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The Situation Room

Libya Slipping From Gadhafi's Grasp?; Saudi Terror Suspect in Custody

Aired February 24, 2011 - 18:00   ET

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

WOLF BLITZER, CNN ANCHOR: Three days after an earthquake in New Zealand, the official death toll now tops 100, while twice that many are still missing.

Here's CNN's Anna Coren.

(BEGIN VIDEOTAPE)

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT (voice-over): It was supposed to be a place of new beginnings for adventurous young people eager to learn English. But now this is a place of mourning.

After days of tirelessly searching through the remains of the Canterbury TV building, police now believe everyone inside is dead, including the 90 students and staff from the King's Education language school which was located on the third floor. Many of the students were from Japan. Others from China, Thailand and other parts of Asia.

For their families back home, an agonizing wait. Some deciding to make the long flight to Christchurch in the hope of finding their child alive.

For others who live nearby, it was a harrowing trip through quake-ravaged streets to get news on their loved ones. Donna Tehrach (ph) and her husband, Tetaki (ph), affectionately known as "Wally," was a beloved English teacher here and was working when the quake struck.

Donna rode her bike to Wally's workplace after failing to reach him on the phone.

DONNA TAI RAKENA, WIFE OF EARTHQUAKE VICTIM: I was hopeful for a long time that he would be coming out, yes. So, it was -- but -- yes.

ANNA COREN, CNN CORRESPONDENT: But then police confirmed her worst fears, that her husband, her soul mate for 30 years, was lost among the mangled steel and rubble.

RAKENA: When the police came around yesterday afternoon, about 2:00 I think it was, and said there was -- that they had gone into recovery mode, and there was -- there was no hope any longer of anyone coming out alive, yes.

COREN: Donna's hope now is they can at least recover her husband's body. No one knows how long it will take. Rescue and recovery crews have been working here for days.

With so many Japanese students missing, Japan's prime minister has sent disaster relief teams to assist with the massive operation. Despite the dismal odds of finding survivors, rescue crews say they will continue to search for any sign of life to the very end.

Anna Coren, CNN, Christchurch, New Zealand.

(END VIDEOTAPE)

BLITZER: And happening now: Here are the latest developments in the Libyan crisis. More of Libya may be slipping from the grasp of Moammar Gadhafi, not just the eastern part of the country. Witnesses now say blood is all over the streets in Zawia. That's a town in the west reportedly held now by the opposition.

Amid a brutal crackdown, Libya's capital, Tripoli, is said to be like a ghost town, but Gadhafi is again defiant, declaring the young protesters are taking some sort of pills, he says, and they're being exploited by al Qaeda.

Our correspondents are deployed throughout the region to bring you the kind of coverage that only CNN can deliver.

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

This just coming into THE SITUATION ROOM. We have just received new video which seems to show just how far the Libyan revolt is now spreading. A Libyan man, who asked not to be identified, shot this just hours ago in the central square in Zawia about 28 miles rest of Tripoli. It was sent in. He sent in this iReport. Listen to this.

The man's brother says it was taken in the aftermath of an attack by Gadhafi's security forces that killed several protesters, wounded others. Some of those security forces are said to have been captured by the demonstrators.

Libya's second largest city was torn from the grip of Moammar Gadhafi, is now controlled by opponents of his regime. But some have paid a truly terrible price.

Our senior international correspondent, Ben Wedeman, is in that eastern Libyan city of Benghazi.

Ben, you have seen firsthand the victims of this violence. Viewers are about to see some very disturbing images. What are the victims telling you?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, what the victims are telling us that they were exposed to withering fire, fire not only with ordinary AK-47s, but also that the Libyan forces were using anti-aircraft and anti-tank weapons against civilians at point-blank range.

Clearly, basically, the Gadhafi regime pulled out all the stops, Wolf, to try to put down this revolt. BLITZER: You also spoke, Ben, with one of the pilots who abandoned his fighter jet. What did he say?

WEDEMAN: Let me clarify that, Wolf.

That -- the pilot who abandoned his plane is hesitant to speak to the international media, because he has relatives in Tripoli. We spoke to another pilot. We spoke to another pilot who has come over to the side of the anti-Gadhafi forces. And he's been in touch by phone with his colleagues in air bases around Tripoli.

And what he told us is that they're reporting that those pilots who refused to carry out the orders of the Gadhafi regime have been executed and that Algerian pilots have been bought in essentially, Wolf, as mercenaries to take their places.

BLITZER: You also filed this report.

(BEGIN VIDEOTAPE)

WEDEMAN (voice-over): Get out of the way, staff wheeling yet another casualty at Benghazi's Al Jalaa Hospital. This man was wounded not in clashes with the Libyan military, but rather when he picked up a hand grenade in an abandoned army camp.

UNIDENTIFIED MALE: Tell them what happened in our country, please. We didn't need anything, just the world know what happened in our country.

WEDEMAN: His wounds are light, however, compared to other cases here in the intensive care unit.

UNIDENTIFIED MALE: This (INAUDIBLE) shot in his chest. The bullet went through the lung, through and through, and ended in the left ventricles.

WEDEMAN: Dr. Ramada Atiwa (ph), a Libyan doctor based in London, rushed home to help treat the wounded. He wasn't prepared for what he found.

UNIDENTIFIED MALE: And the live ammunition which is being used in this country is only -- some of them are anti-aircraft, anti-tank. Imagine if you are a human being and you have been shot with a weapon which is designed to penetrate 10 to 20 centimeter of the -- of a tank.

WEDEMAN: The morgue was equally overwhelmed, staff unable to identify bodies burned beyond all recognition, though they were able to verify the identify of mercenaries killed in the fighting.

This hospital handled the bulk of casualties at the peak of the fighting between protesters and government forces. The experience of the past week was traumatic for all, says Dr. Ali Arabia.

UNIDENTIFIED MALE: Situation we never have been faced before. Actually, it's very, very sad and very depressing moment at that time. Really, everybody was crying and was uncontrolled.

WEDEMAN: Volunteers from the Libyan Red Crescent Society visited the hospital, giving flowers to the wounded, a small token of gratitude from a city quickly becoming accustomed to its hard-won freedom.

(END VIDEOTAPE)

BLITZER: Ben, he is in Benghazi.

There in Benghazi, amid all of this horror, are they at least getting comfortably optimistic, Ben, that Gadhafi's days in Libya are numbered?

WEDEMAN: Well, certainly, Wolf, that's what they hope. And that's what they will tell you. But they're under no illusions.

They know that certainly the weapons that they have access to are not really adequate to the task, should Moammar Gadhafi's forces actually launch an all-out offensive against the eastern part of the country. We were out at the Benghazi Airport today. And we saw that they had engineers working to try to get some old helicopters to fly again.

But the pilots for those helicopters had fled to Tripoli. And they had to find some man who hasn't flown a helicopter for 20 years to try to get them off the ground -- Wolf.

BLITZER: All right, Ben, thanks very much.

We will get back to Ben shortly.

Remember those leaked U.S. diplomatic cables? They offer some extraordinary details about the lavish and oftentimes very cruel lifestyle of Moammar Gadhafi's children.

Brian Todd has been looking closer into this story.

What are you finding out, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, those cables posted on WikiLeaks portray a family that's accumulated a lot of wealth over the decades and who has left a trail of excessive behavior.

(BEGIN VIDEOTAPE)

TODD (voice-over): Moammar Gadhafi's son appears on state TV and tells his nation life is normal. Saif Gadhafi's idea of normal and yours may be slightly different.

U.S. diplomatic cables posted on WikiLeaks give details on the Gadhafi family's lifestyle that -- quote -- "provided local observers with enough dirt for a Libyan soap opera."

The cables say this lavish New Year's Eve party on the island of St. Barts in 2009 was thrown by Mutassim al-Gadhafi, one of the dictator's sons. The cables describe it as a million-dollar personal concert, with Beyonce and Usher performing, this video taken by an eyewitness.

The eyewitness, who declined to be identified by name for security reasons, described to us what he saw.

UNIDENTIFIED MALE: I saw one of Gadhafi's sons, and he had long, slicked-back hair, looked very wealthy. He had lots of female acquaintances around him and was enjoying himself and drinking champagne out of the bottle.

TODD: That same son, according to the diplomatic cables, had thrown another New Year's Eve party on St. Barts the year before and paid Mariah Carey a million dollars to sing four songs. It's the same Mutassim Gadhafi who serves as his father's national security adviser and once met with Hillary Clinton.

In 2006, the family brought Lionel Richie in to perform at the ruins of the house the U.S. had once bombed, this in a country with widespread poverty.

Analyst Steven Clemons spent two days with Saif Gadhafi last year in Libya.

(on camera): And you saw something unusual at his house.

STEVEN CLEMONS, NEW AMERICA FOUNDATION: Clearly guarded by every -- in every corner. And one of the things we found was a tiger. And the tiger was tied up. It was out there. It looked extremely healthy.

TODD (voice-over): Spending is apparently not the only thing the Gadhafi family does to excess. The diplomatic cables say one Gadhafi son, Saadi, has had scuffles with police in Europe, abuse of drugs and alcohol.

The cables also say Gadhafi's son Hannibal once assaulted his wife in a London hotel room. And experts say he's had other incidents.

UNIDENTIFIED MALE: Hannibal, he's the delinquent of the family. So he was arrested in Switzerland in 2008 for beating his servant.

TODD: An arrest which led the Libyan governments, experts say, to briefly hold Swiss businessmen hostage.

CLEMONS: It is a highly personalized, you know, almost Mafia franchise, in which you have got different types of personalities in the mix, and a father who is indulging all of them.

(END VIDEOTAPE)

TODD: Analysts we spoke with and those diplomatic cables also describe an intense personal rivalry for power between those two prominent sons, Saif and Mutassim Gadhafi. On the WikiLeaks cables on the sons, we tried to reach Libya's representative in Washington for response. We didn't hear back. On the accounts of those parties and celebrity performances, we also reached out to representatives for Beyonce, Usher, Mariah Carey and Lionel Richie for comment. We have not heard back -- Wolf.

BLITZER: Those cables also have a fascinating detail, Brian, about how the Gadhafi family invested its money.

TODD: Right. It says that one of the family's chief financial managers last year had been -- this is a cable from last year -- says that one of the financial managers had once been approached by Bernard Madoff about an investment opportunity. But the Libyan financial manager turned Madoff down. So they had the sense at least at that time to maybe stay away from Bernie Madoff.

BLITZER: They could have lost a few billion dollars right there.

TODD: Right.

BLITZER: All right, Brian, thanks very much.

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

Jack, what is going on?

JACK CAFFERTY, CNN ANCHOR: President Obama, as we have -- as we brought you actually live yesterday, did finally speak out on that crisis in Libya. He condemned the violence against anti-government protesters there and he announced that Secretary of State Hillary Clinton will be meeting with top diplomats on Monday in Europe to discuss how to respond to violence in the region.

But our president stopped short of calling for the resignation of Libyan leader Moammar Gadhafi or announcing any sanctions the United States would place against that nation.

All of this happened after the president didn't say anything for the first few days of the crisis. He was reportedly concerned about the safety of Americans inside Libya. Well, it turns out not saying anything is not necessarily a bad thing, at least according to a new Gallup Poll.

While 66 percent of Americans think the United States should play either a leading or major role in resolving international problems, 32 percent say the U.S. should be a minor player or not get involved at all. And that's up from 23 percent just two years ago, and at its highest level in 10 years.

But as tensions mount and the stakes get higher, which they inevitably do when there's all that oil involved, it's unlikely the United States will remain on the sidelines indefinitely.

Here's the question, though, and it doesn't apply just to Libya. Is it time for the United States to scale back its role in world affairs? Go to CNN.com/caffertyfile and post a comment on my blog.

BLITZER: I suspect a lot of our viewers will say yes, Jack.

CAFFERTY: A lot of them already have.

BLITZER: Yes, I'm sure they are. All right.

CAFFERTY: For one thing, we can't afford it. We don't have the money to be doing this.

BLITZER: It's only, I think, in Afghanistan alone, what, $5 billion a month it's costing the United States just in Afghanistan.

CAFFERTY: Yes. And at one time, I read where the Iraq- Afghanistan operations were costing this country something in the neighborhood of a billion dollars a day.

BLITZER: Yes, it's a ton of money, and when you think about all that money that could be spent here in the United States for education or development or whatever.

CAFFERTY: Yes, or what about that infrastructure?

BLITZER: That's right.

All right, Jack, thanks.

CAFFERTY: Yes.

BLITZER: Americans are certainly waiting to get out of Libya, bad weather holding up one chartered ferry stuck in the port of Tripoli.

Plus, a Saudi man under arrest in Texas right now, accused of trying to build a weapon of mass destruction. Did he actually plan to target the home of a former U.S. president?

(COMMERCIAL BREAK)

BLITZER: We're going back to Libya in a few moments. But here's a question. Was former President George W. Bush's Dallas home a bomb target? That's what federal authorities are trying to piece together right now.

A Saudi man is under arrest. He's accused of trailing to build what authorities are describing as a weapon of mass destruction.

Our homeland security correspondent, Jeanne Meserve, is following this case for us. She's joining us now with the details.

What do we know about this, Jeanne?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, the government alleges the suspect had acquired some of materials, equipment and expertise to build an explosive device and he had researched potential targets.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): The Dallas home of former President George W. Bush, nuclear power plants, hydroelectric dams, Dallas nightclubs, and homes of former soldiers who once worked at the infamous Abu Ghraib prison in Iraq, potential targets allegedly researched online by Khalid Ali-M Aldawsari, a 20-year-old Saudi in the U.S. on a student visa to study chemical engineering and business at Texas universities.

He was arrested Wednesday in Lubbock.

ROBERT CASEY, FBI: It ultimately neutralized what was absolutely a planned act of terrorism in the United States.

MESERVE: Police were tipped off about three weeks ago by a freight company suspicious about a shipment of phenol from a North Carolina company. Phenol is used to make an old military explosive known as TNP, or picric acid. The government says Aldawsari had already bought two other ingredients and had he obtained or made the phenol, he would have been able to produce about 15 pounds of explosives, not enough, experts say, to take down a large building, but enough to hurt a lot of people.

JAMES CAVANAUGH, FORMER ATF SPECIAL AGENT IN CHARGE: God forbid he went into a restaurant or nightclub or attacked one of our soldiers. It could have been an awful, awful case.

MESERVE: A search of his apartment allegedly turned up wiring, timing devices, lab equipment, a hazmat suit, and a journal in which Aldawsari allegedly wrote that he was inspired by 9/11 and Osama bin Laden and that he had pursued and won a particular Saudi scholarship because it sent him here to study and provided a stipend which he said in his journal helped support his terror planning.

According to court documents, Aldawsari wrote, "Now, after mastering the English language, learning to build explosives and continuous planning to target the infidel Americans, it is time for jihad."

(END VIDEOTAPE)

MESERVE: Authorities believe that Aldawsari acted alone. At this point there's no indication that he was affiliated with any terror groups.

Given the potential size of the explosive, experts believe that the security cordon around President Bush likely would have kept him safe. Sources say he was informed about the alleged plot after the arrest -- back to you, Wolf.

MESERVE: All right, Jeanne, thank you.

Fleeing Libya. Britain evacuates hundreds of its citizens, despite desperate -- well, desperate to escape the violence right now. So why are so many Americans still waiting to get out? We will explain right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Nationals from a number of countries are making it out of Libya, many of them to the Mediterranean island nation of Malta. But a ferry chartered by the United States government to evacuate U.S. citizens remains in the port of Tripoli.

The State Department says it's been held up by bad weather and departure may still be hours and hours away -- 285 people are on board. More than half of them are U.S. citizens, including embassy staffers and family members.

Meantime, CNN's Ivan Watson has been hearing from some other foreigners who have actually made it to Malta.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN CORRESPONDENT (voice-over): A British royal Air Force cargo plane has just landed here at Malta's International Airport carrying at least 64 foreigners escaping from Tripoli, as well as one dog.

The Maltese government says this island country is the main escape route for tens of thousands of foreigners trapped in Libya right now. At least a half-dozen governments are relying on Malta to try to get them get their nationals out.

UNIDENTIFIED MALE: The airport, organized anarchy is one term I could come up with. Basically, it was just a complete mess. The whole place is just a rubbish dump. It doesn't matter. People are abandoning every last piece of luggage they have got. I'm one of the lucky few who actually managed to get through.

Because there are so many stampedes, the police get fed up with the people, with the overcrowding. They charge with batons and cattle prods and occasionally, yes, small arms fired just to basically frighten people off.

UNIDENTIFIED FEMALE: It was very scary.

UNIDENTIFIED MALE: Yes, scary in the nights. There's some gunfighting in the city at night. But I'm not seeing directly, because I stay home all the times after sunset.

WATSON (on camera): But it's not just foreigners that are desperate to escape. Over here are two Libyan air force fighter planes. Their pilots landed here unexpectedly several days ago. They defected to escape Colonel Gadhafi's regime.

(voice-over): Ivan Watson, CNN, Malta.

(END VIDEOTAPE)

BLITZER: We're staying in Libya. When we come back, we will also check in with Nic Robertson. He's on the scene. Refugees are fleeing Libya in huge numbers. Much more of our coverage -- right after this.

(COMMERCIAL BREAK)

BLITZER: We're learning much more right now about the desperate efforts of some foreign nationals to get out of Libya across the Tunisian border. There are harrowing accounts of what is going on in areas still held by the Libyan regime of Moammar Gadhafi.

Our senior international correspondent, Nic Robertson, is joining us on the phone. He's in Tunisia right now.

Nic, by most accounts, Gadhafi still has control of at least a big chunk of the western part of Libya. But that chunk is growing smaller and smaller all the time. What are you hearing?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: We're getting very mixed reports from people leaving Tripoli.

The highway between Tripoli and the border, some people are telling us that there are groups of armed men at the side of the road with green armbands, green hats showing that they're pro-Gadhafi, that the vehicles are being stopped that they're in. Quite often, they're being checked. Some people indeed were actually turned back on that highway. They couldn't get to the border because there was so much fighting in one particular town.

Other people have told us that the drive was one of the quickest and easiest they had made. They saw checkpoints, but were waved right through, so very varying accounts, people's experiences depending on the time of day.

And we know that one town, Zawaria (ph), close to Tripoli, that government forces that attacked demonstrators there. That appears to have coincided with one period where the highway was at its most dangerous, so a very varied and confused picture.

But Tripoli, the picture from Tripoli that emerges is of a city under siege, the government going house to house in some neighborhoods, and many, many arrests there, we're being told, Wolf.

BLITZER: I understand that a lot of the troops who are being used by Gadhafi are not even Libyans. They're foreign mercenaries, if you will, who are just going around their business killing people almost randomly.

ROBERTSON: There seems to be an element of sort of control and management, if you will, about where these forces are targeting, particularly in Tripoli.

In some areas, they have -- they have targeted areas where the resistance seems to be strongest. They have cordoned off those areas. They have military operations in those areas. No one is allowed in. No one is allowed out. And then people are arrested from within those cordoned-off areas. Areas under siege, that's how people describe it.

And another incident just outside of Tripoli, the gunman loyal to Gadhafi went in and then just shot a crowd of protesters. The protestors fled, but that left several dead, many, many wounded who were taken to hospital. The protesters came out on the streets again.

So just very gruesome, random acts of violence against unarmed crowds. That's what seems to be happening with these militias, some mercenaries, some Libyans loyal to Gadhafi, Wolf.

BLITZER: I take it, Nic, if Libyans or foreigners make it across to the Tunisian border, the Tunisian authorities, the new regime, the new government there, they've had their own issues, as we all know, over the past several weeks. They just allow everyone in. Is that right?

ROBERTSON: They're allowing everyone in. I told the one man, an Egyptian. He said he'd stayed in Egypt until the revolution had ended there and Mubarak was thrown out. He'd gone to work as a hotel manager in Tripoli. The revolution, he said it started there. It was under chaos, too dangerous to stay. He left, and now he's found himself in a third country that's gone through its revolution.

But he said one thing that he said to me that really stuck in my mind, he said what a warm and wonderful welcome they'd had -- he'd had from the people of Tunisia. We've seen them greeting people: picking up their bags at the border. Tunisians who lived close to the border coming in and helping Libyans and other who crossed -- who crossed over, giving them food, giving them water, all on a volunteer basis. So while that revolution shook Tunisia, it's left the people here very willing to help others who are going through a similar plight, Wolf.

BLITZER: Well, please thank those Tunisians from all of us for what they're doing. They're saving lives, obviously, because the situation in Libya is horrendous right now. Nic, thanks very much.

In another rambling address today, Gadhafi seemed to blame Osama bin Laden for his troubles, saying Al Qaeda is manipulating Libya's youth. But if anything, Al Qaeda may be a big loser in all of this turmoil that's sweeping through the region.

Our national security analyst, Peter Bergen, is joining us right now. Peter is the author of a brand-new best seller, "The Longest War."

It's your sense, because I've read your stuff, Peter, that Al Qaeda is losing in the region right now. Explain to our viewers why.

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: It was already losing, Wolf, even before the events in the Middle East that we've seen. Any number of public opinion polls show support for Al Qaeda, bin Laden, suicide bombings dropping.

But the events in the Middle East underlying Al Qaeda's kind of irrelevance. We're not seeing people in the streets of Cairo or Tripoli or in Tunisia carrying banners of, you know, bin Laden's face. And they're not spouting Al Qaeda's venomous critique of the west. They're not people who have trained in bin Laden's training camps. And he's just irrelevant. BLITZER: So when Gadhafi rails, as he did today, when he called in this radio show in Libya, saying Al Qaeda is behind all of his problems right now, he's living in a dream world?

BERGEN: Well, it's you know, more evidence of his eccentricity or even madness. And in fact, not only is it completely untrue; over the last couple of years the Libyan regime, the Gadhafi regime has actually negotiated a cease fire agreement with a group called the Libyan Islamic Fighting Group, which was once allied with Al Qaeda. So, I mean, he knows that to be completely untrue himself.

BLITZER: So he's just trying to whip up a little -- a little frenzy. I don't know if it's going to help him much. Ayman Al- Zawahiri, the No. 2 Al Qaeda leader beyond -- right behind bin Laden. A new audio surfaced today. Tell us about this.

BERGEN: Well, I think it's more of the same. I mean, he -- they're trying to insert themselves, opportunistically, into events they have no control over. He's called, you know, for an Islamic state in Egypt. You know, Egypt is already a pretty Islamic state. What he means by that is a Taliban-style theocracy.

The Egyptians are not clamoring for Taliban-style rule. Nobody in the region is. They've seen what the Taliban looks like in Afghanistan. They know that's not a solution for their problems. And that's why Al Qaeda is offering them.

BLITZER: But people don't necessarily appreciate the rift between the Muslim brotherhood and Al Qaeda.

BERGEN: Yes, I mean, Ayman Al-Zawahiri's written an entire book critiquing Al Qaeda. You know -- sorry. Ayman Al-Zawahiri's written an entire book critiquing the Muslim Brotherhood, precisely because they engage in conventional politics, they engage in elections. There's a great deal of dislike and distrust between these two groups.

BLITZER: So if you take a look at the region right now, we saw Tunisia. Dramatic change. They got rid of their dictator. Egypt, we saw what happened there. Now we see what's happening in Libya. We see a lot of demonstrations in Bahrain and some other countries. Which country do you think the real focus is going to be on next?

BERGEN: Well, I mean, Wolf, we don't know. But I mean, the Saudi royal family must be looking at this, particularly the events in Bahrain, with some worry. The Saudis, you know, the monarchy is popular. They have substantial revenues. But they've given their people very little in the way of democratic freedoms.

I was there in 2005 when they had one of the first elections in decades. It was only a municipal election in Riyadh, the capitol. They must be thinking of themselves. May be a point to do more in terms of giving, you know, some additional democratic rise to their population.

BLITZER: What about Bahrain right now? Because there's -- the majority is largely Sunni but -- is largely Shia but is ruled by largely Sunni leaders in Bahrain, which is the home of the U.S. Navy's 5th Fleet in the Persian Gulf.

BERGEN: Now, I think these monarchies are inherently more stable because you can turn yourself into a constitutional monarchy.

BLITZER: Bahrain's a monarchy.

BERGEN: The problem with somebody like Gadhafi is there are no constitutional dictatorships, right? I mean, there's no way out for him. He either maintains absolute power or he goes. With a monarchy, they can rearrange things a little bit. Give the people more rights. And reinvent themselves as constitutional monarchies, which suggests they will be around longer than these absolute dictatorships.

BLITZER: Where does Iran play in all of this?

BERGEN: I think they must be looking at this with some trepidation. Because initially, you know, they were celebrating the Egyptian revolution. But the Egyptian revolution wasn't motivated by the fundamentalist fervor of the Iranian revolution. I don't think whatever regime replaces the Mubarak regime in Egypt is going to be any more sympathetic to Iran than Mubarak was.

BLITZER: Like a lot of viewers, we're reading your new book, "The Longest War." It's a great read, and we're learning a lot in the process. Congratulations.

BERGEN: Thank you, Wolf.

BLITZER: Peter Bergen joining us.

As turmoil rocks Libya, the roller-coaster relationship between the United States and Libya takes another twist. We have details right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: As Libya's Colonel Moammar Gadhafi vows to crush the uprising against him, the Obama administration is looking into all possible options including sanctions and a no-fly zone. Just the latest swing in the tumultuous relationship between Washington and Tripoli. We asked Lisa Sylvester to dig deeper for us.

What did you find out, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: This is very interesting, Wolf. Because Moammar Gadhafi has actually gone full circle from being shunned by the international community, Libya labeled a spate sponsor of terror, then embraced by world leaders within recent years, and now to being condemned again.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): A series of high-profile meetings in 2008 and 2009, Moammar Gadhafi meeting with Secretary of State Condoleezza Rice, embraced by Prime Minister Tony Blair, a warm greeting by Italian Prime Minister Silvio Berlusconi, and then a meeting between Secretary of State Hillary Clinton and the Libyan leader's son, Mutassim Gadhafi.

HILLARY CLINTON, SECRETARY OF STATE: We deeply value the relationship between the United States and Libya.

SYLVESTER: Suddenly, the same Libya blamed for the bombing of Pan Am 103 over Lockerbie was being welcomed in international circles, all the result of a public relations campaign by Libya to shake off its image as an international pariah and a state sponsor of terror and to be accepted by the international community.

Moammar Gadhafi began in 2003, agreeing to give up his weapons of mass destruction program.

DAVID SCHENKER, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: Libya was reeling from decades of multilateral sanctions that had really held the country back. They were looking forward to investment in the -- in the oil industry in the country and really needed an opening to the west to do this.

SYLVESTER: Libya hired some of the best and brightest U.S. lawyers and lobbyists: the Livingston Group, Blank Rome (ph) and White and Case (ph), spending more than $2 million in 2008 and 2009, according to records filed under the Foreign Agents Registration Act.

Libya's hired representatives pressed the State Department and members of Congress to lift economic sanctions and to exempt Libya from an anti-terrorism law that would have allowed victims of terror to seize government assets.

Paul Blumenthal has written extensively on Libya's lobbying efforts.

(on camera) It seems like they really went from zero to 60, where they had absolutely no lobbying to really ramping up their lobbying efforts here.

PAUL BLUMENTHAL, SUNLIGHT FOUNDATION: Well, they absolutely did ramp up their lobbying efforts really fast. And a lot of that is because the economic sanctions came down. They were removed as a state sponsor of terrorism by the international community. And all of a sudden, you had the African nation with the largest oil reserves in the world available for business. And you had tons of companies -- Chevron, BP, ExxonMobil -- looking to gain entry into this -- into this country.

SYLVESTER (voice-over): Oil companies like Shell and Marathon Oil also jumped in and lobbied the U.S. government on behalf of Libya. The result was a major turnaround. Not only did Washington elite welcome Gadhafi and his family; so did Hollywood.

Super stars from Lionel Ritchie to Beyonce were paid big money to perform at lush parties in the Caribbean and the Middle East.

(END VIDEOTAPE)

SYLVESTER: And now there are calls to re-impose those economic sanctions on Libya coming from, among others, Senator John Kerry, head of the Senate Foreign Relations Committee. He has called the crackdown on protestors beyond despicable.

BLITZER: And we're just getting in from the White House another statement from the White House, saying the president has called -- has spoken by phone today with the leaders of France, Britain and Italy. They've issued a statement. The leaders discussed the range of options that both the United States and European countries are preparing to hold the Libyan government accountable for its actions as well as planning for humanitarian assistance.

A few more sentences, basically reiterating what the president said 24 hours ago. But he's been on the phone with these leaders, interestingly enough. And you know this, Lisa, that the statements coming from the European leaders are much tougher towards Gadhafi. They're mentioning him by name. They're mentioning specific sanctions. They want to impose rather than the sort of general statements without mentioning Gadhafi by name coming from the White House.

SYLVESTER: Yes. And it's interesting, because they say that in this case with Libya, that it's actually the European nations that have more sway that can pressure that are actually in a position to put pressure on Gadhafi.

BLITZER: Yes. They have a lot more say. But we're watching this closely. Thanks very much. We'll stay on top of this story.

Here's another story we're following. Were U.S. senators psychologically tricked into backing more funds and troops for the war in Afghanistan? There are bombshell allegations prompting an investigation right now. We'll have the details right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: U.S. military commanders right now investigating allegations a three-star general ordered psychological operations on lawmakers so they would approve more troops and more funding for the war in Afghanistan. Pentagon correspondent Chris Lawrence is here in THE SITUATION ROOM.

You've been looking into this story.

CHRIS LAWRENCE, CNN CORRESPONDENT: Yes, Wolf. I mean, after one "Rolling Stone" article ended the career of General Stanley McChrystal, a new report is leveling some very serious allegations against the U.S. military again.

Now we've learned that General David Petraeus has ordered an investigation to determine the facts and circumstances surrounding this issue.

Let's start with the who. Members of the Army's psi-ops team in Afghanistan are accusing a superior officer of giving them illegal orders to target American congressmen. They say when they basically defied that order, their boss, Lieutenant General William Caldwell and his staff, reprimanded them and wrote them up for all kinds of violations.

Now, one of the Psi Ops officers in that article, Michael Holmes, tells CNN if they can do this to a lieutenant colonel, what would they do to a corporal?

And his colleague, Major Laurel Levine (ph), also tells us, "We're not allowed to do that against any U.S. citizen, period. Whether it's a congressman or someone's neighbor." She told us it's the first thing they're taught. Never target Americans, ever.

So Psi Ops really is not the same as public affairs. You know, these troops are trained to play with people's heads. Manipulate the enemy into behaving a certain way. Millions of taxpayer dollars are used to fund these teams. They're supposed to be targeting hostile foreign groups in Afghanistan. Senators John McCain, Joe Lieberman, Jack Reed, Al Franken, and Carl Levin are all mentioned as alleged targets for these Psi Ops profiles, Wolf.

BLITZER: Well, with the exception of Al Franken over there, these other senators, they're all big supporters of what the U.S. is doing in Afghanistan.

LAWRENCE: That's right. That's right, Wolf. And in fact, you know, Senator Carl Levin said in a statement, "I never needed any convincing on this point. Basically, I've been trying to convince others we need to send more trainers and beef up their forces."

So again, you know, a lot of these folks are saying there's been no reason to do that. Lieutenant General Caldwell himself categorically denies any accusation that he used the information operations teams to influence U.S. congressmen, and in fact last week Secretary Robert Gates was praising Caldwell on Capitol Hill, describing how only a third of Afghan recruits could shoot straight a year ago. And now it's up to 90 percent qualifying as marksmen.

On the other hand, in the past the military has been accused of mingling public affairs and Psi Ops. And just today an official admitted there is a grey area of preparing information for congressmen and on congressmen who are going to visit a war zone, Wolf.

BLITZER: Chris, thanks very much. We'll stay on top of this story for our viewers.

Is it time for the United States the scale back its role in world affairs? That's Jack's question, and Jack is next.

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BLITZER: Right back to Jack. He's got "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is, "Is it time for the United States to scale down its role in world affairs?" According to a Gallup poll, the number of Americans who say it is is up almost 50 percent in the last couple of years.

James in North Carolina: "Yes, it is. Time for us to mind our own business for a while. And while the federal government is minding its own business, then maybe they'll stay out of the state's business, as well. I don't think the federal government is doing a very good job managing our national affairs, so maybe we shouldn't be trying to manage everyone else's."

A.E. writes: "Times have changed. The Cold War is over. There's no need to play policeman to the world. This is the new world order, and the U.S. needs to adjust to the realities of the present day."

Lawrence writes: "Until the western world learns how to tap into other sources of energy rather than being dependent on oil, we just can't scale back. We're in too deep to oil to think straight. It's time we tap into more green resources."

Paul in Ontario says: "It's time to scale back the military role but not the humanitarian one."

Mark in New Jersey: "I would call Bill Gates tonight, tell him I want to be out of Iraq and Afghanistan by Monday. A billion dollars a day, and they want to lay off teachers? Troops in Germany for what? Whoever decided we're the world police, it's time to change that opinion now."

Paul writes: "We need to maintain a high profile in world affairs. We need to trade for the things we need now and in the future: oil, rare earth metals, et cetera, things that our competitors are actively pursuing. Our democracy was born of revolution. We take a lot of pride in our history: Valley Forge, the Boston Massacre, shot heard round the world, et cetera. We did it with help from Europeans. We need to support the attempts at forming democracies in the Middle East and wherever they occur. It will pay off in the long run."

And Richard says: "This is a no-brainer. Other countries hate us, whether we give them money or we don't. Reduce our foreign giveaways by at least 25 percent. Reduce the deficit. We are broke. Keep our money in the USA."

If you want to read more on this, you find it on my blog: CNN.com/CaffertyFile -- Wolf.

BLITZER: Thanks very much, Jack. Good work.

John King, by the way, speaks to Mike Huckabee. What would he do about Libya if he were president? That's coming up at the top of the hour.

When we come back, look at this: a camel at Wisconsin's state house.

(COMMERCIAL BREAK)

BLITZER: Here's a look at some "Hot Shots."

In Tunisia, a soldier hands a loaf of bread to an Egyptian refugee from Libya.

In Jerusalem, the Chilean miners who survived 69 days trapped underground pray at the Western Wall.

In Afghanistan, young shepherds walk their flock past a school.

And in Wales, Prince William's fiancee, Kate Middleton, pours champagne at a naming ceremony.

"Hot Shots" here in THE SITUATION ROOM.

A camel stunt on "The Daily Show" is no laughing matter. Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): It was the straw that broke the camel joke. "The Daily Show" has been making fun of those who draw parallels between American and Middle Eastern protesters.

BOB SCHIEFFER, CBS NEWS: Is Madison, Wisconsin, Congressman, a Tunisia of American politics now?

JON STEWART, HOST, COMEDY CENTRAL'S "THE DAILY SHOW": They're not the same in any (EXPLETIVE DELETED) way, shape or form at all.

MOOS: So when "Daily Show" correspondent John Oliver was dispatched to Wisconsin, it seemed like bringing a camel would be a great gag. The locals were impressed.

UNIDENTIFIED MALE: "Daily Show"? Oh.

MOOS: Blogger Jack Craver (ph) flipped out his Flip cam in time to capture this. The camel got its foot caught in a police barricade and was making unhappy gurgling noises. It fell again, this time taking a guy down with it.

UNIDENTIFIED MALE: For about 10 minutes here, we were worried the camel's leg was broken.

MOOS: Jack posted the video on his blog, and animal rights defenders took it from there. The Alliance for Animals said, "Animals are not props to be used for low-based humor."

And then there was PETA.

(on camera) Now PETA considers itself a friend of the show, so its letter to Jon Stewart was not exactly scalding.

(voice-over) "Greetings from the many fans of "The Daily Show" here at PETA." They asked the show to make "the compassionate decision never again to use live animals."

It took perhaps ten minutes for handlers to get the camel back on its feet. "The Daily Show" released a statement saying, "The camel remains in good health but is declining media requests at this time."

Correspondent John Oliver had suggested the blogger with the Flip cam should put it down.

JOHN OLIVER, CORRESPONDENT, COMEDY CENTRAL'S "THE DAILY SHOW": Put it down.

MOOS: The following day, we saw Oliver's segment.

OLIVER: I'm witnessing things I never thought I'd see here.

MOOS (on camera): When the Wisconsin protest segment aired on "The Daily Show," the camel was nowhere to be seen. Cut. Not even a camel cameo.

(voice-over) "The Daily Show" said they immediately decided "not to pursue the idea any further and did not film any material with the camel."

This is the second camel in recent months to obtain fame after a fall. Lulabel (ph) fell into a pew at a Christmas pageant rehearsal. No people were hurt. Lulabel (ph) was fine.

And with every camel that falls, we fall for the camel.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: That's it for me. Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.

"JOHN KING USA" starts right now.