX: So in an idle situation, Jill, how could they have prevented him from getting on that plane, just slamming the door shut?

DOUGHERTY: You would really have to go to the next step and for that you need what is called reasonable suspicion of a link to terrorism and the counterterrorism center ruled that it's simply not there. So if it had been, the FBI's terrorism screening center would have put him on what's called the terrorist watch list. Then possibly he could go on to a selectee watch list, that requires additional airport screening, or finally the no-fly list. And that would have, at least theoretically, grounded the suspect. And that would have allowed the State Department then to revoke his visa.

MALVEAUX: And Jill, you covered the State Department and foreign affairs, obviously. A lot of people wondering what has been Secretary of State Hillary Clinton's role in all of this because we haven't seen her in the last week or so.

DOUGHERTY: She has been o vacation. She has been reviewing -- directing this review that they're carrying out that they will present to the president tomorrow. We don't believe that she is going to be actually physically with the president. It will be transmitted in some way, we're not quite sure how.

But we do know that one thing they're looking at very carefully is this visa viper cable. And they're considering, we understand, making it much more specific, a lot fuller. It's a very stripped down brief set of information.

And just one really quick thing coming out of that congressional briefing.

MALVEAUX: Sure.

DOUGHERTY: They're also looking at apparently at this point of making a lower a threshold for action because we're talking about a very passive system.

MALVEAUX: Right. OK, thank you so much. Chock full of information, very good information. Appreciate it.

After the 9/11 attacks a blue-ribbon panel found shortcomings in America's defenses. Chief among them was the failure of government agencies to share information and intelligence. Well is that still true today? I'm going to ask a former 9/11 commissioner Richard Ben- Veniste. Also, there may have been another recent plot against an airliner. Man tried to board a commercial jet in the Somalia capital of Mogadishu last month, with chemicals that authorities believe could have been used as an explosive device. An African Union official said the suspect had a plastic bag containing ammonium nitrate, and a plastic bottle containing sulfuric acid. Now the suspect is also said to have carried an unidentified liquid in a syringe. The flight's final destination was Dubai. The suspect drew suspicion because he was the last one to board, he was arrested after a search turned up those chemicals.

Breaking news at this hour out of Afghanistan. There is a devastating attack on a U.S. base as a suicide bomber takes a heavy toll in American lives. Our CNN's Atia Abawi is in Kabul -Tia.

ATIA ABAWI, CNN CORRESPONDENT: Suzanne, it has been a very busy day here in Afghanistan.

Late Wednesday night, local time, we received information of eight Americans killed in a suicide attack in Eastern Afghanistan in the province of Khost. The attack occurred at Forward Operating Base Chapman. It happened when a suicide bomber wearing a vest entered either the dining facility or the gym. The details are still unclear when he detonated, killing the Americans.

This coming on the same day that the Taliban released a year-end review for 2009 and a look-ahead for 2010. They're calling 2009 a very successful year when it comes to their politics. They're fighting on the front lines as well as their public relations, when it comes to the media.

As for 2010 they say that they will launch major military operations come April, springtime, what is also know as the beginning of fighting season here in Afghanistan.

And earlier today the Afghan government released the results of an investigation after a U.S.-led military operation killed at least nine people in Kunar Province Saturday night. The Afghan government says that nine civilians were killed including primary age students and high school students. The U.S. military said they were involved in an operation in that area. It was a joint operation with their Afghan counterparts, but what they're calling for is a joint investigation to lead to impartial results. Because they say they were in that area looking for an insurgent group that has been known to be involved in criminal activity, Suzanne.

MALVEAUX: Atia, thank you. We're going to check back on developments in Afghanistan.

Also, an asteroid with a possible collision course with Earth? Well Russia scrambles to deflect it with a rocket. It sounds like a movie, but it's not.

Also, he was held hostage in Iraq for more than two years, and now he is finally free. And his overjoyed family is speaking out about it at the end of a long, long nightmare. Plus a show of force in Iran. This time it's the pro-government protesters that are voicing their outrage.

(COMMERCIAL BREAK)

MALVEAUX: The blue-ribbon panel which investigated the 9/11 attacks found a number of failures in American's defenses against terrorism. There were shortcomings when it came to watch lists and overseeing visas. And above all, there was the failure of government agencies to pool and share intelligence. I want you to take a listen to a 9/11 Commission member, Richard Ben-Veniste back in 2005.

(BEGIN VIDEO CLIP)

RICHARD BEN-VENISTE, FORMER 9/11 COMMISSION MEMBER: When we issued our final report one of the central tenets of what we found was there was a failure of communication, that we had accumulated a great deal of information, but that it was not wisely used. Information wasn't shared It wasn't effectively utilized.

(END VIDEO CLIP)

MALVEAUX: Mr. Ben-Veniste joins us here in THE SITUATION ROOM. That was four years ago when you said that. You put a lot of work into that report. We all remember it very clearly. Are you stunned to here now that the problems we're facing today are ones of communication, that people just aren't talking to each other?

RICHARD BEN-VENISTE, FMR. 9/11 COMMISSIONER: Well, it's disappointing. I hope this is an isolated example. I know we have made a lot of progress since we made our recommendations on the 9/11 Commission. Virtually all of them were enacted into law. And now they have been utilized, I think, in great part, by our government and its agencies. But quite clearly there was a failure here, and we need to address it as the president said yesterday. He is determined to hold people accountable, to find out what went wrong, and to take corrective action.

MALVEAUX: You studied our intelligence system in depth and in detail. Why is it so difficult for these different agencies to share information?

BEN-VENISTE: Well, there has always been in Washington this intramural kind of feeling of possessiveness about information that's developed within an agency by its sources. And so there's a tendency to stovepipe, to hoard information, and not to share it. And that has to be overcome. As we said five years ago, it has to be overcome by presidential leadership who requires that it be done, to overcome this obstinate tendency in our government agencies to hoard information.

MALVEAUX: Now, the 9/11 commission in December 5th of 2005 gave its final report and it specifically talked about pre-screening passengers before they board the airline. And you gave this country -- you gave the grade of an F. Here's what the commission said. "A few improvements have been made to existing passenger screening system since right after 9/11. The completion of the testing phase of TSA's prescreening program for airline passengers has been delayed. A new system, utilizing all names on the consolidated terror watch list, is therefore, not yet in operation."

That was back in 2005. What grade would you give the Obama administration today after learning of this incident?

BEN-VENISTE: Again, it's one incident. We're still finding out facts, but clearly we have not seen implemented with the alacrity that we would have wished, the ability to utilize information and to match it against passengers, particularly, those who come from overseas.

Here we had an individual who had an existing visa, but who had spent time, as we know, in Yemen, whose father alerted government agencies to his radicalization, who may have been matched up with other intelligence information, suggesting that a Nigerian would have been involved in a terror plot, all of which, we would have hoped, could have been knitted together.

MALVEAUX: Do you have any confidence in the Obama administration that they are in fact going to deal with this?

BEN-VENISTE: Oh, yes, I do.

MALVEAUX: Because this is something that the Bush administration dealt with. Clearly, it does not look like they're getting a passing grade.

BEN-VENISTE: Quite clearly I do have hope that the Obama administration takes it seriously. We saw the president's reaction immediately, taking responsibility, looking for accountability, all of which is a sea change from what we saw in the last administration, quite frankly.

Now the ability to effect these changes is certainly no easy task as we have seen, but I think the determination is there. They have very good people there. I think where the will is not lacking but is obvious, that we will see some results.

MALVEAUX: Do you think anyone should lose their jobs over this?

BEN-VENISTE: Well, let's see what the facts are, and then make that determination.

MALVEAUX: Finally the 9/11 Commission had said among the recommendations that the United States should attack terrorists and their organizations, root out sanctuaries, utilizing every element of national power. Do you believe that this applies to Yemen now?

BEN-VENISTE: I think it does.

MALVEAUX: Where we are seeing a growing increase in Al Qaeda.

BEN-VENISTE: I think it's a good question, Suzanne. The president has in fact, in the past, past launched attacks in coordination, we think, with the Yemeni government, which is not the most robust government on the planet, to say the least. But we have seen such action, and the president has again reiterated his commitment to seek out those who have struck against us. Perhaps this was, in fact, blowback for earlier attempts to get Al-Alaki, and other individuals, who we know are in Yemen, and who are sponsoring terrorism.

MALVEAUX: OK. Mr. Ben-Veniste, thank you so much for joining us here in THE SITUATION ROOM.

BEN-VENISTE: Thank you. Always a pleasure, Suzanne.

MALVEAUX: Thank you.

Republicans are ramping up their criticism of President Obama over the failed airline terror attack. But what is at stake now for the White House?

And possibly U.S. retaliation for that thwarted bombing? What are the options if president orders a strike against Yemen?

(COMMERCIAL BREAK)

MALVEAUX: The politics of terror. President Obama is facing increasing Republican criticism over the thwarted Christmas Day effort to blow up a U.S.-bound airliner. I want to bring in our Senior Political Correspondent Candy Crowley, who's here with more.

Candy, we saw Dennis McDonough. He is the chief of staff for NSC. He's in Hawaii with the president. Had a briefing and said, look, President Obama gets five briefings a day from The Situation Room; he's got five guys on the ground, he's doing his job, he's being briefing, he's going to have these preliminary results tomorrow. Does the president, do the Democrats face a real problem here, the political implications of what's taking place in Hawaii?

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: The president, I think, less so actually than the Democrats, because the president is not up for re-election next year. The Democrats are.

As far as the theater of it, is concerned, certainly he's not the first president who got caught on a well-deserved vacation, when something happened. He is not the first president to stay put because, of course, they can have communications everywhere. Clearly the White House pushing back against the suggestion that he should return home.

But overarching all of this is the Republican central theme that the president is taking too gradual of an approach to the idea of terrorism. They criticized him for it during the campaign. They have criticized him for it when he decided to move some of the trails of some of the Gitmo prisoners to New York.

So, the question is, how will Republicans approach this? And they'll have plenty of months because there are hearings coming up. First of all we had a statement today from John Boehner, who is, of course, the Republican leader on the House side. He hit on several issues including saying that what the American people need to know is what the president's overarching strategy is.

He wrote, "Republicans will push for the type of aggressive oversight to give the American people confidence that their government is doing everything it can to detect and stop future attacks rather than just responding to them after they happen."

Now, there are several areas where the Republicans see some vulnerabilities. They believe that this is a time to revisit the idea that those trials should take place in New York. And they believe this is a time to revisit what to do with those prisoners of Gitmo, whether or not to close down the Guantanamo Bay prison.

Thirdly, in a letter now from Newt Gingrich, when he laid out several items criticizing the president, the idea of profiling. "In the Obama administration," Gingrich, "wrote protecting the rights of terrorists has been more important than protecting the lives of Americans".

Pretty tough.

"That must now change decisively," Gingrich wrote, "It is time to know more about would-be terrorists, to profile for terrorists and to actively discriminate based on suspicious terrorist information."

So Suzanne, lots of areas where Republicans now see they can move toward, to push the administration. Of course, it's 2010, make some political points.

MALVEAUX: Candy, you and I both covered President Obama when he was a candidate back in 2008, and the Republicans, they were relentless in going after him on national security. But the president, he won overwhelmingly anyway. Is there any change in climate that you're seeing when you talk to some of these Republicans that might allow them more significant inroads in this kind of debate?

CROWLEY: Well, let me tell you, first of all, we have seen the president's ratings overall, go down. And second of all, it is a totally different time. He's no longer a candidate. He is, of course, the president. And something has happened. Before, during the campaign, Republicans were largely arguing in a vacuum. They were arguing in the unknown. No one exactly knew how the president would cope with a crisis. How strong he would be. Whether he would take terrorists on one on one.

We're hearing now talk about would there be U.S.-backed hits on terrorist camps and Yemen and that kind of thing. So it is a different atmosphere, first of all, because the president is more vulnerable than he was just in terms of the polls, and because something's actually happening.

But the Republicans need to be careful. As we all know because we're talking about the safety of the American people. And think someone's who's afraid to get on a plane, or who wonders when they are getting on a plane, whether they are safe, is not going to look all that kindly on people they think are trying to make political points. So it's very tough, or we're in very tough territory for the Republicans, because largely people don't have a great feeling of affection for Republicans at this point. And the Democrats have been able to paint the Republicans as so political that they've got to be careful how hard they push this against President Obama.

MALVEAUX: And you bring up a very good point. People are traveling. They're watching very closely what people are saying and whether or not the president is being reassuring, and whether or not Republicans are being reassuring.

CROWLDY: It is not an issue that is easy to take into politics, but you can't get the politics out of it.

MALVEAUX: Absolutely not. That's why we cover it. We always have a story there. All right. Thank you, Candy.

CROWLEY: Sure.

MALVEAUX: Brianna Keilar is monitoring other top stories coming into THE SITUATION ROOM right now.

Hey, Brianna, what do you have?

BRIANNA KEILAR, CNN NEWS ANCHOR: Suzanne, more than 20 people, including policemen, are dead after a blast ripped through Anbar Province in Iraq. This is one of the worst episodes of violence in months; hitting this region that continues to be threatened by Al Qaeda.

Two suicide bombers, one in a car, another on foot, blamed for these explosions. Police set a curfew while U.S. military troops helped with the evacuations and the investigation.

You know it sounds like a story produced in Hollywood, maybe a Bruce Willis movie. Russia is considering a mission to intercept an asteroid that's on a collision course with Earth. The Russian space agency may launch a rocket to deflect the 885-foot-long asteroid. It's expected to come our way in about 20 years. Keep in mind, though, NASA recently lowered the odds of the encounter.

You know, those are not crop circles right there. It's actually the work of a real artiste. The proud portrait, can you tell, is of President Obama. It's actually by an Italian man, he created this so- called land art in honor of Mr. Obama's visit to Italy for the G8 summit last summer. The painter and musician decided to merge his talent with his country's roots taking over several fields in his native Verona.

Kind of an unexpected perk, I guess, Suzanne, of being president. You get your face carved into a few fields there.

MALVEAUX: That's an amazing picture. Thank you, Brianna.

On a more serious note, a hostage is freed in Iraq two and a half years, later after he was grabbed by Shiite insurgents. We are going to go to Baghdad to look at the moves which lead to his amazing release.

There are stepped up raids against Al Qaeda targets in Yemen. How much is the U.S. helping and is it ready to retaliate directly for the attempt to blow up an airliner?

And chanting "Death to America", thousands turn out to support Iran's regime. Will Iran's future be decided in the streets?

(COMMERCIAL BREAK)

MALVEAUX: Here in THE SITUATION ROOM, happening now, a public defender is assigned to the man accused of trying to bomb a U.S. airliner on Christmas Day. That lawyer is no stranger to high-profile terrorism cases. We're going to take a look at the experience she is bringing to this one.

Also we travel to the suspect's Nigerian hometown and we visit his school, the mosque, in search of a possible motive.

Wolf Blitzer is off today. I'm Suzanne Malveaux, and you're in THE SITUATION ROOM

Two and a half years after he was kidnapped in Iraq by Shiite insurgents, British hostage Peter Moore has been released, and back home as you can imagine, his relatives are ecstatic.

(BEGIN VIDEO CLIP)

GRAEME MOORE, PETER MOORE'S FATHER: We're absolutely overjoyed for the lad. You know, I first heard from a reporter that there was going to be a statement by the foreign office regarding Peter. And I did suspect the worst for about an hour. Then I saw the breaking news on the television and then about went through the ceiling with joy.

(END VIDEO CLIP)

MALVEAUX: Both Iraqi and British officials say the release was part of a process of national reconciliation in Iraq, aimed at getting insurgents to lay down their arms. Our CNN's Diana Magnay has the story from Baghdad. Hey, Diana.

DIANA MAGNAY,CNN INTERNATIONAL CORRESPONDENT: Suzanne, Peter Moore was brought to the British embassy here in Baghdad this morning. He has been going through health checks before he'll be flown back to his family. He has been described as in good health. David Miliband, the U.K. foreign minister said that he was, to put it mildly delighted to be returning home after two and a half years in captivity.

He was taken hostage alongside four security guards in May 2007 and we believe he was held by an Iranian-backed Shiite militant group. Both the Iraqi government and the foreign minister were very sketchy about how it had gone on to secure the Britain's release.

(BEGIN VIDEO CLIP)

DAVID MILIBAND, BRITISH FOREIGN SECRETARY: The British government does not make substantive concessions to hostage takers anywhere, anyplace and there with none in this case. As I said in my statement, there is a process of reconciliation under way in Iraq. It involves previously armed groups committing themselves to the political process. We have seen such processes of reconciliation in other countries, and you'll be able to think of them in those countries yourself. There's no question in my mind that that process of reconciliation is the foundation for the decision by the hostage takers to release Peter Moore today.

(END VIDEO CLIP)

MAGNAY: Now, the Iraqi government has for a couple of years been trying to engage political groups in the political process and that has involved the release of some Iraqi detainees and we know that one detainee who was a high level member of this particular group believed to be holding the five hostages was released in June this year and only a few days later, two, and then a third body of three of those hostages was released back to Baghdad and thus back to the UK, Suzanne.

MALVEAUX: Thank you Diana.

Peter Moore is the sole survivor of the group that was kidnapped in May of 2007. The bodies of three of his security guards have already been returned. The fourth quarter guard is believed to be dead. The British foreign secretary reaffirmed that today, calling again on the hostage takers to return his body.

Yemen says its security forces today says it stormed an al Qaeda hideout. A top official vows to eliminate the terrorists' local branch. Such raids along with air strikes, that have been stepped up lately with American help. I want to go live to our CNN pentagon correspondent Barbara Starr.

And Barbara, are we likely to see even greater U.S. involvement working with the enemy government to go after al Qaeda? Clearly it looks like that's what's happening on the ground.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: You know, Suzanne, every day there seems to be more public acknowledgement between the cooperation of the two countries. New video of a Yemeni military raid against al Qaeda was released earlier this month.

(BEGIN VIDEOTAPE)

STARR: Yemeni forces on a raid against al Qaeda just north of the capital of Sana. Come out. It is better for you. Do not be afraid. Shots are fired. Several suspects are finally captured. This was one of Yemen's efforts to hit back at al Qaeda. U.S. assistance with several strikes that may have killed some of these men is now openly acknowledged.

ABU BAKR AL-QIRBI, YEMENI FOREIGN MINISTER: These are Yemeni armed forces attack, so they're, of course, supported by American intelligence and by the training of the Yemeni armed forces. STARR: What's next? The U.S. military and intelligence community are looking at everything they've got on al Qaeda in Yemen. Strikes are expected to continue and could involve U.S. missiles or aircraft sources say. The U.S. and Yemen are looking for targets linked to the attack on Northwest flight 253. But direct retaliation hasn't always worked.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Our target was terror, our mission was clear, there will be no sanctuary for terrorists?

STARR: In 1998, after al Qaeda attacked U.S. embassies in east Africa, President Clinton ordered cruise missile attacks against targets in Afghanistan. But al Qaeda was untouched. Key operatives had long fled the area. It happened in Yemen back in 2002. A U.S. drone fired a missile. One of the dead was an al Qaeda operative believed to have been behind the October 2000 attack on the navy warship that killed 17 sailors.

(END VIDEOTAPE)

STARR: Bottom line Suzanne, if President Obama decides to order retaliation on the foiled attack on the northwest airlines jet, there's be a target list waiting for him.

MALVEAUX: All right. Barbara Starr, thanks very much for the update.

There were multiple warning signs, and all of them were missed.

UNIDENTIFIED MALE: The fact that this individual showed up with a one-way ticket purchased with cash, with no checked baggage, he should have been pulled aside. And at that point if inspected by a dog, we literally could have detected it.

MALVEAUX: We're going to take look at what these dogs can really do.

(COMMERCIAL BREAK)

MALVEAUX: President Obama says human and system failures helped. Now some experts are saying that a dog could have succeeded where humans failed. Our CNN's Kara Finnstrom explains. How does this work?

KARA FINNSTROM, CNN CORRESPONDENT: Suzanne counter terrorism experts are taking a closer look at all the security tools available to the U.S. right now. And one of them is the bomb-sniffing dog.

(BEGIN VIDEOTAPE)

FINNSTROM: Bear is a German shepherd trained to sniff out explosives.

UNIDENTIFIED MALE: He's placing the explosives in the springs of this vehicle so like it's a car bomb. FINNSTROM: He hones in and signals by sitting.

(on camera): So that was a find.

UNIDENTIFIED MALE: Yes.

FINNSTROM: Uncovering a compound similar to what the U.S. government says airport authorities failed to find on a suspected terrorist accused of trying to blow up a flight into Detroit Christmas day.

UNIDENTIFIED MALE: It's just like silly putty, but it's a very high-grade explosive.

FINNSTROM: Patrick Belts trains bomb sniffing dogs. They're questioning how and when dogs like Bear should be used

LARRY JOHNSON, COUNTERTERRORISM EXPERT: The fact that this individual showed up with a one-way ticket purchased with cash with no checked baggage, he should have been pulled aside.

FRAN FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Dogs tend to be the cheapest, fastest, and most reliable explosive detection capability that we have in this country.

FINNSTROM: Bear has been a $60,000 training investment over the nine years. He trains monthly in different scenarios. Today it's an old bus used to simulate an airplane. It only took the dog seconds to find those explosives hidden aboard the bus, but had the same explosives hidden in my clothing may not have been found at all because they haven't been taught or districted to do so.

PATRICK BELTZ, EXPLOSIVE SNIFFING DOG TRAINER: No one has been given the green light for dogs to smell bodies.

FINNSTROM: That's here in the U.S. He does train dogs to sniff for people in the middle and Far East where standards are different.

BELTZ: In America it could be considered very intrusive to let my dog go to your groin area and sniff around.

WILLIAM YOCHAM, LOS ANGELES PORT POLICE: He could be taught but right now the legalities of it are astronomical.

FINNSTROM: The Transportation Safety Administration says the 700 dogs it's currently using are trained to check baggage and baggage in cargo areas but could be used to check people if necessary. Terrorism concerns have prompted Auburn University to develop program they claim trains dogs to sniff out suspects carrying explosives as they casually walk past. Since the Detroit incident discussions about increasing aviation security have focused mostly on technology. Perhaps one part of the solution is man's best friend.

(END VIDEOTAPE)

FINNSTROM: While these dogs could have an expanded role, they have limitations. They need rest and they have to be fed and walked.

MALVEAUX: Brianna Keilar has some of the other top stories coming into THE SITUATION ROOM right now.

Hey, Brianna, what are you watching?

BRIANNA KEILAR, CNN CORRESPONDENT: Well Suzanne GMAC financial services is going to get $3.8 billion, a shot in the arm, courtesy of U.S. taxpayers. The treasury department agreed to help them with hefty losses in its home mortgage unit. The government says it's less than the roughly $6 billion in so-called T.A.R.P. funds that it had allotted.

Everyone is OK, good new, U.S. Airways jet made an emergency landing at San Antonio International Airport. After circling the airport for an hour to burn off fuel, the plane landed safely with a flat tire. This plane had close to 90 passengers and crew members onboard.

The TV producer accused of trying to extort money from David Letterman will use Tiger Woods' troubles as his defense. He says since Woods' alleged mistress wasn't charged with millions, his client shouldn't be either. He pleaded guilty to attempted grand larceny. Interesting defense.

MALVEAUX: OK. Thank you Brianna.

Her memoir was a bestseller. I'm going to speak with her about Iran today.

(COMMERCIAL BREAK)

MALVEAUX: There were more demonstrations in the streets of Tehran today. Meantime the Iranian police chief is issuing a final warning to protesters. CNN's Rosemary Church, she's been following the developments from Iran Desk in Atlanta.

ROSEMARY CHURCH, CNN CORRESPONDENT: We are seeing some of the worst violence on the streets of Iran since the disputed June 12 elections, and that is why the Iranian government has organized these pro government rallies out on the streets. Look at the hundreds and thousands of supporters of Iran's regime taking to the streets, this time showing force against the opposition. State-sponsored rallies were displayed across the cities and state television showed footage of people swarming downtown areas, including Tehran's square. Now, I want you to compare these images to those coming from amateur video of antigovernment protests back on Sunday in Tehran. Now, these pictures show participants throwing stones at members of Iran's military force. Eight people were killed. More than 500 protesters arrested following those antigovernment demonstrations on Sunday. CNN cannot confirm the authenticity of this amateur video or others. This is very graphic. A warning to all of you. What we see is people on the streets. There is a police van in just a moment. It drives right into the crowd and then it reverses out and then to the side -- to the left-hand side you can see another police van as it comes in and it mows into the crowd there right over the top of that person on the road. You can hear people screaming there. The witnesses move in to collect that person. We don't know man or woman. We don't know if they're dead or alive at this point. Now, we've had reaction from Iran's police chief. We want to get an idea of what he had to say. He has said at this point that those participants will be crushed and no mercy will be shown. Let's listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The time of moderateness is over. I repeatedly said that before, but they thought I was joking. From now on anyone who participates in such demonstrations and gets involved in such fundamental list things will see no leniency. The judicial prosecution will also be harsher. You'll see that.

(END VIDEO CLIP)

CHURCH: A harsh warning to protesters on the streets of Iran. Of course, as we see these reports of deaths and arrests and the increased criticism coming from Iran directed at the United States and Britain increasing that tension between Iran and the west. Back to you.

MALVEAUX: Rosemary, thank you for those dramatic pictures. Azar Nafisi is going to join me next.

(COMMERCIAL BREAK)

MALVEAUX: With the Iranian government controlling information coming out of the country, it's really difficult to gain a full picture. With some perspective Azar Nafisi is joining us. She's the author of the best-selling" Leading Lolita in Teheran."

Thank you so much for joining us here in THE SITUATION ROOM. Clearly, you your pulse on what is happening inside of the country. We have seen for weeks the huge demonstrations that are turning very, very violent. You have friends and family there, so what do you make of what is happening on the ground inside of your home country now?

AZAR NAFISI, JOHNS HOPKINS UNIVERSITY: Well, you know, Suzanne, I imagine how amazing it is and how it becomes the exception that becomes the rule. When the Islamic republic happened, nobody expected a country that was secular to become the first theocracy and now the opposite is happening in Iran. Think that the reports from Iran, there are four important things about it that are very, very different. One is the momentum, and the crackdown of the momentum is cracking down and it is more diverse. And despite the diversity, there is a unity of different strata of people with seculars and women with veils and women without veils and all of them are gathered against what is happening in terms of the Iranian government. And the fourth thing is that the leadership is mainly coming from among the movement. That the leads like Mr. Mousavi and others are following the slogans and the statements that comes from within the movement.

MALVEAUX: Can you explain to us why we are seeing pictures today of thousands of demonstrators who are pro-government and for the Iranian leader Mahmoud Ahmadinejad, and the other side, what is that about?

NAFISI: Well, the way that the government is reacting is also very telling about what is happening in Iran. Its first reaction has been incredible violence, and that shows that it is moving not from a position of strength, but from a position of weakness, because why would you kill and torture people who have nothing but their voices if you are so confidence? Because of the continuity of the demonstrations, and because of the weakening within the system, itself, so many people joining the opposition, the government had to show that, you know, it has people behind it. And you noticed that the people were bussed in from all over the places, and rather than bullets, they were welcomed with sandwiches and rewarded and given a great welcome for the media, and it is shows how frightened the government is.

MALVEAUX: In your book "Reading Lolita in Teheran" you talk about the young women and how it has changed for the culture for the women in Iran and we have seen the female protester who lost her life, and it became kind of galvanized to put a face on the protest movement there. What are the women facing there in Iran now? Are they playing a bigger role in the protests on the street? What has changed?

NAFISI: Well, definitely. You know, what happened with the Iranian women, first of all, they had such a glorious past before the revolution. I mean, we had women senators, women ministers and women active in all walks of life. So when the revolution happened, women were among the first group who came out into the streets shouting, I was in Iran at the time, and they were shouting freedom is neither eastern nor western, but global. They were throwing acid in their faces and putting them in jail, so this movement has continued right down to the children of the revolution, the young women in Iran. I keep telling people, that this struggle is not just political. It is existential, and if you are a young women like Nadal, not just the political beliefs, but the way you look and talk and listening to music and wanting to become philosophy majors, all of this is a statement against the state. You will pay a penalty for it.

MALVEAUX: What did the Iranian people want when we see those demonstrations taking place, what do they want from the United States? From President Obama who says he wants to engage with Mahmoud Ahmadinejad?

NAFISI: Well, I think that any Democratic president, Democratic government should always leave open the dialogue with even the worst of regimes and so that part of it is not something that people object to. But to sort of answer and respond to you shortly, there are two things that I want to remind you of and one is when President Obama was elected a reformist paper published a picture of him and said, why can't we have someone like this? And the government suppressed the paper and closed it down. So the Iranian people expect Obama to go by the same principles that he does, and the slogans in the streets were Obama, Obama, are you with them or with us? That means no intervention or military action, but support for the voices.

MALVEAUX: Thank you so much. What an honor to have you here in THE SITUATION ROOM. NAFISI: Pleasure. Thank you.

MALVEAUX: Some airline pilots claim they were left in the dark about the attempted bombing on Christmas day, and they are not happy about it, and they are pointing fingers.

One of the biggest Muslim communities in the U.S. is also voicing outrage. We have reaction.

UNIDENTIFIED MALE: And now, we get this other terrorist that attempts to blow an airliner right over our heads, right over the heads of the largest Muslim population outside of the middle east, right over our heads, and we are going to sit and watch? We said no.

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MALVEAUX: Detroit has one of the largest Muslim populations in the United States, but many of them are angry over the alleged plot by a fellow Muslim to blow up a U.S. airliner on Christmas day. Our CNN's Mary Snow is there live.

And, Mary, obviously a lot of emotions are coming from the community today.

MARY SNOW, CNN CORRESPONDENT: Yes, a lot of emotions, Suzanne, and particularly of anger. Some of the Muslim-Americans here say that they feel they are under siege, and they are speaking out to distance themselves from the extremists and condemn violence.

BEGIN VIDEOTAPE)

SNOW: Inside of a tiny mosque in Detroit, fellow Muslims are led in prayer. It is a break from what he describes is the shocking news that Umar Farouk Abdulmutallab, a Nigerian and Muslim stands accused of plotting to blow up an airliner.

IMAM KAZEEM AGBOOLA, MUSLIM COMMUNITY CENTER OF DETROIT: This is a disgrace and embarrassment to us as Muslims, to us as Nigerians.

SNOW: The imam says he has concerns about the safety of his small community, but there is also anger. What makes you angry?

NOA FASINA, MUSLIM COMM. CTR. OF DETROIT WORSHIPPER: This is not the Islam that I know.

SNOW: Members of the mosque joined other Muslim groups Tuesday to condemn the attempted terror plot.

DAWUD WALID, EXECUTIVE DIRECTOR, CAIR-MICHIGAN: No political, faith or ideology could ever justify the murdering of innocent civilians.

SNOW: But activist hopes for more than words. He lives in Dearborn, and he says that American-Muslims were just recovering from the other terrorist attempts. MAJED MOUGHNI, MUSLIM ACTIVIST: : And now, we get this other terrorist that attempts to blow an airliner right over our heads, right over the heads of the largest Muslim population outside of the middle east, right over our heads, and we are going to sit and watch? We said no.

SNOW: Moughni is taking to the streets and organizing online.

MOUGHNI: Our goal between now and then is to literally spread the word out.

SNOW: He is organizing a march in Detroit to coincide with Abdulmutallab's court dates.

MOUGHNI: If they have something against Americans, we are Americans. If you have something against Muslim, we are Muslim. We are willing to die for it, because we are laying on the side of peace, and you are not.

(END VIDEOTAPE)

SNOW: And Suzanne, (INAUDIBLE), as you saw, they were successful to get a permit for the rally he is organizing outside of federal court in Detroit on January 8. He says so far he's gotten hundreds of responses and he hoping that thousands of people will turn out - Suzanne.

MALVEAUX: All right, Mary. Thank you very much.