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U.S. Officials: Ten American Sailors Held by Iran; Iranian News Service: American Sailors 'Arrested'; Interview with Sen. Tom Cotton. Aired 5-6p ET

Aired January 12, 2016 - 17:00   ET

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

[17:00:03] JAKE TAPPER, CNN HOST: The State of the Union is just a few hours away. What does the president say about this? National security likely to be a central theme of the president's address. This urgent development could change what the president says tonight.

That's it for THE LEAD. I'm Jake Tapper. I turn you over now to Wolf Blitzer and THE SITUATION ROOM.

WOLF BLITZER, CNN ANCHOR: Happening now, breaking news. U.S. sailors seized. Ten U.S. Navy sailors, they are now in Iranian custody after two small U.S. Navy vessels entered Iranian waters. Urgent high-level efforts are underway now to try to secure their release.

Suicide blast. ISIS is blamed for a bloody attack on a U.S. ally. A bombing in Istanbul's tourist district kills at least ten foreigners. Turkey says the assailant recently arrived from Syria.

Russian missile move. Moscow says it will create new army divisions based in Europe and make five nuclear missile regiments ready for combat. President Putin says it's possible they could give Syria's president asylum. Are we now in a new cold war?

And President Obama's big night. The president puts finishing touches on his last State of the Union address. He'll speak just hours from now. Can he get his agenda on track or is he already just a lame duck? We want to welcome our viewers in the United States and around the world.

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

ANNOUNCER: This is CNN breaking news.

BLITZER: In the breaking news, ten American sailors are now being held by Iran after their two small U.S. Navy vessels apparently entered Iranian waters. U.S. officials say they hope the matter will be settled quickly. The secretary of state, John Kerry, has already made an urgent call to his Iranian counterpart.

A shattering blast ripped through historic district in Turkey's ancient city of Istanbul today. The area is popular with tourists. And at least ten foreigners were killed, most of them Germans. NATO ally Turkey is blaming ISIS for the suicide attack and says the bomber had recently arrived from Syria. And beset by crisis after crisis, President Obama's now preparing for

his final State of the Union address, only four hours from now. Aides say he'll strike an optimistic tone, trying to portray a nation on the rebound, and he'll seek to draw contrasts to the negative messages coming from the Republican presidential campaign trail.

I'll speak with Republican Senator Tom Cotton of the Senate Armed Services and Intelligence Committees. And our correspondents, analysts and guests, they will have full coverage of all the day's top stories.

Let's get straight to the breaking news. Ten American sailors held by Iran right now after two small navy vessels apparently entered Iranian waters. U.S. officials are scrambling to get them released as quickly as possible.

Let's go to our Pentagon correspondent, Barbara Starr, for the very latest.

Barbara, what are you learning?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, just a short time ago, a senior U.S. official told me these sailors may be spending the night in Iran, at least the hours of darkness at this point. It is not expected that they will be released, put back out to sea, on their boats until the daylight hours.

Two U.S. Navy Rivering small patrol aircraft equipped with .50 caliber machine guns and 10 U.S. Navy sailors, at this hour still believe to be pier side on Farsi Island in the Persian Gulf, an Iranian island.

The two boats were transiting, making a trip from Bahrain to Kuwait. We are told that right now, what the U.S. thinks may have happened is that one of the small boats experienced a mechanical problem, perhaps losing propulsion, perhaps beginning to drift, and of course, the other Navy boat would not leave those sailors behind.

It was at that point, the theory goes right now, that they drifted into Iranian territorial waters. It is believed they were picked up by Iranian naval personnel from Iran's Revolutionary Guard Corps which operates around Farsi Island. This is one of the most aggressive elements of the Iranian military and national security apparatus in that country.

Right now, Iran has assured the U.S. that all ten U.S. sailors are safe, that they are being treated accordingly, and that they will be released, they will be allowed to continue their journey up to Bahrain, one ship, a boat, disabled. We don't know the status of that. But this could go on for several hours, Wolf, before it is finally resolved -- Wolf.

BLITZER: This comes on the heels last year of several incidents, as you well know, in the Persian Gulf in the same very region where the U.S. suspected Iran was engaged in aggressive behavior.

In December, U.S. Navy revealed video of Iran firing rockets near warships. That was in December back in July. Iran flagged ships targeted. The U.S. -- some U.S. Navy vessels with lasers. In May five Iranian boats fired shots in the Persian Gulf not far away from U.S. ships. A U.S. flagship in April that was intercepted by Iranian patrols. It looks like there's a pattern going on here, but obviously, it's been a long time since Iran has taken U.S. military personnel under arrest, if you will. That's what the Fars news agency is saying: these ten American sailors are under arrest by the Iranians right now. This is a big deal.

STARR: Wolf, this is a very big deal, and it is substantively, militarily quite different than the incidents you're quite accurately recounting.

Because what you're talking about in this case is small, vulnerable U.S. Navy craft in these very tight, very tense waters. They are quick with .50 caliber machine guns.

But consider this. These are not big warships. They have a very limited ability to defend themselves. And if the Iranians come alongside and essentially say, "You're coming with us," the prospect very dismal of seeing U.S. Navy sailors potentially -- and I'm just saying potentially -- with the -- surrendering their weapons with hands up is a very dismal prospect.

But this has happened in the past. It happened to the British navy, several years ago during the height of the Iraq War in the Persian Gulf. Some small boats were boarded by the Iranians. The British naval personnel were taken to Iran for several days. A lot of propaganda value for the Iranians out of that incident. The British, not able to defend themselves.

And a very little-remembered incident in the very opening days when a very small U.S. naval craft also, its personnel drifted into contested waters, and a small number of U.S. military personnel were taken into Iran overnight. They were later released. That's an incident very few remember.

But the issue is on these small craft, very limited ability to defend themselves. The military, U.S. military always says everyone has the right to defend themselves. No reports at this point that shots were fired. That's a very difficult prospect in the face of Iranian naval authorities -- Wolf.

BLITZER: These were small vessels, indeed. But the U.S. has some big vessels, the Fifth Fleet in the Persian Gulf headquartered in Bahrain. These two little vessels were going from Kuwait to Bahrain. The U.S. has some major fire power in that region. Let see what the Iranians do next.

Stand by for more. I want to bring in our chief national security correspondent, Jim Sciutto. What are you hearing, Jim, because this is pretty alarming?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, I've just been in touch with a senior administration official just in the last few moments who tells me there is nothing to indicate anything hostile on the part of Iranian authorities in the detention of U.S. sailors and repeat the point that you mentioned earlier, Wolf, and that is that the U.S. has received assurances that these ten sailors are in good health and that they will be released very soon. Whether that's tonight or possibly several hours until daylight, that is what the administration is saying right now.

Keep in mind, the U.S. and Iran wouldn't have this kind of contact, for instance, Secretary of State John Kerry reaching out to his Iranian counterpart. A couple of years ago, that didn't exist, so they have channels there that didn't exist before.

I'll tell you this. The version of the story that is being presented to the Iranian public tonight is very different. The Fars news agency -- this is a state news agency in Iran. It is reporting that these ten sailors and in fact, it has this detail, Wolf -- and this is just the Iranian news agency -- that it is nine men and one woman, that they were arrested.

It also goes on to describe in great detail the weapons that were on these American boats. It says there were .350 caliber machine guns on the weapons. It says that the GPS detectors on the boats were confiscated by the Iranians.

And keep this detail in mind, as well, because this is very key. The Iranians are reporting that this was an Iranian Revolutionary Guard Corps personnel who picked up these U.S. sailors. That is key, because the Revolutionary Guard Corps, certainly very much from the hardliner camp in Iran. In fact, Iranian hardliners, they -- they have their own military. They have their own ground forces and naval forces.

And often in the past, those other cases you mentioned, Wolf, of firing rockets near a U.S. ship, chasing and detaining for a while a U.S. cargo ship, that was done by the Revolutionary Guard Corps. That shows a division in Iran.

The Iranian president, Hassan Rouhani, who, in effect, negotiated this deal, a different camp from the Revolutionary Guard Corps. They have a different agenda. It could be a key detail as we watch this play out going forward.

I would just make this note based on Barbara's reporting there, that if those sailors are held until daylight in Iran, we're talking about six, seven hours from now, with the time difference, keep in mind that would bring those sailors to be in Iranian detention during the president's final State of the Union speech tonight, when he is almost certain to mention the Iranian nuclear deal negotiated with Tehran.

[17:10:06] BLITZER: And as you well know, U.S. officials have long said there are two Irans out there, the Iran Revolutionary Guard Corps, which operates on the one hand, and the other government that the U.S. has been dealing with, Kerry has been dealing with, the foreign minister, the president. On the other hand, it's the ayatollah, who's the supreme leader. He makes the final decision, if the Revolutionary Guard wants to parade these American sailors in front of cameras, show that they were arrested. They can do that. SCIUTTO: That's absolutely right. The other key piece of timing

here. The State of the Union address tonight. The Iran nuclear deal, it looks like, will be implemented in the next several days as soon as Friday, I've been told, by administration officials. But sometime this month.

And when that happens, implementation means the lifting of these punishing economic sanctions on Iran. So the timing of this, even if it was an accident, if it wasn't planned, impossible not to make that connection between those two. Not to say that was the motive but that timing certainly does not look good for the administration.

BLITZER: Yes. We're going to find out from the U.S. Navy what those two small vessels were doing. We know they were en route from Kuwait, where the U.S. has a major naval facility, on their way to Bahrain, which is the headquarters of the U.S. Navy's 5th Fleet in the Persian Gulf. We're going to find out exactly what they were doing, these two small Navy vessels, with ten sailors on board.

Stand by. I want to bring in Republican Senator Tom Cotton of Arkansas. He's a key member of the Senate Intelligence and Armed Services Committee. He's also a combat veteran who served in both Iraq and Afghanistan.

Your reaction, Senator, to the fact that Iran is now holding ten Americans. They say they've arrested these ten American sailors, and they are in Iranian custody, together with those two small vessels.

SEN. TOM COTTON (R), ARKANSAS: Wolf, this kind of openly hostile action is not surprising exactly what I and so many others predicted when President Obama was negotiating the nuclear deal with Iran, that it would embolden their aggression towards the United States and our allies in the region.

Also want to react, though, to something Jim Sciutto said just before I came on. He said, according to a senior administration official, there's no sign of hostile intent by Iran.

Think about that for a second. Senior members of Barack Obama's administration are apologizing for Iran, seizing two U.S. Navy vessels and holding ten sailors hostage. The White House, tonight, is a hotbed of cold feet.

BLITZER: It comes just before, four hours before the president's address, before a joint session of the U.S. Congress. And in that speech, we were told the president would mention the Iran nuclear deal as a very positive step you, together with all the Republicans, voted against it. It's about to be implemented, as Jim Sciutto said. Billions and billions of dollars in sanctions are about to flow to Iran. Is there anything you can do to stop that?

COTTON: Wolf I don't think the timing of this intercept of our two naval vessels in the Persian Gulf is coincidental. Rarely are matters coincidental when you're dealing with the ayatollahs in Iran.

First off, it's humiliating to Barack Obama and, therefore, the United States to have American sailors held hostage during his final State of the Union.

Second, as you say, the nuclear deal is about to be implemented, maybe as early as this week, in which Iran is going to get over a hundred billions of dollars to continue its campaign of terror and aggression throughout the region and around the world. This is the ayatollahs trying to inflict maximum humiliation on the United States and on President Obama.

Unfortunately, that's been the story we've seen since the nuclear deal was signed in the summer, and it's what we can expect to continue for the next coming months. It won't be the final humiliation. It's just one more sip from this bitter cup that we'll be offered again and again.

BLITZER: You used the word "hostages," Senator. A lot of us remember, 1979, 1980 when American diplomats at the U.S. embassy in Tehran, they were taken prisoner. They were held hostage for 444 days. When you used the word "hostage," are you referring to that experience? Because that would be awful, obviously.

COTTON: Well, Iran has a history of holding American hostages and trying to kill Americans, whether it's in Iran or Iraq or Lebanon. And now, they've seized two U.S. naval vessels.

I would say put the map of the Persian Gulf back up on the screen, Wolf, and your viewers can see how improvable it is that those naval vessels go in from Kuwait to Bahrain along the Saudi coast would have ventured into Iranian waters. It would seem to me much more likely that Iran waited the time when they would have maximum leverage to conduct this operation, as Jim Sciutto noted by the Revolutionary Guard Corps, the shock troops of the Iranian regime.

BLITZER: Because I've always suspected -- and I know U.S. intelligence analysts have always suspected that the Iranian Revolutionary Guard Corps, in this particular case much more hostile to the United States than the government, per se, the foreign minister, Jivad Zarif, or the president, Rouhani, that there are, in effect, two Irans. One supports the Iran nuclear deal. They're trying to make it work. But the Revolutionary Guard Corps has always been skeptical, opposed, but they've been forced to go along, because the ayatollah says they should go along.

How do you see that division within Iran?

COTTON: Well, Wolf, there may be two Irans, but the division isn't between moderates and hardliners. It's between hardliners and harder liners. The Revolutionary Guard Corps is intent on spreading the Islamic revolution around the world. That's the founding principle of the Islamic Republic of Iran. The Revolutionary Guard Corps is the keeper of that revolution, and they are largely responsible for killing our soldiers in Iraq and Afghanistan. It's not surprising now that they're boasting on Iranian TV that they intercepted two small naval vessels and are holding 10 American sailors hostage.

BLITZER: Stand by, Senator. We have a lot more to talk about, including some suspicion out there, already out there that this Iranian Revolutionary Guard Corps, they would like to scuttle this Iran nuclear deal for whatever reason.

Stay with us. We're following the breaking news. Ten American sailors now being held by Iran, as well as their two small Navy vessels. We'll be right back.

(COMMERCIAL BREAK)

[17:20:30] BLITZER: Following breaking news with Republican Senator Tom Cotton of Arkansas.

Senator, I want you to stand by. Ten American sailors and nine men, one women -- one woman, they are now being held by Iran after their two small U.S. Navy vessels, apparently, if you believe the Iranians, entered Iranian waters. U.S. officials say they hope the matter will be settled quickly. I want to get an update from our chief national security correspondent, Jim Sciutto.

You're getting more information coming in. What are you learning?

SCIUTTO: I spoke with a senior defense official just now. They're trying to examine how to this happened. Two working theories are either an engine stopped working, they drifted into these waters and went ashore because of that, or perhaps there was a navigational error.

But from both defense officials and administration officials, I'm being told that this was not an overtly hostile act. They weren't surrounded, taken in, this kind of thing. That's at least what the administration is saying now, based on what it knows right now.

To be clear, as we said just a few minutes ago, what you're hearing from the Iranian press is somewhat different. They're talking about these two small U.S. Navy boats being armed, detailing how many weapons they had on board, saying they confiscated GPS equipment on board from this.

And also a key detail, just to remind our viewers, this is -- they were taken by forces from the Iranian Revolutionary Guard Corps, which is from the hard lined camp in Iran. Whether that is significant, we will only know as more details come out.

But in past hostile acts, in and around U.S. assets in the Persian Gulf, including just a couple of weeks ago firing at missiles very close to U.S. aircraft carrier. It was the same IRGC, the Iranian Revolutionary Guard Corps, that did that. Taken at the time certainly as a message of toughness.

But what the administration is saying right now, keep in mind of the timing, just a couple of hours from the State of the Union address, is they're not reading anything overtly hostile, that they've been given assurances that the sailors are safe and that they will be released soon.

But as our Barbara Starr was reporting, they may not be released until daylight. And that is still several hours away, which means they would still be in Iranian custody while the president is making the State of the Union address.

BLITZER: Was there any indication, Jim, that these two vessels had any mechanical problems that require them to be taken to shore?

SCIUTTO: That is what they're investigating now. That is one of their possibilities, that it was a mechanical problem or possibly a navigational problem that led them to go onshore, which is what is an Iranian island in the middle of the Persian Gulf. Also factoring into the decision. It's 2 a.m. in the morning there right now.

Would it be safer for them to be repatriated, as it were, in the morning during daylight hours, as opposed to immediately? But none of that can minimize the potential -- not just potential but the actual difficulty of this year. You have U.S. and Iranian forces in close contact here, questions in particular. Here's the key question. Were these U.S. Navy boats taken under duress at gun point? Whether they voluntarily go ashore. We don't have the answer to that question yet.

BLITZER: There nine men, one woman, these ten...

SCIUTTO: According to the Iranians.

BLITZER: ... sailors, according to the Fars news agency, which is the official Iranian news agency.

Senator Cotton, you're still with us. Your reaction to the latest information that we're getting? And I just want to point out we have a picture of a vessel similar to the two vessels that are now in the custody of the Iranians.

This is what that vessel looks like. This is not one of the two, but this is similar to what is now under Iranian control and the Iranian news agency, Fars, says these ten Americans are under arrest. Your reaction?

COTTON: Well, I'm glad you have that image up, Wolf, so Americans can see. These are very small vessels. Not much bigger than what you might find on Lake Darnell on a weekend.

Jim Sciutto's reporting remains to me astonishing. The administration is rushing out officials to say there's no hostile intent in Iran's seizing our ships and holding our sailors incommunicado, President Obama and his administration seems more intent on protecting Iran and protecting their nuclear deal than getting our sailors back.

Look, if you put up the map of the Persian Gulf again, Wolf, Americans can see for themselves how unlikely it is that those two ships drifted from the coast of Saudi Arabia, which is the path they were taking from Kuwait to Bahrain, into Iranian waters.

However, even if they did, Wolf, even if they did enter Iranian waters, what would we expect a responsible, civilized country to do? They would immediately let those sailors contact the U.S. 5th Fleet in Bahrain.

If we had a Mexican ship that came into our waters or if one of our ships were in the Saudi Arabian waters, that's what we would expect that country to do for us. That's what we would do for them. The fact that they feel comfortable holding these ships and these sailors and parading their weapons on Iranian TV goes to show just how emboldened the nuclear deal has made Iran.

[17:25:05] BLITZER: We've translated the Fars news agency report. Senator, Fars is the official Iranian government news agency.

They say these two American vessels were each equipped with three .50- caliber machine guns, one on the front. We got a picture of what these vessels look like: one on the front. We've got a picture of what these vessels look like. One on the front, two on the side.

The Fars news agency says they illegally entered Iranian waters about two kilometers inside Iranian waters. They say the information, as these two vessels were moving, was recorded by GPS devices. And they are now, the Americans and the two vessels, in the hands of the Iranian Revolutionary Guard.

It specifically says the Iranian Revolutionary Guards. It doesn't say the Iranian navy. There are differences, right?

COTTON: Yes, Wolf, the Revolutionary Guard Corps are the shock troops of the Islamic revolution. Their reason for being over the last 37 years has been to export revolution around the world and to support terrorism around the world, including against American troops in Iraq and Afghanistan, or our diplomats in places like Lebanon.

It's not surprising that the Revolutionary Guard Corps would be in charge of holding American sailors' ships like this. Nor, in my opinion, is it surprising that it happens hours before Barack Obama gives his final State of the Union and just days before we might be releasing over $100 million to Iran.

This is an effort by Iran, in all likelihood, to humiliate the United States and Barack Obama and to exert maximum leverage with the emboldened hand that President Obama gave them with this nuclear deal.

BLITZER: But Senator, if the Iranians keep -- if they hold these ten Americans hostage, if you will, if they keep this U.S. -- these two U.S. vessels under their control, that whole Iranian nuclear deal, that could go away. And there are some suspicions -- I've heard it, I'm sure you have -- the Revolutionary Guard Corps, they never liked this deal to begin with. They'd like nothing better than to see it go away. Do you buy that?

COTTON: Well, one would certainly hope if Iran doesn't promptly release these sailors that President Obama would not proceed in releasing $100 billion to them. But Wolf, I frankly have my doubts.

Let's just take stock of a few of the things that happened over the last six months since that deal was reached. Iran has violated U.N. Security Council resolutions about ballistic missiles. It's fired rockets within a few hundred yards of U.S. naval ships in the Strait of Hormuz. It's convicted Jason Rezaian, a "Washington Post" reporter held hostage, on trumped up false charges. It's taken two more Americans hostage. It's raided and burned the embassy of a U.S. ally, and now it seized two U.S. Navy vessels and held ten sailors incommunicado. That's -- that's a picture of an emboldened Iran and a White House that has, at every point, conciliated and appeased Iran so it can keep its nuclear deal.

BLITZER: When the Saudi embassy in Tehran the other day was ransacked and burned in the aftermath of the Saudis executing about 40 convicted terrorists, including one top Shiite cleric, you believe the Revolutionary Guard Corps was directly responsible for the takedown, for the burning of the Saudi embassy in Tehran?

COTTON: Wolf, I believe that in a theocratic dictatorship like Tehran, embassies aren't raided and burned without the implicit or even explicit support of the key factions within the regime.

BLITZER: We're now getting more information, Senator, from another Iranian news source. They claim these two vessels were, in their words, rescued by the Iranians, because they were going through some technical difficulties. Have you heard that?

COTTON: I have not, Wolf. But again, if these ships experienced technical difficulties and happened to drift into Iranian water that was so far away from their path, why have we not heard from these sailors?

Why has Iran not allowed them to use their radio to radio to the Fifth Fleet in Bahrain and say, "We're OK. The Iranians have us in custody. They're going to help us get back to Bahrain"? Why have we not heard that?

I think because the reports are saying on Iranian television tell the accurate story. Not the defenses you're hearing from Iran out of the Obama administration.

BLITZER: So what do you want the Obama administration, Senator, to do?

COTTON: Well, President Obama should make it very clear, these sailors and both vessels are to be put on radio or on a telephone with naval officials in Bahrain immediately to assure their safety and their whereabouts, and they're to be immediately released. If they're not released, the Iran deal will not go forward, and military force will be on the table to retaliate for this act of aggression.

BLITZER: What do you mean military force?

COTTON: I mean all options, Wolf.

BLITZER: Specifically, would you see this as a justification for the U.S. trying to go in there and bring back these ten American sailors?

COTTON: Well, Wolf, any time American service members are held hostage we always have justification for trying to free them.

But Iran's continued reign of terror and aggression in the Middle East gives more than ample justification to lead all allies in a campaign against Iran. The best way for them to avoid that now is account for our sailors and immediately return them to U.S. custody.

[17:30:07] BLITZER: So when Pentagon officials and other U.S. officials say they have information these ten Americans will be released promptly, are you accepting that?

COTTON: Well, it depends on what you mean by promptly, Wolf. Iran in 2007 seizes British ships and sailors and didn't release them for 13 days. At the time, they claimed they were in Iranian waters, but we've quickly learned through that incident that those British sailors had been in international waters. But whether they release troops in the next 13 minutes, the next 13 hours, or the next 13 days, it still goes to show just how emboldened Iran feels after the nuclear deal.

BLITZER: Is there a difference in interpretation and definition of Iranian international waters in the Persian Gulf or are the U.S., the Iranians, other countries in the region all on the same page, which is international waters, which is Iranian waters, which is, for example, Bahrainian or Kuwaiti or UAE waters? Is there some sort of problem there?

COTTON: Well, here and there, there are some disputed waters, Wolf. But it's fairly clear under international laws what is and is not a country's territorial waters.

And again, if you'll put the map of the Persian Gulf on the screen, Americans can see for themselves how improbable it is that a ship broke down and drifted across the gulf from the western side of the gulf on the Saudi coast to the Iranian territorial waters.

But even if they did, why has Iran not let the soldiers communicate with their higher headquarters, why have they not begun to immediately make provisions for returning them to the 5th Fleet in the Persian Gulf? It's because they feel emboldened, and they can act in such a reckless fashion.

BLITZER: If one of those vessels did suffer some mechanical failure, it's hard for me to believe both simultaneously, coincidentally, both suffered some mechanical failure. But if one of them did, would the other vessel automatically stay close to that vessel, just for protective purposes?

COTTON: Well, Wolf, I share your skepticism. But you're also right that those two ships were not separated.

Another point to raise is if one vessel did have mechanical problems and lost power and began to drift. It's at least possible that the other vessel that still had power might have moored up to it, prevented it from drifting into Iranian waters. That's why I'm deeply skeptical of the claims you hear coming out of Iran and apparently even some quarters of our administration.

BLITZER: I know you're -- you're like everyone anxious to hear what the president of the United States is going to say about this tonight. I assume he'll have to mention this in the State of the Union address. Specifically, what words would you like to hear from him?

COTTON: Well, I think it would be a welcome relief to Americans and, frankly, much of the world. The president took a very hard line and simply said Iran must release these sailors immediately.

Otherwise, the nuclear deal with Iran will be immediately canceled and rescinded, and they won't receive that $100 billion.

This is something similar to what Jimmy Carter did in the last year of his presidency. After three years of feckless foreign policy, once the Soviet Union invaded Afghanistan, and Tehran took over our embassy and held Americans hostage, he toughened up. He learned from his past mistakes. Unfortunately, after seven years of Barack Obama's impotent foreign policy I don't expect to hear that tonight.

BLITZER: Senator, hold on for a moment. Jim Sciutto, our chief national security correspondent, is still with me.

Jim, I just wanted you to update our viewers here in the United States and around the world the latest information that is now coming in to CNN.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Let go through the details here. Two small U.S. Navy boats encountered a problem, whether that was navigational or mechanical. The administration, the DOD, is now attempting to confirm. When they encountered that problem, they either voluntarily or involuntarily ended up in Iranian territorial waters, around an island in the Persian Gulf. This was during a trip from Bahrain to -- from Bahrain...

BLITZER: From Kuwait to Bahrain.

SCIUTTO: Kuwait to Bahrain. And that is when those sailors, who the Iranians say included nine men and one woman, were taken or chose to be taken or went ashore of their own volition. We don't know the answer to that question. They are now in Iranian hands on this island.

Now, the administration and the Defense Department, officials from both tell me that this was not a hostile act and that they've received assurances from the Iranians that, one, those sailors are in good health, they're safe, and that they will be released very soon.

And the reason they're not being released at this very moment is because it's past 2 a.m. in the morning in the Persian Gulf, and to release mariners in those conditions at night would be unsafe for them. So they're considering it prudent, they say, to wait until daylight, and they have assurances that that's when they will be released.

To be fair, Wolf, and you and I have talked about this, from the Iranian side, at least as this incident is being reported in the Fars news agency, which is the Iranian state news agency, they used the term "arrested" to describe how these sailors were picked up, although we have a more recent report with an Iranian news agency saying that they were rescued.

They also, though, describe, the Iranians, the weapons that were on board these ships, and they talk about some equipment being confiscated. And I'll just add a point that I made before, that these Iranian forces that took these Americans were from the Revolutionary Guard Corps. This is, in effect, the military wing of the hardline elements in the Iranian government. So certainly have a different approach and view to the U.S. than others in the Iranian government, including those who negotiated the nuclear deal.

[17:35:10] So, from the administration, they're saying that this is not -- this not a dire situation.

SCIUTTO: But let's be honest here, Wolf. It's taking place just hours from the president's final State of the Union address when he's likely to mention rapprochement, the Iran nuclear deal, which is going to be implemented this weekend and that, of course, time and key, as well.

Nuclear deal with Iran that is meant to be implemented this weekend, and you have this very difficult, to say the least, diplomatic and military issue of U.S. sailors being in the hands of the Iranians.

The key question now, is that voluntarily? Did they go ashore because they had a problem and, out of an abundance of caution, because of their safety, they went ashore of their own volition or was it under duress? Were guns drawn? These are questions we don't have the answers to right now.

BLITZER: Yes, it's obviously a very murky situation. But a very dangerous situation.

Bottom line, though, ten American sailors, according to the Iranian news agency for us, nine men, one woman. They are, according to Fars, the Iranian news agency, under arrest. A separate Iranian news agency says they were rescued because they were -- the two vessels were suffering some sort of mechanical problem.

I want to go back to Senator Tom Cotton. What has always been intriguing to a lot of people is why, in the process of negotiating this nuclear deal, the other Americans, including Jason Rezaian, "The Washington Post" reporter; Amir Hekmati, a former U.S. Marine, a U.S. citizen who's a Christian cleric, why weren't they released as part of the Iranian nuclear deal? Why are they still being held, some of them now, for years?

COTTON: Wolf, that's a very good question that I and many others, including many Democrats had throughout the course of these negotiations. Iran was holding at least four American hostages. They've since take two more hostages. Rather than releasing Jason Rezaian, they convicted him on trumped up, false charges.

The Obama administration should have never sat down with an outlaw regime that was holding American hostages. That should have been a precondition for any kind of negotiations, not a term that was ultimately excluded entirely from a final deal. Again, it's just one example of the long series of concessions that

the president has made towards Iran that has emboldened them to feel, for instance, today, like they can hold vessels and American sailors under arrest as their own news agencies say.

BLITZER: Senator, I want to thank you very much for helping us. We're following the breaking news. Senator Tom Cotton of Arkansas has been with us. Senator, thank you very much.

We're going to get White House reaction. That's coming up. Jen Psaki, the president's communications adviser, she's going to be joining us, as well. We're following the breaking news. Ten American sailors, nine men, one woman, according to the Iranian news agency, Fars, they are under arrest. The two U.S. Navy vessels, they've been detained by the Iranian Revolutionary Guard Corps. Much more on the breaking news right after this.

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BLITZER: We're following the breaking news. Ten U.S. Navy sailors, nine men, one woman, they are now being held by Iran after their two small U.S. Navy vessels, according to the Iranians, entered Iranian waters in the Persian Gulf.

Iran's semi-official news service says the sailors have been arrested, urgent efforts clearly underway right now to try to gain their quick release.

Let's go to our senior White House correspondent, Jim Acosta. Jim, what are you learning?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, this is like an October surprise right before the State of the Union, but the White House, at this point, is urging calm. I talked to a U.S. official just a few moments ago who said that the administration has every expectation at this point that this matter will be resolved promptly and that the sailors will go on their way.

This official did note, as Jim Sciutto is mentioning, it is the middle of the night over in Iran. So it's not the best time for these sailors to resume their journey. So Wolf, that is an indication that this is probably not going to be resolved before the State of the Union.

But clearly, this is not what the president wants to be dealing with just hours before his final State of the Union address. Keep in mind, an address that is expected to highlight -- I'm told it will highlight -- the Iran nuclear deal. This is a legacy-defining issue for this president.

Senator Cotton was saying a few moments ago that the president should issue an ultimatum, if these sailors are not released promptly, that the Iran deal goes away. Keep in mind, Wolf, this is a multilateral dealing not just between the U.S., the U.S. and Iran but other countries. And so I can't imagine the White House issuing that kind of ultimatum tonight. I think they want to try to get these ten American sailors out as

quickly as possible. They certainly don't want to do anything that's going to undermine that effort and issuing a direct threat presumably the Iranian Revolutionary Guard, the so-called hardliners in Iran, would react very, very fiercely.

So I can certainly understand why the administration would want to see if this can be resolved quickly, quietly without a lot of fanfare. The priority right now, get those ten Americans out of Iranian custody, get those two U.S. Navy vessels back in U.S. control, as opposed to Iranian control.

But you say the president was going to talk about the Iranian nuclear deal. I understand he was also going to talk about the normalization of diplomatic relations with Cuba...

ACOSTA: Correct.

BLITZER: ... citing these two issues as great foreign policy achievements.

ACOSTA: That's right. Wolf, I am told that tonight the president is going to present a defense of the Obama doctrine: that -- diplomacy first, unilateral action second.

And according to a White House memo that we obtained on the State of the Union address, President Obama will be forward looking, I'm told, in tonight's speech. He will be vowing to the American people that he will keep them safe in the battle against ISIS and talk about the things he still wants to get done.

[17:45:02] And as one of the president's top advisers told me, I think they were hoping that this was going to be the big headline tonight, Wolf, but obviously it's being overshadowed by the situation in the Persian Gulf. The president is going to push back tonight against these, quote, "embarrassing Republican comments," that are being made out on the campaign trail. That's according to Valerie Jarrett, a senior adviser to the president that I talked to earlier today.

White House officials tell me that the president will make one last push for gun control, closing the terror detention center at Guantanamo, passing criminal justice reform and defeating ISIS. But make no mistake, Wolf, the president wanted to come out and talk about the Obama doctrine, talk about how the country has gone through two wars and that he is essentially tried to get them out of this war, and that this is no time to go it alone with any kind of unilateral action and starting a large ground war in the Middle East.

He was going to talk about this Iran nuclear deal, talk about normalizing diplomatic relations with Cuba, but now all of it has this cloud hanging over it, the situation with Iran. You have to think inside the White House right now, they are extremely nervous about what is happening, minute by minute, with this very tense situation.

WOLF BLITZER, CNN ANCHOR: Yes, 10 American sailors now in custody of the Iranians. This is an awkward moment, especially for the president right now, a few hours from the State of the Union address.

Jim Acosta, thanks very much. We'll get back to you. I know you're going to get more information, more reaction from the White House.

We're also standing by to speak with Jen Psaki, she's the communications adviser to the president. We'll get her take on what's going on as far as this Iranian situation is concerned as well.

I want to bring in -- right now I want to bring back our chief national security correspondent Jim Sciutto along with our chief political analyst Gloria Borger and our CNN political commentator Ryan Lizza, the Washington correspondent for the "New Yorker" magazine.

Guys, we're following breaking news, only a little bit more than three hours away from the president's State of the Union address. Stick around, more information is coming in. Let's take a quick break.

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[17:51:33] BLITZER: We're following the breaking news. Ten U.S. Navy sailors, nine men, one woman, they're being held by Iran right now after two small U.S. Navy vessels, according to the Iranians, apparently entered Iranian waters of the Persian Gulf. Iran's news agency says the sailors have been, quote, "arrested."

Want to bring back our chief national security correspondent Jim Sciutto along with analyst Gloria Borger and our CNN political commentator Ryan Lizza.

You're getting more information on what U.S. officials are saying.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, two quick points. One, we're learning that these two small U.S. Navy boats were in the vicinity of this Iranian island to be refueled by a larger U.S. ship. It's not clear that they were refueled, so it raises another possibility as to what the maintenance issue was, and that's that they simply ran out of gas. We don't know that at this point.

But another point I'll make is this, these are Revolutionary Guard corps troops, that -- they're sailors, I should say, that took them into detention. Their area of responsibility is the entire Persian Gulf from the coast there all the way up to the Straits of Hormuz, so they would be the ones they would come into contact with.

But I will say this, the Fars News Agency that said that these sailors were arrested, that is the media arm of the Iran Revolutionary Guard Corps. So the Revolutionary Guard's story -- I'm not saying that's a hard news organization, but the Revolutionary Guard's story on this is that they were arrested. That's the message that they're putting out there.

BORGER: Or rescued, which is it?

BLITZER: Yes.

SCIUTTO: Well --

BORGER: Arrested or rescued?

SCIUTTO: The Revolutionary Guard are just saying arrested.

BLITZER: Yes, the Revolutionary Guard says arrested. Some more moderate Iranians say rescued, if you will.

BORGER: Right.

BLITZER: This is a really awkward moment, only a few hours, Gloria, from the president's State of the Union address, during which he was going to hail the U.S.-brokered Iran nuclear deal.

BORGER: Sure, you know, talk about stepping on your message, right? This is a moment for the president to look at his legacy, to talk about -- to set the table, essentially, for the Democratic nominee for the presidency, whomever that is, to talk about his achievements. And obviously, he looks to the Iran nuclear deal as one of his major achievements of this administration. And here you have this embarrassing situation.

The question I have, Wolf, is does the president mention it, or can they actually get it resolved before 8:00 tonight when he goes on the air? I think that's what they would like. They're clearly downplaying it now in every interview the White House press secretary has given, including to Jake Tapper. So, you know, we have to see whether they can move quickly enough so he doesn't have to talk about it.

(CROSSTALK)

SCIUTTO: But if they're waiting for daylight, it won't be in time.

BORGER: Well, right. Exactly.

BLITZER: The president delivers the State of the Union address at 9:00 p.m. Eastern.

BORGER: At 9:00. Sorry. We're on at 8:00.

BLITZER: Which is, what, about --

BORGER: Stay tuned.

BLITZER: About 5:00 a.m., as sunlight is just beginning over the Persian Gulf.

BORGER: I'm looking at the countdown clock. In three hours, right.

BLITZER: And as I was saying, Ryan, the president was going to be welcoming the Iranian nuclear deal, saying this has effectively ended Iran's nuclear program.

RYAN LIZZA, CNN POLITICAL COMMENTATOR: Yes, look, I think whether he addresses it tonight or not will depend on whether the White House thinks talking about it publicly will help or hurt the effort to get these sailors back home. You know, on the one hand, his whole argument tonight about national security was going to be about diplomacy and the benefits of diplomacy, and his view is that this nuclear deal with Iran pushes relations with Iran forward.

And when things like this happen, when there are incidents where our sailors come in contact with theirs, and if they're arrested, if that's accurate, that actually having some kind of a relationship with Iran will help us resolve this more peacefully.

[17:55:04] So, in a sense, an issue like this, a conflict like this is exactly the kind of test of the Obama doctrine that he was going to talk about tonight, so --

(CROSSTALK)

BLITZER: What's clear is that --

BORGER: Just the thing that couldn't happen tonight.

LIZZA: Yes .

BLITZER: The Secretary of State John Kerry, he immediately got on the phone. I assume he called Javad Zarif, the Foreign minister.

BORGER: Right.

BLITZER: Or some other high-ranking Iranian official.

LIZZA: A decade ago --

BLITZER: To try to get these Americans out.

BORGER: You couldn't do that.

SCIUTTO: Two years ago, you wouldn't have had that channel.

BLITZER: Yes. That channel is a very, very robust channel.

Stand by. We're following the breaking news, 10 American sailors now in the custody of the Iranian Revolutionary Guard Corps. We'll get White House reaction. Jen Psaki, the communications adviser to the president, she'll join us live.

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[18:00:09] BLITZER: Happening now, breaking news. Americans held by Iran.