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The Situation Room

Terror Trial Reversal; President Obama to Run for Reelection

Aired April 04, 2011 - 18:00   ET

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

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: But the opposition demands that happen now.

Concerned the violence could explode, a senior U.S. official says the U.S. is talking about Saleh and the opposition -- quote -- "trying to get him to move more quickly." But the timing is delicate and publicly the State Department won't go that far.

MARK TONER, STATE DEPARTMENT SPOKESMAN: There's a gap between what President Saleh said and what the people have asked for, and certainly in our discussions, both with the government and with the opposition that we're helping -- or talking about bridging that gap.

DOUGHERTY: President Saleh, in office since 1978, has been a firm U.S. ally in the fight against terror in a country that U.S. officials believe is home to some of the most active al Qaeda operatives in the world.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We are obviously concerned that in this period of political unrest, that al Qaeda and other groups will attempt to take advantage of that power vacuum, and that's one of the reasons why we urge political dialogue to take place and a timetable for this transition that President Saleh has talked about to be begun.

(END VIDEOTAPE)

DOUGHERTY: Yes, and the real worry that we're told by the senior administration official is that President Saleh will simply hang on for too long and that that could lead to a spiral of violence and chaos and a lot of major, major problems.

WOLF BLITZER, CNN ANCHOR: Jill Dougherty, thanks very much.

And to our viewers, you're in THE SITUATION ROOM.

Happening now: The Obama administration does a 180, announcing military trials for 9/11 suspects, instead of civilian trials, including for the self-proclaimed mastermind of 9/11, Khalid Sheikh Mohammed.

Also, fierce fighting in key Libyan towns, with rebels claiming to have one oil port city surrounded, government forces on the defensive. We're going there live. And breaking news: a major announcement from Boeing following that terrifying in-flight rupture in the roof of a Southwest Airlines plane.

Breaking news, political headlines and Jeanne Moos all straight ahead. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

A major reversal by the Obama administration today, folding in the face of stiff resistance in Congress. The attorney general, Eric Holder, now says Khalid Sheikh Mohammed and four other 9/11 terror suspects will face a military trial at Guantanamo Bay, rather than civilian trials in the United States, as the administration wanted.

Let's go straight to our White House correspondent, Dan Lothian, who is working the story for us. This is an issue the president strongly campaigned on after his inauguration, an issue he addressed immediately, but now a major reversal.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf.

This was a campaign promise. It was an issue that attracted a lot of voters. White House spokesman Jay Carney today was asked about this being a failure of the administration going back on a promise. He sidestepped a lot of those questions, but said that there was a lot of congressional opposition and that the president really wanted to make sure that justice was brought as swiftly as possible.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): President Obama's Gitmo policy was set in stone before he ever walked in to the White House.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: As president, I will close Guantanamo, reject the Military Commissions Act. We are less safe because of the way George Bush has handled this issue. We need to give our national security agencies the tools they need. And that means closing Guantanamo.

LOTHIAN: With great fanfare, the president used his first executive order to set an optimistic timeline, within a year. And his administration was public about its desire to have alleged 9/11 terrorists, like Khalid Sheikh Mohammed, tried in federal civilian courts, not military tribunals at Guantanamo.

ERIC HOLDER, U.S. ATTORNEY GENERAL: I'm confident in the ability of our courts to provide these defendants a fair trial.

LOTHIAN: But that legal strategy ran into a brick wall.

HOLDER: Members of Congress have intervened and imposed restrictions, blocking the administration from bringing any Guantanamo detainees to trial in the United States.

LOTHIAN: Now a dramatic reversal. The five suspected terrorists will be tried at Gitmo, and the detention facility will remain open indefinitely. HINA SHAMSI, ACLU: The administration should not have flip- flopped in response to political pressure.

LOTHIAN: The ACLU and other critics blame the administration for dragging its feet.

SHAMSI: The administration had about a year to bring these cases to federal court before Congress imposed restrictions.

LOTHIAN: But Republicans see the decision as a long-awaited step in the right direction.

REP. PETER KING (R), NEW YORK: Shouldn't be worried about what different human rights groups are going to say. We have to do what's right for America, what's just.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Military commissions at Guantanamo far from the U.S. mainland were always the right idea for a variety of compelling reasons.

LOTHIAN: Attorney General Holder now says he has full faith and confidence in the military commission system, a system critics call illegitimate, flawed and untested.

MASON CLUTTER, THE CONSTITUTION PROJECT: Shouldn't be a political matter. Points shouldn't be made on this issue. The federal court system is our tried-and-true system.

(END VIDEOTAPE)

LOTHIAN: A senior defense official said that they did not advocate for this decision, but that they have a court system that is ready to handle all of these cases -- Wolf.

BLITZER: So, even though he promised to close Guantanamo Bay within a year after taking office, for all practical purposes, Gitmo in Cuba is going to remain open for the foreseeable future.

LOTHIAN: That's right, Wolf, because these cases will be tried there at Gitmo. And so, despite that promise that the president made -- and you're right -- as I pointed out, this was one of the first things that he did after going into office, delivering on that campaign promise, but now it's uncertain when it will be closed.

BLITZER: Dan, thanks very much.

Let's go to Libya right now, where rebel forces say they have surrounded the key oil town of Al Brega. That comes with word of a possible deal to have one of Moammar Gadhafi's sons potentially succeed him.

Let's begin our coverage on what is going on in Libya with CNN's Reza Sayah. He's in Benghazi with more on the latest fighting.

What's the latest as far as the fighting is concerned, Reza? REZA SAYAH, CNN CORRESPONDENT: Well, Wolf, on the battlefield, the storyline remains pretty much the same. No one is winning. There's a lot of gunfire, artillery fire, people getting hurt, people getting killed, but neither side has the clear edge.

The front line remains the key oil town of Brega. You have regime forces pretty much to the west, and you have rebel forces to the east surrounding the gates in that direction. They're just pounding this city with rockets and heavy artillery. I'm not sure how many civilians are caught in this town, but, if they are, they are in deep trouble.

If any side made any progress today, it was the rebels, but it was paltry. It was meager. They inched forward to the eastern gates of the city. They made it to the outskirts of the city limits, but they were pushed back. So it's a stalemate, Wolf. And based on what we saw today and over the past couple of weeks, neither side seems to have the ability to score a clear-cut military victory.

The rebel forces obviously still outgunned, outmanned by the regime forces, they still don't have a single tank that functions. The regime forces on the other hand could potentially mount a military offensive, but they would probably get pounded by those NATO airstrikes.

So it's a stalemate, Wolf, and nobody knows where this is going.

BLITZER: In Tripoli, as you know, Reza, our own Nic Robertson is reporting that perhaps one or more of Gadhafi's sons could emerge as the new leader if the father steps aside. I know you're speaking with some of the opposition leaders where you are in Benghazi. What are they saying about that?

SAYAH: Well, the opposition here in Benghazi, Wolf, has a very clear message. And they say any political solution offered by the regime that involves the transfer of power from Colonel Gadhafi to any member of his inner circle, any member of his family is unacceptable. We talked to a rebel spokesperson.

Here's how he spelled it out.

because Well,

UNIDENTIFIED MALE: What you need to understand, Colonel Gadhafi and his regime, his regime is his kids. He doesn't have anyone else. He has his regime and his militia. And if you think about it, the government is Gadhafi and the Gadhafi family. And those are rejected by the Libyan people. And there's no way for them to be -- to play a part of any government.

(END VIDEO CLIP)

SAYAH: So there you have it. Based on that statement, if the regime, the Gadhafi regime, truly wants a political solution, Wolf, they have to think of another plan.

BLITZER: All right. Reza Sayah, we will stay in close touch with you. Thank you.

Eman al-Obeidy became the face of the struggle in Libya after she burst into a hotel saying shy was raped by pro-Gadhafi soldiers. Just as quickly, she vanished, as government agents spirited her away.

Finally, she's free again and pleading to the world for help. She spoke with CNN's Anderson Cooper.

(BEGIN VIDEO CLIP)

EMAN AL-OBEIDY, ALLEGED RAPE VICTIM (through translator): I would like to direct a word to all the people watching this around the world and in America, that we are a peaceful people, and we are not members of al Qaeda.

We are a simple people and moderate Muslims, not extremists. And we're not asking for anything, except for our freedom and dignity, and the most basic human rights, which are denied to us.

(END VIDEO CLIP)

BLITZER: You are going to hear a lot more of her conversation with Anderson later tonight on "A.C. 360," 10:00 p.m. Eastern.

We will have much more on Libya coming up this hour. Anthony Shadid of "The New York Times" will be joining us.

Jack Cafferty is back today. We will talk to him.

Also, "The New York Times" columnist -- or journalist, I should say, Anthony Shadid, remember, he was held captive for six days. Is he ready to go back to Libya? Maybe, maybe not. We will ask him.

And breaking news, an announcement from Boeing about hundreds of planes after one 737 split open in flight.

And the controversy over a 9/11 museum and the remains of some victims. We will hear from the family of one of them.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty's been thinking about those violent, deadly protests in Afghanistan over the weekend. He's here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Only about 30 people attended a Florida pastor's Koran burning last month. It was an event that followed a mock trial of the holy book of Islam. At the time, the pastor -- and we use that term extremely loosely -- a guy named Terry Jones, claimed that his Koran burning was a success and he's now about to put the Islamic Prophet Mohammed on trial next.

The actions of this publicity-seeking lunatic fringe pastor are sparking scores of anti-American protests, many of which turned violent in cities throughout Afghanistan. More than 20 people were killed over the weekend in retaliation for the burning of the Koran. General David Petraeus, the allied commander of the 150,000 troops in Afghanistan, said Jones' stunt poses new threats to the security of U.S. soldiers fighting a war against the Taliban.

You may remember this clown Jones had threatened to do something like this once before. He was talked out of it after people like Petraeus and eventually President Obama and Secretary of Defense Robert Gates all spoke up. But Jones apparently couldn't stay out of the spotlight. And now Afghan President Hamid Karzai, another winner in all this, has called on this White House, Congress and the United Nations to bring this pastor to justice, whatever that means. We do have freedom of speech in this country.

It is not clear that he broke any laws, except the law against stupidity. Yesterday, on "Face the Nation" on CBS, Senate Majority Leader Harry Reid said some members of Congress are considering some sort of action against Jones. I have no idea what that would be.

Republican Senator Lindsey Graham said Congress may have to think about limits for freedom of speech when words or actions enrage U.S. enemies and endanger the lives of U.S. citizens and soldiers overseas.

I think it's against the law to yell fire in a crowded theater, that kind of stuff.

Here's the question. Should anything be done about the pastor in Florida who burned the Koran? Go to CNN.com/caffertyfile and post a comment on my blog.

BLITZER: I don't know, Jack, what could be done against the pastor. I do know that Hamid Karzai, the president of Afghanistan, who has had our support, billions and billions of dollars over 10 years, including hundreds of thousands of troops over these 10 years, he brought this issue to a head when he raised -- nobody even knew what the pastor was doing.

All of a sudden, Hamid Karzai last week spoke about it. And he whipped up -- he knew he shouldn't have done this. He whipped up a lot of those fanatics, who went ahead and killed these U.N. personnel, the members of the U.N.

CAFFERTY: Right.

BLITZER: It was really disgusting, what the president of Afghanistan did. Obviously, those killers, he should go after the people who killed those United Nations officials. But it was sick for him to raise that issue.

(CROSSTALK)

CAFFERTY: He's not going to do that.

BLITZER: I know he's not.

CAFFERTY: He's no friend of ours. When are we going to figure out that Hamid Karzai, we're in bed with another guy playing both ends against the middle and taking our money? BLITZER: Yes.

CAFFERTY: I mean, he's not going to do anything, except what he did, which was to be responsible for 20-some people getting killed over this thing. Hamid Karzai is no friend of this country. And isn't it about time we, you know, packed up our bedrolls and got the hell out of there? Why are we still there after 11 years? What are getting done?

(CROSSTALK)

BLITZER: I can't tell you. I have known Hamid Karzai now for 10 years, met with him on many occasions. I can't tell you how disappointed I am in his thinking to even raise this issue, knowing it would spark this kind of hatred of the United -- they wanted to go after Americans. They couldn't find any. So they went after United Nations personnel. I agree...

CAFFERTY: He knew exactly what he was doing.

BLITZER: Yes. It was really sick. It was really a sick decision he made.

All right, Jack, thanks very much.

CAFFERTY: Sure.

BLITZER: I think our viewers will have a lot to say about this as well.

Other important news we're following, including some breaking news, a government order for inspections of hundreds of 737s after that terrifying in-flight rupture that left a gaping hole in the roof of a Southwest Airlines plane.

Jeanne Meserve is working this story for us.

It's a lot of nervous out there as a result of what happened.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: But quick action.

The Federal Aviation Administration will order operators of specific Boeing 737s to conduct electromagnetic inspections for fatigue damage after this frightening episode on the Southwest Airlines flight last Friday night.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): At 35,000 feet, the fuselage of the Phoenix-to-Sacramento Southwest flight ripped open, leaving a gaping hole five feet long. Passengers described a loud noise.

UNIDENTIFIED MALE: All of a sudden, there's a big sunroof in the middle of the plane, a big old hole. You could see daylight running through it. UNIDENTIFIED FEMALE: All of a sudden, the oxygen masks dropped. And everyone was trying to get the mask on.

UNIDENTIFIED FEMALE: I'm holding the hand of the guy next to me, trying not to bawl my eyes out.

MESERVE: After an emergency landing at a military base in Arizona, the damaged section was removed, along with the flight recorders, for analysis by National Transportation Safety Board experts.

Investigators believe the problem began with a crack in the lap joint in a part of the fuselage where only visual inspections are required.

GREG FEITH, FORMER SENIOR AIR SAFETY INVESTIGATOR, NATIONAL TRANSPORTATION SAFETY BOARD: This is a relatively young airplane. And that's why it's of concern to the NTSB and the FAA, with these microscopic cracks in a place that even the manufacturer hadn't anticipated in the past.

MESERVE: Indeed, when Southwest immediately grounded 79 of its Boeing 737-300s for closer inspection, subsurface cracks were found in three additional planes.

Southwest aircraft get a lot of wear and tear, averaging six flights per day. This aircraft had a major maintenance inspection just last March, but in addition to looking at the plane, investigators will look at the airline.

Back in 2009, the FAA fined Southwest $7.5 million for missing required inspections for cracks in the fuselage. Later the same year, a hole the size of a football forced the emergency landing of a Southwest jet in Charleston, West Virginia, now this terrifying incident.

(END VIDEOTAPE)

MESERVE: A top NTSB official says his agency has reviewed the maintenance records for the aircraft and found no problems. The chunk of fuselage is expected back in D.C. tonight.

Metallurgists and material experts will examine that to see if further corrective actions are needed. Also, Wolf, he says there is no connection between this incident and the one in Charleston. They looked the same, but had different causes.

BLITZER: Yes, they have got to figure this one out, too.

All right, thanks very much.

Why Newt Gingrich is now accusing President Obama of -- quote -- "personally killing" public financing of presidential campaigns.

Plus, tons of radioactive water being dumped into the Pacific Ocean right now -- the latest on Japan's nuclear crisis. (COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: A living nightmare for four journalists in Libya captured by Libyan soldiers. They faced the possibility of death. I will speak with one of those journalists, Anthony Shadid of "The New York Times." He's the Pulitzer Prize winner. He has got some thoughts about what's going on in Libya right now.

And NATO leads the mission to enforce the no-fly zone, but not without some unexpected help from the U.S. military.

And families of 9/11 victims are appalled by a plan to house human remains at Ground Zero.

(COMMERCIAL BREAK)

BLITZER: Fighting raging today in Libya today in the key towns of Al Brega and Misrata amid growing buzz of cracks inside the Gadhafi regime and a possible deal to transfer power to one of his sons.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now, Anthony Shadid, the correspondent for "The New York Times."

Anthony, I want to get to what happened to you and your colleagues shortly, but let's talk about Libya for a moment or two.

How serious is this split right now in Gadhafi's inner circle?

ANTHONY SHADID, "THE NEW YORK TIMES": Well, I thought it was an interesting sign into what may await us down the road in Libya, where you have Colonel Gadhafi's sons, several of them each with their own militia, maybe a sense that the father isn't going to last all that long or cannot last all that long, given the international pressure on him, and perhaps a potential fight among the sons over what power remains in places like Tripoli, the capital, where the government remains firmly entrenched.

BLITZER: How significant would it be? Let's say if Saif al- Islam Gadhafi took over for his father, his father retired, disappeared. Would that really make a difference in the scheme of things in Libya?

SHADID: Well, so there are some who think that his motivations are different, that he has a different plan of action than his father might have.

But I think that would be a difficult estimation to make. I mean, he is part of the regime, very much a part of this government. He has helped perpetuate this government. The language that he used as the government cracked down on the rebels was some of the same vicious language that we heard from Colonel Gadhafi. It is hard to see the opposition also taking that as a realistic offer, seeing some kind of transition that would be in the hands of Saif al-Islam, whatever -- whatever statements he might make. I think he remains so closely entrenched in the regime, so closely identified with his father, that the idea that he could really bring about something in that country, something that would reflect the aspirations of the people there, it's a pretty difficult argument to make.

BLITZER: We're showing pictures of four of the sons. How much of a rivalry is there between these four sons?

SHADID: There's clearly a rivalry. There's absolutely a rivalry among them. I think Colonel Gadhafi at this point thinks that he can trust them, but I wonder if the sons themselves think they can trust each other.

They do have their own militias. They have these guys, basically young men with guns. We saw them firsthand. It's not clear how well they're organized, even how well they're trained, but they clearly have weapons. And a lot of their weapons do outmatch the arsenal that the rebels in the opposition have.

BLITZER: I'm hearing just from my sources that they expect more serious defections in the coming days. Are you hearing that as well?

SHADID: You know, I have not picked up on that. But I wouldn't necessarily pick up on it from here.

There is a sense I guess from afar at least that the government seem to be crumbling somewhat. But crumbling I think is an -- it is an elastic term. And how much, how fast, if in fact it is, I think it's a tough -- again, it's another tough prospect out there.

This government does have some staying power still. And when we left Tripoli a couple weeks ago, it was remarkable to me how much Tripoli felt still in the hands of the government.

BLITZER: You spent some quality time with the rebels in Benghazi, in Ajdabiya, where you were captured. Who are these rebels? Do you have a good sense who they are?

SHADID: What struck me, Wolf, is how kind of the spectrum of the opposition, of the rebels themselves.

When I was coming in to the country from Egypt, we saw some of these men in Derna, for instance. These were -- they were Islamists and they would identify themselves as such. One of the guys I had met had spent time in Afghanistan, had been -- had been in jail in Libya, had spent a little bit of time fighting Gadhafi during kind of an Islamist rebellion that was going on in Eastern Libya in the 1990s.

Then you get to parts of Benghazi or other cities in eastern Libya, for that matter, and you meet very kind of western-educated computer, you know -- computer scientists, not that Islamists couldn't be computer scientists either, but people that would definitely identify themselves as kind of secular and liberal. It's a -- it's a remarkable breadth, I think, that represents the opposition.

Right now they're united, obviously, in the goal of bringing down Colonel Gadhafi's government, but what -- what unites them beyond that, I think, is not all that much. And I think as this goes on and if, in fact, we do see a stalemate, we're going to see the splits and those fissures, I think, start to emerge a little bit more forcefully.

BLITZER: You and your colleagues from "The New York Times" were held captive by the Libyans of Gadhafi, his forces, what, for six days. How -- first of all, how are you doing now that you've been freed for a while, you've had a chance to breathe?

SHADID: I'm doing fine here. You know, I'm in the United States. And obviously, the conditions are far better here. And I think as a journalist, you know, part of you wants to, you know, get over the experience, to try to move on. It's difficult in our situation, because we've lost someone that was close to us during that time.

I think the other part of you as a journalist feels that, you know, you're missing events at least for me, someone who's tried to cover the Arab world for a long time, you know, spent at least 15 years waiting for.

BLITZER: Because your other colleagues, Tyler Hicks, Steven Farrell, Lynsey Addario, how are they doing?

SHADID: They seem to be doing quite well. We're all in New York together. We've kind of started going our different ways. I think everybody is going to try to take a break for at least a little while from what we were doing before.

BLITZER: Your driver, Mohammed, he's still missing, right?

SHADID: And this is the person I was referring to. That's right. You know, when we were seized, when we were captured at that checkpoint outside of Ajdabiya, a gun battle started almost instantly. We went one direction, and our driver went the other direction. That's the last moment we saw the driver. His fate is still -- is still unknown.

We -- I have to say, I have to be honest with you, we fear the worst on that. But "The New York Times" has spent people to Libya to find out, to try to determine his whereabouts, whether he might be in custody, if he's not in custody, if he did die, and where his body might be. I think it's been incredibly difficult for his family and I think we as, you know, the journalists who, you know, got him there, got him to that checkpoint, we -- you know, we bear a very -- a very big burden over his fate.

BLITZER: I know you're getting ready to go back to the Middle East. Are you ready to go back to Libya?

SHADID: You know, I don't think I am, to be honest, Wolf. I very much want to continue covering these unbelievable events, I mean, events that, you know, a generation or perhaps more haven't witnessed in the Arab world. I do want to see that. But -- and I do want to cover that. But I think -- I think Libya at this point, it would probably be taking a few too many risks at this point to go back.

BLITZER: I think your family's happy to hear that. How are they -- how are they dealing with the fact that you're going back to the Middle East?

SHADID: I think my father still wishes that I went to law school, but I think at this point after 15 years of doing this, he's kind of resigned himself that I'll be going back, you know, probably sooner rather than later.

BLITZER: Are you going to go to Beirut?

SHADID: I am. I'm bureau chief in Beirut, and I hope to get to Egypt soon after. I think, you know, a lot of us who cover the region just realized that, you know, as dramatic as events are elsewhere in the Arab world, Egypt still is the fulcrum in a lot of ways over -- over where these rebellions, uprisings and revolutions are going to end up.

BLITZER: Thank you very much for joining us. Good luck. Be careful over there. And we'll hopefully have you on here on THE SITUATION ROOM on many occasions.

SHADID: Thank you. I appreciate it.

CNN's Nic Robertson has new information on a possible change of leadership in Libya. Nic is standing by live. Stay with us. We'll go to Tripoli right after this.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

BLITZER: We're getting some breaking news out of Libya. Let's go straight to our senior international correspondent, Nic Robertson. He's in Tripoli.

What are you hearing, Nic, about all of these reports that you've been on the cutting edge reporting a lot of them, of potential splits inside the Gadhafi family, specifically among his sons?

NIC ROBERTSON, CNN CORRESPONDENT: Wolf, I don't think we're seeing those splits at the moment. The family, from what we can tell from the sources we're talking to, are still pretty unified.

I think what is interesting, one of the interesting dynamics here is it's very clear that this diplomatic initiative -- indeed I've been told this deputy foreign minister who's traveling to Europe, to Turkey, to Greece at the moment -- the story or the sort of initiative that he's peddling is the initiative that Saif al Gadhafi should take over from his father. That we didn't know before. That's now very clear for us.

But one of the things that I've learned here, it seems to be in trying to sort of sell this narrative internally, one of the key things for Gadhafi to do is to convince the tribes in the country, those that are loyal to him, that still give him support, this that they should put their trust in his son, Saif al Gadhafi, and the family. And from other people, other sources that I've talked to, there's a feeling here that the sons are not really up to the job.

So Colonel Gadhafi handing off power at the moment is really dependent on him being able to convince some of the tribes to support the sons. Because if that doesn't happen, then you get a disintegration, then you get a lot of infighting, and then you get the chaos that we've heard people very close to the regime talking about, Wolf.

BLITZER: If Gadhafi, the father, handed over power to his son, Saif al-Islam al-Gadhafi and all the other sons were on board, presumably Gadhafi would go somewhere, either stay in the country or go someplace else. But do they really believe that the opposition, the rebels in Benghazi and elsewhere, would accept this Saif taking over, as opposed to Moammar Gadhafi remaining in power? In other words, would that be a big deal to the opposition?

ROBERTSON: I think to a certain degree here, the regime here is in a cocoon of its own making. It tries to write the narrative for the journalists here. It believes what it puts out on state television itself. It believes -- we've heard from Gadhafi, "My people love me." They believe this.

And I think one of the things that's troubling them at the moment is they're beginning to hear pushback from the opposition. They're beginning to hear that Saif al-Islam won't -- this idea of him taking over won't fly.

And they're also going to hear this now coming from the Italian foreign minister, who said now that they support -- the Italian government now supports the rebels, now see them as the sort of legitimate diplomatic point in the country at the moment, and they reject the idea of Saif al-Gadhafi taking over.

That, I think, is going to cause some consternation for the regime, because they're not really coming up with another idea at the moment.

Part of what Gadhafi wants to do, as I understand it from the sources we have, is see a safe transfer of power. The last thing he wants to see is that he hands over the country to somebody, and then it goes downhill and goes into flames. This is his view.

As I say, this is the narrative and the vision that they're locked in here. This is how they see it. And it isn't necessarily how the rest of the world sees it, but that's the point that they're coming from to negotiate on all of this.

Something else I learned interesting tonight, as well, is that Gadhafi really does seem to be seriously considering himself moving out of power, because he's already, from what I understand, thinking about his legacy here, how he is going to be remembered, how he is going to be enshrined into the history of Libya. Is his name going to be woven into the flag of the country, for example, or is he going to be remembered some other way?

So from the sources I have, I get a clear understanding that he really is thinking that his time is up. It's just the passing on of power, in the words of the source, needs to be a respectable solution, Wolf.

BLITZER: Sounds to me, at least as an outsider, he's living sort of in a dream world. He obviously believes what he's dreaming over there, but it sounds totally unrealistic, given what's happened over these past couple of months. If, in fact, he were to hand over power to Saif al-Islam Gadhafi, his son, would he stay in Libya or would he go to a third country?

ROBERTSON: I think there's an understanding that he would go to another country. You know, the way this thing it's been described to me is you can get into a process of negotiations here, but don't set as a precondition to the negotiations that Gadhafi has to leave. You will get that at the end of the negotiations, is what I'm being told, because he's ready to go. And that does seem to be an acceptance that he would move on to another country.

But -- but it's if everyone comes at the negotiations with his removal a starting point, then that seems to be a nonstarter from their side.

As you say, Wolf, his view and the regime's view of the world at the moment is not the same view that the rest of the world has, but this is a man who still believes that he has control of three-quarters of the country, still believes he has the support of perhaps 4 to 5 million out of the 6 million people here. Still believes that he has a strong enough grip on the capital of 2 million people that he can hold on for a lot longer.

So in a way, they're waiting for the world to sort of come around to their reality, to realize that the rebels can't defeat them, to realize that the rebels don't represent everyone, to realize that the rebels are fractured and don't have a unified voice and can't deliver some of this stability that even the rump of his regime can offer.

So that's -- that's sort of their position, Wolf. They're waiting for the rest of the world to come around and realize that he can't be pushed from power. As I say, that's their view. Obviously, the rest of the world is waiting for more defections.

BLITZER: Nic Robertson doing some amazing reporting for us from Tripoli. Thank you very much, Nic. We'll stay, obviously, in close touch.

Barack Obama's 2012 re-election campaign could top the price tag of his last run for the White House.

And the burning of the Koran in Florida enraged protesters in Afghanistan. Jack Cafferty has your e-mail.

All that and a lot more coming up.

(COMMERCIAL BREAK)

BLITZER: President Obama officially launched his re-election bid at the crack of dawn today. Sources tell CNN the campaign hopes to raise $1 billion. And if others do the same, we could be looking at a potential $3 billion presidential election.

Let's get some more from our senior analysts David Gergen and Gloria Borger.

Gloria, why does he need a billion dollars since he has no Democratic opponent for the Democratic presidential nominee -- nomination. He's got the benefit of being an incumbent president. Why does he need a billion dollars?

GLORIA BORGER, CNN POLITICAL ANALYST: Well, when you talk to senior Obama advisers, it's clear that whenever you run a presidential campaign, you think you're running defense. You're always running defense.

And today I spoke with a senior advisor who made it very clear he believes that the Supreme Court decision which allows corporations to give unlimited money to campaigns indirectly is really going to affect them.

And they say, look, it's not about what we can raise. It's how they can outspend us through these third-party so-called independent expenditure groups.

My question was, OK, you've got labor on your side, right? And labor will be able to spend money on your behalf in the same way that corporations can spend, presumably, for Republicans. And the answer is that labor doesn't have as much money as corporations. And by the way, the Obama administration has done some things that has gotten labor angry and could do some things in the future that won't make labor happy.

BLITZER: Yes. The last time he ran in 2008 he had 30 or 40 primaries and caucuses. He spent $745 million.

BORGER: Right.

BLITZER: This time he wants to spend a billion dollars with no opponent for the Democratic nomination. Has he, for all practical purposes, as Newt Gingrich is suggesting -- and I'll play a little clip from Newt Gingrich, David -- killed public campaign financing? Listen to Newt Gingrich.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), FORMER SPEAKER OF THE HOUSE: He has personally killed public financing. And Congress might as well just repeal it and save the money. Nobody will try to compete with Barack Obama with public financing. And he's, in effect, trying to create a Chicago-style machine for the whole country with a billion dollars. (END VIDEO CLIP)

BLITZER: Does he have a point there, Newt Gingrich, David?

DAVID GERGEN, CNN POLITICAL ANALYST: Well, Newt Gingrich may have a hard time winning elections, but he can be devastating in an argument. And he does have a point. And it is a valid point.

Last time around Barack Obama as a Democrat, as a liberal did refuse public financing. A lot of eyebrows went up when he did that. John McCain took public financing.

This time around I can't imagine a Republican taking public financing. It would make no sense. And obviously, the president isn't. So yes, for all intents and purposes, this cycle of public financing has been killed. Whether it will come back or not, we'll have to wait and see.

BLITZER: We're going to focus all this week on the $3 billion presidential campaign, guys. We'll continue this conversation tomorrow. Thank you.

Jack Cafferty is coming up next. Then a new controversy at Ground Zero.

(COMMERCIAL BREAK)

BLITZER: Let's head right back to Jack for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The question this hour is: "Should anything be done about that goofy pastor down in Florida who burned the Koran, which led to the killings of more than 20 people in Afghanistan?"

Bradley in Oregon writes, "If he bought the book -- if he bought his copy of the book, followed all trash burning and fire regulations in his area, then he did nothing wrong. Nothing needs to be done about someone exercising his First Amendment rights. Your question should actually be what should be done about murderous savages who deliberately slaughter the innocent, whatever their claimed motivation for doing so?"

J.F. writes from New Orleans, "There are many things I'd like to see happen to him, but at least the IRS could take away his church's tax-exempt status because of the political nature of his speech."

Frank in Pennsylvania: "To protect our right to speak out passionately for things that we defend, we have to be ready to defend the rights of those who express the very opposite opinion. I try to remember if somebody burns my Bible or flag, they're burning symbols, not the principles. Nor does it change my rights. That being said, I think the media should ignore the actions of a single persons. Much like the church that protests at military funerals, if we don't give them a stage, they don't have a message." Richard in Ohio writes, "Unfortunately, nothing will be done to this Neanderthal who put our troops at further risk by this stupid, ignorant behavior."

Benny writes, "There's nothing that can be done. They could stop him from running a church or any religious institution on the grounds of inciting violence. The people who need to be pulled into the 20th Century are the Afghans. They need to learn that not everybody believes in Mohammed or holds the Koran in high esteem, and there will be people who burn the Koran, whether they like it or not."

And finally, Gordon says, "He deserves to be ignored. All he wants is attention, which he gets from whatever kinds of people are drawn to a church of hate. I'd say that's enough. If I had any sense, I wouldn't read about him or respond, so I'm guilty, as well. As for the discord in Afghanistan, it's not his fault; it's theirs. The Afghan leaders who encourage or accept murder in response to a senseless, yet harmless act are far more complicit in the deaths than the pastor. No one should be allowed to kill somebody because of idiocy that's occurring 10,000 miles away."

Amen. If you want to read more, go to the blog, CNN.com/CaffertyFile.

BLITZER: I'm waiting to see if Hamid Karzai arrest anyone and prosecutes them for killing these United Nations officials.

CAFFERTY: Yes, that will happen. Maybe you could start with his brother.

BLITZER: But that's another story.

CAFFERTY: That's another story.

BLITZER: That's right. See you tomorrow. Thank you.

Controversy over the 9/11 memorial at Ground Zero. Why some of the victims' families right now are upset.

(COMMERCIAL BREAK)

BLITZER: Emotions from 9/11 victims' family members about new plans for unidentified remains. CNN's Mary Snow is joining us from New York with more on this growing controversy -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, you know, to date the remains of 1,123 people killed at the World Trade Center on September 11 have never been identified. That's roughly 40 percent of the victims. And a plan about where to put unidentified remains is drawing fire from some 9/11 family members.

(BEGIN VIDEOTAPE)

SNOW (voice-over): For Maureen and Al Santora, their son, Christopher, is never far from their hearts.

MAUREEN SANTORA, MOTHER OF VICTIM: He's always -- he's always with me.

SNOW: Maureen wears these necklaces every day, she tells us, to remember her son, who was a firefighter killed at the World Trade Center on 9/11, while some of Christopher's remains were recovered and buried, the Santoras are upset about a plan to place 9,000 unidentified victims' remains at a repository in the lower level of a 9/11 museum being built at Ground Zero.

AL SANTORA, FATHER OF VICTIM: I certainly don't want my son's remains, a part of him that is down there or in that group, to be in a museum. It just is -- it's just wrong.

SNOW: The Santoras joined a group of families Sunday to say they want something more in line with the Tomb of the Unknowns. And they say they were not told specifically about where the remains would be located.

(on camera) Your response to that?

ALICE GREENWALD, DIRECTOR, NATIONAL SEPTEMBER 11 MEMORIAL AND MUSEUM: Well, they were included.

SNOW (voice-over): Alice Greenwald is director of the National September 11 Memorial and Museum.

GREENWALD: I understand the difficulty and the sensitivity of this issue. You know, the decision to bring the remains to the World Trade Center site, to place them at bedrock, was the result of a process that involved family members.

SNOW: But families like the Santoras say not all of the 9/11 relatives were made aware of the issue. The museum is slated to open in 2012. Greenwald says the repository won't be accessible to the public. But the remains will be accessible to the medical examiner, who will have custody and continue to use updated technology to test and possibly identify them.

GREENWALD: And in fact, his commitment, which he has said explicitly, is that, as DNA analysis becomes more and more and more precise, he is committed to trying to make positive identifications going forward.

SNOW: While Greenwald calls this the most sensitive part of the museum and memorial, the Santoras say people making the decisions can't know their anguish.

M. SANTORA: It makes a big, big difference when you personally lost somebody that you loved and you are being told that decisions about their remains are not up to you.

(END VIDEOTAPE)

SNOW: And Wolf, the Santoras and other families are pushing the city. What they want to do is to send letters to all 9/11 family members notifying them what the current plan is and whether they agree with it or not -- Wolf. BLITZER: Our heart goes out to all those families, especially as we approach the 10th anniversary. Thanks very much, Mary, for that.

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

"JOHN KING USA" starts right now.