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Is the Samarra Offensive the Beginning of New Military Campaign? New Video of a Beheading of Iraqi Contractor

Aired October 02, 2004 - 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.


BETTY NGUYEN, CNN ANCHOR: Video of another beheading in Iraq was posted on an Islamist Web site just a short time ago. Reuters news agency says the pictures showed a militant decapitating a man identified as an Iraqi contractor. The victim was wearing an access badge issued by U.S. forces.
Also in the news, Pentagon sources tell CNN the current Samarra offensive is the start of a campaign to rid Iraqi cities of insurgents. More than 5,000 U.S. and Iraqi troops secured government, police and religious sites in Samarra yesterday. The Iraqi government wants to retake areas under insurgent control before scheduled January elections.

Now to this country. Candidates George Bush and John Kerry will talk about domestic issues in campaign appearances today.

Here's a live shot in Columbus, Ohio, where the president is about to speak. And he will be pushing an economic agenda, including partly privatized Social Security, health care changes and tax cuts.

The senator speaks at an Orlando high school next hour. He'll charge the president with bad decisions that have driven up costs, while middle class incomes have fallen.

And to sports. Seattle Mariner Ichiro Suzuki set a major league record last night for most hits in a season. The 258th hit came in the third inning of last night's Mariners-Texas Rangers game and broke an 84-year record set by George Sisler.

Those are the stories "Now in the News." I'm Betty Nguyen here at the CNN global headquarters.

ON THE STORY starts right now.

CANDY CROWLEY, CNN ANCHOR: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week. I'm Candy Crowley, ON THE STORY of the debate, John Kerry and what next in this final month of campaign 2004.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: I'm Suzanne Malveaux, in Columbus, Ohio, with President Bush, ON THE STORY about he and his team scored in the debate.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: I'm Barbara Starr, on how the political debate is forced to share the headlines with deadly attacks in Iraq.

KELLI ARENA, CNN JUSTICE DEPARTMENT CORRESPONDENT: I'm Kelli Arena, ON THE STORY of continuing fears that terrorists will accelerate efforts to disrupt elections in Iraq, in Afghanistan, and in the United States.

KATHLEEN HAYS, CNN FINANCIAL CORRESPONDENT: And I'm Kathleen Hays, ON THE STORY of how oil prices cut across all political lines and how $50 a barrel hits home.

We'll also go to northern Iraq and have the latest on the fight for Samarra from CNN's Jane Arraf.

E-mail us at ONTHESTORY@CNN.com.

Now straight to Suzanne Malveaux and the president and the candidate.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Mixed messages send the wrong signals to our troops. Mixed messages send the wrong signals to our allies. Mixed messages send the wrong signals to the Iraqi citizens.

(END VIDEO CLIP)

MALVEAUX: President Bush Thursday night before 62 million people watching his first presidential debate. Of course taking a jab at his opponent, but also, of course, emphasizing that he has made the tough decisions and that, friend or foe, you know where he stands. Those are the kind of messages that he is sending and testing out in Columbus, Ohio, today.

CROWLEY: Suzanne, who would of thought we'd be talking about George Bush defending the substance and John Kerry defending the style, but here we are anyway. You know, what went wrong here for the Bush campaign? What are you hearing, you know, behind the scenes? I've so far heard, oh, he was frustrated, oh, he was -- what do they think happened that made for those terrible cutaway shots with George Bush?

MALVEAUX: Well, certainly the White House will tell you that they think it was a draw. They say that of course that it wasn't really necessary for him to what they call punch Kerry in the nose, that he just needed to seem resolute in what he was saying. But behind the scenes, when you talk to Republican officials, when you talk to these people in the administration, they were quite surprised.

They were disappointed. They looked at him. They did not believe that he looked like he was in control, that he was very uncomfortable.

And the cutaways really were what did him in, those shots. They said that he looked uncomfortable, that he looked away. And this was something that -- even angry at times. It was something, however, that the Bush campaign even anticipated in those practice sessions.

When they practiced before him they fired rapid-fire questions at the president, hoping to test whether or not he would actually lose his temper. And that is -- that is exactly what some of the people saw. They saw kind of a testy, annoyed president.

HAYS: But do you think -- I mean, I think I'm one of the few people on the planet who didn't -- who really when I was watching the debate thought that this -- he is trying to show us how angry he is at John Kerry, how angry he is at the idea that you could have a global test or a global alliance. Is there anybody in the Bush camp that defends the president, I guess trying to look like a fighter or something?

MALVEAUX: Well, certainly the White House. I mean, White House officials say of course he was trying to look like he was taking him on. But there are a couple of things here to notice.

I think the audience, what American people saw, is a different president than perhaps that they're used to seeing. We see him on a daily basis. We've been following him months and months, and you see him in these settings where there are thousands of supporters. The people boo and they laugh and they cheer almost on cue here.

This is a president who was taken out of that comfort zone. He was put side by side with someone who was directly challenging his positions. And that is a side to the president I don't think a lot of people get to see.

ARENA: So, Suzanne, what is the strategy now from here forward? I mean, has the focus changed?

MALVEAUX: Well, certainly the strategy here is to try to cut down as much as possible Kerry's arguments, the arguments that he made. He did talk about a global test. He was talking about building alliances.

The Bush strategy is to try to portray that as a weakness on defense, that he would actually try to seek the permission of other countries, even allow other countries have veto power. That is something the president mentioned just yesterday, that it would give France veto power.

They're also going to hit him really hard on what they say are these inconsistent positions. These are the kinds of things that they were hammering before. But we have seen just within the last couple of days a new sense of aggressiveness from the president; we have also seen as well, when you take a look at the nuances and his behavior, it was just yesterday looking very deliberately at his notes, very carefully at his notes, making sure that he is saying exactly what it is he intends to say to his audiences and then trying to hit Kerry as hard as possible.

STARR: Now Suzanne, you talked about his comfort zone and what he's used to doing in front of the public. With the next debate coming up in that town hall format, how are they preparing the president for that? Should we expect changes?

MALVEAUX: Well, certainly expect the president to be a bit more comfortable in that format. But it really depends on the audiences.

As you know, they are going to be very particular. The rules are particular about who is going to be in that audience, how those questions are going to be posed.

The president does well in these type of town hall meetings. But again, you have to realize here what you are watching and what you are seeing is an audience that is preselected. It is an audience that, by all standards, support the president. They are volunteers for his campaign.

This president is not used to being challenged in that way that you saw in that debate. And one of his own spokespersons said, well, you know, he was reacting to just kind of a chutzpah of Kerry in taking him on in those kind of positions. Well, you can bet that the audiences you see here do not have that kind of chutzpah that the president is used to.

CROWLEY: Suzanne, do you get any sense -- I was really actually very interested in the chemistry between the two candidates. Do you get any sense for how George Bush feels about John Kerry? There was that question about, you know, do you think he's qualified. It seemed to me there was a lot of tension in that room.

MALVEAUX: There was a lot of tension in that room. I mean, a lot of people made a big deal about that handshake, who pulled away first, even the sense of like who walked away. And at the very end as well, when you had the families come up and whether or not they actually embraced each other or were friendly enough, these are the kinds of things, the little tiny things that people like us pick apart and make a big deal out of.

But also, it's something that this campaign knows they're very good when it comes to using those symbols, putting out those messages. They concede that it really could have gone better, and they are certainly hoping for a much stronger performance on Friday.

COLLINS: Suzanne Malveaux ON THE STORY and on the trail with George Bush. Thanks, Suzanne.

I am back on the story of the significance of the debate for the Kerry campaign in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: When I talked about the $87 billion, I made a mistake in how I talk about the war. But the president made a mistake in invading Iraq. Which is worse?

(END VIDEO CLIP) CROWLEY: So John Kerry, that first debate, saying, I made a mistake, but look at the difference between us. For the Kerry campaign now, how do build on any advantage he picked up Thursday night, keep up the pressure on the campaign trail and prepare for Friday's debate.

Welcome back. We are ON THE STORY.

HAYS: Well, you know, Candy, it was asymmetric, wasn't it? Because George Bush leading in the polls, for John Kerry he had to stay in the game. He has stayed in the game. But it's interesting to me that the CNN-Gallup poll, which gave him the win in the debate, also put Bush ahead in who can better deal with Iraq.

CROWLEY: Well, what's interesting is they saw that right away and immediately tried to draw the sting from that and say, look, now, what we want you to know is what we think is we have opened up a conversation. They don't say we've kept him in the game because they couldn't -- they wouldn't concede he's out of the game. But, you know, look, going into that, everyone felt if Bush comes on and he's boffo, it's the end of it, because he's -- Bush is leading by, you know, enough.

You know, the problem for the Kerry campaign now is they were -- they were like caught in that trap of high expectations. So we're on the plane with Mike McCurry and Stephanie Cutter and there everybody is, you know, just bouncing coming out of Miami. And Mike immediately begins to say, "Write the story for us."

Aides downright giddy about, and then said, now, listen, I just want you all to know that this was just an opening of the door. They're going to -- the Republicans are going to say, oh, well, the horse race didn't change, and they're right. But the horse race never chains. We're just starting this conversation, getting people to give us another look.

ARENA: I mean, so do they really think, though, at the end of the day, that this is going to really make -- I mean, do debates really matter, Candy, is what I'm asking?

CROWLEY: Well, you know, it's always easy to look back at debates and say, well, you know, the minute that Gerald Ford said that Poland wasn't under communist domination, he lost it. Or the minute Ronald Reagan, you know, put together a sentence and sort of dismissed the age issue with a joke, he won the election.

It's more complicated than that. But again, you go back to, did it give John Kerry another day to make his case?

It really did. And it put, I think, enormous pressure on George Bush for the second debate. And it's interesting how they're playing this.

John Kerry yesterday was making fun of the way Bush talked, much to the delight of the audience. You know, that sort of halting, you know, back and forth kind of way. So they really feel -- and I was sort of stunned, because I've watched George Bush before. Anyone that was looking for the guy that could really, you know, articulate perfectly, is going to want to listen to John Kerry, because that's not Bush's forte.

STARR: And as you say now, build on the advantage. So what's the strategy from now to Election Day? Where do they campaign? Where do they think they can take some advantage on this?

CROWLEY: Well, it's really the same as the strategy always is in October. What they're going to do is take some of those debate moments, incorporate them into the standard stump speech, broaden out the conversation a little to the economy, but never get quite off Iraq. But use it on the same template, saying, well, you know, he misled you on Iraq and he's also misleading you on Social Security, health care, he hasn't done this, he promised you that, he's not telling you the truth, and just, you know, put that over and superimpose it on domestic policies. Toward the end, what you have to do, of course -- those last two weeks are all about going to those base places and going, get out, get out, get out, get out the vote.

STARR: And, of course, we shouldn't forget Cheney and Edwards are about to have a go at it.

CROWLEY: Which I think will be so much fun. I really do.

I was really glad to find out I was going to Cleveland only because I don't know whether there's less pressure -- most people don't think vice presidential debates move the polls one way or the other. And just the -- just visually the match-up of this kind of elder statesman and then, I mean, you have a guy that's been in politics for six years.

Now, he's very -- you know, a very accomplished trial lawyer, so he knows his way around a word or two. So I just think it will be a great yin and yang match-up.

HAYS: You know, Candy, after the debate Tuesday night, though, I still don't feel that either candidate gave me a blueprint for what they would do in Iraq. John Kerry says, I would do it better than George Bush. George Bush says I'll stay the course and I won't leave and I'm the best guy to do it. I thought that John Kerry had a lot more specific things to say about what he would do about nuclear non- proliferation than he did about Iraq.

CROWLEY: Well, and I think Barbara will concur, that's because the options are not -- I mean, the options are pretty much what they both agree on, let's work better with the allies, let's do better on the reconstruction, let's go ahead and have these elections. So there really isn't all that much difference.

I mean, John Kerry's main point is I'll do it better, or I wouldn't have gotten us there this way. So when you look at this day going forward, there really isn't that -- any difference really between the two of them, other than John Kerry says this president can't do it and I can do it. That is still a tough sell, I think, in the middle of -- in the middle of a war, and people seeing it.

ARENA: And then one question -- the one thing we kept hearing from President Bush just repeatedly throughout was, you know, well, he keeps changing positions, he keeps -- I mean, we've heard that, you know, for months now. But is that still something that's resonating, do you think?

CROWLEY: I think it does. I mean, I think the single most damaging phrase ever for John Kerry was in March in West Virginia. "I voted for that before I voted against it."

Can you explain it in Senate speak, but most people out there listening go, OK, you know. So absolutely it stuck, and you see it in poll after poll after poll, this guy is a flip-flopper.

What the Kerry campaign hopes is that they turned on the TV on Thursday night and saw a guy that was, you know, running (ph) straight and saying, you know, no, I've always felt this way, I've always felt that way. But in the end, this campaign's margins were set early on.

John -- John Kerry's campaign is predicated on the basis of, this guy can't do the job. He doesn't have the brains to do the job, he's incompetent. George Bush's parameters have been, he doesn't have the spine to do it.

So, you know, I mean, that is the basic argument when you look at it even domestically. Those are what the two men are arguing.

HAYS: And from the sublime to the ridiculous, how many people commented about the fact that the two wives had the white suits on?

CROWLEY: I didn't, because I didn't see that.

ARENA: She was really focusing on the debate.

Well, of course, while the candidates were talking about Iraq, a major battle was under way against insurgents in Samarra, north of Baghdad. Our Jane Arraf was there and joins us ON THE STORY right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: The best indication about when we can bring our troops home, which I really want to do -- but I don't want to do so for the sake of bringing them home. I want to do so because we've achieved an objective.

KERRY: I'm not talking about leaving. I'm talking about winning.

(END VIDEO CLIP)

STARR: Hard to find anything that grabs military attention more than talk about bringing the troops home. From here in Washington, to the outposts in Iraq and Afghanistan, from the brass to the grunts, the debate served up fresh insights about how the commander in chief and his challenger view their future.

Now, let's tell you, we are still trying to get Jane Arraf on the phone where she is on the front lines with the troops in Iraq. But still, the debate really did focus on this war.

HAYS: And when are you going to bring troops home? And President Bush says, when I get them done. And John Kerry says, what, six months into it I'm going to take a look?

STARR: Well, it's very interesting. Everybody stayed away from timelines, didn't they? That's really the -- that's the value of no return for a commander in chief about when they can bring the troops home.

(CROSSTALK)

CROWLEY: Although, he has said it on the trail. On the trail, he said, I can see that at the end of my four years I would bring them all home.

STARR: And, you know, he's -- if he gets elected, he's going to be held to that. It will be very interesting to see if he can pull it off, because, of course, right now, with the insurgency, it all depends on the violence. It depends on the political process. And from the people we speak to in the Pentagon, nobody is very cheerful about it at the moment.

ARENA: Barbara, I'm interested in what's going on in Iraq, I mean, with the insurgents. What is your take on what this grand scheme is to deal with this issue?

STARR: Well, as we've talked about, Jane Arraf on the front lines in Samarra. Samarra now shaping up as the first military incursion, U.S. and Iraqi, into these insurgent strongholds prior to the elections in Iraq at the end of January. This is now the effort to re-establish what the Pentagon calls local control, Iraqi control.

ARENA: Where did Samarra...

STARR: Why are they in Samarra and why are they not Fallujah?

ARENA: Yes, right.

STARR: Because Fallujah is too hard. Fallujah, a lot of people are going to shoot back.

They're going for Samarra because, even though the fighting is very tough, the pictures we see show very tough street fighting, it's not as bad, it's not as tough as Fallujah is going to be, by all accounts.

CROWLEY: And wouldn't militarily -- doesn't it send a signal if you can take lesser places and make Fallujah sort of the last place? Doesn't it tell something to the people in Fallujah? STARR: You start with the things you think you can be successful at.

CROWLEY: Right.

STARR: So this is part of the strategy. And what the Pentagon will tell you is, don't count on the military to fix it all. That there's going to have to be a political strategy as well.

They're going to have to get Iraqis to -- you know, as they say, to fight for their country. But this week, we saw that terrible bombing attack in Baghdad, when they opened a sewer plant. And, you know, dozens of small Iraqi children...

HAYS: Children who were getting candy and gifts from American soldiers.

STARR: By all accounts, according to Iraqis, the children were encouraged to go to this place. They were going to get candy and balloons and friendly smiles from the U.S. soldiers. And the insurgents set off multiple bombs, killing a lot of Iraqi children. Very tough business.

CROWLEY: You know, on the campaign trail, certainly with Kerry, we hear a lot of, you know, the president is living in a spin, a fantasy land. You know, he keeps telling us everything is great, which I know sort of takes away from George Bush, not completely what he's saying.

But we did hear Don Rumsfeld, it seems to me, go out of his way at least to give a gloomy assessment. Or is that just the first time I've heard him and you've heard him say that?

STARR: No. He's -- he's -- his words are increasingly somber. He will tell you that he's never predicted a rosy future, that it would be easy going. That he's always said it's hard work.

But in his last several public appearances before groups in the Pentagon, he seems to be reminding people that the violence is getting worse and that they expect it to grow worse prior to the election. Certainly paving the way for many, many tough weeks ahead in Iraq.

HAYS: Do they need more troops? Haven't there been indications that there might need to be some bolstering of the forces there specifically for the election?

STARR: General Abizaid says so far -- the commander of U.S. forces in that region -- no, he doesn't need more American troops. Part of the strategy, again, local control, get those Iraqi security forces trained and in there.

ARENA: All right. Well, we have so much more to talk about. We hope to get Jane Arraf on the phone very shortly. We'll be back right after this break.

(COMMERCIAL BREAK) NGUYEN: Good morning. Here are the stories "Now in the News."

Video of another beheading in Iraq was posted on an Islamist Web site a short time ago. The pictures show a man identified as an Iraqi contractor being killed. The victim was wearing an access badge issued by U.S. forces.

In Iraq, sporadic gunfire echoes through the Sunni Muslim stronghold of Samarra. U.S. and Iraqi forces are battling pockets of resistance. The Pentagon says the offensive is the first effort to regain control of a string of cities before Iraqi elections. And that will take place in January.

In Salt Lake City, Utah, police say dental records confirm that human remains found in a landfill are those of Lori Hacking. Finding the badly decomposed body ends the two-month search. Hacking's husband, Mark, is in jail, accused of her murder.

Documents released in the Kobe Bryant case give conflicting accounts of the hotel room encounter between Bryant and the woman who later accused him of rape. The case was dropped last month when the woman said she would not testify against the Los Angeles Lakers star.

Those are the stories "Now in the News." I'm Betty Nguyen here at the CNN global headquarters.

Now it's back to ON THE STORY.

(BEGIN VIDEO CLIP)

KERRY: Fifty dollars a barrel isn't as bad as it might get, because analysts are now telling us that the price may go up to $60. And the average American is going to feel this pain.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BUSH: I'm looking forward to the debate on domestic policy, too. There are some big differences. He's going to run up your taxes. I'm going to keep them low.

(END VIDEO CLIP)

HAYS: Big differences indeed. And some things the presidents can influence and others they can't. Taxes is something well under their control, but the oil market, that seems to be out of control right now.

Welcome back to ON THE STORY. I'm Kathleen Hays.

CROWLEY: OK, I read the other day that one of the reasons the stock market has not done all that well lately -- correct me if that's wrong, because I haven't been following it...

HAYS: You've been busy, Candy. That's understandable. CROWLEY: ... is because they worry that John Kerry is going to be elected. Now, I know that's -- I mean, that's along the lines everyone thinks, oh, Wall Street would be worried about John Kerry's because a Democrat. Is that so? How is Wall Street looking at this election?

HAYS: This kind of shifts from time to time. When there was a time early in the summer where Bush going firmly ahead in the polls was helping the stock market, the idea being that this will make the tax cuts permanent, including dividend tax cuts. And an incumbent, keeping an incumbent, not having to switch, you don't have the uncertainty. A reason why it's good.

After the debates, it didn't really seem to bother Wall Street at all that John Kerry had done well and acquitted himself. And I think at this point Wall Street is saying, let's just get past the election, let's get past the uncertainty. The fourth quarter starting off on a good footing, all this is positive.

There was an interesting study out this week, though, showing -- looking back at the past 100 years and how the stock market did in the two months running into the election. Fifteen out of 16 times, if the stock market did better, the incumbent party won. Nine out of 10 times, if the stock market was down, the incumbent party lost.

So the stock market probably -- maybe it isn't how the -- the election is going to affect the stock market, but how the stock market is going to affect the election. And one analyst I spoke to said he thinks the rocky stock market might be one reason why President Bush hasn't picked up more momentum.

STARR: We just talked about oil prices. Oil prices are out of control. Taxes you can control. What should we look for in both of those areas now?

HAYS: Well, certainly the latest with President Bush, of course, is that he says he's going to go ahead and sign legislation to make his tax cuts permanent. You know, the expanded child tax credit, the relief for married couples.

And the big difference with John Kerry is John Kerry has said, well, you know, I'm going to keep tax cuts for the middle class, but I'm going to rescind the tax cut for people who make more than $200,000 a year. And that will pay for this expanded health care plan that I want to put in place, and that is needed so that companies don't have to pay so much for workers so they don't outsource jobs overseas. It's all part of his big comprehensive plan on the job front.

ARENA: I'm going to totally change the topic here.

HAYS: Go ahead.

ARENA: Vioxx. Merck, I mean, hello? What's going to happen to the stock? HAYS: Well, we know the stock already plummeted 27 percent Thursday morning after Merck, Ray Gilmartin, the chief executive, came out and said we are pulling Vioxx from the market, we're doing this voluntarily.

And everybody gets Merck high marks for this. They had -- they were 18 months into a clinical trial to see how Vioxx actually affected cancer patients for colon cancer. But they -- and there had always -- there had been some evidence that Vioxx had created an increased risk of cardiac arrest.

And 18 months into the trial they decided, yes, that's what's happening. And it seemed that a patient might be able to use it.

For up to 18 months, there was no difference. But Merck felt it was important just to get the drug off the market.

The stock tanked, came back a little bit on Friday, though, because -- (UNINTELLIGIBLE), for example, upgraded the stock, saying basically it's a well-capitalized company, it pays a dividend, they have problems, they need to find new drugs. People are talking about a merger.

ARENA: Well, do they have anything in the pipeline?

HAYS: They have -- actually, they're -- like Pfizer, their biggest competitor, which is the number one drug company, they're doing more and more alliances with biotech companies, looking for more ways to license drugs instead of just creating their own drugs in- house, which is what Merck is known for.

And of course there's a question of litigation. Some people say maybe they won't be quite so subject to litigation because they've been putting some warning on the Vioxx drug for a while. But there's already dozens of suits lined up and, undoubtedly, after this, there's going to be that many more.

CROWLEY: It seemed -- what are the other drug companies that make similar products? What happened to their stocks? Only because you've got to look at that and go, well, if that's what it did for that drug, what about these other drugs?

HAYS: It's interesting. Pfizer has Celebrex, which is the number one drug. Pfizer actually did better because people's first thought, I guess, is, well, let's see, 1.25 million people take Vioxx. They're going to have to switch to something, and maybe they'll switch to Celebrex.

Another drug analyst we talked to said, you know what? Everybody who takes any kind of Phase II Cox inhibitor, which is what these things are to make you less sensitive to arthritis pain, should be looking at this drug.

They should ask their doctors about Celebrex or if they take some other drug like this, because if there's a problem with Vioxx, maybe there is a problem with this drug as well. He said, maybe you should consider taking good old-fashioned aspirin.

CROWLEY: Buy Bayer.

HAYS: There you go.

And, of course, if you're in the oil market, then you had headaches this week anyway. So probably those people are going for the super aspirin.

ARENA: Over $50?

HAYS: Fifty bucks a barrel. I keep saying, you know, it's wonderful following the oil market because it just makes you focus on so many different parts of the world. And the latest part of the world is Nigeria.

Nigeria produces 2.5 million barrels a day. If you've been following, you remember just a couple of weeks ago OPEC said, the Saudis, we're going to boost our production by two billion barrels a day. So you can see what a big part of daily global production going on in the market Nigeria is.

Plus, it's light, sweet crude. And this is the stuff that is very readily turned into gasoline.

The Saudis this week said, hey, we'll give you some more oil, maybe a million, million and a half barrels a day more. But it's heavy crude. It isn't the same kind of thing. So the price closed over $50 a barrel.

Now, what's interesting, there's a big debate, more and more oil is being pumped. There's a sense that high oil prices could slow economies, maybe demand could slow down. At some point we could have a big drop in oil prices.

But if you're waiting to fill your home heating oil tank, you could play that game. You could say, well, maybe the prices are going to crack as we get further into the winter, and wait to fill your tank. The problem is, so far, people have been waiting to fill their tanks and the price has just gone up, up, up.

STARR: I'll be the one to ask this week.

HAYS: OK.

STARR: Martha, Martha, Martha, off to the cupcake prison or something. Is this the end of the story?

HAYS: Well, of course not. With Martha? No.

You know, the other story a week before last was that -- her doing a reality show. So we know that Martha is just going away until she can plant her garden in the spring. But she's going to jail in West Virginia.

She's going to a correctional facility there. Squeaky Fromme has been there of -- you know, from Charles Manson fame, et cetera. And she didn't get to go to Florida, like she wanted. She didn't get to go to Connecticut. But she was adamant that she wanted to start her sentence. And I think that there was some sense, too, that the correctional system didn't want to make it look as though they were catering completely to Martha Stewart.

ARENA: But nobody mentions that whole SEC shadow in the background that could still come in and say, this is it for you. You know, in terms of direct involvement.

HAYS: Well, in terms of being an executive of her company, because if she -- if you are convicted of a felony, you are often barred for life from running a company, being an executive. But this crime she committed was in her personal life, not against the company. So it still remains to be seen. We'll see in the spring when she's out planting her garden how it goes.

STARR: Well, from the business world, back to the war, and the view from northern Iraq. We're going to have Jane Arraf ON THE STORY after this.

(COMMERCIAL BREAK)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: A little bit of the view from Samarra in Iraq. Welcome back. I'm Jane Arraf. Welcome back to ON THE STORY.

STARR: Jane, we have been watching your pictures come in from the front lines of Samarra for the last several days. Please explain to us, help us understand how that fighting is going.

How did you get there? How are you managing to do your job right on the front lines there?

ARRAF: I'm going to say one of those things, and I'm sure we've all experienced this. We've been pushing for this to happen for a couple of weeks. And when it finally happened, there were a couple of moments when I thought to myself, "Why in the world are we doing this?"

One of them was probably on the helicopter ride down here, which swerves so much that you really -- you don't really think you're going to die, but you really, really wonder what sane person would really subject themselves to this. It was, needless to say, enormously interesting, exciting and worthwhile.

The other one was perhaps being crammed into the back of a Bradley fighting vehicle for about 10 hours. But again, that was all a prelude to watching this amazing thing unfold, one of the biggest combat operations here since the end of the war, and one that has particular significance because it was done with Iraqis.

And it was just an amazing thing, the number of men, the number of troops, the city itself. We have got the Tigris River behind us. We're in Samarra, which was once the capital of the Islamic world, recently overtaken, according to U.S. officials, by insurgents, and they moved in a very big way to get those insurgents out.

And we had a front row seat. It was amazing.

ARENA: Jane, tell us, what is the very latest on how that battle is going? I mean, you're there. You're in the thick of it.

Please be careful, though. We're all very worried about you. But please tell us, where do things stand right now?

ARRAF: It's still not completely over. They are continuing to take the city, the 1st Infantry Division and the Iraqis who are helping them, the new Iraqi security forces, sector by sector.

We've just come back from driving around the city with the commanding general of the 1st Infantry Division, Major General John Baptiste (ph), and he went to see how it was going. And in the space of just, let's say 10 minutes, ere were a couple of things that sort of illustrate the challenges of Iraq these days.

One was a roadside bomb that did not go off. It was in the road. It was discovered. But presumably it won't go over. But there it was, a danger to those around it, particularly Iraqis.

And then the general got out a little while later, actually got out of his Humvee and talked to people, talked to Iraqis. And there they were, standing there, complaining to him.

And any time I see that, I think of back to the Saddam years, and I think, "God, there has to be hope for this place." So it's all a mix of everything.

But today, there are scattered incidents. There is still gunfire out there. Not all the insurgents have been rooted out. And people are just starting to trickle back into the streets.

It's very, very empty. But officials we talked to say they're confident that this will do the trick.

CROWLEY: Jane, when we first heard of the U.S.-trained Iraqis joining forces, the U.S. forces were not at all happy how they performed around Fallujah. How did they do this time?

ARRAF: They say they did a lot better. And probably part of it is time and part of it is planning and part of it is learning from mistakes.

One of the ways that they used the Iraqi forces quite cleverly is the same thing they essentially did in Najaf, which is to take a special group of Iraqi commandos, Iraqi special forces, the same ones we met in Najaf, as a matter of fact, and they used them to breach the mosque here. This is a sacred site, one of the holiest sites in Shia Islam. They didn't want Americans running around it.

Now, it was an extra ordinary image as that battle unfolded, seeing lines of U.S. soldiers in the street leading up to the this incredible golden-domed mosque. But when the real push came, and they broke down the doors, blasted open the doors, it was Iraqis leading that charge. And Iraqis very proud to be leading that charge.

All still a work in progress. And certainly, it's not perfect. They need a lot of training. They need more of them.

They need equipment. They need more of everything. But the numbers were there. There were more than 1,000 of them this time. And by all accounts, this seemed to have worked.

HAYS: Jane, what about morale among the U.S. troops? Are they following the election campaign? Did they have any exposure to the debates? What's the feeling among the troops?

ARRAF: You know, I asked some of them, because we were out when the campaign was on. It hit at about 4:00 in the morning our time. And that was exactly when we were bonding with these soldiers in this Bradley, waiting for the battle to begin.

And I got a variety of views. But one that really I think reflect the experience of soldiers.

One told me that he had thought about it a long time and he -- if he were to make that choice, he didn't believe that this war was worth it. But yet, he was re-enlisting in the Army.

And he said, "For me, it doesn't have all the answers, but it has some of the answers. And my family is the most important thing to me."

There's a real pragmatism here, a real sense among some that we talked to of thinking about why they're here, whether they should be here. But one thing that's really different is you really get a sense of purpose that you don't on the outside.

We imagine here that soldiers are living these horrible, dangerous lives, which indeed they are maybe five, 10 percent of the time. But the rest of the time they do feel they have a sense of mission.

But I just want to tell you about something that one soldier said to us when we were in (UNINTELLIGIBLE), in another city. He said, "You know, I think about this, and the toughest thing is, you don't know who the bad guys are. And some days I don't even know if we're the good guys."

A real sense of reflection there. But overall, still a sense of purpose, I think.

STARR: Jane, one of the very interesting side notes, I know that some the troops you are there with are National Guard troops. These are people who just a few short months ago were living their lives here in the United States, now in the thick of combat.

That's also something the Pentagon is watching very closely, to see how those troops are performing. By all accounts very well, I think, right? ARRAF: They seem to be. And one of the units we were with when this battle was unfolding, gunfire going on for literally hours in front of that mosque in the narrow streets around it, we were with a National Guard unit. And one of the soldiers in that unit happened to be the only casualty so far, the only fatality in the U.S. military.

He had been here only a month. And the National Guard are sort of amazing.

They signed up for different reasons, but a lot of them were New York policemen, for instance, who signed up after 9/11. They signed up because they felt they needed to do something.

Others never expected in a million years what they were in for. But they're still all here pulling together. And part of this huge variety of people that have found themselves in Iraq, in an alien culture, in very difficult circumstances, essentially trying to make it better. And it's really quite touching.

ARENA: Well, Jane, we know that you've got to get back to work. Tell us, what's on the story for you in coming days?

ARRAF: We are going to be watching what's going on in Samarra. They are still retaking the city, still sectors that they haven't fully taken control of. And then the hard part begins.

It's quite a lot like Najaf, it seems. First you get rid of the insurgency, but then you have to do all sorts of other things to make sure the place remains stable.

It needs a police chief. It needs money coming in. We're going to be trying to get up to the Iranian border to see what's going on around there, and possibly travel more throughout the Sunni Triangle to see what's really happening and what the future holds for this region.

ARENA: All right, Jane. Thank you so much for joining us. We know you've had never-ending work days recently, so thank you. And again, truly, be careful.

ARRAF: Thank you all.

ARENA: Well, from the war in Iraq, to the war on terrorism at home and how American Taliban John Walker Lindh may wish he wasn't so quick to negotiate a deal and a 20-year prison sentence. I'm back ON THE STORY right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ASA HUTCHINSON, HOMELAND SECURITY UNDERSECRETARY: In every area of concern we've enhanced, ratcheted up the security measures that are in place.

(END VIDEO CLIP) ARENA: That was Asa Hutchinson, homeland security undersecretary, on how tight security is getting even tighter, amidst concerns that without even specific information a terrorist attack could disrupt the November election.

Welcome back. We are ON THE STORY.

STARR: OK, Kelli. We know they don't want to talk about it a lot, but it seems like every week, you know, terrorism concerns, disrupting the election. What's the bottom line right now? What are they worried about most?

ARENA: Well, the bottom line remains the same. Officials continue to insist that they get fresh information in almost on a daily basis, suggesting that al Qaeda and related groups want to hit the U.S. before on Election Day. They say that the threat is real, but again -- and the frustration here is in they don't know who, they don't know when, they don't know where, and they don't know how.

Major concern about a chem-bio attack. That has been, though, for the last several months. Nothing has changed on that front. And so they're walking a very fine line here.

You know, do they -- do they have -- they have to continue to say, yes, we remain concerned. And you're going to see very visible signs of that concern on the street. More manpower on the street, more aggressive questioning, searching of vehicles, re-interviewing people that are out there that they think may have information, going back to sources and informants.

HAYS: But even in everyday lives, I have a friend who was at the airport just today and found that the searching was way too aggressive.

CROWLEY: It really -- I mean, it is noticeable in the airports. I have to tell you, I was appalled at the albeit female at the body search that they now do. I mean, it is -- it is definitely extremely aggressive.

They are touching you. I mean, and not just that sort of how they started out. I mean, this was a full kind of, you know, up and down, which I found really appalling.

UNIDENTIFIED FEMALE: Maybe your doctor should be doing it.

CROWLEY: In fact I was -- exactly, stuff your doctor would be doing. And I was with a female friend, and we both, I mean, literally stepped back because it was that aggressive.

ARENA: Well, this is -- you see, this is very indicative of the stress. I mean, you do have some threat weariness on the part of the people who are out there on the front lines. And you do have bulletins that have gone out saying, look, you know, al Qaeda has -- may use women for these attacks.

And so don't -- you know, readjust your thinking. And look at women as much of a threat as you look at men coming into the country. So I think what you -- what you may be a victim of is -- is that -- that constant drum beat that we've all been hearing, telling these guys, you know, do your job, it could be you who is responsible for letting that one person into the United States who does the deed.

HAYS: Kelli, you know, when I saw the story of Yasser Hamdi and John Walker Lindh, I'm never sure what kind of context to put this in. Is this just a story of a couple of unique guys? Is there some resonance, some bigger part of the story that fits in the big terror picture?

ARENA: Well, you know, for those who don't know, Yasser Hamdi we think is soon to be released. That deal hit a glitch because the Saudi government apparently was not totally on board with him going back to the country under the conditions that were set.

John Walker Lindh, as we know, is spending 20 years in prison basically for the same thing, both picked up on the battlefield. One went through the criminal justice system, one was put in military custody and he was an enemy combatant. One will be free, one won't.

And so John Walker Lindh is asking for a commutation of sentence from the president, which publicly nobody is saying anything, but behind the scenes most people are saying, probably not a chance, you know, in this environment. But it is -- it is how -- I mean, this is just one of the areas where the Bush administration has come under extreme criticism, because this was a person who was given a lot of attention.

He was described as a very serious threat, someone who was out there fighting against American troops. The -- they thought that he had some intelligence value. Back in December, the Pentagon said, well, we're done, we're done talking to him, end of story. You know, he can go now as far as we're concerned.

But very interesting how they were both handled in very different venues. And that's where a lot of the confusion has set in, because nothing has been very consistent.

And these guys are very much making up the rules as they go. They have never been in a situation like this before. And that is a large part of the problem.

STARR: Well, thank you for bringing us up to date, because it will be very interesting to watch what happens in all of these cases now.

Stay with us. We're back ON THE STORY after this.

(COMMERCIAL BREAK)

HAYS: Thanks to my colleagues, as always. Candy, rushing from the airport, Jane Arraf, in the middle of a battle in Samarra. And, of course thank you, as always, for watching ON THE STORY.

We'll be back next week. A special goodbye to our associate producer, Tanzy Sultiziak (ph). She is one of those stars behind the scene who make us look so good. We wish her all luck, everything good in Chicago, thank her for everything she did for us ON THE STORY.

Still ahead, CNN's "PEOPLE IN THE NEWS," focusing this week on vice presidential candidates Dick Cheney and John Edwards.

First, a check on making news right now.

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Aired October 2, 2004 - 10:00   ET
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BETTY NGUYEN, CNN ANCHOR: Video of another beheading in Iraq was posted on an Islamist Web site just a short time ago. Reuters news agency says the pictures showed a militant decapitating a man identified as an Iraqi contractor. The victim was wearing an access badge issued by U.S. forces.
Also in the news, Pentagon sources tell CNN the current Samarra offensive is the start of a campaign to rid Iraqi cities of insurgents. More than 5,000 U.S. and Iraqi troops secured government, police and religious sites in Samarra yesterday. The Iraqi government wants to retake areas under insurgent control before scheduled January elections.

Now to this country. Candidates George Bush and John Kerry will talk about domestic issues in campaign appearances today.

Here's a live shot in Columbus, Ohio, where the president is about to speak. And he will be pushing an economic agenda, including partly privatized Social Security, health care changes and tax cuts.

The senator speaks at an Orlando high school next hour. He'll charge the president with bad decisions that have driven up costs, while middle class incomes have fallen.

And to sports. Seattle Mariner Ichiro Suzuki set a major league record last night for most hits in a season. The 258th hit came in the third inning of last night's Mariners-Texas Rangers game and broke an 84-year record set by George Sisler.

Those are the stories "Now in the News." I'm Betty Nguyen here at the CNN global headquarters.

ON THE STORY starts right now.

CANDY CROWLEY, CNN ANCHOR: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week. I'm Candy Crowley, ON THE STORY of the debate, John Kerry and what next in this final month of campaign 2004.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: I'm Suzanne Malveaux, in Columbus, Ohio, with President Bush, ON THE STORY about he and his team scored in the debate.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: I'm Barbara Starr, on how the political debate is forced to share the headlines with deadly attacks in Iraq.

KELLI ARENA, CNN JUSTICE DEPARTMENT CORRESPONDENT: I'm Kelli Arena, ON THE STORY of continuing fears that terrorists will accelerate efforts to disrupt elections in Iraq, in Afghanistan, and in the United States.

KATHLEEN HAYS, CNN FINANCIAL CORRESPONDENT: And I'm Kathleen Hays, ON THE STORY of how oil prices cut across all political lines and how $50 a barrel hits home.

We'll also go to northern Iraq and have the latest on the fight for Samarra from CNN's Jane Arraf.

E-mail us at ONTHESTORY@CNN.com.

Now straight to Suzanne Malveaux and the president and the candidate.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Mixed messages send the wrong signals to our troops. Mixed messages send the wrong signals to our allies. Mixed messages send the wrong signals to the Iraqi citizens.

(END VIDEO CLIP)

MALVEAUX: President Bush Thursday night before 62 million people watching his first presidential debate. Of course taking a jab at his opponent, but also, of course, emphasizing that he has made the tough decisions and that, friend or foe, you know where he stands. Those are the kind of messages that he is sending and testing out in Columbus, Ohio, today.

CROWLEY: Suzanne, who would of thought we'd be talking about George Bush defending the substance and John Kerry defending the style, but here we are anyway. You know, what went wrong here for the Bush campaign? What are you hearing, you know, behind the scenes? I've so far heard, oh, he was frustrated, oh, he was -- what do they think happened that made for those terrible cutaway shots with George Bush?

MALVEAUX: Well, certainly the White House will tell you that they think it was a draw. They say that of course that it wasn't really necessary for him to what they call punch Kerry in the nose, that he just needed to seem resolute in what he was saying. But behind the scenes, when you talk to Republican officials, when you talk to these people in the administration, they were quite surprised.

They were disappointed. They looked at him. They did not believe that he looked like he was in control, that he was very uncomfortable.

And the cutaways really were what did him in, those shots. They said that he looked uncomfortable, that he looked away. And this was something that -- even angry at times. It was something, however, that the Bush campaign even anticipated in those practice sessions.

When they practiced before him they fired rapid-fire questions at the president, hoping to test whether or not he would actually lose his temper. And that is -- that is exactly what some of the people saw. They saw kind of a testy, annoyed president.

HAYS: But do you think -- I mean, I think I'm one of the few people on the planet who didn't -- who really when I was watching the debate thought that this -- he is trying to show us how angry he is at John Kerry, how angry he is at the idea that you could have a global test or a global alliance. Is there anybody in the Bush camp that defends the president, I guess trying to look like a fighter or something?

MALVEAUX: Well, certainly the White House. I mean, White House officials say of course he was trying to look like he was taking him on. But there are a couple of things here to notice.

I think the audience, what American people saw, is a different president than perhaps that they're used to seeing. We see him on a daily basis. We've been following him months and months, and you see him in these settings where there are thousands of supporters. The people boo and they laugh and they cheer almost on cue here.

This is a president who was taken out of that comfort zone. He was put side by side with someone who was directly challenging his positions. And that is a side to the president I don't think a lot of people get to see.

ARENA: So, Suzanne, what is the strategy now from here forward? I mean, has the focus changed?

MALVEAUX: Well, certainly the strategy here is to try to cut down as much as possible Kerry's arguments, the arguments that he made. He did talk about a global test. He was talking about building alliances.

The Bush strategy is to try to portray that as a weakness on defense, that he would actually try to seek the permission of other countries, even allow other countries have veto power. That is something the president mentioned just yesterday, that it would give France veto power.

They're also going to hit him really hard on what they say are these inconsistent positions. These are the kinds of things that they were hammering before. But we have seen just within the last couple of days a new sense of aggressiveness from the president; we have also seen as well, when you take a look at the nuances and his behavior, it was just yesterday looking very deliberately at his notes, very carefully at his notes, making sure that he is saying exactly what it is he intends to say to his audiences and then trying to hit Kerry as hard as possible.

STARR: Now Suzanne, you talked about his comfort zone and what he's used to doing in front of the public. With the next debate coming up in that town hall format, how are they preparing the president for that? Should we expect changes?

MALVEAUX: Well, certainly expect the president to be a bit more comfortable in that format. But it really depends on the audiences.

As you know, they are going to be very particular. The rules are particular about who is going to be in that audience, how those questions are going to be posed.

The president does well in these type of town hall meetings. But again, you have to realize here what you are watching and what you are seeing is an audience that is preselected. It is an audience that, by all standards, support the president. They are volunteers for his campaign.

This president is not used to being challenged in that way that you saw in that debate. And one of his own spokespersons said, well, you know, he was reacting to just kind of a chutzpah of Kerry in taking him on in those kind of positions. Well, you can bet that the audiences you see here do not have that kind of chutzpah that the president is used to.

CROWLEY: Suzanne, do you get any sense -- I was really actually very interested in the chemistry between the two candidates. Do you get any sense for how George Bush feels about John Kerry? There was that question about, you know, do you think he's qualified. It seemed to me there was a lot of tension in that room.

MALVEAUX: There was a lot of tension in that room. I mean, a lot of people made a big deal about that handshake, who pulled away first, even the sense of like who walked away. And at the very end as well, when you had the families come up and whether or not they actually embraced each other or were friendly enough, these are the kinds of things, the little tiny things that people like us pick apart and make a big deal out of.

But also, it's something that this campaign knows they're very good when it comes to using those symbols, putting out those messages. They concede that it really could have gone better, and they are certainly hoping for a much stronger performance on Friday.

COLLINS: Suzanne Malveaux ON THE STORY and on the trail with George Bush. Thanks, Suzanne.

I am back on the story of the significance of the debate for the Kerry campaign in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: When I talked about the $87 billion, I made a mistake in how I talk about the war. But the president made a mistake in invading Iraq. Which is worse?

(END VIDEO CLIP) CROWLEY: So John Kerry, that first debate, saying, I made a mistake, but look at the difference between us. For the Kerry campaign now, how do build on any advantage he picked up Thursday night, keep up the pressure on the campaign trail and prepare for Friday's debate.

Welcome back. We are ON THE STORY.

HAYS: Well, you know, Candy, it was asymmetric, wasn't it? Because George Bush leading in the polls, for John Kerry he had to stay in the game. He has stayed in the game. But it's interesting to me that the CNN-Gallup poll, which gave him the win in the debate, also put Bush ahead in who can better deal with Iraq.

CROWLEY: Well, what's interesting is they saw that right away and immediately tried to draw the sting from that and say, look, now, what we want you to know is what we think is we have opened up a conversation. They don't say we've kept him in the game because they couldn't -- they wouldn't concede he's out of the game. But, you know, look, going into that, everyone felt if Bush comes on and he's boffo, it's the end of it, because he's -- Bush is leading by, you know, enough.

You know, the problem for the Kerry campaign now is they were -- they were like caught in that trap of high expectations. So we're on the plane with Mike McCurry and Stephanie Cutter and there everybody is, you know, just bouncing coming out of Miami. And Mike immediately begins to say, "Write the story for us."

Aides downright giddy about, and then said, now, listen, I just want you all to know that this was just an opening of the door. They're going to -- the Republicans are going to say, oh, well, the horse race didn't change, and they're right. But the horse race never chains. We're just starting this conversation, getting people to give us another look.

ARENA: I mean, so do they really think, though, at the end of the day, that this is going to really make -- I mean, do debates really matter, Candy, is what I'm asking?

CROWLEY: Well, you know, it's always easy to look back at debates and say, well, you know, the minute that Gerald Ford said that Poland wasn't under communist domination, he lost it. Or the minute Ronald Reagan, you know, put together a sentence and sort of dismissed the age issue with a joke, he won the election.

It's more complicated than that. But again, you go back to, did it give John Kerry another day to make his case?

It really did. And it put, I think, enormous pressure on George Bush for the second debate. And it's interesting how they're playing this.

John Kerry yesterday was making fun of the way Bush talked, much to the delight of the audience. You know, that sort of halting, you know, back and forth kind of way. So they really feel -- and I was sort of stunned, because I've watched George Bush before. Anyone that was looking for the guy that could really, you know, articulate perfectly, is going to want to listen to John Kerry, because that's not Bush's forte.

STARR: And as you say now, build on the advantage. So what's the strategy from now to Election Day? Where do they campaign? Where do they think they can take some advantage on this?

CROWLEY: Well, it's really the same as the strategy always is in October. What they're going to do is take some of those debate moments, incorporate them into the standard stump speech, broaden out the conversation a little to the economy, but never get quite off Iraq. But use it on the same template, saying, well, you know, he misled you on Iraq and he's also misleading you on Social Security, health care, he hasn't done this, he promised you that, he's not telling you the truth, and just, you know, put that over and superimpose it on domestic policies. Toward the end, what you have to do, of course -- those last two weeks are all about going to those base places and going, get out, get out, get out, get out the vote.

STARR: And, of course, we shouldn't forget Cheney and Edwards are about to have a go at it.

CROWLEY: Which I think will be so much fun. I really do.

I was really glad to find out I was going to Cleveland only because I don't know whether there's less pressure -- most people don't think vice presidential debates move the polls one way or the other. And just the -- just visually the match-up of this kind of elder statesman and then, I mean, you have a guy that's been in politics for six years.

Now, he's very -- you know, a very accomplished trial lawyer, so he knows his way around a word or two. So I just think it will be a great yin and yang match-up.

HAYS: You know, Candy, after the debate Tuesday night, though, I still don't feel that either candidate gave me a blueprint for what they would do in Iraq. John Kerry says, I would do it better than George Bush. George Bush says I'll stay the course and I won't leave and I'm the best guy to do it. I thought that John Kerry had a lot more specific things to say about what he would do about nuclear non- proliferation than he did about Iraq.

CROWLEY: Well, and I think Barbara will concur, that's because the options are not -- I mean, the options are pretty much what they both agree on, let's work better with the allies, let's do better on the reconstruction, let's go ahead and have these elections. So there really isn't all that much difference.

I mean, John Kerry's main point is I'll do it better, or I wouldn't have gotten us there this way. So when you look at this day going forward, there really isn't that -- any difference really between the two of them, other than John Kerry says this president can't do it and I can do it. That is still a tough sell, I think, in the middle of -- in the middle of a war, and people seeing it.

ARENA: And then one question -- the one thing we kept hearing from President Bush just repeatedly throughout was, you know, well, he keeps changing positions, he keeps -- I mean, we've heard that, you know, for months now. But is that still something that's resonating, do you think?

CROWLEY: I think it does. I mean, I think the single most damaging phrase ever for John Kerry was in March in West Virginia. "I voted for that before I voted against it."

Can you explain it in Senate speak, but most people out there listening go, OK, you know. So absolutely it stuck, and you see it in poll after poll after poll, this guy is a flip-flopper.

What the Kerry campaign hopes is that they turned on the TV on Thursday night and saw a guy that was, you know, running (ph) straight and saying, you know, no, I've always felt this way, I've always felt that way. But in the end, this campaign's margins were set early on.

John -- John Kerry's campaign is predicated on the basis of, this guy can't do the job. He doesn't have the brains to do the job, he's incompetent. George Bush's parameters have been, he doesn't have the spine to do it.

So, you know, I mean, that is the basic argument when you look at it even domestically. Those are what the two men are arguing.

HAYS: And from the sublime to the ridiculous, how many people commented about the fact that the two wives had the white suits on?

CROWLEY: I didn't, because I didn't see that.

ARENA: She was really focusing on the debate.

Well, of course, while the candidates were talking about Iraq, a major battle was under way against insurgents in Samarra, north of Baghdad. Our Jane Arraf was there and joins us ON THE STORY right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: The best indication about when we can bring our troops home, which I really want to do -- but I don't want to do so for the sake of bringing them home. I want to do so because we've achieved an objective.

KERRY: I'm not talking about leaving. I'm talking about winning.

(END VIDEO CLIP)

STARR: Hard to find anything that grabs military attention more than talk about bringing the troops home. From here in Washington, to the outposts in Iraq and Afghanistan, from the brass to the grunts, the debate served up fresh insights about how the commander in chief and his challenger view their future.

Now, let's tell you, we are still trying to get Jane Arraf on the phone where she is on the front lines with the troops in Iraq. But still, the debate really did focus on this war.

HAYS: And when are you going to bring troops home? And President Bush says, when I get them done. And John Kerry says, what, six months into it I'm going to take a look?

STARR: Well, it's very interesting. Everybody stayed away from timelines, didn't they? That's really the -- that's the value of no return for a commander in chief about when they can bring the troops home.

(CROSSTALK)

CROWLEY: Although, he has said it on the trail. On the trail, he said, I can see that at the end of my four years I would bring them all home.

STARR: And, you know, he's -- if he gets elected, he's going to be held to that. It will be very interesting to see if he can pull it off, because, of course, right now, with the insurgency, it all depends on the violence. It depends on the political process. And from the people we speak to in the Pentagon, nobody is very cheerful about it at the moment.

ARENA: Barbara, I'm interested in what's going on in Iraq, I mean, with the insurgents. What is your take on what this grand scheme is to deal with this issue?

STARR: Well, as we've talked about, Jane Arraf on the front lines in Samarra. Samarra now shaping up as the first military incursion, U.S. and Iraqi, into these insurgent strongholds prior to the elections in Iraq at the end of January. This is now the effort to re-establish what the Pentagon calls local control, Iraqi control.

ARENA: Where did Samarra...

STARR: Why are they in Samarra and why are they not Fallujah?

ARENA: Yes, right.

STARR: Because Fallujah is too hard. Fallujah, a lot of people are going to shoot back.

They're going for Samarra because, even though the fighting is very tough, the pictures we see show very tough street fighting, it's not as bad, it's not as tough as Fallujah is going to be, by all accounts.

CROWLEY: And wouldn't militarily -- doesn't it send a signal if you can take lesser places and make Fallujah sort of the last place? Doesn't it tell something to the people in Fallujah? STARR: You start with the things you think you can be successful at.

CROWLEY: Right.

STARR: So this is part of the strategy. And what the Pentagon will tell you is, don't count on the military to fix it all. That there's going to have to be a political strategy as well.

They're going to have to get Iraqis to -- you know, as they say, to fight for their country. But this week, we saw that terrible bombing attack in Baghdad, when they opened a sewer plant. And, you know, dozens of small Iraqi children...

HAYS: Children who were getting candy and gifts from American soldiers.

STARR: By all accounts, according to Iraqis, the children were encouraged to go to this place. They were going to get candy and balloons and friendly smiles from the U.S. soldiers. And the insurgents set off multiple bombs, killing a lot of Iraqi children. Very tough business.

CROWLEY: You know, on the campaign trail, certainly with Kerry, we hear a lot of, you know, the president is living in a spin, a fantasy land. You know, he keeps telling us everything is great, which I know sort of takes away from George Bush, not completely what he's saying.

But we did hear Don Rumsfeld, it seems to me, go out of his way at least to give a gloomy assessment. Or is that just the first time I've heard him and you've heard him say that?

STARR: No. He's -- he's -- his words are increasingly somber. He will tell you that he's never predicted a rosy future, that it would be easy going. That he's always said it's hard work.

But in his last several public appearances before groups in the Pentagon, he seems to be reminding people that the violence is getting worse and that they expect it to grow worse prior to the election. Certainly paving the way for many, many tough weeks ahead in Iraq.

HAYS: Do they need more troops? Haven't there been indications that there might need to be some bolstering of the forces there specifically for the election?

STARR: General Abizaid says so far -- the commander of U.S. forces in that region -- no, he doesn't need more American troops. Part of the strategy, again, local control, get those Iraqi security forces trained and in there.

ARENA: All right. Well, we have so much more to talk about. We hope to get Jane Arraf on the phone very shortly. We'll be back right after this break.

(COMMERCIAL BREAK) NGUYEN: Good morning. Here are the stories "Now in the News."

Video of another beheading in Iraq was posted on an Islamist Web site a short time ago. The pictures show a man identified as an Iraqi contractor being killed. The victim was wearing an access badge issued by U.S. forces.

In Iraq, sporadic gunfire echoes through the Sunni Muslim stronghold of Samarra. U.S. and Iraqi forces are battling pockets of resistance. The Pentagon says the offensive is the first effort to regain control of a string of cities before Iraqi elections. And that will take place in January.

In Salt Lake City, Utah, police say dental records confirm that human remains found in a landfill are those of Lori Hacking. Finding the badly decomposed body ends the two-month search. Hacking's husband, Mark, is in jail, accused of her murder.

Documents released in the Kobe Bryant case give conflicting accounts of the hotel room encounter between Bryant and the woman who later accused him of rape. The case was dropped last month when the woman said she would not testify against the Los Angeles Lakers star.

Those are the stories "Now in the News." I'm Betty Nguyen here at the CNN global headquarters.

Now it's back to ON THE STORY.

(BEGIN VIDEO CLIP)

KERRY: Fifty dollars a barrel isn't as bad as it might get, because analysts are now telling us that the price may go up to $60. And the average American is going to feel this pain.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BUSH: I'm looking forward to the debate on domestic policy, too. There are some big differences. He's going to run up your taxes. I'm going to keep them low.

(END VIDEO CLIP)

HAYS: Big differences indeed. And some things the presidents can influence and others they can't. Taxes is something well under their control, but the oil market, that seems to be out of control right now.

Welcome back to ON THE STORY. I'm Kathleen Hays.

CROWLEY: OK, I read the other day that one of the reasons the stock market has not done all that well lately -- correct me if that's wrong, because I haven't been following it...

HAYS: You've been busy, Candy. That's understandable. CROWLEY: ... is because they worry that John Kerry is going to be elected. Now, I know that's -- I mean, that's along the lines everyone thinks, oh, Wall Street would be worried about John Kerry's because a Democrat. Is that so? How is Wall Street looking at this election?

HAYS: This kind of shifts from time to time. When there was a time early in the summer where Bush going firmly ahead in the polls was helping the stock market, the idea being that this will make the tax cuts permanent, including dividend tax cuts. And an incumbent, keeping an incumbent, not having to switch, you don't have the uncertainty. A reason why it's good.

After the debates, it didn't really seem to bother Wall Street at all that John Kerry had done well and acquitted himself. And I think at this point Wall Street is saying, let's just get past the election, let's get past the uncertainty. The fourth quarter starting off on a good footing, all this is positive.

There was an interesting study out this week, though, showing -- looking back at the past 100 years and how the stock market did in the two months running into the election. Fifteen out of 16 times, if the stock market did better, the incumbent party won. Nine out of 10 times, if the stock market was down, the incumbent party lost.

So the stock market probably -- maybe it isn't how the -- the election is going to affect the stock market, but how the stock market is going to affect the election. And one analyst I spoke to said he thinks the rocky stock market might be one reason why President Bush hasn't picked up more momentum.

STARR: We just talked about oil prices. Oil prices are out of control. Taxes you can control. What should we look for in both of those areas now?

HAYS: Well, certainly the latest with President Bush, of course, is that he says he's going to go ahead and sign legislation to make his tax cuts permanent. You know, the expanded child tax credit, the relief for married couples.

And the big difference with John Kerry is John Kerry has said, well, you know, I'm going to keep tax cuts for the middle class, but I'm going to rescind the tax cut for people who make more than $200,000 a year. And that will pay for this expanded health care plan that I want to put in place, and that is needed so that companies don't have to pay so much for workers so they don't outsource jobs overseas. It's all part of his big comprehensive plan on the job front.

ARENA: I'm going to totally change the topic here.

HAYS: Go ahead.

ARENA: Vioxx. Merck, I mean, hello? What's going to happen to the stock? HAYS: Well, we know the stock already plummeted 27 percent Thursday morning after Merck, Ray Gilmartin, the chief executive, came out and said we are pulling Vioxx from the market, we're doing this voluntarily.

And everybody gets Merck high marks for this. They had -- they were 18 months into a clinical trial to see how Vioxx actually affected cancer patients for colon cancer. But they -- and there had always -- there had been some evidence that Vioxx had created an increased risk of cardiac arrest.

And 18 months into the trial they decided, yes, that's what's happening. And it seemed that a patient might be able to use it.

For up to 18 months, there was no difference. But Merck felt it was important just to get the drug off the market.

The stock tanked, came back a little bit on Friday, though, because -- (UNINTELLIGIBLE), for example, upgraded the stock, saying basically it's a well-capitalized company, it pays a dividend, they have problems, they need to find new drugs. People are talking about a merger.

ARENA: Well, do they have anything in the pipeline?

HAYS: They have -- actually, they're -- like Pfizer, their biggest competitor, which is the number one drug company, they're doing more and more alliances with biotech companies, looking for more ways to license drugs instead of just creating their own drugs in- house, which is what Merck is known for.

And of course there's a question of litigation. Some people say maybe they won't be quite so subject to litigation because they've been putting some warning on the Vioxx drug for a while. But there's already dozens of suits lined up and, undoubtedly, after this, there's going to be that many more.

CROWLEY: It seemed -- what are the other drug companies that make similar products? What happened to their stocks? Only because you've got to look at that and go, well, if that's what it did for that drug, what about these other drugs?

HAYS: It's interesting. Pfizer has Celebrex, which is the number one drug. Pfizer actually did better because people's first thought, I guess, is, well, let's see, 1.25 million people take Vioxx. They're going to have to switch to something, and maybe they'll switch to Celebrex.

Another drug analyst we talked to said, you know what? Everybody who takes any kind of Phase II Cox inhibitor, which is what these things are to make you less sensitive to arthritis pain, should be looking at this drug.

They should ask their doctors about Celebrex or if they take some other drug like this, because if there's a problem with Vioxx, maybe there is a problem with this drug as well. He said, maybe you should consider taking good old-fashioned aspirin.

CROWLEY: Buy Bayer.

HAYS: There you go.

And, of course, if you're in the oil market, then you had headaches this week anyway. So probably those people are going for the super aspirin.

ARENA: Over $50?

HAYS: Fifty bucks a barrel. I keep saying, you know, it's wonderful following the oil market because it just makes you focus on so many different parts of the world. And the latest part of the world is Nigeria.

Nigeria produces 2.5 million barrels a day. If you've been following, you remember just a couple of weeks ago OPEC said, the Saudis, we're going to boost our production by two billion barrels a day. So you can see what a big part of daily global production going on in the market Nigeria is.

Plus, it's light, sweet crude. And this is the stuff that is very readily turned into gasoline.

The Saudis this week said, hey, we'll give you some more oil, maybe a million, million and a half barrels a day more. But it's heavy crude. It isn't the same kind of thing. So the price closed over $50 a barrel.

Now, what's interesting, there's a big debate, more and more oil is being pumped. There's a sense that high oil prices could slow economies, maybe demand could slow down. At some point we could have a big drop in oil prices.

But if you're waiting to fill your home heating oil tank, you could play that game. You could say, well, maybe the prices are going to crack as we get further into the winter, and wait to fill your tank. The problem is, so far, people have been waiting to fill their tanks and the price has just gone up, up, up.

STARR: I'll be the one to ask this week.

HAYS: OK.

STARR: Martha, Martha, Martha, off to the cupcake prison or something. Is this the end of the story?

HAYS: Well, of course not. With Martha? No.

You know, the other story a week before last was that -- her doing a reality show. So we know that Martha is just going away until she can plant her garden in the spring. But she's going to jail in West Virginia.

She's going to a correctional facility there. Squeaky Fromme has been there of -- you know, from Charles Manson fame, et cetera. And she didn't get to go to Florida, like she wanted. She didn't get to go to Connecticut. But she was adamant that she wanted to start her sentence. And I think that there was some sense, too, that the correctional system didn't want to make it look as though they were catering completely to Martha Stewart.

ARENA: But nobody mentions that whole SEC shadow in the background that could still come in and say, this is it for you. You know, in terms of direct involvement.

HAYS: Well, in terms of being an executive of her company, because if she -- if you are convicted of a felony, you are often barred for life from running a company, being an executive. But this crime she committed was in her personal life, not against the company. So it still remains to be seen. We'll see in the spring when she's out planting her garden how it goes.

STARR: Well, from the business world, back to the war, and the view from northern Iraq. We're going to have Jane Arraf ON THE STORY after this.

(COMMERCIAL BREAK)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: A little bit of the view from Samarra in Iraq. Welcome back. I'm Jane Arraf. Welcome back to ON THE STORY.

STARR: Jane, we have been watching your pictures come in from the front lines of Samarra for the last several days. Please explain to us, help us understand how that fighting is going.

How did you get there? How are you managing to do your job right on the front lines there?

ARRAF: I'm going to say one of those things, and I'm sure we've all experienced this. We've been pushing for this to happen for a couple of weeks. And when it finally happened, there were a couple of moments when I thought to myself, "Why in the world are we doing this?"

One of them was probably on the helicopter ride down here, which swerves so much that you really -- you don't really think you're going to die, but you really, really wonder what sane person would really subject themselves to this. It was, needless to say, enormously interesting, exciting and worthwhile.

The other one was perhaps being crammed into the back of a Bradley fighting vehicle for about 10 hours. But again, that was all a prelude to watching this amazing thing unfold, one of the biggest combat operations here since the end of the war, and one that has particular significance because it was done with Iraqis.

And it was just an amazing thing, the number of men, the number of troops, the city itself. We have got the Tigris River behind us. We're in Samarra, which was once the capital of the Islamic world, recently overtaken, according to U.S. officials, by insurgents, and they moved in a very big way to get those insurgents out.

And we had a front row seat. It was amazing.

ARENA: Jane, tell us, what is the very latest on how that battle is going? I mean, you're there. You're in the thick of it.

Please be careful, though. We're all very worried about you. But please tell us, where do things stand right now?

ARRAF: It's still not completely over. They are continuing to take the city, the 1st Infantry Division and the Iraqis who are helping them, the new Iraqi security forces, sector by sector.

We've just come back from driving around the city with the commanding general of the 1st Infantry Division, Major General John Baptiste (ph), and he went to see how it was going. And in the space of just, let's say 10 minutes, ere were a couple of things that sort of illustrate the challenges of Iraq these days.

One was a roadside bomb that did not go off. It was in the road. It was discovered. But presumably it won't go over. But there it was, a danger to those around it, particularly Iraqis.

And then the general got out a little while later, actually got out of his Humvee and talked to people, talked to Iraqis. And there they were, standing there, complaining to him.

And any time I see that, I think of back to the Saddam years, and I think, "God, there has to be hope for this place." So it's all a mix of everything.

But today, there are scattered incidents. There is still gunfire out there. Not all the insurgents have been rooted out. And people are just starting to trickle back into the streets.

It's very, very empty. But officials we talked to say they're confident that this will do the trick.

CROWLEY: Jane, when we first heard of the U.S.-trained Iraqis joining forces, the U.S. forces were not at all happy how they performed around Fallujah. How did they do this time?

ARRAF: They say they did a lot better. And probably part of it is time and part of it is planning and part of it is learning from mistakes.

One of the ways that they used the Iraqi forces quite cleverly is the same thing they essentially did in Najaf, which is to take a special group of Iraqi commandos, Iraqi special forces, the same ones we met in Najaf, as a matter of fact, and they used them to breach the mosque here. This is a sacred site, one of the holiest sites in Shia Islam. They didn't want Americans running around it.

Now, it was an extra ordinary image as that battle unfolded, seeing lines of U.S. soldiers in the street leading up to the this incredible golden-domed mosque. But when the real push came, and they broke down the doors, blasted open the doors, it was Iraqis leading that charge. And Iraqis very proud to be leading that charge.

All still a work in progress. And certainly, it's not perfect. They need a lot of training. They need more of them.

They need equipment. They need more of everything. But the numbers were there. There were more than 1,000 of them this time. And by all accounts, this seemed to have worked.

HAYS: Jane, what about morale among the U.S. troops? Are they following the election campaign? Did they have any exposure to the debates? What's the feeling among the troops?

ARRAF: You know, I asked some of them, because we were out when the campaign was on. It hit at about 4:00 in the morning our time. And that was exactly when we were bonding with these soldiers in this Bradley, waiting for the battle to begin.

And I got a variety of views. But one that really I think reflect the experience of soldiers.

One told me that he had thought about it a long time and he -- if he were to make that choice, he didn't believe that this war was worth it. But yet, he was re-enlisting in the Army.

And he said, "For me, it doesn't have all the answers, but it has some of the answers. And my family is the most important thing to me."

There's a real pragmatism here, a real sense among some that we talked to of thinking about why they're here, whether they should be here. But one thing that's really different is you really get a sense of purpose that you don't on the outside.

We imagine here that soldiers are living these horrible, dangerous lives, which indeed they are maybe five, 10 percent of the time. But the rest of the time they do feel they have a sense of mission.

But I just want to tell you about something that one soldier said to us when we were in (UNINTELLIGIBLE), in another city. He said, "You know, I think about this, and the toughest thing is, you don't know who the bad guys are. And some days I don't even know if we're the good guys."

A real sense of reflection there. But overall, still a sense of purpose, I think.

STARR: Jane, one of the very interesting side notes, I know that some the troops you are there with are National Guard troops. These are people who just a few short months ago were living their lives here in the United States, now in the thick of combat.

That's also something the Pentagon is watching very closely, to see how those troops are performing. By all accounts very well, I think, right? ARRAF: They seem to be. And one of the units we were with when this battle was unfolding, gunfire going on for literally hours in front of that mosque in the narrow streets around it, we were with a National Guard unit. And one of the soldiers in that unit happened to be the only casualty so far, the only fatality in the U.S. military.

He had been here only a month. And the National Guard are sort of amazing.

They signed up for different reasons, but a lot of them were New York policemen, for instance, who signed up after 9/11. They signed up because they felt they needed to do something.

Others never expected in a million years what they were in for. But they're still all here pulling together. And part of this huge variety of people that have found themselves in Iraq, in an alien culture, in very difficult circumstances, essentially trying to make it better. And it's really quite touching.

ARENA: Well, Jane, we know that you've got to get back to work. Tell us, what's on the story for you in coming days?

ARRAF: We are going to be watching what's going on in Samarra. They are still retaking the city, still sectors that they haven't fully taken control of. And then the hard part begins.

It's quite a lot like Najaf, it seems. First you get rid of the insurgency, but then you have to do all sorts of other things to make sure the place remains stable.

It needs a police chief. It needs money coming in. We're going to be trying to get up to the Iranian border to see what's going on around there, and possibly travel more throughout the Sunni Triangle to see what's really happening and what the future holds for this region.

ARENA: All right, Jane. Thank you so much for joining us. We know you've had never-ending work days recently, so thank you. And again, truly, be careful.

ARRAF: Thank you all.

ARENA: Well, from the war in Iraq, to the war on terrorism at home and how American Taliban John Walker Lindh may wish he wasn't so quick to negotiate a deal and a 20-year prison sentence. I'm back ON THE STORY right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ASA HUTCHINSON, HOMELAND SECURITY UNDERSECRETARY: In every area of concern we've enhanced, ratcheted up the security measures that are in place.

(END VIDEO CLIP) ARENA: That was Asa Hutchinson, homeland security undersecretary, on how tight security is getting even tighter, amidst concerns that without even specific information a terrorist attack could disrupt the November election.

Welcome back. We are ON THE STORY.

STARR: OK, Kelli. We know they don't want to talk about it a lot, but it seems like every week, you know, terrorism concerns, disrupting the election. What's the bottom line right now? What are they worried about most?

ARENA: Well, the bottom line remains the same. Officials continue to insist that they get fresh information in almost on a daily basis, suggesting that al Qaeda and related groups want to hit the U.S. before on Election Day. They say that the threat is real, but again -- and the frustration here is in they don't know who, they don't know when, they don't know where, and they don't know how.

Major concern about a chem-bio attack. That has been, though, for the last several months. Nothing has changed on that front. And so they're walking a very fine line here.

You know, do they -- do they have -- they have to continue to say, yes, we remain concerned. And you're going to see very visible signs of that concern on the street. More manpower on the street, more aggressive questioning, searching of vehicles, re-interviewing people that are out there that they think may have information, going back to sources and informants.

HAYS: But even in everyday lives, I have a friend who was at the airport just today and found that the searching was way too aggressive.

CROWLEY: It really -- I mean, it is noticeable in the airports. I have to tell you, I was appalled at the albeit female at the body search that they now do. I mean, it is -- it is definitely extremely aggressive.

They are touching you. I mean, and not just that sort of how they started out. I mean, this was a full kind of, you know, up and down, which I found really appalling.

UNIDENTIFIED FEMALE: Maybe your doctor should be doing it.

CROWLEY: In fact I was -- exactly, stuff your doctor would be doing. And I was with a female friend, and we both, I mean, literally stepped back because it was that aggressive.

ARENA: Well, this is -- you see, this is very indicative of the stress. I mean, you do have some threat weariness on the part of the people who are out there on the front lines. And you do have bulletins that have gone out saying, look, you know, al Qaeda has -- may use women for these attacks.

And so don't -- you know, readjust your thinking. And look at women as much of a threat as you look at men coming into the country. So I think what you -- what you may be a victim of is -- is that -- that constant drum beat that we've all been hearing, telling these guys, you know, do your job, it could be you who is responsible for letting that one person into the United States who does the deed.

HAYS: Kelli, you know, when I saw the story of Yasser Hamdi and John Walker Lindh, I'm never sure what kind of context to put this in. Is this just a story of a couple of unique guys? Is there some resonance, some bigger part of the story that fits in the big terror picture?

ARENA: Well, you know, for those who don't know, Yasser Hamdi we think is soon to be released. That deal hit a glitch because the Saudi government apparently was not totally on board with him going back to the country under the conditions that were set.

John Walker Lindh, as we know, is spending 20 years in prison basically for the same thing, both picked up on the battlefield. One went through the criminal justice system, one was put in military custody and he was an enemy combatant. One will be free, one won't.

And so John Walker Lindh is asking for a commutation of sentence from the president, which publicly nobody is saying anything, but behind the scenes most people are saying, probably not a chance, you know, in this environment. But it is -- it is how -- I mean, this is just one of the areas where the Bush administration has come under extreme criticism, because this was a person who was given a lot of attention.

He was described as a very serious threat, someone who was out there fighting against American troops. The -- they thought that he had some intelligence value. Back in December, the Pentagon said, well, we're done, we're done talking to him, end of story. You know, he can go now as far as we're concerned.

But very interesting how they were both handled in very different venues. And that's where a lot of the confusion has set in, because nothing has been very consistent.

And these guys are very much making up the rules as they go. They have never been in a situation like this before. And that is a large part of the problem.

STARR: Well, thank you for bringing us up to date, because it will be very interesting to watch what happens in all of these cases now.

Stay with us. We're back ON THE STORY after this.

(COMMERCIAL BREAK)

HAYS: Thanks to my colleagues, as always. Candy, rushing from the airport, Jane Arraf, in the middle of a battle in Samarra. And, of course thank you, as always, for watching ON THE STORY.

We'll be back next week. A special goodbye to our associate producer, Tanzy Sultiziak (ph). She is one of those stars behind the scene who make us look so good. We wish her all luck, everything good in Chicago, thank her for everything she did for us ON THE STORY.

Still ahead, CNN's "PEOPLE IN THE NEWS," focusing this week on vice presidential candidates Dick Cheney and John Edwards.

First, a check on making news right now.

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