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U.N. Approves U.S. Plans for Iraq; U.S. Faces Challenge of Protecting Its Citizens From Terror

Aired May 24, 2003 - 10:00   ET

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

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


JOSIE KARP, CNN SPORTS CORRESPONDENT: A little later ON THE STORY of the golfer who shook up the sport with a blonde ponytail and a pretty good game.
LIZ NEISLOSS, CNN U.N. PRODUCER: I'm Liz Neisloss in New York. What a difference a war makes. A United Nations stamp of approval for U.S. plans in Iraq.

ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT: And I'm Andrea Koppel in Atlanta on the story of how the U.S. is facing new challenges of protecting its citizens not just at home, but around the globe.

We'll be talking about all of these stories.

We'll also go to Israel and Kelly Wallace will talk about what the U.S. and what Jerusalem is trying to do to move things ahead on the road map for peace.

And we'll listen to the president's weekly radio address, released later at this hour.

We want to hear from you. E-mail your questions to cnn.commonthestory, but Sheila MacVicar gets us started first.

SHEILA MACVICAR, SR. INTL. CORRESPONDENT: It's been a pretty busy week here in Riyadh, I have to say. But -- and the thing, of course, which is of greatest concern, is the continuing high level of security.

You know, of course, that the U.S. and other embassies here in Riyadh were closed beginning on Wednesday.

Well, we've heard that the German and the British have reopened here today; the American is still closed, of course, for the Memorial Day holiday. And all of this against a backdrop of continued security alert which has checkpoints all over Riyadh -- all over the country, as a matter of fact, and it has to be said, it's maybe a little quiet now but it's still a pretty jittery place.

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: Sheila, I imagine that -- I imagine that a whole attitude has changed over there. Sheila, I'm sorry.

I imagine that the whole attitude has changed over in Saudi Arabia. Can you just describe, you know, what are people's fears now? Are people waiting over this weekend for the other shoe to drop?

MACVICAR: The attitude has changed. Terrorism was something that until about two weeks ago -- those triple attacks on that Monday night -- that happened some place else.

And the Saudis didn't even grasp the import of the participation of 15 Saudi Arabia nationals in 9/11 and understand how that affected people in the United States or even people in Europe. It was something that happened in other places and to other people.

These attacks brought home the problem. They brought the problem to their front doors. And on Saudi TV they have seen pictures of Arab families, Muslims, and even Saudis who were wounded in those attacks.

So there is, there's a tremendous sense of outrage. There are people who are saying -- including the government, but beyond the government, who are saying, you know, it's no longer just enough to say that you condemn these attacks. We are going to condemn people who even try to find a justification for these acts.

So, yes, that's all changed and it has to be said there will still be pockets, there will still be places where there will be people who will resist the reforms that the state's trying to put into place to try to deal with these issues.

KOPPEL: Sheila, I know U.S. officials certainly feel that based on the kind of cooperation that they've been getting on the ground since the investigation began, which has been quite good, that the attacks did shake up this Saudi kingdom.

But what kind of concrete changes are they making on the ground beyond sort of the public condemnations?

MACVICAR: Listen; some of the things that they are talking about are things that will take a generation to implement.

They're talking about changing the educational curriculum.

They're talking about insuring that what is said in the mosques does not preach intolerance or hatred for the West or for Christians and Jews.

That's something that -- the question of what is preached and what is -- will be sort of acceptable is something that can be dealt with fairly quickly.

But you have to remember that there are many thousands of people in this country who have listened to sermons over the years, who have preached a different brand, if you will, which has said things, which have been against the West.

There are many thousands of people here, men who left here who went and fought in Afghanistan, in Chechnya, in Bosnia. There is a pool of support here and we know that there is still a pool of support here because those people who carried out the attacks, those people who planned those attacks, they are still believed to be in Saudi Arabia, but as far as we know the authorities have yet been unable to find any of them.

And you have to remember they've started looking for most of those people about ten days before the bombing took place.

NEISLOSS: So Sheila, we've been hearing a little bit about some cooperation with government authorities between the U.S. and the Saudis -- what do you hear? Is there really genuine progress, are things really, really progressing in any way?

MACVICAR: Well in terms of progress, in terms of the investigation front, there are a number of people who are now in Saudi custody.

Last weekend they said that there were four people who they believed had information. We know that there's a number of other people who've been arrested since. We don't know how many of those other than the folks who were arrested at Jeddah Airport on Monday night are significant and those three people clearly are very significant.

In terms of the cooperation between the Americans and the Saudis, you'll remember in the past where it was really the situation between the FBI and Saudi investigators had gone from bad to being even worse. The Khobar Towers investigation a perfect example. The FBI wasn't allowed to even interview those suspects.

In this circumstance, we seem to have a better situation, at least so far, where there is better cooperation, and that probably is a reflection of both the Saudi concern and the Saudi willingness to be seen to cooperate on this issue.

SNOW: Sheila, what's it been like covering this story? I saw a piece you did yesterday about a 2-year-old that frankly made -- brought tears to my eyes. Are people very open about it, is the anger out there in the open, is it hard to talk to people?

MACVICAR: It's a subject that's on everybody's mind. Every place you go, all this week, you go -- you know, to buy a newspaper, you go talk to someone, everyone is talking about what happened. People are still in shock.

This was considered a very safe place. Not just a safe place for Westerners to live, but a safe place -- a safe place for families, a place where, as I said before -- you know, terrorism was something that happened somewhere else and to other people.

That has changed now; people really feel that they may be under threat. People talking about the traffic jams that are caused by these checkpoints and sometimes these traffic jams go on for miles.

They say listen please, please, please -- please check us -- we want to know that we are safe. We know that if the police are out here doing something, at least we may be a little safer than if they were not.

So, there is a real concern, there is real fear, and there is real fear because those attacks, although they have been in the West largely portrayed as being against Westerners -- here they are seen in many cases as having -- whether intentionally or not, many people believe intentionally having hit at Arabs and Muslims in the same way that the attacks took place in Morocco.

That is a big change and that has produced, as I said, a lot of anger. And families -- I mean, what can you do when you see pictures like the Kaili (ph) family who are really struggling to come to terms with what happened to them, what happened to their neighbors, what happened to their neighborhood.

KOPPEL: So Sheila, what kind of impact do you think these suicide bombings will eventually have on the U.S.-Saudi relationship which as you know since 9/11 has been on a -- on a virtual roller coaster ride?

MACVICAR: Well, that's a really interesting question and you -- I think you describe it really well. It has been a roller coaster ride, it has been -- you know the Saudis talk about the amount of cooperation that they have given; they talk about the intelligence cooperation.

But, clearly, you know there were problems and frictions in that relationship and there is only in the aftermath of the bombing as though it had been agreed before. There had been an intelligence cooperation committee set up between U.S. and Saudi authorities so that they can, they hope, in real time exchange what may be very important intelligence information.

There are ways, basically, that they are working on the relationship to be more open, to have a better exchange of information. And the question really is what happens in the future here. How do these reforms progress. How do the leaders of Saudi Arabia see themselves and their country in the future and how do the people see the leaders? That's really a very, very big question.

KOPPEL: Well, our thanks to Sheila MacVicar in Riyadh who has been on the ground now for a number of days and I know that you have to get back on the story as soon as you finish with us. What's on your agenda today, Sheila?

MACVICAR: We were just at the National Guard Hospital talking to some of the survivors of the attack, but you know you were talking about how difficult is this story to cover -- well, one of the things we're trying to get some traction on, if you will, is just where exactly the investigation is.

How many people have the Saudis got in custody, how valuable are those people, and where are they making progress, or perhaps not making progress? And it has to be said publicly this investigation has moved very, very slowly.

KOPPEL: Well, we are certainly enjoying watching your reports from here. Sheila MacVicar in Riyadh, thank you very much.

The Saudi attacks turned up the heat on U.S. authorities to protect Americans around the world. I'll talk about whether that is an impossible task when we're back in two minutes.

ANNOUNCER: Andrea Koppel is CNN's State Department correspondent. She joined CNN in 1993. She is a former CNN Beijing Bureau Chief and Tokyo correspondent.

ON THE STORY is brought to you by Oracle E-Business Week. All your applications engineered to work together. All your information in one place.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: I would not want to see all travel shut down. I hope Americans will continue to travel, but that they will do it in a way that reflects the danger in a particular area of travel.

(END VIDEO CLIP)

KOPPEL: Secretary of State Colin Powell about the huge challenge of combating terrorism and protecting potential victims. We're back ON THE STORY.

There are about four million Americans who live overseas. That's the rough estimate. And millions more who travel abroad as tourists. And when it comes right down to it, Americans need to know that they are not guaranteed protection by the U.S. government when they're overseas and so what can they do to get information?

The State Department advises that Americans look on their web site, that really is point number one. Go there and see if there are any travel warnings for the country that you are either living in or that you're planning to go to. Look out for those public announcements that are listed.

And fundamentally, in some instances, it is dangerous to be abroad in certain countries. Use common sense and you should stay away from public -- very public settings where there are large crowds of Americans or Westerners.

And it really is disconcerting and I can see how difficult it is for Americans to make a decision whether or not they do want to take that vacation because it takes a lot of the fun out of it when you're always looking over your shoulder.

NEISLOSS: Andrea, I have my e-mail basically set up to get those State Department travel advisories, and I have to say there isn't a day that goes by that there isn't some country that pops up, or two, or three.

And it is pretty detailed information on what to avoid, what not to do, but -- but what does this mean also though for the actual State Department posts around the world?

Do -- how do they get their warnings? KOPPEL: Well, they get it in many -- many of the same ways that the rest of us do. In fact, the government has to release this information. It's -- by law -- ever since the Pan Am 103 bombing they've had to do this and they get alerts that are posted and many of these posts, many of the U.S. Embassies and consulates have heightened security already since 9/11 and even going back to 1998, but what they do is they put extra guards out there. That's not the same thing that can be done necessarily outside hotels, outside schools.

They rely on the host government and as we saw just last week in Saudi Arabia, the U.S. government did ask for increased security and the Saudis were sort of like, my gosh, we can't put increased guards outside all of the various facilities that the U.S. government wants us to -- that's not necessarily an acceptable answer as far as the U.S. is concerned but it's the reality on the ground.

SNOW: So Andrea this week the code -- the terror threat level went up to orange as I think every American knows now. And there was a lot of talk on -- in the media about this tape that came out from Ayman Al-Zawahiri warning -- a very clear warning he is calling on Muslims to essentially attack Americans overseas.

How did the State Department read that tape and how worried are they at this point?

KOPPEL: Well, it's interesting. To answer the second part of your question, they're still not sure if it is the real McCoy. In fact, some of our colleagues' sources have said that because the tape wasn't a very good quality this broadcast they may never know.

But in terms of their read of the tape, it's our understanding talking to State Department officials that the U.S. government had actually gotten wind of this tape as recently as Saturday or Sunday last weekend and that Secretary Powell had spoken with the foreign minister of Qatar where Al-Jazeera the satellite TV network is based.

Had asked the foreign minister to use his influence with Al- Jazeera to keep what the U.S. believed was the most inflammatory section of the tape from being broadcast, the part calling upon Muslims to light a fire under the feet of Westerners.

And that actually did not happen, that tape was broadcast, which was why you heard so much anger coming from the podium and coming from Secretary Powell because they felt they had assurances from the government of Qatar that they weren't going to air the tape. When push comes to shove, though, what the Qatar government will say is it's a free media. They don't have that kind of influence, much as the U.S. government doesn't exercise influence over what CNN can broadcast, they can't exercise influence over Al-Jazeera.

SNOW: Andrea, I want to ask you about some criticism of the State Department. We all remember a few weeks ago the former Speaker of the House Newt Gingrich sort of attacked Colin Powell and the State Department. He's going to do it again. I was at a luncheon with him yesterday where he said that he's going to write an article coming out in "Foreign Policy" magazine. It'll be on newsstands next month. And in that article he's going to take some more shots at the State Department essentially. He says it's not personal, it's not about Colin Powell, but it's about the structure of the State Department. He thinks that essentially the diplomats are being too nice to -- to -- dictators, he would say around the world and that you know they don't carry the president's message effectively. How's the State Department going to respond to that?

KOPPEL: Oh, I think we can take a pretty good guess based on the last time that the former speaker made his -- made his comments, criticizing -- again the State Department and Secretary of State Powell -- they will likely say that the Speaker is actually criticizing President Bush because after all Secretary of State Powell only carries out what President Bush wants him to do in terms of executing foreign policy. But you know this is an institutional situation, it certainly not new with the Bush administration -- this has existed for decades.

The diplomats who work at the State Department, their job, they see it, is to try to bring about as amicable a relationship with various governments around the world as possible. Some people might say that's a good thing, clearly former Speaker Gingrich thinks that they're coddling dictators. So I think it depends upon your perspective and certainly depends upon the policy that you're talking about.

If you're looking at Iraq, certainly Secretary of State Powell was trying to find a diplomatic solution but again when push came to shove the president decided time had run out and Secretary Powell stood behind him and did everything he could.

NEISLOSS: And I think on Iraq and on all these international issues I think from overseas the diplomats are saying it -- these splits we know all about them, they kind of roll their eyes at this point and just wait till Washington hashes things out.

SNOW: One respite from the hard realities of a dangerous world, the saga of Annika Sorenstam. We all watched it. Who won, who lost and was it really the battle of the sexes? Josie Karp is on the story in two minutes.

ANNOUNCER: Josie Karp is a correspondent for CNN Sports. She joined CNN in 1998. Earlier she covered the Dallas Cowboys for the "Fort Worth Star-Telegram." She graduated from Harvard.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ANNIKA SORENSTAM, PROFESSIONAL GOLFER: I'm very, very pleased to have played all day and -- was I nervous on the tee.

(END VIDEO CLIP)

KARP: That's Annika Sorenstam, the world's best female golfer, talking about what a nerve-wracking experience it was to test her game against the men.

Annika Sorenstam is gone now here in Fort Worth. I'm Josie Karp on the story of a historic week here. Even though Annika Sorenstam did not make the cut, she left an impression and it was one of those events where you almost had to be here to really understand the magnitude of it.

Just a couple of things really stick out. One is on Thursday morning when Annika Sorenstam was walking up the 18th fairway, the way the crowd greeted her with such cheers. You would have thought it was Sunday at the Masters or something like that. And that support continued all week long.

So that was one thing that you just don't see. And then it was the way that Annika Sorenstam reacted to all of the support from the crowd. She's someone who has been criticized sometimes for being too stoic, but she was so emotional.

She said going into this that this was a test for her, this wasn't about men versus women, it wasn't about humanity, it was about one human being and she really showed that with her emotions and probably changed the minds of a lot of people who thought it wasn't a good idea for her to be out here.

KOPPEL: Josie, behind the scenes did you find many young girls, teenagers, who were on the sidelines watching as well and what message do you think they could or should take away from Annika's two days on the links?

KARP: There were so many of them you couldn't even count them and they would wear "Go Annika" buttons, some of the girls would make their own T-shirts and their own hats. And the thing that Annika Sorenstam said -- she was asked why do you think the crowd responded to you so much and she said the reason is because I'm out here living my dream and that's the message that she appeared to be sending to all of those little girls. And not just the little girls, to the little boys -- the guys -- anyone who was watching.

It was hard to not be touched by what she was doing.

NEISLOSS: But we all did -- we all did hear some of the harsh comments from the male golfers. Is there a sense that she really with what she's achieved broke some barriers, that she really did actually open the gate for other women?

KARP: Well, what -- she said is this really wasn't about open gates for other women to get out here on the golf course and compete with the men on a regular basis. She wanted this to be something about her and being a competitive person wanting to test herself.

On Thursday you had a lot of people saying she shot a one over 71, that she proved that she could -- she alone -- could compete with the men and maybe there'd be some other women out there who might like to try.

But that was the real victory in terms of her game. There are certainly guys out here today who will say that she showed the next day that women have no place out here but the overriding effect that Annika Sorenstam had was that she showed dignity and class and she was doing something that she wanted to do and there really wasn't an ulterior motive.

SNOW: But Josie does it in some way just to play Devil's Advocate prove that maybe there should be a separate league for women -- there were a lot of men, I know, who came out and said, some of the golfers came out and said, you know, there's a reason why there are two different leagues.

KARP: Well, it showed that the best female golfer in the world can't compete with the men for a title in her first tournament. And it probably showed that on a regular basis the best woman in the world isn't going to win a lot of money on the men's tour.

But she didn't by any means embarrass herself and there weren't a lot of people saying it shows that there's a huge gap in the men's game and the women's game. But it did prove a point that there's a place for Annika Sorenstam to win championships and that's not here.

KOPPEL: So where do we go from here? Liz was asking about whether or not other women would play but I mean was this more than just Annika testing herself and an opportunity for advertisers to make a lot of money?

KARP: Well I think just listening to her and seeing the emotions that she showed afterward, it was clear that this was something that was so personal to her.

She had been criticized for maybe seeking publicity -- that this was all a publicity stunt. Anyone who was there watching her speak at the end of her round yesterday, I would defy them to say that today. It was so clear that this was so personal to her.

NEISLOSS: But I have to ask about some...

KARP: You're not going to believe this -- we've got a shot going -- we've got a shot that needs to be played right here -- on the golf tournament, and the tournament director is asking me to keep my voice down, so I'm going to give you my golf voice and let you pick it up for just a minute.

NEISLOSS: Well the golf whisper is very appropriate then. But I have to ask you about the money. What does this mean for her in terms of endorsements and contracts?

KARP: Well she's definitely going to get deals out of this that she would not have gotten before.

SNOW: Josie can't say anymore.

KARP: I'm going to have to give you the ultimate golf whisper.

KOPPEL: Josie, I'm not going to use the golf whisper and I'm going to thank you very much for joining us today. What is next ON THE STORY for you for the rest of your day?

KARP: I'm going to stay right here.

KOPPEL: OK, terrific, all right, Josie, thanks.

Straight ahead, what difference can it make for President Bush to go to the Middle East and is it really kiss and make up at the United Nations?

Up next, a check on the headlines at this hour and live to Kelly Wallace in Jerusalem.

ANNOUNCER: Kelly Wallace is a CNN International correspondent. She was born and raised in Brooklyn, New York. She studied economics at the University of Pennsylvania's Wharton School. And she was a CNN White House correspondent during the Clinton and Bush administrations.

(COMMERCIAL BREAK)

KOPPEL: Iraq could begin exporting oil again in about two weeks. That's according to the country's top oil official. The expectation comes after the U.N. lifted its trade sanctions against Iraq on Thursday.

Iraq hopes oil production will be up back to about 1.5 million barrels a day by mid-June.

In Baghdad it was payday for civil servants. First to get paid are electric utility workers, struggling to get the power back on. They are getting three months salary and a thirty-dollar bonus.

The first case of Mad Cow Disease in North America in a decade has been traced to a farm in Alberta, Canada. Investigators are looking into how many calves the infected cow produced and what it ate.

Illegal cattle feed is considered the most likely cause of infection. Thirteen farms in three provinces are now under quarantine. The U.S. has banned all beef imports from Canada.

New trouble at "The New York Times." "Newsweek" magazine and "The Columbia Journalism Review" say the paper has suspended Pulitzer prize-winning reporter Rick Bragg. He's accused of not crediting a freelance reporter in a story about Florida oystermen. This comes after the resignation of "Times" reporter Jayson Blair, who the paper said plagiarized and fabricated stories.

Now let's go back to ON THE STORY.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Let's see the man in the eyes before he will blow himself (ph) and he was taking with him, I saw pieces of legs (ph) here in my car this is the paper (ph) that was in the car, it was blood on it.

(END VIDEO CLIP)

KELLY WALLACE, CNN JERUSALEM CORRESPONDENT: A man we talked to Monday night reacting to the fifth suicide bombing in a 48 hour period.

Welcome back, I'm Kelly Wallace ON THE STORY, in Jerusalem. That violence appeared to deliver a sharp blow to that so-called Mid East road map. But one week later somewhat of a breakthrough.

Israeli Prime Minister Ariel Sharon is now saying he can back that road map and plans to take it to his Cabinet for a vote as early as tomorrow.

This is all paving the way for a possible three-way summit involving U.S. President Bush and it would be the U.S. president's biggest leap yet into this Israeli-Palestinian conflict.

NEISLOSS: It seems though the terrorism and these waves of violence have usually pushed the Israelis away from the negotiating tables, so what's different here, what brought Sharon on board?

WALLACE: American pressure, Liz. American officials were pressing the Israelis to go ahead and accept this road map even with reservations to get the process going.

Prime Minister Sharon spoke on the phone with President Bush; we are also told other Israeli officials have been on the phone. One official, in fact, meeting in Washington during the week. The message was the Americans needed the Israelis to come out and accept this.

The Israelis said they needed conviction that the Americans would take into account their concerns. You had a White House statement coming out on Friday saying it will take into account those concerns. So the Israelis say they got the guarantee they needed.

SNOW: Kelly, I guess I'm still wondering, though, are we any closer this time around to a real deal and I'm wondering particularly about the new Palestinian prime minister Mahmoud Abbas, is he in control, is he in a position to negotiation, are we really going to see something happen?

WALLACE: Well right now he's been on the job just about three weeks and so far he hasn't really achieved much success. He started meeting with one of the radical Palestinian groups, the group Hamas, which claimed responsibility for four of the five suicide bombings we saw last weekend -- Hamas is saying so far it will continue its attacks against Israelis so that meeting broke up with no breakthrough.

The Israelis are saying they need to see the prime minister now doing something on the ground, and they are saying now that they are going to accept this road map, he has to deliver and so, Kate, the key question really is can he really reign in these radical Palestinian groups?

American officials definitely want to see some results before convening that three-way summit meeting. Knowing President Bush will have a lot on the line to make sure the Palestinians are going to come out of it doing something on the ground.

KOPPEL: Kelly what's your read on the ground there? We know that even though Prime Minister Sharon says he accepts that it obviously still has to go through his cabinet, he has said, however -- maybe he's not talking about it as much in the last day but that he still has reservations among them concern about right of return of Palestinian refugees and dismantling settlement outposts.

What makes you believe, if you do, that a meeting with President Bush, Mahmoud Abbas and Prime Minister Sharon would be anything more than just another photo opportunity?

WALLACE: I hate to be the cynic, Andrea, but it's not clear that it won't just be sort of another summit meeting. I guess the key difference is American pressure right now.

One analyst we talked to -- it's interesting -- did say that Prime Minister Sharon, he believes, was a bit surprised by the pressure coming from President Bush right now. That the president is urging him to accept this road map. That the prime minister did not think that pressure would be coming right now.

So the key question will be if the Americans are really going to put pressure on both the Israelis and the Palestinians -- the Palestinians to improve security and crack down on these groups and then the Israelis to take steps such as pulling troops out of Palestinian towns, easing travel restrictions, freezing settlement activity.

Right now it is unclear, Andrea, the key question is how much pressure is going to come from the White House and right now some people are saying they are a bit surprised. They think more pressure is coming than they thought might be coming at this point in time.

SNOW: Kelly, stay with us for some more conversation after this quick break. Both the Middle East and the United States Congress searching for the same thing this week, compromise. I'll be talking about taxes and terrorism when we're back ON THE STORY in two minutes.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... which is able to identify problems facing the American people and get things done. These are can-do people.

(END VIDEO CLIP)

SNOW: Strong presidential praise, finally, for the Congress he had roughed up in recent weeks for failing to deliver the full tax cut that the president wanted. Welcome back, we're ON THE STORY.

The president showing up at the Capitol the other day praising the Congress. But I got to tell you; it was like an episode of "Survivor" Washington-style.

They took, essentially this week, a bunch of Republicans, put them in a room, notably the two top tax writing guys, Senator Chuck Grassley and Congressman Bill Thomas, who both had very strong ideas about what they wanted in his tax cut bill, and I'm told that behind that closed door it was very -- to put it politely -- intense behind the door.

I'm told that Chairman Thomas, he's -- every one sees him as a brilliant man but has -- he has a very strong temper. I don't think that's any secret in Washington.

And I'm told he erupted a few times; they had to bring in Vice- President Cheney to finally smooth things over twice they had to bring him in to smooth things over and get this tax bill through.

So the president sort of getting what he wanted but it was a rough ride getting there.

WALLACE: Kate, I'd like to ask you about -- I'm taking -- I'm sorry, Andrea, I was going to ask Kate a question. In terms of the prospective of this tax bill -- how it was crafted, what it will mean in terms of implications for 2004, how much will Republicans and the Bush administration really concerned about this bill when it comes to the president's reelection chances?

SNOW: Yes, well that's a big part of this. Politics, you know, politics always plays into these kind of decisions. We ended up with essentially the Senate number, 350 billion in tax that's over ten years, but the House policy in terms of the dividend tax, the tax on stock dividends and capital gains reduction.

A lot of stuff crammed into that $350 billion -- one of the things that's tricky about it is the way they crammed it in that number is they sort of lowered taxes for now, bring them back in a couple of years, and then they go down again because of the 2001 tax cut that's already law.

Somebody called it the yo-yo tax cut. Senator Max Baucus called it a yo-yo. And the reason that it's all in there again it comes down to politics, the president wanted to get whatever he could get out of this Congress so that he can go on the road and say look I cut your taxes; we're helping the economy.

One Republican told me this week -- a Republican member of the House told me, the reason that some of these tax cuts go away in just two years is no coincidence. That's 2005 and that means that, you know, they're going to be out on the campaign trail, you'll hear the president saying vote for me because I will extend that tax cut, don't vote for the Democrats who will bring back higher taxes.

KOPPEL: Well, Kate, you were mentioning the heated words coming from many of those opposed to the tax cut. Some of them I read from Senator Dayton from Minnesota, Democratic Senator who called it the shameful looting of the federal treasury. SNOW: Well, one of the things that Democrats say, Andrea, is that if you really do the math, if they are going to extend the tax cut beyond just a few years, the math ends up being more than $800 billion over ten years, so Democrats will say and have said that this thing is going to bust the federal government.

This is going to put us in the red, it's going to increase the federal deficit and that has an impact down the road, according to some economists, on interest rates and growth. Republicans, of course, singing a completely different tune and say this is getting money into people's pockets, investors pockets, it's going to jump start the economy.

NEISLOSS: So you still have yelling on both sides, I guess, and with this whole yo-yo. Is there any way of saying who wins in this?

SNOW: Well, I think it's a pretty big victory for the president because again all this fine print is really probably not going to make it -- I hate to say it -- but it's -- most people aren't going to look at the fine print.

Most people are going to say, hey, I'm getting a check in the mail and that's great because you know if you have children you're going to get a check this summer, once the president signs this into law. $400 per child if you make under $110,000 a year. That's a lot of families out there are going to get checks in the mail.

NEISLOSS: Well, we now go from politicians in Washington to those international politicians called diplomats at the United Nations here in New York.

I'm ON THE STORY of the U.S. return to the United Nations, this time for a win. And have the bruises of the Iraq war debate been forgotten? We're back in two minutes.

ANNOUNCER: Liz Neisloss is CNN's United Nations Senior Producer. She graduated from Dartmouth, joined CNN in 1990, and she won the U.N. Correspondents Association "Gold Award" for her reporting in 1999.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KOFI ANNAN, SECRETARY GENERAL, UNITED NATIONS: This is a product of a compromise and in a compromise, no one gets all that they want, and we do have a compromise solution and we have to work with it.

(END VIDEO CLIP)

NEISLOSS: United Nations Secretary General Kofi Annan telling reporters this week whatever the battles were over Iraq, let's all move on.

He's also talking about the agreement to allow the U.S. and Britain to control Iraq and use its oil riches to rebuild. Welcome back we are ON THE STORY. This week was a pretty big win for the United States with a resolution that lifted sanctions; this is 13 years of sanctions. It also gives control to the U.S. of Iraq's oil.

They will set up a fund called the Iraqi Development Fund. The money will go from the oil revenues into that fund and the U.S. will be able to decide how that money will be spent. Sanctions lifting means planes can fly in and out, commercial planes, people, goods, all the things that normal countries without embargoes can experience, a market economy can revive again.

It means people can invest in Iraq -- so it will be helpful.

SNOW: Liz is this, though, is the behind the scenes story here about the French and the Germans and the fact that we're all sort of back on the same -- the U.S. and them are all back on the same page?

NEISLOSS: Well, they're back on the same page for now. It was described by one analyst, I thought very well put, as a marriage of convenience. During these discussions they -- the diplomats were saying things like, look, we're in no mood for a battle. But it was clear, these countries were maybe on the wrong side of the war, but they did not want to be on the wrong side of the peace.

So they had to work things out. Also very importantly, they all have bilateral interests with the U.S. and they want those to be moved forward; they don't want to get stuck in the past. The German ambassador told reporters we can't undo history, we have to help the Iraqi people so there's a big mix at play here -- it remains to be seen if this marriage of convenience will hold, though.

WALLACE: Liz, you were telling us the Syrian ambassador did not show up, left his seat empty. What is that about and what's the significance here?

NEISLOSS: Well, it's not the first time that has happened -- the Syrians did not have instructions from their government, they pleaded for more time -- the Security Council president decided in consultation with the U.S. and the U.K., the sponsors of this resolutions, no, no more time.

Syria now says maybe they're playing both sides; they would have supported the resolution. They are the Arab voice on the Council. So they do have to consider their constituency.

WALLACE: Liz I know from the original draft to the one that was finally voted on there were about 90 changes made and the U.S. had said prior to the vote that they wanted a U.N. role, a vital role, but not U.N. rule -- how did things end up. How much of a role will the U.N. be playing?

NEISLOSS: It was a big push. France, Germany, and Russia really wanted to see a strengthened U.N. role. What they ended up with still even according to U.N. officials is a little bit vague. This U.N. representative who we now know is going to be filled by a very seasoned, very well-liked diplomat will be there to coordinate humanitarian, to help get the politics, the new institutions up and running in Iraq, but it's really very unclear how much authority they actually will be given. They will be independent, but how much they can actually do remains to be seen.

KOPPEL: Liz, you know, obviously the U.N. got such a black eye back in March -- are they going to announce any U.N. weapons inspectors again; is there any movement for that?

NEISLOSS: That's actually the very ironic part of this whole story. We all remember, and I spent a lot of time talking about Hans Blix and weapons inspectors being front and center -- that is -- was -- originally not even going to be in the resolution.

The U.S. did not and still does not want those weapons inspectors back. Every other Security Council member, including their allies, the British, they would like to see a return of the inspectors in some kind of role for them in a last minute concession that got in. They will revisit the issue.

SNOW: Well my thanks to my colleagues and thank you all out there for watching ON THE STORY. We'll be back next week.

Still ahead PEOPLE IN THE NEWS focusing this week on Melissa Etheridge and Margaret Cho.

At 12 noon Eastern, 9 a.m. Pacific, CNN LIVE SATURDAY, and at 1 p.m. Eastern, 10 a.m. Pacific, IN THE MONEY on how the raised terror alert will effect you and me this Memorial Day weekend.

Coming up at the top of the hour a news alert, but first we'll listen to the president's weekly radio address.

(BEGIN VIDEOTAPE)

BUSH: Good morning. This week Congress took vital action to create jobs in America. Following the outlines of a jobs and growth package I announced in January, members of the House and Senate reached agreement on a bill to strengthen our nation's economy by reducing income tax rates, lowering the marriage penalty, increasing the child credit from $600 to $1,000, increasing the expensing the allowance for small business investment, and significantly reducing taxes on dividends. These tax cuts will go into effect immediately, and some retroactively.

About 25 million families with children will see their child credit increase and will receive checks of up to $400 per child. And 136 million Americans who pay income taxes, including 23 million small business owners who pay taxes at the individual rate, will see their taxes lowered.

By leaving American families with more to spend, more to save and more to invest, these reforms will help boost the nation's economy and create jobs. When people have extra take-home pay, there's greater demand for goods and services. And employers will need more workers to meet that demand.

A higher expensing allowance will help small firms, including farms and ranches, to buy new equipment so they can become more productive and expand their operations. They will also have more money to add new employees. And reducing the tax rate on dividends will help shareholders across America, from teachers invested in 401(k) accounts, to seniors who depend on dividends for their financial well being.

I appreciate the leadership of Congressman Bill Thomas of California and Senator Chuck Grassley of Iowa, who worked with their colleagues to hammer out a final agreement. This achievement is a victory for every family struggling to pay the bills, every entrepreneur hoping to expand the business and create new jobs and every American looking for work. I look forward to signing this jobs and growth legislation in the coming week.

I will also work with Congress to bring down the budget deficit that has resulted from war, recession and terrorist attacks. Faster growth in the economy will bring more revenues into the federal Treasury. Yet moving toward a balanced budget also requires that we hold federal spending to a responsible level. Spending discipline is crucial to my economic program. I urge the Congress to set priorities and stick to the responsible budget plan they passed back in April.

By that measure, discretionary federal spending will rise by 4 percent, about the same as the increase in the average American family's income. Governments should not grow faster than worker's paychecks. Governments should follow the example the American families by setting priorities and staying with them.

Our citizens and our economy have endured great challenges over the last two and a half years. Yet this nation's workers and entrepreneurs, who remain the most productive in the world, are rising to meet every challenge. Our economy continues to grow, and inflation and interest rates remain low. With new relief for the taxpayers, we have laid the foundation for even stronger growth in the years ahead and more jobs for American workers.

Thank you for listening.

(END VIDEOTAPE)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





Protecting Its Citizens From Terror>


Aired May 24, 2003 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOSIE KARP, CNN SPORTS CORRESPONDENT: A little later ON THE STORY of the golfer who shook up the sport with a blonde ponytail and a pretty good game.
LIZ NEISLOSS, CNN U.N. PRODUCER: I'm Liz Neisloss in New York. What a difference a war makes. A United Nations stamp of approval for U.S. plans in Iraq.

ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT: And I'm Andrea Koppel in Atlanta on the story of how the U.S. is facing new challenges of protecting its citizens not just at home, but around the globe.

We'll be talking about all of these stories.

We'll also go to Israel and Kelly Wallace will talk about what the U.S. and what Jerusalem is trying to do to move things ahead on the road map for peace.

And we'll listen to the president's weekly radio address, released later at this hour.

We want to hear from you. E-mail your questions to cnn.commonthestory, but Sheila MacVicar gets us started first.

SHEILA MACVICAR, SR. INTL. CORRESPONDENT: It's been a pretty busy week here in Riyadh, I have to say. But -- and the thing, of course, which is of greatest concern, is the continuing high level of security.

You know, of course, that the U.S. and other embassies here in Riyadh were closed beginning on Wednesday.

Well, we've heard that the German and the British have reopened here today; the American is still closed, of course, for the Memorial Day holiday. And all of this against a backdrop of continued security alert which has checkpoints all over Riyadh -- all over the country, as a matter of fact, and it has to be said, it's maybe a little quiet now but it's still a pretty jittery place.

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: Sheila, I imagine that -- I imagine that a whole attitude has changed over there. Sheila, I'm sorry.

I imagine that the whole attitude has changed over in Saudi Arabia. Can you just describe, you know, what are people's fears now? Are people waiting over this weekend for the other shoe to drop?

MACVICAR: The attitude has changed. Terrorism was something that until about two weeks ago -- those triple attacks on that Monday night -- that happened some place else.

And the Saudis didn't even grasp the import of the participation of 15 Saudi Arabia nationals in 9/11 and understand how that affected people in the United States or even people in Europe. It was something that happened in other places and to other people.

These attacks brought home the problem. They brought the problem to their front doors. And on Saudi TV they have seen pictures of Arab families, Muslims, and even Saudis who were wounded in those attacks.

So there is, there's a tremendous sense of outrage. There are people who are saying -- including the government, but beyond the government, who are saying, you know, it's no longer just enough to say that you condemn these attacks. We are going to condemn people who even try to find a justification for these acts.

So, yes, that's all changed and it has to be said there will still be pockets, there will still be places where there will be people who will resist the reforms that the state's trying to put into place to try to deal with these issues.

KOPPEL: Sheila, I know U.S. officials certainly feel that based on the kind of cooperation that they've been getting on the ground since the investigation began, which has been quite good, that the attacks did shake up this Saudi kingdom.

But what kind of concrete changes are they making on the ground beyond sort of the public condemnations?

MACVICAR: Listen; some of the things that they are talking about are things that will take a generation to implement.

They're talking about changing the educational curriculum.

They're talking about insuring that what is said in the mosques does not preach intolerance or hatred for the West or for Christians and Jews.

That's something that -- the question of what is preached and what is -- will be sort of acceptable is something that can be dealt with fairly quickly.

But you have to remember that there are many thousands of people in this country who have listened to sermons over the years, who have preached a different brand, if you will, which has said things, which have been against the West.

There are many thousands of people here, men who left here who went and fought in Afghanistan, in Chechnya, in Bosnia. There is a pool of support here and we know that there is still a pool of support here because those people who carried out the attacks, those people who planned those attacks, they are still believed to be in Saudi Arabia, but as far as we know the authorities have yet been unable to find any of them.

And you have to remember they've started looking for most of those people about ten days before the bombing took place.

NEISLOSS: So Sheila, we've been hearing a little bit about some cooperation with government authorities between the U.S. and the Saudis -- what do you hear? Is there really genuine progress, are things really, really progressing in any way?

MACVICAR: Well in terms of progress, in terms of the investigation front, there are a number of people who are now in Saudi custody.

Last weekend they said that there were four people who they believed had information. We know that there's a number of other people who've been arrested since. We don't know how many of those other than the folks who were arrested at Jeddah Airport on Monday night are significant and those three people clearly are very significant.

In terms of the cooperation between the Americans and the Saudis, you'll remember in the past where it was really the situation between the FBI and Saudi investigators had gone from bad to being even worse. The Khobar Towers investigation a perfect example. The FBI wasn't allowed to even interview those suspects.

In this circumstance, we seem to have a better situation, at least so far, where there is better cooperation, and that probably is a reflection of both the Saudi concern and the Saudi willingness to be seen to cooperate on this issue.

SNOW: Sheila, what's it been like covering this story? I saw a piece you did yesterday about a 2-year-old that frankly made -- brought tears to my eyes. Are people very open about it, is the anger out there in the open, is it hard to talk to people?

MACVICAR: It's a subject that's on everybody's mind. Every place you go, all this week, you go -- you know, to buy a newspaper, you go talk to someone, everyone is talking about what happened. People are still in shock.

This was considered a very safe place. Not just a safe place for Westerners to live, but a safe place -- a safe place for families, a place where, as I said before -- you know, terrorism was something that happened somewhere else and to other people.

That has changed now; people really feel that they may be under threat. People talking about the traffic jams that are caused by these checkpoints and sometimes these traffic jams go on for miles.

They say listen please, please, please -- please check us -- we want to know that we are safe. We know that if the police are out here doing something, at least we may be a little safer than if they were not.

So, there is a real concern, there is real fear, and there is real fear because those attacks, although they have been in the West largely portrayed as being against Westerners -- here they are seen in many cases as having -- whether intentionally or not, many people believe intentionally having hit at Arabs and Muslims in the same way that the attacks took place in Morocco.

That is a big change and that has produced, as I said, a lot of anger. And families -- I mean, what can you do when you see pictures like the Kaili (ph) family who are really struggling to come to terms with what happened to them, what happened to their neighbors, what happened to their neighborhood.

KOPPEL: So Sheila, what kind of impact do you think these suicide bombings will eventually have on the U.S.-Saudi relationship which as you know since 9/11 has been on a -- on a virtual roller coaster ride?

MACVICAR: Well, that's a really interesting question and you -- I think you describe it really well. It has been a roller coaster ride, it has been -- you know the Saudis talk about the amount of cooperation that they have given; they talk about the intelligence cooperation.

But, clearly, you know there were problems and frictions in that relationship and there is only in the aftermath of the bombing as though it had been agreed before. There had been an intelligence cooperation committee set up between U.S. and Saudi authorities so that they can, they hope, in real time exchange what may be very important intelligence information.

There are ways, basically, that they are working on the relationship to be more open, to have a better exchange of information. And the question really is what happens in the future here. How do these reforms progress. How do the leaders of Saudi Arabia see themselves and their country in the future and how do the people see the leaders? That's really a very, very big question.

KOPPEL: Well, our thanks to Sheila MacVicar in Riyadh who has been on the ground now for a number of days and I know that you have to get back on the story as soon as you finish with us. What's on your agenda today, Sheila?

MACVICAR: We were just at the National Guard Hospital talking to some of the survivors of the attack, but you know you were talking about how difficult is this story to cover -- well, one of the things we're trying to get some traction on, if you will, is just where exactly the investigation is.

How many people have the Saudis got in custody, how valuable are those people, and where are they making progress, or perhaps not making progress? And it has to be said publicly this investigation has moved very, very slowly.

KOPPEL: Well, we are certainly enjoying watching your reports from here. Sheila MacVicar in Riyadh, thank you very much.

The Saudi attacks turned up the heat on U.S. authorities to protect Americans around the world. I'll talk about whether that is an impossible task when we're back in two minutes.

ANNOUNCER: Andrea Koppel is CNN's State Department correspondent. She joined CNN in 1993. She is a former CNN Beijing Bureau Chief and Tokyo correspondent.

ON THE STORY is brought to you by Oracle E-Business Week. All your applications engineered to work together. All your information in one place.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: I would not want to see all travel shut down. I hope Americans will continue to travel, but that they will do it in a way that reflects the danger in a particular area of travel.

(END VIDEO CLIP)

KOPPEL: Secretary of State Colin Powell about the huge challenge of combating terrorism and protecting potential victims. We're back ON THE STORY.

There are about four million Americans who live overseas. That's the rough estimate. And millions more who travel abroad as tourists. And when it comes right down to it, Americans need to know that they are not guaranteed protection by the U.S. government when they're overseas and so what can they do to get information?

The State Department advises that Americans look on their web site, that really is point number one. Go there and see if there are any travel warnings for the country that you are either living in or that you're planning to go to. Look out for those public announcements that are listed.

And fundamentally, in some instances, it is dangerous to be abroad in certain countries. Use common sense and you should stay away from public -- very public settings where there are large crowds of Americans or Westerners.

And it really is disconcerting and I can see how difficult it is for Americans to make a decision whether or not they do want to take that vacation because it takes a lot of the fun out of it when you're always looking over your shoulder.

NEISLOSS: Andrea, I have my e-mail basically set up to get those State Department travel advisories, and I have to say there isn't a day that goes by that there isn't some country that pops up, or two, or three.

And it is pretty detailed information on what to avoid, what not to do, but -- but what does this mean also though for the actual State Department posts around the world?

Do -- how do they get their warnings? KOPPEL: Well, they get it in many -- many of the same ways that the rest of us do. In fact, the government has to release this information. It's -- by law -- ever since the Pan Am 103 bombing they've had to do this and they get alerts that are posted and many of these posts, many of the U.S. Embassies and consulates have heightened security already since 9/11 and even going back to 1998, but what they do is they put extra guards out there. That's not the same thing that can be done necessarily outside hotels, outside schools.

They rely on the host government and as we saw just last week in Saudi Arabia, the U.S. government did ask for increased security and the Saudis were sort of like, my gosh, we can't put increased guards outside all of the various facilities that the U.S. government wants us to -- that's not necessarily an acceptable answer as far as the U.S. is concerned but it's the reality on the ground.

SNOW: So Andrea this week the code -- the terror threat level went up to orange as I think every American knows now. And there was a lot of talk on -- in the media about this tape that came out from Ayman Al-Zawahiri warning -- a very clear warning he is calling on Muslims to essentially attack Americans overseas.

How did the State Department read that tape and how worried are they at this point?

KOPPEL: Well, it's interesting. To answer the second part of your question, they're still not sure if it is the real McCoy. In fact, some of our colleagues' sources have said that because the tape wasn't a very good quality this broadcast they may never know.

But in terms of their read of the tape, it's our understanding talking to State Department officials that the U.S. government had actually gotten wind of this tape as recently as Saturday or Sunday last weekend and that Secretary Powell had spoken with the foreign minister of Qatar where Al-Jazeera the satellite TV network is based.

Had asked the foreign minister to use his influence with Al- Jazeera to keep what the U.S. believed was the most inflammatory section of the tape from being broadcast, the part calling upon Muslims to light a fire under the feet of Westerners.

And that actually did not happen, that tape was broadcast, which was why you heard so much anger coming from the podium and coming from Secretary Powell because they felt they had assurances from the government of Qatar that they weren't going to air the tape. When push comes to shove, though, what the Qatar government will say is it's a free media. They don't have that kind of influence, much as the U.S. government doesn't exercise influence over what CNN can broadcast, they can't exercise influence over Al-Jazeera.

SNOW: Andrea, I want to ask you about some criticism of the State Department. We all remember a few weeks ago the former Speaker of the House Newt Gingrich sort of attacked Colin Powell and the State Department. He's going to do it again. I was at a luncheon with him yesterday where he said that he's going to write an article coming out in "Foreign Policy" magazine. It'll be on newsstands next month. And in that article he's going to take some more shots at the State Department essentially. He says it's not personal, it's not about Colin Powell, but it's about the structure of the State Department. He thinks that essentially the diplomats are being too nice to -- to -- dictators, he would say around the world and that you know they don't carry the president's message effectively. How's the State Department going to respond to that?

KOPPEL: Oh, I think we can take a pretty good guess based on the last time that the former speaker made his -- made his comments, criticizing -- again the State Department and Secretary of State Powell -- they will likely say that the Speaker is actually criticizing President Bush because after all Secretary of State Powell only carries out what President Bush wants him to do in terms of executing foreign policy. But you know this is an institutional situation, it certainly not new with the Bush administration -- this has existed for decades.

The diplomats who work at the State Department, their job, they see it, is to try to bring about as amicable a relationship with various governments around the world as possible. Some people might say that's a good thing, clearly former Speaker Gingrich thinks that they're coddling dictators. So I think it depends upon your perspective and certainly depends upon the policy that you're talking about.

If you're looking at Iraq, certainly Secretary of State Powell was trying to find a diplomatic solution but again when push came to shove the president decided time had run out and Secretary Powell stood behind him and did everything he could.

NEISLOSS: And I think on Iraq and on all these international issues I think from overseas the diplomats are saying it -- these splits we know all about them, they kind of roll their eyes at this point and just wait till Washington hashes things out.

SNOW: One respite from the hard realities of a dangerous world, the saga of Annika Sorenstam. We all watched it. Who won, who lost and was it really the battle of the sexes? Josie Karp is on the story in two minutes.

ANNOUNCER: Josie Karp is a correspondent for CNN Sports. She joined CNN in 1998. Earlier she covered the Dallas Cowboys for the "Fort Worth Star-Telegram." She graduated from Harvard.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ANNIKA SORENSTAM, PROFESSIONAL GOLFER: I'm very, very pleased to have played all day and -- was I nervous on the tee.

(END VIDEO CLIP)

KARP: That's Annika Sorenstam, the world's best female golfer, talking about what a nerve-wracking experience it was to test her game against the men.

Annika Sorenstam is gone now here in Fort Worth. I'm Josie Karp on the story of a historic week here. Even though Annika Sorenstam did not make the cut, she left an impression and it was one of those events where you almost had to be here to really understand the magnitude of it.

Just a couple of things really stick out. One is on Thursday morning when Annika Sorenstam was walking up the 18th fairway, the way the crowd greeted her with such cheers. You would have thought it was Sunday at the Masters or something like that. And that support continued all week long.

So that was one thing that you just don't see. And then it was the way that Annika Sorenstam reacted to all of the support from the crowd. She's someone who has been criticized sometimes for being too stoic, but she was so emotional.

She said going into this that this was a test for her, this wasn't about men versus women, it wasn't about humanity, it was about one human being and she really showed that with her emotions and probably changed the minds of a lot of people who thought it wasn't a good idea for her to be out here.

KOPPEL: Josie, behind the scenes did you find many young girls, teenagers, who were on the sidelines watching as well and what message do you think they could or should take away from Annika's two days on the links?

KARP: There were so many of them you couldn't even count them and they would wear "Go Annika" buttons, some of the girls would make their own T-shirts and their own hats. And the thing that Annika Sorenstam said -- she was asked why do you think the crowd responded to you so much and she said the reason is because I'm out here living my dream and that's the message that she appeared to be sending to all of those little girls. And not just the little girls, to the little boys -- the guys -- anyone who was watching.

It was hard to not be touched by what she was doing.

NEISLOSS: But we all did -- we all did hear some of the harsh comments from the male golfers. Is there a sense that she really with what she's achieved broke some barriers, that she really did actually open the gate for other women?

KARP: Well, what -- she said is this really wasn't about open gates for other women to get out here on the golf course and compete with the men on a regular basis. She wanted this to be something about her and being a competitive person wanting to test herself.

On Thursday you had a lot of people saying she shot a one over 71, that she proved that she could -- she alone -- could compete with the men and maybe there'd be some other women out there who might like to try.

But that was the real victory in terms of her game. There are certainly guys out here today who will say that she showed the next day that women have no place out here but the overriding effect that Annika Sorenstam had was that she showed dignity and class and she was doing something that she wanted to do and there really wasn't an ulterior motive.

SNOW: But Josie does it in some way just to play Devil's Advocate prove that maybe there should be a separate league for women -- there were a lot of men, I know, who came out and said, some of the golfers came out and said, you know, there's a reason why there are two different leagues.

KARP: Well, it showed that the best female golfer in the world can't compete with the men for a title in her first tournament. And it probably showed that on a regular basis the best woman in the world isn't going to win a lot of money on the men's tour.

But she didn't by any means embarrass herself and there weren't a lot of people saying it shows that there's a huge gap in the men's game and the women's game. But it did prove a point that there's a place for Annika Sorenstam to win championships and that's not here.

KOPPEL: So where do we go from here? Liz was asking about whether or not other women would play but I mean was this more than just Annika testing herself and an opportunity for advertisers to make a lot of money?

KARP: Well I think just listening to her and seeing the emotions that she showed afterward, it was clear that this was something that was so personal to her.

She had been criticized for maybe seeking publicity -- that this was all a publicity stunt. Anyone who was there watching her speak at the end of her round yesterday, I would defy them to say that today. It was so clear that this was so personal to her.

NEISLOSS: But I have to ask about some...

KARP: You're not going to believe this -- we've got a shot going -- we've got a shot that needs to be played right here -- on the golf tournament, and the tournament director is asking me to keep my voice down, so I'm going to give you my golf voice and let you pick it up for just a minute.

NEISLOSS: Well the golf whisper is very appropriate then. But I have to ask you about the money. What does this mean for her in terms of endorsements and contracts?

KARP: Well she's definitely going to get deals out of this that she would not have gotten before.

SNOW: Josie can't say anymore.

KARP: I'm going to have to give you the ultimate golf whisper.

KOPPEL: Josie, I'm not going to use the golf whisper and I'm going to thank you very much for joining us today. What is next ON THE STORY for you for the rest of your day?

KARP: I'm going to stay right here.

KOPPEL: OK, terrific, all right, Josie, thanks.

Straight ahead, what difference can it make for President Bush to go to the Middle East and is it really kiss and make up at the United Nations?

Up next, a check on the headlines at this hour and live to Kelly Wallace in Jerusalem.

ANNOUNCER: Kelly Wallace is a CNN International correspondent. She was born and raised in Brooklyn, New York. She studied economics at the University of Pennsylvania's Wharton School. And she was a CNN White House correspondent during the Clinton and Bush administrations.

(COMMERCIAL BREAK)

KOPPEL: Iraq could begin exporting oil again in about two weeks. That's according to the country's top oil official. The expectation comes after the U.N. lifted its trade sanctions against Iraq on Thursday.

Iraq hopes oil production will be up back to about 1.5 million barrels a day by mid-June.

In Baghdad it was payday for civil servants. First to get paid are electric utility workers, struggling to get the power back on. They are getting three months salary and a thirty-dollar bonus.

The first case of Mad Cow Disease in North America in a decade has been traced to a farm in Alberta, Canada. Investigators are looking into how many calves the infected cow produced and what it ate.

Illegal cattle feed is considered the most likely cause of infection. Thirteen farms in three provinces are now under quarantine. The U.S. has banned all beef imports from Canada.

New trouble at "The New York Times." "Newsweek" magazine and "The Columbia Journalism Review" say the paper has suspended Pulitzer prize-winning reporter Rick Bragg. He's accused of not crediting a freelance reporter in a story about Florida oystermen. This comes after the resignation of "Times" reporter Jayson Blair, who the paper said plagiarized and fabricated stories.

Now let's go back to ON THE STORY.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Let's see the man in the eyes before he will blow himself (ph) and he was taking with him, I saw pieces of legs (ph) here in my car this is the paper (ph) that was in the car, it was blood on it.

(END VIDEO CLIP)

KELLY WALLACE, CNN JERUSALEM CORRESPONDENT: A man we talked to Monday night reacting to the fifth suicide bombing in a 48 hour period.

Welcome back, I'm Kelly Wallace ON THE STORY, in Jerusalem. That violence appeared to deliver a sharp blow to that so-called Mid East road map. But one week later somewhat of a breakthrough.

Israeli Prime Minister Ariel Sharon is now saying he can back that road map and plans to take it to his Cabinet for a vote as early as tomorrow.

This is all paving the way for a possible three-way summit involving U.S. President Bush and it would be the U.S. president's biggest leap yet into this Israeli-Palestinian conflict.

NEISLOSS: It seems though the terrorism and these waves of violence have usually pushed the Israelis away from the negotiating tables, so what's different here, what brought Sharon on board?

WALLACE: American pressure, Liz. American officials were pressing the Israelis to go ahead and accept this road map even with reservations to get the process going.

Prime Minister Sharon spoke on the phone with President Bush; we are also told other Israeli officials have been on the phone. One official, in fact, meeting in Washington during the week. The message was the Americans needed the Israelis to come out and accept this.

The Israelis said they needed conviction that the Americans would take into account their concerns. You had a White House statement coming out on Friday saying it will take into account those concerns. So the Israelis say they got the guarantee they needed.

SNOW: Kelly, I guess I'm still wondering, though, are we any closer this time around to a real deal and I'm wondering particularly about the new Palestinian prime minister Mahmoud Abbas, is he in control, is he in a position to negotiation, are we really going to see something happen?

WALLACE: Well right now he's been on the job just about three weeks and so far he hasn't really achieved much success. He started meeting with one of the radical Palestinian groups, the group Hamas, which claimed responsibility for four of the five suicide bombings we saw last weekend -- Hamas is saying so far it will continue its attacks against Israelis so that meeting broke up with no breakthrough.

The Israelis are saying they need to see the prime minister now doing something on the ground, and they are saying now that they are going to accept this road map, he has to deliver and so, Kate, the key question really is can he really reign in these radical Palestinian groups?

American officials definitely want to see some results before convening that three-way summit meeting. Knowing President Bush will have a lot on the line to make sure the Palestinians are going to come out of it doing something on the ground.

KOPPEL: Kelly what's your read on the ground there? We know that even though Prime Minister Sharon says he accepts that it obviously still has to go through his cabinet, he has said, however -- maybe he's not talking about it as much in the last day but that he still has reservations among them concern about right of return of Palestinian refugees and dismantling settlement outposts.

What makes you believe, if you do, that a meeting with President Bush, Mahmoud Abbas and Prime Minister Sharon would be anything more than just another photo opportunity?

WALLACE: I hate to be the cynic, Andrea, but it's not clear that it won't just be sort of another summit meeting. I guess the key difference is American pressure right now.

One analyst we talked to -- it's interesting -- did say that Prime Minister Sharon, he believes, was a bit surprised by the pressure coming from President Bush right now. That the president is urging him to accept this road map. That the prime minister did not think that pressure would be coming right now.

So the key question will be if the Americans are really going to put pressure on both the Israelis and the Palestinians -- the Palestinians to improve security and crack down on these groups and then the Israelis to take steps such as pulling troops out of Palestinian towns, easing travel restrictions, freezing settlement activity.

Right now it is unclear, Andrea, the key question is how much pressure is going to come from the White House and right now some people are saying they are a bit surprised. They think more pressure is coming than they thought might be coming at this point in time.

SNOW: Kelly, stay with us for some more conversation after this quick break. Both the Middle East and the United States Congress searching for the same thing this week, compromise. I'll be talking about taxes and terrorism when we're back ON THE STORY in two minutes.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... which is able to identify problems facing the American people and get things done. These are can-do people.

(END VIDEO CLIP)

SNOW: Strong presidential praise, finally, for the Congress he had roughed up in recent weeks for failing to deliver the full tax cut that the president wanted. Welcome back, we're ON THE STORY.

The president showing up at the Capitol the other day praising the Congress. But I got to tell you; it was like an episode of "Survivor" Washington-style.

They took, essentially this week, a bunch of Republicans, put them in a room, notably the two top tax writing guys, Senator Chuck Grassley and Congressman Bill Thomas, who both had very strong ideas about what they wanted in his tax cut bill, and I'm told that behind that closed door it was very -- to put it politely -- intense behind the door.

I'm told that Chairman Thomas, he's -- every one sees him as a brilliant man but has -- he has a very strong temper. I don't think that's any secret in Washington.

And I'm told he erupted a few times; they had to bring in Vice- President Cheney to finally smooth things over twice they had to bring him in to smooth things over and get this tax bill through.

So the president sort of getting what he wanted but it was a rough ride getting there.

WALLACE: Kate, I'd like to ask you about -- I'm taking -- I'm sorry, Andrea, I was going to ask Kate a question. In terms of the prospective of this tax bill -- how it was crafted, what it will mean in terms of implications for 2004, how much will Republicans and the Bush administration really concerned about this bill when it comes to the president's reelection chances?

SNOW: Yes, well that's a big part of this. Politics, you know, politics always plays into these kind of decisions. We ended up with essentially the Senate number, 350 billion in tax that's over ten years, but the House policy in terms of the dividend tax, the tax on stock dividends and capital gains reduction.

A lot of stuff crammed into that $350 billion -- one of the things that's tricky about it is the way they crammed it in that number is they sort of lowered taxes for now, bring them back in a couple of years, and then they go down again because of the 2001 tax cut that's already law.

Somebody called it the yo-yo tax cut. Senator Max Baucus called it a yo-yo. And the reason that it's all in there again it comes down to politics, the president wanted to get whatever he could get out of this Congress so that he can go on the road and say look I cut your taxes; we're helping the economy.

One Republican told me this week -- a Republican member of the House told me, the reason that some of these tax cuts go away in just two years is no coincidence. That's 2005 and that means that, you know, they're going to be out on the campaign trail, you'll hear the president saying vote for me because I will extend that tax cut, don't vote for the Democrats who will bring back higher taxes.

KOPPEL: Well, Kate, you were mentioning the heated words coming from many of those opposed to the tax cut. Some of them I read from Senator Dayton from Minnesota, Democratic Senator who called it the shameful looting of the federal treasury. SNOW: Well, one of the things that Democrats say, Andrea, is that if you really do the math, if they are going to extend the tax cut beyond just a few years, the math ends up being more than $800 billion over ten years, so Democrats will say and have said that this thing is going to bust the federal government.

This is going to put us in the red, it's going to increase the federal deficit and that has an impact down the road, according to some economists, on interest rates and growth. Republicans, of course, singing a completely different tune and say this is getting money into people's pockets, investors pockets, it's going to jump start the economy.

NEISLOSS: So you still have yelling on both sides, I guess, and with this whole yo-yo. Is there any way of saying who wins in this?

SNOW: Well, I think it's a pretty big victory for the president because again all this fine print is really probably not going to make it -- I hate to say it -- but it's -- most people aren't going to look at the fine print.

Most people are going to say, hey, I'm getting a check in the mail and that's great because you know if you have children you're going to get a check this summer, once the president signs this into law. $400 per child if you make under $110,000 a year. That's a lot of families out there are going to get checks in the mail.

NEISLOSS: Well, we now go from politicians in Washington to those international politicians called diplomats at the United Nations here in New York.

I'm ON THE STORY of the U.S. return to the United Nations, this time for a win. And have the bruises of the Iraq war debate been forgotten? We're back in two minutes.

ANNOUNCER: Liz Neisloss is CNN's United Nations Senior Producer. She graduated from Dartmouth, joined CNN in 1990, and she won the U.N. Correspondents Association "Gold Award" for her reporting in 1999.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KOFI ANNAN, SECRETARY GENERAL, UNITED NATIONS: This is a product of a compromise and in a compromise, no one gets all that they want, and we do have a compromise solution and we have to work with it.

(END VIDEO CLIP)

NEISLOSS: United Nations Secretary General Kofi Annan telling reporters this week whatever the battles were over Iraq, let's all move on.

He's also talking about the agreement to allow the U.S. and Britain to control Iraq and use its oil riches to rebuild. Welcome back we are ON THE STORY. This week was a pretty big win for the United States with a resolution that lifted sanctions; this is 13 years of sanctions. It also gives control to the U.S. of Iraq's oil.

They will set up a fund called the Iraqi Development Fund. The money will go from the oil revenues into that fund and the U.S. will be able to decide how that money will be spent. Sanctions lifting means planes can fly in and out, commercial planes, people, goods, all the things that normal countries without embargoes can experience, a market economy can revive again.

It means people can invest in Iraq -- so it will be helpful.

SNOW: Liz is this, though, is the behind the scenes story here about the French and the Germans and the fact that we're all sort of back on the same -- the U.S. and them are all back on the same page?

NEISLOSS: Well, they're back on the same page for now. It was described by one analyst, I thought very well put, as a marriage of convenience. During these discussions they -- the diplomats were saying things like, look, we're in no mood for a battle. But it was clear, these countries were maybe on the wrong side of the war, but they did not want to be on the wrong side of the peace.

So they had to work things out. Also very importantly, they all have bilateral interests with the U.S. and they want those to be moved forward; they don't want to get stuck in the past. The German ambassador told reporters we can't undo history, we have to help the Iraqi people so there's a big mix at play here -- it remains to be seen if this marriage of convenience will hold, though.

WALLACE: Liz, you were telling us the Syrian ambassador did not show up, left his seat empty. What is that about and what's the significance here?

NEISLOSS: Well, it's not the first time that has happened -- the Syrians did not have instructions from their government, they pleaded for more time -- the Security Council president decided in consultation with the U.S. and the U.K., the sponsors of this resolutions, no, no more time.

Syria now says maybe they're playing both sides; they would have supported the resolution. They are the Arab voice on the Council. So they do have to consider their constituency.

WALLACE: Liz I know from the original draft to the one that was finally voted on there were about 90 changes made and the U.S. had said prior to the vote that they wanted a U.N. role, a vital role, but not U.N. rule -- how did things end up. How much of a role will the U.N. be playing?

NEISLOSS: It was a big push. France, Germany, and Russia really wanted to see a strengthened U.N. role. What they ended up with still even according to U.N. officials is a little bit vague. This U.N. representative who we now know is going to be filled by a very seasoned, very well-liked diplomat will be there to coordinate humanitarian, to help get the politics, the new institutions up and running in Iraq, but it's really very unclear how much authority they actually will be given. They will be independent, but how much they can actually do remains to be seen.

KOPPEL: Liz, you know, obviously the U.N. got such a black eye back in March -- are they going to announce any U.N. weapons inspectors again; is there any movement for that?

NEISLOSS: That's actually the very ironic part of this whole story. We all remember, and I spent a lot of time talking about Hans Blix and weapons inspectors being front and center -- that is -- was -- originally not even going to be in the resolution.

The U.S. did not and still does not want those weapons inspectors back. Every other Security Council member, including their allies, the British, they would like to see a return of the inspectors in some kind of role for them in a last minute concession that got in. They will revisit the issue.

SNOW: Well my thanks to my colleagues and thank you all out there for watching ON THE STORY. We'll be back next week.

Still ahead PEOPLE IN THE NEWS focusing this week on Melissa Etheridge and Margaret Cho.

At 12 noon Eastern, 9 a.m. Pacific, CNN LIVE SATURDAY, and at 1 p.m. Eastern, 10 a.m. Pacific, IN THE MONEY on how the raised terror alert will effect you and me this Memorial Day weekend.

Coming up at the top of the hour a news alert, but first we'll listen to the president's weekly radio address.

(BEGIN VIDEOTAPE)

BUSH: Good morning. This week Congress took vital action to create jobs in America. Following the outlines of a jobs and growth package I announced in January, members of the House and Senate reached agreement on a bill to strengthen our nation's economy by reducing income tax rates, lowering the marriage penalty, increasing the child credit from $600 to $1,000, increasing the expensing the allowance for small business investment, and significantly reducing taxes on dividends. These tax cuts will go into effect immediately, and some retroactively.

About 25 million families with children will see their child credit increase and will receive checks of up to $400 per child. And 136 million Americans who pay income taxes, including 23 million small business owners who pay taxes at the individual rate, will see their taxes lowered.

By leaving American families with more to spend, more to save and more to invest, these reforms will help boost the nation's economy and create jobs. When people have extra take-home pay, there's greater demand for goods and services. And employers will need more workers to meet that demand.

A higher expensing allowance will help small firms, including farms and ranches, to buy new equipment so they can become more productive and expand their operations. They will also have more money to add new employees. And reducing the tax rate on dividends will help shareholders across America, from teachers invested in 401(k) accounts, to seniors who depend on dividends for their financial well being.

I appreciate the leadership of Congressman Bill Thomas of California and Senator Chuck Grassley of Iowa, who worked with their colleagues to hammer out a final agreement. This achievement is a victory for every family struggling to pay the bills, every entrepreneur hoping to expand the business and create new jobs and every American looking for work. I look forward to signing this jobs and growth legislation in the coming week.

I will also work with Congress to bring down the budget deficit that has resulted from war, recession and terrorist attacks. Faster growth in the economy will bring more revenues into the federal Treasury. Yet moving toward a balanced budget also requires that we hold federal spending to a responsible level. Spending discipline is crucial to my economic program. I urge the Congress to set priorities and stick to the responsible budget plan they passed back in April.

By that measure, discretionary federal spending will rise by 4 percent, about the same as the increase in the average American family's income. Governments should not grow faster than worker's paychecks. Governments should follow the example the American families by setting priorities and staying with them.

Our citizens and our economy have endured great challenges over the last two and a half years. Yet this nation's workers and entrepreneurs, who remain the most productive in the world, are rising to meet every challenge. Our economy continues to grow, and inflation and interest rates remain low. With new relief for the taxpayers, we have laid the foundation for even stronger growth in the years ahead and more jobs for American workers.

Thank you for listening.

(END VIDEOTAPE)

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