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The Situation Room

Tension Ratcheting up in Egypt; White House Calls for "Orderly Transition"

Aired January 31, 2011 - 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: Brooke, thanks very much.

Happening now, Egypt's newly installed vice president now in talks with the opposition and promising constitutional reform. But with his country already on the brink, it could be too little too late.

Also, the evolving White House reaction to the crisis, with the administration blind-sided by the upheaval in Egypt. And potential fallout from the crisis that couple pact all of us -- surging, surging oil prices.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Tension in Egypt ratcheting up today, one week into a grassroots uprising demanding an end to 30 years of authoritarian rule by the president, Hosni Mubarak. We're following all of the latest developments, as thousands and thousands of people continue to defy the curfew. A team of heavily armed U.S. Marines has been sent to the U.S. Embassy in Cairo to provide additional security. More than 500 Americans already have been evacuated from Egypt aboard five flights, with many more planned. And protesters now say they're organizing what they call a million man march through Cairo and Alexandria tomorrow.

Let's get all of the latest from Cairo right now.

CNN's Anderson Cooper is standing by.

He's joining us on the phone -- Anderson, tell us what you saw and heard on this day.

ANDERSON COOPER, CNN ANCHOR: Well, you know, Wolf, today is the seventh day. It's now the end of that day. It's -- it is midnight here in Cairo, largely a peaceful day in the streets of Cairo. A much heavier military presence by the -- by the Egyptian Army on the streets. They're clearly trying to have a show of force. They're much heavier -- a heavier hand in terms of controlling access to some of the areas where people have been protesting -- controlling some of the choke points to that, limiting where people could go in order to get to the protests.

But the protest -- the people turned out, still, in large numbers down in Liberation Square. I was down there for several hours today. Again, just thousands of people chanting, demanding that Mubarak go. And no matter what Mubarak has done in terms of shuffling his cabinet, appointing new ministers today, they say it is not enough, that he's got to go and that is their bottom line.

BLITZER: I understand, Anderson, you had a chance to speak with Mohamed ElBaradei, the Nobel Peace Prize winner, the former head of the International Atomic Energy Agency, now emerging as a key opposition figure to President Mubarak.

How did that go?

COOPER: Well, I talked to him early this morning. He had spent a part of the evening -- last night down in Liberation Square, addressing the crowd. You know, he only got here on Thursday, so he doesn't have a huge base of support within -- within Egypt. But clearly, his name has been rising here. His popularity has been rising here, his popularity has been rising. And now he says he's been talking to other members of -- of -- sort of the organizers of these protests. They've talked about the importance of forming some sort of a national unity government if and when Hosni Mubarak leaves. I asked Mohamed ElBaradei if he would be interested in one day running for president in Egypt. He says he's not thinking that far, but certainly is keeping his options open if -- if he was called to do that.

But he is adamant, again, that -- that nothing short of -- of Hosni Mubarak stepping down from power would be acceptable at this point.

BLITZER: Is there any indication you're seeing at all, Anderson, that Mubarak is getting ready to do such a thing?

COOPER: No indication at all. I mean, you know, he's appointed new members of his government. He -- he's made no public statements giving any sense that he is going to be giving up power. In fact, as you know, the person he's appointed to be his vice president is the former head of his intelligence service, certainly a man who is known for having a -- a firm hand.

Also, all day, military helicopters circled overhead, while the protesters are down on the ground in Liberation Square. And though his -- the police have not returned to the inner part of Cairo, they were -- some traffic police were on the outskirts of Cairo today, on the streets. That's the first time they had been seen in quite a while, since they were pulled back.

And again, the Egyptian military still has a very strong hand here. They have said -- one military spokesman made a statement saying that the military would not harm people here. But -- but it remains to be seen exactly what that means and exactly what's going to happen in the next couple of days.

BLITZER: Finally, Anderson, when you speak with protesters themselves, whether at the main Liberation Square there, Tahrir Square, or other places, what -- beyond saying they despise President Mubarak and the regime, what do they say about the United States? COOPER: Oh, without a doubt, two to one, they say that they are disappointed in -- in the statements that they've heard from the Obama administration. They would like a much firmer siding of the United States government with the protesters. They -- they -- you know, there -- there's a lot of very intelligent people among these protesters, a lot of them who have spent time in the United States who say, look, we understand the United States feels it's walking, you know, a tightrope here, to use that cliche. But -- but they say, look, time is now to -- to side with the protesters and to be on the right side of history.

BLITZER: Anderson Cooper is going to have a lot more coming up later tonight on "A.C. 360".

Anderson will stay in very, very close touch.

The White House certainly is walking a delicate line right now, on the one hand, calling -- and I'm quoting now -- "for an orderly transition" -- that's the phrase they're using, but at the same time saying it's not the place of the United States to support or oppose the ouster of the Egyptian president, Hosni Mubarak.

Let's go to our White House correspondent, Dan Lothian.

He's working this part of the story for us.

All right, what are -- what's the latest, Dan, because it seems that there's been a shift, a subtle but significant shift in what we're hearing from the administration?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. I mean, first of all, this White House is being careful in the words that are uttered from the podium or from the president or even the secretary of State because they don't want, as one top aide said, they don't want their words to create any more volatility on the streets of Egypt.

But the wording has changed, the White House insisting, though, that the message has not. The wording, where they're talking about orderly transition -- you heard that from the secretary of State yesterday. The president had that in a statement released over the weekend. And then Robert Gibbs again reinforcing that message today. They don't want to meddle, at least according to the White House, in the internal affairs of Egypt. And they're pushing back at suggestions that this White House is calling for a regime change.

(BEGIN VIDEO CLIP)

LOTHIAN: Orderly transition means change. So by -- by using those words, is the administration now admitting that President Mubarak should leave?

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Again, Dan, that's -- that is -- I do believe orderly transition means change. And what we've advocated from the very beginning is that the way Egypt looks and operates must change.

LOTHIAN: If he's the leader, though, are you not saying that he should be changed or removed from office by saying that?

GIBBS: No. Again, Dan, that -- that is not for -- that is not for our country or our government to determine. I don't think people that seek greater freedom are looking for somebody else to pick what and how that change looks like.

(END VIDEO TAPE)

LOTHIAN: Now Tom Donilon, the national security adviser, who continues to take the lead on this, holding briefings with other officials here at the White House, including the president. The president getting updates throughout the day. And I should point out, Wolf, that in addition to the national security team, President Obama inviting experts on Egypt from outside the administration to come in and help decide the way forward there -- Wolf.

BLITZER: We're going to be speaking with one of those outside experts who was invited into the White House momentarily, Dan.

Stand by.

After days of absence, police are returning to the streets of Cairo.

Frederik Pleitgen is our man on the scene, as well -- Fred, tell our viewers what you're seeing that is obviously a shift from yesterday.

FREDERIK PLEITGEN, CNN CORRESPONDENT: Well, it's -- it's a little bit of a shift, Wolf. We are seeing some traffic cops on the beat that we haven't seen over the past couple of days. In fact, I actually walked past the makeshift checkpoints here, just a couple of yards from where we are right here, a couple of minutes ago. And there were actually a couple of traffic police who were trying to keep the peace and man that checkpoint, together with some of these people who have been arming themselves and trying to defend the streets on their own. So it was sort of a makeshift checkpoint that was going on. And they were stopping cars together.

It seems as though the traffic police is sort of one form of police that a lot of people here are willing to accept. However, in large parts of the city, there still really isn't anything in the way of law enforcement on the streets, especially if you get outside of the downtown area here in Cairo and go sort of into the outskirts there. It still is quite a lawless and chaotic sort of environment, although I do have to say that a lot of these community militias that are forming, a lot of the people who are banding together, they're actually doing quite a good job of keeping the peace. And we were walking around some of these areas outside of downtown. And I have to say, we felt quite safe coming up to the checkpoints that were manned by ordinary people -- Wolf.

BLITZER: The community militias, what kind of weapons -- I understand that they -- they just have the basic elementary weapons to protect themselves, but really not many guns or anything like that.

PLEITGEN: Well, no, yes, they -- that's exactly right. They have the -- basic and elementary are exactly the right words here. I mean you're talking about sawed off vacuum cleaner pipes. You're talking about clubs. You're talking about two by fours that they sort of try to saw. Some have samurai swords. Some have, you know, sort of old hunting rifles or pistols. It is really the basic things.

But on the other hand, the -- the alleged looters or the looters that are going around and the people that they're trying to protect themselves against, they really aren't armed with anything different, either. I mean I saw a couple of these guys who are alleged looters come by and they also had guys on the backs of motorcycles carrying swords. So it really is something where if enough of these guys band together, they can do a pretty good job of keeping their neighborhood safe. And in some of these streets, you'll have a checkpoint about every 50 yards. So if you want to get -- go through there, you are going to get checked. So it's a pretty effective system in most areas.

And it appears as though -- the ones that we were in, at least, it seems as though they're doing quite a good job of keeping themselves safe, at least, although walking around at night still here is not really an advisable thing to do -- Wolf.

BLITZER: And, quickly, Fred, what about food and water, basics?

Are they running out of those -- those things?

PLEITGEN: Yes. It's a -- it's a big problem. It's food, water, of course, sort of basic groceries, as well as gasoline that are becoming big issues. There are shortages here. There are, of course, a lot of stores that simply aren't opening because the owners are afraid to open them. And, on the other hand, there is also a lot of trouble getting this stuff.

Now, we were seeing people who are still able to go to some grocery stores and buy some stuff. But we're also hearing that a lot of them are -- are sort of stacking up on these things so that they can survive several days.

I actually visited a couple of Americans who are here currently, who are trying to leave, but they're not going to get a flight for a couple of days. And they said that when they saw this sort of happening, when they saw this materializing, this situation, they went out and bought as much as they could simply to be able to survive a couple of days.

But, of course, at some point, that's going to run out, as well. And it is really a big concern for the people. Not only that, but, also, the fact that, for a lot of them, it's very difficult to get your hands on any cash because all the ATMs -- or a lot of the ATMs aren't working at this point -- Wolf.

BLITZER: Fred, stand by.

We're going to be getting back to you.

All of our correspondents on the scene, they are eyewitnesses to history unfolding in Egypt right now. With Egypt in charge of a vital shipping lane, there's also growing concern about the flow of oil out of the Middle East. All of us, potentially, could soon feel the impact in the form of higher prices.

And fear the -- fear that the upheaval will spread -- one country in particular is very worried it may next be in line.

And a major blow to health care reform here in the United States -- a federal judge says the entire law must be declared void.

So what happens now?

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is certainly closely following the uprising in Egypt.

Let's go to Jack.

He's got The Cafferty File -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: First came Iran, then Tunisia, now Egypt. And as popular uprisings sweep through the Middle East, it is hard to underestimate the role that's being played by social media and new technologies, Twitter, Facebook, YouTube, cell phones, even cable news outlets, are putting a tremendous amount of power into the hands of ordinary people, and don't think for a minute that the rest of the Arab world isn't watching closely. For starters, these communications tools allow ordinary citizens to plan and organize protests in a way that was unthinkable just a few short years ago.

They can spread the word about mass demonstrations, ensuring that more people will show up and in turn the sheer size of some of these protests makes it impossible or close to impossible for the government to crack down and stop them. Also, thanks to Facebook and Twitter, the protests aren't happening in a vacuum like they may have decades ago. When young Egyptians take to the streets by the thousands, the world is seeing it and hearing about it in real time, through texts and tweets and pictures and videos.

And it's why governments like Egypt or Iran have tried to crack down on the internet and some of these websites. In the case of Egypt, social media have also put pressure on Washington, D.C. to act more quickly. With so much information leaking out, it became impossible for this country to downplay what was going on in Egypt and stay out of it. No surprise that other dictators in the Middle East are worried, and they should be. They could be next.

Here's the question. How have social media and technology affected these popular uprisings like the ones we're seeing in Egypt? Go to CNN.com/caffertyfile for us to comment on my blog. It's a different world out there.

WOLF BLITZER, CNN ANCHOR: Certainly is. I've been a journalist like you, Jack, for a long time. I follow a lot of this on Twitter. I get a lot of information from there. So, I'm not necessarily all that reliable, but a lot very reliable and it's a useful source of information, so it's a good thing to have.

CAFFERTY: And it's the enemy of people who -- of the dictators who don't want the public to know anything.

BLITZER: Certainly it is.

CAFFERTY: An uneducated public is the dictator's greatest friend, and these social websites are eating into that in a big way.

BLITZER: Yes. You're not going to see any of those social websites allowed to be used, for example, in North Korea where I recently visited.

CAFFERTY: Oh, no.

BLITZER: That's not happen (ph). All right. Jack, thanks very much. Jack Cafferty will be back with the 'Cafferty File."

One week into the uprising, President Hosni Mubarak shows absolutely no sign, at least so far, of stepping down, although, some believe he, eventually, will have no choice. Let's get some more from CNN's Fareed Zakaria, host of "Fareed Zakaria GPS" that airs Sunday here on CNN. I don't know if you heard what the former president, Jimmy Carter, who brokered the Israeli/Egyptian peace treaty back in 1979. He said over the weekend, he said, quote, "Mubarak will have to leave." Is that a fact? Will Mubarak have to leave?

FAREED ZAKARIA, CNN ANCHOR: I think he will. He's a dead man walking. I don't see how he's able to sustain power with seven days of protests, million-man marches planned. The military has in effect signaled something very important. They have signaled that they are not going to crack down on the protest which is only going to have the -- the effect of empowering the protesters, of bringing more people out on the street.

So, the military has decided, I'm reading code here, but the military has decided that in order to save its own legitimacy, its own popularity, and the regime that it is the backbone of, it is not going to do anything to -- to end the calls for Mubarak's resignation. That's what these marches are all about. That is the central demand. Whether he -- whether he -- you know, what I think the military is probably trying to think through right now is does he have to go tomorrow, or can he go in an orderly fashion?

Remember, he's got to run for re-election anyway in September, Mubarak. So, there's already a point at which his regime expires or his term expires. I don't even think he'll be able to last that long, but in any event, whether it's weeks or months, Hosni Mubarak's regime, reign in Egypt is over.

BLITZER: Some have said he's living in a bubble right now. He really doesn't appreciate what's going on in the streets of Cairo and Alexandria and elsewhere. Is there a world leader or a group of world leaders who should simply get on the phone, call him up and say, President Mubarak, it's over. You need an orderly transition, step down. Let the vice president take over. Call for elections in 180 days?

ZAKARIA: There's only one person who could do it. I think he's going to be impervious to anybody else, and that is Barack Obama. This is not a -- a protest or a revolt or revolution that has the United States centrally involved. One of the fascinating things about this revolt, both in Tunisia and Egypt, is the things you don't hear on the Arab street, Palestine, Israel, and the United States. Now you're beginning to hear a little bit about the U.S. and how it shouldn't support Mubarak, but basically, these have been internal organic revolts.

But the one outside actor that can play a role is Washington. And if Obama were to call Hosni Mubarak and tell him, look, we -- we honor you for the support you have given the United States, for the moderating role you've had over these three decades, but it is clear that you cannot stay in power. You know, have lost the contract with your people. You have lost legitimacy. Plan for an orderly departure, and you will be able to leave with some dignity. And if he does that, I do believe that -- that it's possible he'll be able to leave with dignity. Egypt is a very strong state. It's not going to collapse, but he does need to go.

BLITZER: Quickly, Fareed, I spoke with the former Jordanian foreign minister, Marwan Muasher, yesterday, and he said that it's very possible that the unrest in Egypt could spread to Jordan and maybe elsewhere as well. How likely is that?

ZAKARIA: Egypt is the heart and soul of the Arab world. When Arabs watch movies, they come from Egypt. When they listen to popular music, it comes from Egypt. Egypt is the place that trends emanate from in the Arab world, from school onward. So, yes, this is going to be an earthquake in the Arab world. Look, these are tough regimes. They're also quite different.

You know, the Saudi monarchy has been able to bribe its people into quiescence. So, they may be safe. But, I think, this will have repercussions. Jordan has got to be worried. You're already seeing things in Yemen and seeing things in Sudan. This is big. This is going to continue.

BLITZER: It's going to be huge. All right, Fareed, thanks very, very much. We're going to have a lot more coming up on what's going on in Egypt, indeed, in the region and what it means for all of us. That's coming up.

Also, other important news. Buy a gun, undergo a background check. The New York City mayor, Michael Bloomberg, says he has the undercover video to prove that's not necessarily always the case.

And the Midwest bracing for the big one. Why airlines are now telling passengers they had better change their travel plans.

(COMMERCIAL BREAK)

BLITZER: Health care reform takes a big legal hit. Lisa Sylvester is here. She's monitoring that and some of the other top stories in the SITUATION ROOM right now. Tell our viewers what happened.

LISA SYLVESTER, CNN CORRESPONDENT: Yes, this is quite a big development, Wolf. Sweeping health care reform championed and signed last year by President Obama has been declared unconstitutional. The 78-page ruling by a federal judge in Florida comes in a challenge by 26 states to sections of the Patient Protection and Affordable Care Act. It strikes down the mandate requiring most Americans to buy health insurance or face stiff penalties. The Justice Department says it will appeal the ruling in the 11th circuit court of appeals.

FEMA's administrator says the huge winter storm bearing down on the central U.S. should be taken seriously. Airlines are warning passengers with Midwest connections this week to go ahead and change their plans without penalty. Forecasters say parts of Missouri and Illinois could see more than a foot of snow tomorrow, and CNN meteorologist, Rob Marciano, says folks should be bracing for a three and a half day event.

New York mayor, Michael Bloomberg, says undercover video proves it. Guns are still easy to get. Bloomberg today unveiled a video of New York investigators buying weapons at an Arizona gun show despite telling vendors they probably would not pass a background check. Bloomberg challenged lawmakers to close the so-called gun show loophole that lets buyers purchase weapons from private sellers without checking their background -- Wolf.

BLITZER: That's a huge issue for Mayor Bloomberg. Let's see how far he gets from that (ph). Thanks very much, and I know you're working on another important story for us. Just to let our viewers know, it involves oil, Egypt, the price of gas. We're working on that story.

SYLVESTER: We'll have that for you.

BLITZER: Coming up, we'll keeping a close eye on the situation in Egypt, including growing shortages of vital supplies in Egypt, including food, fuel and a lot more. We're going back live to Cairo.

Plus, how Iran could come out a big winner in all of this, potentially, at least? Details of what that country is now saying and what it stands potentially to gain.

(COMMERCIAL BREAK)

BLITZER: Let's get the latest developments unfolding right now in Egypt. With demonstrations on the street, the head of the Arab league is now calling for a peaceful transition in Egypt, and I'm quoting now from one era to the other. Egypt's newly -- newly placed vice president says the embattled President Hosni Mubarak has asked him to start working on constitutional reform, and as the White House calls for an orderly transition, the state department hopes to have 1,000 Americans evacuated from Egypt by the end of the day. We're going to have a lot more on this part of the story.

The unrest certainly making it increasingly difficult for Egyptians to live their normal lives with shortages of food, fuel and cash spreading. CNN's Arwa Damon has more from Cairo. ARWA DAMON, CNN CORRESPONDENT: Wolf, helicopters have been overhead for hours. Demonstrators still defying the curfew, but away from the capital Tahrir Square, what we are seeing is a city very much struggling to survive.

(BEGIN VIDEOTAPE)

(voice-over): This is not the capital that many Egyptians recognize nor is it one they want the outside world to see. Residents line up at a popular bread factory amid fears of a food shortage.

As we are filming from a bridge, this man starts yelling at us to stop.

UNIDENTIFIED MALE: Why are you filming, he shouts? Is this a nice image? It's ugly.

DAMON (voice-over): He threatens to break our camera.

In the chaos at another bread line, a woman tells us they want Mubarak to stay. The men angrily yell at us to leave.

(on camera): This is the second neighborhood that we've come to where we've seen people getting incredibly aggressive, not wanting to be filmed in this kind of a situation.

(voice-over): The same woman meets us at the car and apologizes for the way we are treated.

UNIDENTIFIED FEMALE (through translator): It's because of this terrible situation that we are in, she explains. We are good people. We're sorry.

DAMON (voice-over): Most shops in Cairo are shut. It's not just food shortages that are of rising concern. Another problem that Egyptians are facing is just getting money.

(on camera): Banks are all closed. The screens on ATM machines dark. If a person doesn't have cash in hand, they are facing a serious problem.

(voice-over): Across the capital, normal life has been paralyzed.

(on camera): A number of gas stations that we've been driving by have been closed. Some of them because of security reasons where owners don't want to be filmed. Others like at this one because they quite simply ran out of fuel and are not sure when stocks are going to be arriving.

(voice-over): Away from the demonstrators we found a population increasingly frustrated and angry.

(on camera): Tell us what right what is on your mind and what are you so upset?

UNIDENTIFIED FEMALE: I am upset with the revolutions in the (INAUDIBLE). It doesn't represent us. It doesn't represent our opinion. We're here sticking with Hosni Mubarak only. Give him time to work, and then he can go, but peacefully.

(through translator): Who is going to govern Egypt, she asks, switching to Arabic? A group of youth? Don't demonstrate. Talk to the government.

DAMON: Why is everybody so angry with the media?

UNIDENTIFIED FEMALE: Because it doesn't give a very good picture about us.

DAMON (voice-over): An argument breaks out with another woman, and we are again forced to stop filming. However torn this nation is becoming, the demonstrators are determined to weather it out, no matter what.

(on camera): What are you doing about things like food, money, because we're hearing there's a food shortage, there's a cash shortage.

UNIDENTIFIED MALE: People here are supporting each other, you know. My neighbor -- my neighbor gave us food and gave us water and all what we need, OK? All the stores also are supporting the people.

DAMON (voice-over): For some, these chaotic events are the stirrings of freedom. For other Egyptians, they mark the onset of anarchy.

(on camera): With the demonstrations expected to intensify, there is widespread worry of more violence and more shortages -- Wolf.

BLITZER: Arwa Damon on the scene for us, thank you.

Iranian leaders are certainly closely watching all these developments in Egypt. If the government in Egypt falls, the Tehran could be one of the big winners. CNN's Brian Todd is here in THE SITUATION ROOM. He's looking into this part of the story for us. What's the Iranian regime's attitude toward all of this?

BRIAN TODD, CNN CORRESPONDENT: Well, right now they are looking at this and actually kind of enjoying it in some kind of odd way, Wolf, but we're exploiting that at the moment right now. Part of this, as you know, is a religious conflict. Iran is Shiia. Its main rivals in the Middle East, Egypt, Saudi Arabia, Jordan are mostly Sunni Muslim nations. But there are all sorts of factors that play in this intense rivalry and the fact that Egypt is wobbling right now, experts say, benefits Iran.

(BEGIN VIDEOTAPE)

TODD (voice-over): More than 1,000 miles away from these protests, leaders of another Middle East power watch with enthusiasm. Iran's parliament speaker says, "The time has reached to overcome puppet autocratic regimes by relying on the Islamic teachings."

Experts say Iran's leaders would welcome the downfall of the Mubarak regime, widely seen as perhaps their most bitter arch rival in the region.

(on camera): How does Iran stand to benefit from what's going on in Egypt right now?

MARC GINSBERG, FORMER U.S. AMBASSADOR MOROCCO: There's nothing that Iran wants more than instability in the Middle East, particularly among the autocratic leaders, even if they are Sunni autocratic leaders. Why? Because they hope that eventually these leaders will have to give way to a more Islamist-oriented political establishments that may or may not be interested in aligning themselves with Iran, but at least are no longer aligned with the United States.

TODD (voice-over): According to experts and western diplomatic sources we interviewed, Iran has agents inside most Middle East countries, and the mistrust between Iran's leaders and Egyptian President Hosni Mubarak is poisonous.

A 2009 U.S. diplomatic cable posted on WikiLeaks says, "Mubarak and his advisors are now convinced that Tehran is working to weaken Egypt through creation of Hezbollah cells, support of the Muslim Brotherhood and destabilization of Gaza."

The Muslim Brotherhood, once very militant, now more political, is an opposition group in Egypt which gave birth to the Hamas movement. Hamas, the major power in Gaza, a dangerous threat to Israel and supported by Iran, is considered a terrorist group by the U.S., but experts are divided about possible connections between Iran and the Muslim Brotherhood.

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: I'm not sure that Iran has much of, you know, a foothold in Egypt through the Muslim Brotherhood. I don't see any evidence of that.

TODD (voice-over): But there are plenty of other tensions. Mubarak has worked hard to prevent Iran from developing nuclear weapons and their rivals on another key front.

(on camera): Does this instability in Egypt benefit Iran from an oil- producing and shipping standpoint?

AFSHIN MOLAVI, NEW AMERICA FOUNDATION: Absolutely. Unrest in Egypt has already bolstered oil prices, and they have gone above $100 per barrel, and who does that benefit? That benefits Iran. Iran earns 80 percent of its hard currency earnings from crude oil revenues.

(END VIDEOTAPE)

TODD: Afshin Molavi says more instability in Egypt is the best case scenario for Iran. He points out Iran is facing what he calls grave uncertainties economically right now. He says if Egypt continues to boil, oil prices continue to rise, Iran's leaders would use that to mask some of their own economic problems for their people. Wolf, they've been known to do that in the past.

BLITZER: But there is one school of thought that believes that a change of government, a change of regimes in Egypt, would not necessarily benefit the Iranian regime.

TODD: That's right. We have to remember that even if Mubarak goes, whatever is left in Egypt, whoever takes power probably Egypt is still going to be a Sunni Muslim country. So they're going to have that natural religious rivalry anyway.

But also Peter Bergen points out what is Mubarak goes and is replaced by some kind of a coalition government where there are some hard-lined (ph) Islamists, some moderate secularists. The Iranian opposition could look at that and say, hey, that could work for us and they could revolt again against the Mullahs like they did in 2009. So the Mullahs could be sweating that out a little bit.

BLITZER: You know, they probably are because what's happening in Egypt and Tunisia that could inspire people in Iran to stand up to their regime or Syria, for that matter, and other countries in the region as well.

TODD: They came close in 2009. It was repressed. It could happen again.

BLITZER: Brian, thanks very, very much. And we're just getting this in to THE SITUATION ROOM. The ministry of information in Egypt has just said they are going to shut down all mobile phone systems, all networks, mobile phone networks in Egypt over the next few hours in advance of this so-called million-man march, a demonstration that's scheduled tomorrow for Egypt.

They are going to shut down all cell service, mobile phone service going in and out of Egypt. We're watching this. This is a formal announcement just coming into THE SITUATION ROOM from the ministry of information in Egypt. Potentially, a very, very significant development. Clearly, the Egyptian government wants this stopped, this -- these protests, these demonstrations. And they believe if they shut down the mobile phone systems maybe that will help. We'll see if it has the opposite effect.

The political crisis in Egypt could have unintended consequences for the rest of the world, especially the oil-hungry world. What happens in these narrow waters could mean higher prices at gas pump.

(COMMERCIAL BREAK)

BLITZER: One of the most critical U.S. allies in the Middle East on the brink right now. So how is the White House handling this crisis in Egypt? Let's talk about it with our senior political analyst David Gergen and Gloria Borger.

Gloria, I know you've been doing some reporting on this. Was the White House caught by surprise by these fast moving developments in Egypt?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: I think not in Egypt, but I do think from reporting this out today, both inside and outside the administration, it's fair to say that Tunisia caught them by surprise, not Egypt, Tunisia. Tunisia caught the world by surprise, and in taking a step back, after Tunisia occurred, I think the question some in the administration are asking, could there have been a way to predict, for example, the departure of Ben Ali in Tunisia? They make the case that it's very hard to predict revolutions. You can't predict what millions of people are going to do. You don't have a crystal ball that way. But once Tunisia occurred, they say it was all hands on deck. They knew exactly what could occur in Egypt, and so they say, yes, they were ready for it.

BLITZER: You know, I raise the question because, David, here's what the Secretary of State Hillary Clinton said last Tuesday, and let me play it for you and our viewers.

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HILLARY CLINTON, SECRETARY OF STATE: Our assessment is that the Egyptian government is stable and is looking for ways to respond to the legitimate needs and interests of the Egyptian people.

(END VIDEO CLIP)

BLITZER: And then two days later on Thursday the vice president of the United States, Joe Biden, was on PBS and said this.

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JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: I think that it would be -- I would not refer to him as a dictator.

(END VIDEO CLIP)

BLITZER: He would not refer to President Mubarak as a dictator. Well, those statements have caused a lot of consternation on the streets of Cairo and Alexandria saying this administration was -- was out of touch with reality.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, Wolf, I think in fairness, they did not foresee Tunisia coming, but no one else in the world foresaw that.

BORGER: That's right.

GERGEN: I've been at the World Economic Forum in Davos, Switzerland, and I can just tell you there was widespread surprise, universal surprise, really, that Tunisia happened.

BORGER: Exactly.

GERGEN: Once it spread to Egypt, I think where the administration is vulnerable is it did not really foresee that Mubarak would be so close to being toppled as he is today. As of last Tuesday, they clearly thought he was likely to remain in power, that he could ride it out. And they made these statements, I think, in retrospect they wish they hadn't made. But as time goes on, they are in now a very, very delicate process of trying to disentangle themselves from Mubarak and trying to figure out, how do you have a soft landing in Egypt in a way they did in the Philippines, you know, when the Marcos regime was toppled as opposed to a hard landing of the kind that occurred in Iran when the Shah was toppled.

BLITZER: Gloria, do you hear any -- is there any evidence that the political leadership at the top is now telling the intelligence community, hey guys, where were you? We were surprised by all of this.

BORGER: No, I don't have any evidence of that. It could be occurring, but I certainly don't have any evidence of it. Look, I think, Wolf, the problem the administration has that David's talking about is, yes, the whole world did not predict Tunisia.

I think where they seemed a little flat-footed was in their message and how aggressively they decided to respond to what was going on in Egypt, you know. They went from one message to, you know, he's not a dictator, he's trying to do what he can to let's have a transition.

And so, I think what's confusing is what message the administration wants to send, and I think what we saw was that they were a bit flat- footed in that because we've seen it evolve.

BLITZER: All right, guys. We're going to continue this. Thanks so much, David Gergen and Gloria Borger. Lots to dissect here.

Meanwhile, millions and millions of barrels of oil passing through Egypt's Suez Canal, and there's real concern right now that the upheaval in Egypt will result in higher oil prices that all of us will feel at the pump and beyond.

Plus, a U.S. soldier suspected of passing American secrets to WikiLeaks. He's now claiming a connection to the unrest in Egypt. Details of what he's saying and more coming up.

BLITZER: Jack's back with "The Cafferty File" -- Jack.

JACK CAFFERTY, "The Cafferty File": The question this hour is how social media and technology affect the popular uprisings like the one we're seeing in Egypt. H.J. writes, "This is great news Well, actually the news isn't that great, but the idea of social media is. Governments and large businesses no longer have total control over the media and public opinion. It's a great counterbalance to the power struggle in the world."

Sean in Michigan, "Dictatorships can only thrive when they control information. As long as those who are being repressed can find a way to get the information out, the dictators will have a hard time and will likely crumble all the more quickly. Social media is only one way to spread information, as long as the Internet exists, there will always be a way to use it. I think we're witnessing the end of a totalitarian state as a form of governance."

That might be a bit much.

Eric write, "Some in the news media are leading viewers to conclude that the Egyptian protesters are mostly secular, non-violent, not anti-American and somewhat more Westernized than protesters that we've seen in other Arab countries. To that end, where are the Egyptian women protesters? I've seen only men.

John writes, "This instant technology is wonderful. It shows the whole world in real time what monsters govern these countries. After 30 years of repression, Mubarak is doomed. My only hope is that democracy will take over."

It seems democracy would be the logical choice since Facebook and Twitter are the essence of free speech.

Ahmed writes, "Social media are redefining the dynamics of popular revolt. The need for a central figure to drive a revolution is being replaced by the collective consciousness of the masses.

And Joyce writes, Oh, my God, if we had had all this technology back in the '60s and '70s, how different the United States would be today. Just think how many folks would have shown up for Martin Luther King, the March on Washington and our own Days of Rage."

And what would have happened at Kent State?

If you want to read more on this, go to my blog CNN.blog/cafferty file.

BLITZER: It's a whole new world out there, Jack, it certainly is.

CAFFERTY: It is.

BLITZER: Thank you. With Egypt in charge of a vital shipping lane, there's growing concern right now about the flow of oil out of the Middle East. All of us could soon feel the impact in the form of higher prices. Stand by.

And guarding Egypt's treasures. That's at the pyramids and more. We're going to show you what's being done to protect the country's priceless antiquities.

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BLITZER: Here's a look at some extraordinary hot shots coming out of Cairo right now. In the central square, a man looks up as a helicopter flies overhead. On this the seventh day of anti-government protests, soldiers are positioned in front of the Giza pyramids. After praying in the Square, a demonstrator holds a sign protesting President Hosni Mubarak.

And on a street lined with protestors, look at this, an Egyptian soldier shoots rounds into the air to disperse the crowd. "Hot Shots." Especially today, pictures are worth 1,000 words.

Egypt's upheaval has many fearful that the country's greatest treasures are at risk. The government rolls out modern weapons to protect Egypt's ancient heritage. And later, why the man accused of turning secret documents over to WikiLeaks feels a direct connection to what's happening in Egypt. Stay with us. We'll be right back.

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BLITZER: Anti-Egyptian government protests springing up all over the place, especially here in the United States. CNN's Allan Chernoff is standing outside the Egyptian Mission to the United Nations in New York with what's going on there. Allan, tell our viewers.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Wolf, the rally is breaking up just about now. We've had about 250 people here in front of the Egyptian Mission to the United Nations, just one block away from the U.N. People screaming and shouting, down, down, with Mubarak. Egypt must be free. But we've also heard a fair amount of criticism of U.S. policy. One sign over here that many people were holding said no more U.S. dollars for the bloody Mubarak dictatorship.

And also there were some cheers for the Palestinians, as well. One man in the crowd told me that if there was a regime change, then the border with Gaza must open up.

So a fairly wide range of opinion over here in terms of what should happen, but the unifying force here among the protesters is that the president of Egypt must step down -- Wolf.

BLITZER: Allan Chernoff at the United Nations, thanks very much.

And to our viewers, you're in THE SITUATION ROOM. Happening now, a stunning announcement signaling possible change, repeat, possible change in Egypt. What the country's new vice president, the first one in 30 years, has just revealed. Stand by for that.

Egypt's biggest protests yet may be looming. Meantime, a chaotic scene in Cairo captured by one of our viewers. Wait until you see the looks on one soldier's face as he tried to control the crowd.

And looking for answers, the White House turns to a number of experts on Egypt. We're talking with one of them live this hour.

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