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Is Arafat's Reign as Palestinian Authority Leader Over?

Aired October 30, 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.


TONY HARRIS, CNN ANCHOR: And good morning, everyone. I'm Tony Harris.
In the news now, CNN's Christiane Amanpour reports that Yasser Arafat's Palestinian doctors concluded he most likely has leukemia. And Arafat reportedly is not in full possession of his faculties and is unable to make decisions. Palestinian leaders reportedly believe that Arafat's political era is over, and they're meeting to choose new leadership.

An explosion in Baghdad this morning. The blast struck the offices of Al Arabiya. The Arab TV network says several of its workers have been hurt. Iraqi police tell CNN a car bomb caused the explosion which happened in an area that also houses political parties.

Intense battles in the Iraqi city of Falluja this morning, and a heavy toll on U.S. forces. The U.S. military says eight Marines have been killed and nine others wounded. The casualties come amid heavy U.S. air and artillery strikes in the city.

Analysts are pouring over the videotaped message from Osama bin Laden, the one broadcast yesterday by Al Jazzera. But they believe the tape is authentic and recent. It's the first such message in which bin Laden directly admits responsibility for the 9/11 attacks.

I'm Tony Harris at the CNN Center in Atlanta. ON THE STORY starts right now.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week in the final countdown to Election Day. I'm Barbara Starr, ON THE STORY of how a new Osama bin Laden tape and missing explosives in Iraq dominate the news just before the election.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: I'm Candy Crowley, in Miami, ON THE STORY of the John Kerry campaign three days out from the election.

ELAINE QUIJANO, CNN CORRESPONDENT: I'm Elaine Quijano, in Columbus, Ohio, ON THE STORY of President Bush and the final sprint towards Election Day.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: I'm Kelly Wallace, in Wisconsin, ON THE STORY of how both presidential campaigns are battling through last-minute predictions, polls and plans to get their voters out.

KATHLEEN HAYS, CNN CORRESPONDENT: And I'm Kathleen Hays, ON THE STORY of how the economy has predicted presidential winners in the past, and what signals we see this year. We'll be talking about all these stories today.

We'll also go to Iraq, where Jane Arraf is ON THE STORY of a violent week there and watching the U.S. election from afar.

And Andrea Koppel joins us to talk about Palestinian leader Yasser Arafat, his illness and what lies ahead.

E-mail us at ONTHESTORY@CNN.com.

Now straight to Elaine Quijano and the Bush campaign.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Let me make this very clear. Americans will not be intimidated or influenced by an enemy of our country. I'm sure Senator Kerry agrees with this.

I also want to say to the American people that we're at war with these terrorists and I am confident that we will prevail. Thank you very much.

(END VIDEO CLIP)

QUIJANO: President Bush responding to the new Osama bin Laden tape. A dramatic new development in the final days of the campaign.

CROWLEY: Elaine, I take great joy in turning around the question I'm getting now all the time on the Kerry side, and that is how do they think this whole Osama bin Laden tape is going to play into the election?

QUIJANO: Yes, I'm sure you do, Candy. Well, they are very cautious, as I'm sure you can well understand, about what they are saying publicly about that. That is really first and foremost.

In fact, at first, they didn't want to talk about that at all. But now, what some aides are saying, in fact most aides are saying, is when you look at poll numbers, the polls very favorable for President Bush on the issue of terrorism. They feel that perhaps this will give him the edge.

On the other hand, you also have some Bush aides who are saying, look, the very fact that this tape is out there shows that Osama bin Laden, the man behind September 11, has still not been brought to justice. So really the answer at this point up in the air, they don't know.

Some people, in fact, most people think perhaps this will help the president. Others, though, not so sure that it will benefit him.

WALLACE: And Elaine, what's the strategy from here? You know, the president, of course, some tough, tough talk last night in Ohio. Is he -- are we expecting him to continue that in the next days through the election?

QUIJANO: Absolutely. Aides are saying that the president certainly isn't going to tone down his criticisms of Senator Kerry, much as they don't want to be seen as sort of politicizing this tape and the development. They say, though, that they will continue to hit hard against Senator Kerry on the issue of who can better protect America.

We heard the president yesterday, in fact, respond to a comment by Senator Kerry after that tape had aired, talking about how the senator saying he felt that perhaps the president allowed Osama bin Laden to escape from Tora Bora. And the president very sharply saying that was shameful.

So look for the president again to continue with some harsh language along those lines. Not clear, though, if he's going to come out and talk about the tape again, mentioning it specifically. But likely to hear the president continuing to hit hard, to continue with his jabs against Senator Kerry to try and make his case to the voters in these final days that Senator Kerry is not the person who can best handle the terrorism fight.

STARR: Now, Elaine, we are down to really just hours before the polls open in this country. What is Bush's -- President Bush's strategy? Everyone anticipates seeing him continue to move through the so-called swing states. Is he still going to play the economic message, or is he really going to stick solely to national security?

QUIJANO: Well, I think it has more to do now when you talk to some of these Bush aides with the idea of President Bush's character. We saw this yesterday in New Hampshire, in fact.

He was joined by family members of September 11 victims, and he attempted really to try and drive home the point that his reasons, whether you agree or disagree, for taking action in Iraq, for carrying out the war on terrorism as he has carried it out, really has been driven. Those reasons have been driven by these family members and the connection, the memories that he has of those days immediately after September 11.

He talked about that yesterday. He talked about how he recognized the family member whose son's badge, a port authority officer badge that he has in his pocket that he carries with him, really trying to impress upon people that, look, not everyone agrees with the way that this has been carried out. But my determination, my commitment, remains steadfast, because of the pain of these people. And that it is something that he wants Americans very much to remember, and realize his motivations really lie with -- with doing what he had to prevent the pain from happening again.

HAYS: Elaine, some on the Democratic side saying, well, now, President Bush is deciding he needs to go after traditional Democrats. Republicans say, well, of course, they share our values, that's why we're going after these folks. Whereas before it seemed the Bush team concentrating on its own camp, not worrying about the undecideds because the margin was too thin.

Has there been a shift of strategy in these final days?

QUIJANO: Well, there have been. You hear him talking a lot about social issues, especially when he goes out into these conservative areas where Democrats, you know, traditionally have been the driving force. But the president trying to reach out on those social issues, things like abortion, things like gay marriage. So as well as the national security message, you're also hearing that from the president out on the campaign trail as well.

CROWLEY: Elaine Quijano, I think we're bidding you adieu here, in Columbus, Ohio, where I think all of us now have honorary residency. Hopefully we'll see you on the campaign trail sometime. Thanks, Elaine.

QUIJANO: Sure.

CROWLEY: The Kerry speech is now getting shorter and sharper. We're on that story after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: They said, thinking they were just cutting me right to the quick, they said, "John Kerry won't be president until the Red Sox win the World Series."

(APPLAUSE)

KERRY: Well, we're on our way! We're on our way!

(END VIDEO CLIP)

CROWLEY: Trust me when I tell you, three days out from the election, they will take any sign they can get on either side. Welcome back, We're ON THE STORY.

WALLACE: Hello to you, Candy. You know, question for you. You've watched presidential candidates time and time again. What's your sense of how the Kerry campaign handled the reaction to this Osama bin Laden tape, and did it seem that they thought it was a mistake for the senator in that interview to mention, you know, how he thought President Bush missed an opportunity to get him, Osama bin Laden, at Tora Bora?

CROWLEY: I can tell you that they don't thing it was a mistake. They think it was a misinterpretation by the media.

As we know, the senator, right when the bin Laden news was coming out, sat down for a local interview with a Wisconsin station. He said basically what he said a little later on the tarmac, which is was, "We're all Americans. We're going to get this guy." You know, "They're barbarians." And -- but then he went onto say, "And I think it's a same George Bush didn't get bin Laden in Tora Bora. I wouldn't have done it the way he did it. And because he did it the way he did it, that's why we're in the situation we are today."

Well, they -- you know, the Kerry campaign very sensitive to this. What got, you know, a very -- what can we call it -- heated discussion with the Kerry campaign aide after I did a story saying that they dialed that back later on and just did the "We're all Americans" part and left out the Tora Bora and losing bin Laden. So they are extremely cautious at this point and a little nervous, obviously, that they're going to be seen as trying to make politics of the most hated man in America suddenly appearing on our TV screen.

Having said that, you can't take bin Laden out of this election. It just doesn't work. He's been at the center of this election since it began.

STARR: Kelly, let me ask you something. Let me shift gears just slightly for a minute.

But to get to the bottom line that's approaching here, as you and Candy have covered this election season, it just continues to seem neck and neck. Somebody's up a little bit, somebody's down a little bit. But basically it's been a dead heat.

What's the war gaming on the campaign trail that you're hearing about whether or not this really may go to the courts? And how prepared are both the Kerry and the Bush campaigns legally to take this to the courts if there isn't a clean winner Tuesday night?

WALLACE: Well, Barbara, you know, they're both very, very prepared. I mean, we talked about it, and many of our colleagues have done stories about how you have more, you know, lawyers on ready -- on the ready at the polling places than polling workers. You know, they are both ready for this.

The sense you're getting, though, is, at least, from both sides, is that they don't think it's going to come down to that. Both sides thinking that ultimately it's going to swing a few points in either direction.

No surprise, the Bush team thinks it's going to go for President Bush, the Kerry team for Senator Kerry. And both have sort of different strategies.

You're seeing Senator Kerry trying to reach out to the undecideds. Mike McCurry, one of his top advisers, saying he thinks ultimately the race will come down to trying to get those people who voted for President Bush four years ago, who don't feel like they got what voted for, but are still having a hard time making the switch. And so what you're trying to hear -- what the senator is trying to do in the final days, trying to get an argument to those people that on domestic and international issues, he's trying to make the case it's time for change. HAYS: You know, Candy, a lot of your fellow correspondents are especially jealous of you guys this time of the year because you're following these campaigns around it's really exciting. But when you get Bruce Springsteen involved, then we get especially jealous. What's going on there, and what's the mood been with the crowds you've seen?

CROWLEY: Well, let's see, two years in Holiday Inns versus one day with Bruce Springsteen. It's almost even, what can I tell you.

(LAUGHTER)

CROWLEY: Listen, you know, this was -- I mean, Madison, Wisconsin, where Bruce Springsteen first showed up -- and I think that's what you're seeing on your TV screen. It's hard for me to tell -- a huge crowd there. They estimated 80,000.

That is Wisconsin. That's Madison, Wisconsin, that you're looking at.

Look, there's nothing -- I mean, if you've ever seen reporters as groupies, we don't do that easily. We're cynical about everything.

But last night, when we were in Miami, Bruce Springsteen also appearing there. Afterwards, he came and stuck his head in the press camp, and, you know, you would have thought the millionaire had come to hand us all checks.

So, you know, we're all kind of around that age, and Bruce Springsteen is kind of ageless in that sense. So it's certainly -- look, any time, if you ask them like on a serious note, "Hey, does Bruce Springsteen or John Bon Jovi or any of these people bring people out to vote?" And the answer, is look, they're not going to change votes.

But after this Springsteen concert in Wisconsin, they had big signs, "Follow me." And took people to the voting booth.

They took them to go ahead and vote, because they can vote early there. So insofar as you've got this captive audience that comes to see Bruce Springsteen, they go, "Hey, while you're here, let's go to the voting booth." It can be very effective.

WALLACE: Candy, what's your sense, too, though, following the Springsteen days of the crowd Senator Kerry is getting? I was somewhat surprised yesterday, West Palm Beach not filling that entire space.

And you can see behind me here in Appleton, Wisconsin -- again, this is an area President Bush -- or George W. Bush won by about 10 points against Al Gore. Not going to fill this capacity here. What's your sense of the crowds he's been getting lately, Candy?

CROWLEY: You know, I have the same -- the same feel that you did yesterday looking at the crowd in West Palm, which should be really big and enthusiastic. Even in Miami, where, there were empty spaces. But, look, first of all, crowds never tell you anything other than the ability of either side to actually drive people to the event. They didn't have to try too hard when Bruce Springsteen was there.

The other thing talking with some of the people last night is they may have candidate fatigue. I mean, let's face it, these guys are in and out of about six states. And, you know, once you've -- I mean, with all due respect to these gentlemen, if you've seen them three or four times, you've heard it.

So it could be that. I don't -- you know, I'm always cautious about reading a whole lot into how many or how passionate the crowd is.

I mean, sometimes you can tell, hey, the candidate was off this time, he was flat. But they may just be suffering from a little candidate fatigue in Florida. Love to know, you know, how many times they've been in these same places.

So it could be that. It could tell us something. I'm just always really cautious about those crowds.

STARR: Candy, Kelly, either one of you, you know, watching this from afar in Washington, once again, what are we going to see in these final hours? A lot of movement through the same swing states, I know, but is there going to be any final sharpening of the message? Are the next couple of days going to just be negative messages, you know, the final swing at each other?

WALLACE: Well, I'll jump in first, then Candy.

CROWLEY: Go ahead, Kelly.

WALLACE: OK. Clearly, they're all spending a lot of time in Wisconsin and Iowa and Minnesota, Ohio.

Barbara, the sense, though, is trying to stay on message and not make any news, not get away from that message. And trying to kind of hammer away at the messages they've been putting forward, certainly for Senator Kerry.

He tried to do it yesterday, where is his aides say try to bring together all his arguments both on domestic and international issues, why he believes the choice now should be for John Kerry and not for President Bush. So also, Barbara, as you know, and Candy, of course, it's get out the vote time.

It's energize those supporters, get them out, get them excited. You have former President Clinton out today in New Mexico. It's bring out the surrogates to try and get more excitement, get people more motivated to go out on Tuesday.

Candy, I'm sure you agree there, right?

CROWLEY: Absolutely. It's sort of campaign in a capsule time. And you -- where once you get a long speech on the economy, now you get a paragraph, because there's a paragraph on health care and there's a paragraph on the war on terrorism. But then this is also the time to start being a little inspirational.

So we're getting some, you know, and the sun is rising and, you know, the future is ahead of us, and it's bright. So we're getting a little Ronald Reaganesque at the end, because you not only have to drive the voters to the polls -- and the best way on the Kerry side to do that is pound President Bush, and there's a lot of that. But there's also, "I've got a vision, I've got a plan."

So you really get this combination, the "Reader's Digest" version of every speech that's been given over the last two years in a shorter version because you want to hit as many places as you can.

HAYS: I'm wondering which of you two may have been nearest to the campaign when John Edwards had a little more excitement than he wanted on a plane that was forced to have the forced landing. How -- I was just thinking of his family and his wife and his kids, obviously must have shook everybody else up.

But another person not mentioned yet, Ralph Nader. Are there worries in the Kerry camp about, you know, Nader siphoning off some votes that could make differences in these very close states?

CROWLEY: The short answer is absolutely.

WALLACE: Go ahead, Candy.

CROWLEY: Sorry. The short answer is absolutely.

Look, it's not that he's -- that they mention him a lot. But there are people that are working with the Kerry campaign to reach out to the Nader voters and say, "You want to waste your vote?" You know, because rember what happened in Florida. So they've been trying very hard to tamp down that vote.

Early on, they tried to get him out of race. I mean, they tried to, you know, sweet talk him out of race. I think Ralph Nader is immune to sweet talk. And he's in it.

So basically, what they've been doing is reaching out to the Green Party, reaching out to the natural Nader voters, saying, "Waste of a vote here." But look, if you're looking at these polls and you're seeing one, two points, and then you see that Ralph Nader can draw one or two points, that's a concern. Having said that, he's not in every battleground state, so he is less of a concern than he was for Al Gore.

WALLACE: Yes. And Candy, of course, big concern.

The other thing that's so interesting, and you're hearing it from both sides -- particularly, though, more from the Democrats -- all these new voters who are registered. Also, young voters.

Will we see young voters turn out in record numbers? Will we see new registered voters turn out in record numbers? And what impact that will have on these polls that we've been watching.

Will they show that those polls are meaningless? And that's something both sides are watching very carefully on Tuesday.

STARR: Well, Kelly, we know you're getting right back on the campaign trail. And for all of us, a reminder, an unexpected reminder this week of how international events can intrude at any time.

Palestinian leader Yasser Arafat rushed to a Paris hospital. His health and Mideast politics in peril. We're back on that story with State Department correspondent Andrea Koppel after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We are very relieved that he was able to travel. He arrive in good shape, conscious. I talked to him. He expressed his appreciation and his thanks for the French government for having allowed him to be in the proper hospital.

(END VIDEO CLIP)

ANDREA KOPPEL, CNN STATE DEPT. CORRESPONDENT: Lila Shaheed (ph), Palestinian spokeswoman, talking about Yasser Arafat's arrival in France. His health, of course, is uncertain, and as the political situation he leaves behind is also uncertain.

Welcome back. I'm Andrea Koppel, and we're ON THE STORY.

STARR: Now, Andrea, there's been some developments this morning on his medical condition?

KOPPEL: This is something that is going to be developing until the bitter end. And we don't know when that will be.

Christiane Amanpour has spoken to her sources, unnamed Palestinian officials who are telling her that the post-Arafat succession period has begun and that Yasser Arafat is mentally incapacitated. I spoke to two Palestinian sources who said a word that I can't repeat on television, but it has to do with manure. They said that the fact is nobody knows.

Yasser Arafat is a very sick man. That much we do know. He is in hospital right now.

One indicator of just how sick he is the fact that he agreed to leave Ramallah, not just his headquarters where he had been holed up for two-and-a-half years, but to leave the Palestinian territories for the first time in several years. The fact that the Israeli government has let him leave and assured that he can return is an indicator of just how sick he is.

But guys, we don't know what's wrong with him. That is why the doctors in Paris are giving him the several times over to try to see is this terminal or is this something that can be treated? HAYS: Well, and the question is, of course, if it's any cancer like leukemia, anyone who's known a leukemia patient knows this can take time, it can go either way. So obviously the horse race has begun.

KOPPEL: The horse race has begun. And one of the reasons for that is that Yasser Arafat say master tactician. He's been at the head and the founding member of the PLO for 50 years. That is no accident.

He has been able to keep all of his potential suspected opponents off -- off balance. He has not hand picked his successor, and that's what we're watching right now.

Yasser Arafat could be around for a number of years to come, but what we're seeing right now, at least for the short term, are behind- the-scenes jockeying for power. As you said, the horse race has begun.

If Yasser Arafat were to die, there is a Palestinian constitution in place. What would happen is that the head of -- the speaker of the Palestinian Legislative Council would have -- would be the temporary president for about 60 days, and then there would be elections. But most likely, what most experts say would happen is that there would never be another Yasser Arafat, someone like a Mao Tse-tung, who had -- wore all of the hats and controlled all of the power.

Most likely, what you would se is a collective or a kind of collegial leadership in which a number of people help to run the Palestinian Authority. But he is the symbol of the Palestinian national movement.

CROWLEY: Andrea, that sort of sounds like a recipe, you know, for disaster for peace in the Middle East, if you have a collective speaking for the Palestinian side. On the other hand, obviously, the Bush administration won't even talk to Yasser Arafat. So moving this forward, does the change in leadership help or hurt the Middle East process?

KOPPEL: Most people -- most analysts that I've spoken with say in the short term there would be no change. It also depends -- my gosh, we're three days away from an election in this country, Candy. So we don't know who the next president will be.

If it's George Bush, you're absolutely right. They've already ruled out having any contact with Yasser Arafat. But if it's a John Kerry, per se, and it's a new Palestinian leadership, could that change things? And it might change things for the Bush administration.

Nobody knows at this time. But again, in the short term, most believe that there will be no change on the ground.

HAYS: Andrea, we know that you have to scoot along the ground, get to your next assignment here on CNN. We're glad you could join us and tell us about the latest on Yasser Arafat. KOPPEL: My pleasure.

HAYS: From the Middle East and Europe to Wall Street, some people are looking at economic numbers to predict Tuesday's voting numbers. I'm back on that story after this and a check on what's making news right now.

Also coming up, Barbara Starr and the latest on the hundreds of tons of missing munitions in Iraq. And Baghdad bureau chief Jane Arraf is ON THE STORY in Iraq.

Stay with ON THE STORY.

(COMMERCIAL BREAK)

HARRIS: I'm Tony Harris at the CNN Center. "Now in the News," an explosion in Baghdad this morning. The blast struck the offices of Al Arabiya.

The Arab TV network says several of its workers have been hurt. There is no immediate report of casualties. Iraqi police tell CNN a car bomb caused the explosion which happened in an area that also houses political parties.

A devastating loss this morning for the 1st Marine Expeditionary Force in Iraq. Eight U.S. Marines have been killed and nine have been wounded in heavy fighting in Falluja. Some of those Marines were killed when a homemade bomb exploded in a vehicle.

Sources close to Yasser Arafat tell CNN that the ailing Palestinian leader suffers from dementia, most likely has leukemia, and can no longer lead the Palestinian Authority. Palestinian officials are meeting in Ramallah today to prepare for new leadership. Medical specialists in Paris have not yet made a formal diagnosis.

And steady and resolved, that's how President Bush described himself in today's last weekly radio address before Election Day. The president appeared and appealed for votes by highlighting his leadership of the war on terror.

(BEGIN AUDIO CLIP)

BUSH: The direction of the war on terror is at stake in the election of 2004. And when you go to the polls on Tuesday, rember this: I will do whatever it takes to defend America and prevail in the war on terror. And I will always support the men and women who do the fighting.

(END AUDIO CLIP)

HARRIS: He did not mention the new tape of Osama bin Laden.

I'm Tony Harris. Now back to ON THE STORY.

(BEGIN VIDEO CLIP) KERRY: When I am president of the United States, I want an economy where Americans aren't just working for the economy, the economy is working for Americans.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: The president and I will not be satisfied until every American wants to work and find a job. But this is a strong, growing economy. Don't let the Democrats tell you otherwise.

(END VIDEO CLIP)

HAYS: No surprise, the economy was part of the campaign back- and-forth this week. Just yesterday, new economic growth numbers. The last we'll see before Election Day showed expansion, but not as much as many experts had predicted.

Welcome back. We're ON THE STORY.

CROWLEY: Kathleen, when you look at Wall Street as a predictor of what's going to happen in the election, what does the crystal ball say?

HAYS: Well, actually, it's interesting. A lot of people, of course, Candy, everyone is trying to figure out what's going on. And so we don't have crystal balls.

We look at the past. We look at all kinds of gauges to say what the numbers say about who's the next president.

Interestingly enough, Wall Street, if you look at some work done by the "Stock Traders Almanac," who look at every election since 1904, focusing on October, the last month before the election, if the stock market is up more than 3.3 percent, they found the incumbent always wins. If it's down more than a half percentage point, the incumbent always loses.

You know how the stock market finished this time for the month of October? Down something like 0.53 percent. It's a very close signal. A lot of things in the economy right now are like that.

A lot of political scientists say GDP is strong enough to really -- really point towards a Bush victory pretty solidly. But if you look at jobs, which have grown very slowly, if you look at consumer confidence, the latest number below 100. That suggests narrowly that there's a favor for John Kerry in the economic numbers right now.

STARR: Well, it's interesting. Go back to jobs for a second, because that's what we keep hearing so much about.

We heard about it in the debates. The Kerry campaign certainly trying to make the case that jobs -- the jobs picture under Bush has not been a good one, but yet Bush still saying it's OK, we're making progress.

HAYS: Jobs have been created, jobs are growing. The GDP grew 3.7 percent. That's a perfectly respectable GDP number. It's pretty healthy, actually.

Incomes are growing. But the economy that we have now doesn't create jobs very easily because we're productive, because a lot of businesses are cautious.

So depending on where you put the emphasis, you really could say that either candidate has -- is not lying. They're not making it up. But they emphasize different things.

Another one of these let's massage the numbers, let's dissect the numbers. If you look at jobs growth in the last six months before an election, according to (UNINTELLIGIBLE), if it's below an average of around 1 percent, at an annualized rate -- I'm giving you a lot of numbers. Basically, he says right now the jobs growth is just weak enough to say, you know, it probably gives the edge to Kerry.

But again, so many things are close. And I think we really see it reflected in the polls and what you hear from a lot of voters.

CROWLEY: Kathleen, let me talk about oil prices a second. And that is, is there anything in those? I mean, my -- my common sense says oil prices sends up gas prices, and everybody sees gas prices. Therefore, as they go higher, that's bad for George Bush. Anything else in the oil prices that's going on that predicts?

HAYS: Well, right now with oil prices -- we had such an interesting week in the oil market because, you know, oil has been one of the biggest stories for the stock market. The election uncertainty and oil, those are two things really weighing on the stocks in the last several weeks.

We saw numbers suggesting that crude oil inventories, with the Saudis pumping a ton out, OPEC pumping a ton out, finally starting to build. Heating oil inventories, though, are still low. There is a lot of demand right now for heating oil and diesel. That's a problem.

The impact of the hurricane still creeping refineries somewhat. The numbers are starting to come back up, Candy.

But another big story, if you really want to get your mind in this geopolitical oil spin was China. China raised interest rates for the first time in nine years.

They're one of the big gobblers, big guzzlers of gas. So for a while the stock market rallied, "Oh, boy, China is going to slow down. We won't be using so much oil in the world."

And then people said, "You know what? But they only raised interest rates a little bit."

And China is growing. They're going to keep consuming oil. So I think that one of the main predictions now, get used to high oil prices. Because if they come down, they won't come down much.

STARR: Amidst all this serious business -- and serious it is -- there was one funny little thing in the economy this week, the Red Sox?

HAYS: The Red Sox. You know, and I think like John Kerry said, if the Red Sox win, it seems like anything can happen.

This is -- of course the World Series really enthralled the country. Certainly people on Wall Street staying up late every night and going to work bleary-eyed.

There is the parade right now. People still celebrating. But you know who else is celebrating is Fox, one of those other news channels.

It was something like the fourth most watched series in nine years or 19 years. Let me just say that people really tuned into watch this. So they were very happy.

The Red Sox next year are going to be talking dollars and cents. They're going to have something like -- I think it's 16 or 18 -- about a dozen and a half, let me be safe -- players up as free agents. And they've already committed a lot of their money to some of their star players.

But this includes people like Pedro Martinez, one of the star pitchers. I think it includes Derek Lowe. They've already got money committed to some big players like Manny Ramirez, who's one of the great batters in this series.

So that is going to be an issue for the Sox, if they see it they can come back and do this again. In fact, one sports writer called this the new curse for the Red Sox. That now that they've won, it's going to be tough to keep the players they've got, who've become free agents, without putting up the money.

But one final point. Fenway Park is an old, small park. They're already filled to capacity. It's tough to really add on any space to bring in the money.

We'll see how it goes for the Sox. But what a week. It was certainly one of the uplifting things, for Boston, that is, this week ahead of the elections.

STARR: Well, Kathleen Hays, sports reporter, who knew?

From the business world to Iraq, Baghdad bureau chief Jane Arraf and I are back ON THE STORY after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KERRY: The bottom line about these weapons that have disappeared, here's the bottom line. They're not where they're supposed to be. You were warned to guard them. You didn't guard them. They're not secure.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BUSH: A president needs to get all the facts before jumping to politically-motivated conclusions.

(END VIDEO CLIP)

STARR: Well, that was the story at the Pentagon this week. The case of the missing explosives provided both presidential candidates with plenty of ammunition, and it left plenty of questions by the end of the week about what happened, when, and what is the impact on security in Iraq.

Welcome back. We're ON THE STORY.

HAYS: Well, you know, Barbara, I think there's some cynical news watchers and voters out there who said, "What a surprise if some explosives are missing." Obviously, though, this was a huge amount, enough that could blow up all kinds of things.

But I'm very confused now. I think a lot of people are, too. Who took what? Who has it? What was the latest? And does it really mean anything later?

STARR: Well, as we now refer to the Pentagon, every once in a while we call it mystery science theater, especially with this story. You have two threads going on here.

You have technically what did happen to this amount explosives. And that may be unknowable at the end of the day.

It was a war zone. It may be that a variety of things happened. Some may have been destroyed it. Some have been looted. It might have been before the war, it might have been after the war.

It's going to wind up being a big "Who knows?" But there is the political side, of course.

All sides, both campaigns, and the Pentagon, clearly making this a political issue, and responding to it at the Pentagon with a political overtone. Trying to prove a case for the administration, but never quite able to settle on what they thought really happened to all of this stuff.

So it was a very entertaining week. A lot of theater, not a lot of facts.

CROWLEY: Barbara, it's interesting to me that on the campaign trail, John Kerry, at least, has already stopped talking about that. We have moved on, although not on the stump, to the bin Laden tape.

What, looking at that, do U.S. officials see on the tape? Have they picked up any hints? You know, what do they make of the tape? STARR: Candy, the tape did not come as a surprise to any senior military or intelligence officials. It was really what they might have expected.

They have looked at this tape and there are several interesting things as you look at it. Bin Laden looks to be in pretty good shape. Dick Cheney said he was hiding somewhere in a cave. He's looking pretty good.

His clothing is clean, tidy. He appears to be in much better health than the last time we saw him on tape.

And if you look at the physical surroundings, you can't tell much. But you can tell some things.

He does not appear to be in a cave. There is good lighting. There is good sound. There are production values to this tape.

So somewhere he is surrounded by people. He was either brought to this location or a television film crew came to him.

Our own CNN TV crews, our technical people, have looked at this, and they're commenting like, "Hey, look, he's got lighting, he's the got sound." There's got to be people on the other side of that camera.

Some very interesting things about what bin Laden said. One of the biggest hints was he spoke about the fact 1,000 U.S. deaths in Iraq. The U.S. fatality rate reached 1,000 somewhere around September 7. So there is a very great possibility this tape is very recent, at least since September 7.

It has a timestamp on it that would have indicated last Sunday. No one is really sure if it was, that was just slapped on. But there's every indication this tape is quite recent.

HAYS: Well, and I think one of the frightening speculations that's been raised is its release now, because it contains some hidden signal to start some big attack right before the election.

STARR: Well, the tapes by the al Qaeda leadership, in fact, have been -- in the past, when they have emerged on the international stage, there have been attacks that followed. Not always, sometimes. And that is clearly what they are looking for.

And, in fact, that is one of the reasons that the U.S. government had pressed Al-Jazeera and the Qatar government not to broadcast the tape. They wanted to really, you know, put a lid on it and not have it out there as some international signal.

But look at the tape. It gives you every indication that bin Laden himself has some level of communications left somewhere with the outside world.

He refers to John Kerry. He refers to relatively recent events. He seems to know what's going on. Whether he controls the same network he used to remains to be seen.

HAYS: Obviously getting some help somewhere along the line or he wouldn't still be alive.

Well, we're back on -- with more on Iraq with Baghdad bureau chief Jane Arraf in just a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I at least know I'm fighting for what I believe in. I'm fighting with the guys who I'd rather be with.

(END VIDEO CLIP)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: That was Specialist Nicholas Cruz (ph), talking about his motivation to keep fighting for his buddies to make sure they all get home alive.

Welcome backs. We're ON THE STORY.

CROWLEY: Jane, I know, obviously, those soldiers' primary mission right now is to stay alive and to move this war forward. But you've been out and about. Are they talking about the election, viewing the election? What's the conversation like about that?

ARRAF: Well, it takes a little while to get it rolling, because there is a natural hesitancy to talk about the stuff. But they do talk about it among themselves. And once you get them going, it is hard to get them stop. And yes, they are talking about it.

Now, a lot of them say it does not make any difference to them, and they don't even plan to vote. But the ones who do have opinions have quite strong opinions. And one of the things I was struck by is that there does seem to be more sympathy than I would have thought for John Kerry.

Maybe it's the experience they've had here, maybe it's the fact that they're glued to the Internet when they're not out there fighting. But that is a definite undercurrent out there.

STARR: Now, Jane, here, we've just heard in the last hour or so about casualties today out west of Baghdad, near Falluja, eight troops killed, nine injured. The Falluja area continues to be of great concern to the U.S. military, and a sense -- a sense here that sooner or later they're going to have to go beyond the air campaign that they've been waging out there.

ARRAF: That ground campaign is definitely coming, Barbara. The Iraqi officials here, all the way from the prime minister on down, have been pretty clear. If people in Falluja do not hand over what they believe are a large number of foreign insurgents they say tied to the Zarqawi network, they are essentially going in there.

We've had Marines, for instance, Marine officials talking in Marine speak, saying that they are going to wack the city. What that means is either it's a threat designed to get people out there, designed to get local people to give up the insurgents, or they seem to be about to do what they say they will do, which is massing forces for an all-out offensive on that city -- Barbara.

HAYS: Jane, I want to ask you again about the mood among the troops and the extent to which they're following the election. You noted people on the Internet a lot.

In these last few days ahead of the election, some very striking political ads, using families of soldiers. Certainly one on the Kerry side, where a woman whose brother died is out there very prominently. A lot of commentary on that.

Do soldiers see these kinds of ads? Do they have any opinion on whether they feel they are being used or this is an appropriate way to be getting votes?

ARRAF: You know, one of the stories we've been doing is basically how soldiers feel about death. Because it has become such a political issue in the states. And you would think that the people who feel it the strongly -- the most strongly are those troops out there who are losing young men and women who have become like brothers and sisters to them over the last few months in Iraq.

But, in fact, what you find is that they seem to take it for granted that people are going to die, that they could die. Much more so than you find in the U.S.

CROWLEY: Jane, we saw in Afghanistan, when they got a chance to vote, that there was a great passion for it when the day finally came. As we move toward what we hope will be obviously elections in Iraq, on the street, are they looking forward to that, or does that look like another time for people to be in great danger?

ARRAF: Probably the latter. You're absolutely right.

Now, people desperately do want to vote. But they don't want to give up their lives for it. And right now, what they're looking at is the prospect that elections could perhaps even be delayed.

This has all been overlooked. But just a couple days from now, registration starts, registration of Iraqi voters. They're supposed to go and get their ballots and start that ball rolling. But with the violence going on, it's really not entirely clear to most people whether elections can take place, whether parties can get their act together, whether these could be real elections in any sense at all.

STARR: Jane, we all seem to be talking about elections in a whole lot of different countries right now. But getting back to the U.S. presidential election, explain to people, are the soldiers out in Iraq able to vote? Have they cast their absentee ballots? Do they feel like they're participating?

ARRAF: A lot of them have been able to vote. Some of them didn't -- never got the absentee allots. There was a real effort made to register voters.

In the units we were with, the sergeants major would go out and make sure people were registered. But most of them did seem to be able to vote, those who wanted to. But again, there is great deal of apathy, a lot of soldiers saying it just won't make any difference.

STARR: Well, Jane, thank you. And we're all back ON THE STORY after this.

(COMMERCIAL BREAK)

HAYS: Thanks to my colleagues. Thank you for watching ON THE STORY. We'll be back next week.

Still ahead, "PEOPLE IN THE NEWS" focusing this week on Laura Bush and Teresa Kerry.

Straight ahead, a check of what's making news right now.

And we're going to leave you with some very fun pictures. It's the celebration, the Red Sox victory in Boston. Look at all those people celebrating the end of an 86-year curse.

The curse of the bambino, it's over. The Bostonians feel very happy.

And we're happy you joined us today as well.

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


Aired October 30, 2004 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: And good morning, everyone. I'm Tony Harris.
In the news now, CNN's Christiane Amanpour reports that Yasser Arafat's Palestinian doctors concluded he most likely has leukemia. And Arafat reportedly is not in full possession of his faculties and is unable to make decisions. Palestinian leaders reportedly believe that Arafat's political era is over, and they're meeting to choose new leadership.

An explosion in Baghdad this morning. The blast struck the offices of Al Arabiya. The Arab TV network says several of its workers have been hurt. Iraqi police tell CNN a car bomb caused the explosion which happened in an area that also houses political parties.

Intense battles in the Iraqi city of Falluja this morning, and a heavy toll on U.S. forces. The U.S. military says eight Marines have been killed and nine others wounded. The casualties come amid heavy U.S. air and artillery strikes in the city.

Analysts are pouring over the videotaped message from Osama bin Laden, the one broadcast yesterday by Al Jazzera. But they believe the tape is authentic and recent. It's the first such message in which bin Laden directly admits responsibility for the 9/11 attacks.

I'm Tony Harris at the CNN Center in Atlanta. ON THE STORY starts right now.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week in the final countdown to Election Day. I'm Barbara Starr, ON THE STORY of how a new Osama bin Laden tape and missing explosives in Iraq dominate the news just before the election.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: I'm Candy Crowley, in Miami, ON THE STORY of the John Kerry campaign three days out from the election.

ELAINE QUIJANO, CNN CORRESPONDENT: I'm Elaine Quijano, in Columbus, Ohio, ON THE STORY of President Bush and the final sprint towards Election Day.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: I'm Kelly Wallace, in Wisconsin, ON THE STORY of how both presidential campaigns are battling through last-minute predictions, polls and plans to get their voters out.

KATHLEEN HAYS, CNN CORRESPONDENT: And I'm Kathleen Hays, ON THE STORY of how the economy has predicted presidential winners in the past, and what signals we see this year. We'll be talking about all these stories today.

We'll also go to Iraq, where Jane Arraf is ON THE STORY of a violent week there and watching the U.S. election from afar.

And Andrea Koppel joins us to talk about Palestinian leader Yasser Arafat, his illness and what lies ahead.

E-mail us at ONTHESTORY@CNN.com.

Now straight to Elaine Quijano and the Bush campaign.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Let me make this very clear. Americans will not be intimidated or influenced by an enemy of our country. I'm sure Senator Kerry agrees with this.

I also want to say to the American people that we're at war with these terrorists and I am confident that we will prevail. Thank you very much.

(END VIDEO CLIP)

QUIJANO: President Bush responding to the new Osama bin Laden tape. A dramatic new development in the final days of the campaign.

CROWLEY: Elaine, I take great joy in turning around the question I'm getting now all the time on the Kerry side, and that is how do they think this whole Osama bin Laden tape is going to play into the election?

QUIJANO: Yes, I'm sure you do, Candy. Well, they are very cautious, as I'm sure you can well understand, about what they are saying publicly about that. That is really first and foremost.

In fact, at first, they didn't want to talk about that at all. But now, what some aides are saying, in fact most aides are saying, is when you look at poll numbers, the polls very favorable for President Bush on the issue of terrorism. They feel that perhaps this will give him the edge.

On the other hand, you also have some Bush aides who are saying, look, the very fact that this tape is out there shows that Osama bin Laden, the man behind September 11, has still not been brought to justice. So really the answer at this point up in the air, they don't know.

Some people, in fact, most people think perhaps this will help the president. Others, though, not so sure that it will benefit him.

WALLACE: And Elaine, what's the strategy from here? You know, the president, of course, some tough, tough talk last night in Ohio. Is he -- are we expecting him to continue that in the next days through the election?

QUIJANO: Absolutely. Aides are saying that the president certainly isn't going to tone down his criticisms of Senator Kerry, much as they don't want to be seen as sort of politicizing this tape and the development. They say, though, that they will continue to hit hard against Senator Kerry on the issue of who can better protect America.

We heard the president yesterday, in fact, respond to a comment by Senator Kerry after that tape had aired, talking about how the senator saying he felt that perhaps the president allowed Osama bin Laden to escape from Tora Bora. And the president very sharply saying that was shameful.

So look for the president again to continue with some harsh language along those lines. Not clear, though, if he's going to come out and talk about the tape again, mentioning it specifically. But likely to hear the president continuing to hit hard, to continue with his jabs against Senator Kerry to try and make his case to the voters in these final days that Senator Kerry is not the person who can best handle the terrorism fight.

STARR: Now, Elaine, we are down to really just hours before the polls open in this country. What is Bush's -- President Bush's strategy? Everyone anticipates seeing him continue to move through the so-called swing states. Is he still going to play the economic message, or is he really going to stick solely to national security?

QUIJANO: Well, I think it has more to do now when you talk to some of these Bush aides with the idea of President Bush's character. We saw this yesterday in New Hampshire, in fact.

He was joined by family members of September 11 victims, and he attempted really to try and drive home the point that his reasons, whether you agree or disagree, for taking action in Iraq, for carrying out the war on terrorism as he has carried it out, really has been driven. Those reasons have been driven by these family members and the connection, the memories that he has of those days immediately after September 11.

He talked about that yesterday. He talked about how he recognized the family member whose son's badge, a port authority officer badge that he has in his pocket that he carries with him, really trying to impress upon people that, look, not everyone agrees with the way that this has been carried out. But my determination, my commitment, remains steadfast, because of the pain of these people. And that it is something that he wants Americans very much to remember, and realize his motivations really lie with -- with doing what he had to prevent the pain from happening again.

HAYS: Elaine, some on the Democratic side saying, well, now, President Bush is deciding he needs to go after traditional Democrats. Republicans say, well, of course, they share our values, that's why we're going after these folks. Whereas before it seemed the Bush team concentrating on its own camp, not worrying about the undecideds because the margin was too thin.

Has there been a shift of strategy in these final days?

QUIJANO: Well, there have been. You hear him talking a lot about social issues, especially when he goes out into these conservative areas where Democrats, you know, traditionally have been the driving force. But the president trying to reach out on those social issues, things like abortion, things like gay marriage. So as well as the national security message, you're also hearing that from the president out on the campaign trail as well.

CROWLEY: Elaine Quijano, I think we're bidding you adieu here, in Columbus, Ohio, where I think all of us now have honorary residency. Hopefully we'll see you on the campaign trail sometime. Thanks, Elaine.

QUIJANO: Sure.

CROWLEY: The Kerry speech is now getting shorter and sharper. We're on that story after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: They said, thinking they were just cutting me right to the quick, they said, "John Kerry won't be president until the Red Sox win the World Series."

(APPLAUSE)

KERRY: Well, we're on our way! We're on our way!

(END VIDEO CLIP)

CROWLEY: Trust me when I tell you, three days out from the election, they will take any sign they can get on either side. Welcome back, We're ON THE STORY.

WALLACE: Hello to you, Candy. You know, question for you. You've watched presidential candidates time and time again. What's your sense of how the Kerry campaign handled the reaction to this Osama bin Laden tape, and did it seem that they thought it was a mistake for the senator in that interview to mention, you know, how he thought President Bush missed an opportunity to get him, Osama bin Laden, at Tora Bora?

CROWLEY: I can tell you that they don't thing it was a mistake. They think it was a misinterpretation by the media.

As we know, the senator, right when the bin Laden news was coming out, sat down for a local interview with a Wisconsin station. He said basically what he said a little later on the tarmac, which is was, "We're all Americans. We're going to get this guy." You know, "They're barbarians." And -- but then he went onto say, "And I think it's a same George Bush didn't get bin Laden in Tora Bora. I wouldn't have done it the way he did it. And because he did it the way he did it, that's why we're in the situation we are today."

Well, they -- you know, the Kerry campaign very sensitive to this. What got, you know, a very -- what can we call it -- heated discussion with the Kerry campaign aide after I did a story saying that they dialed that back later on and just did the "We're all Americans" part and left out the Tora Bora and losing bin Laden. So they are extremely cautious at this point and a little nervous, obviously, that they're going to be seen as trying to make politics of the most hated man in America suddenly appearing on our TV screen.

Having said that, you can't take bin Laden out of this election. It just doesn't work. He's been at the center of this election since it began.

STARR: Kelly, let me ask you something. Let me shift gears just slightly for a minute.

But to get to the bottom line that's approaching here, as you and Candy have covered this election season, it just continues to seem neck and neck. Somebody's up a little bit, somebody's down a little bit. But basically it's been a dead heat.

What's the war gaming on the campaign trail that you're hearing about whether or not this really may go to the courts? And how prepared are both the Kerry and the Bush campaigns legally to take this to the courts if there isn't a clean winner Tuesday night?

WALLACE: Well, Barbara, you know, they're both very, very prepared. I mean, we talked about it, and many of our colleagues have done stories about how you have more, you know, lawyers on ready -- on the ready at the polling places than polling workers. You know, they are both ready for this.

The sense you're getting, though, is, at least, from both sides, is that they don't think it's going to come down to that. Both sides thinking that ultimately it's going to swing a few points in either direction.

No surprise, the Bush team thinks it's going to go for President Bush, the Kerry team for Senator Kerry. And both have sort of different strategies.

You're seeing Senator Kerry trying to reach out to the undecideds. Mike McCurry, one of his top advisers, saying he thinks ultimately the race will come down to trying to get those people who voted for President Bush four years ago, who don't feel like they got what voted for, but are still having a hard time making the switch. And so what you're trying to hear -- what the senator is trying to do in the final days, trying to get an argument to those people that on domestic and international issues, he's trying to make the case it's time for change. HAYS: You know, Candy, a lot of your fellow correspondents are especially jealous of you guys this time of the year because you're following these campaigns around it's really exciting. But when you get Bruce Springsteen involved, then we get especially jealous. What's going on there, and what's the mood been with the crowds you've seen?

CROWLEY: Well, let's see, two years in Holiday Inns versus one day with Bruce Springsteen. It's almost even, what can I tell you.

(LAUGHTER)

CROWLEY: Listen, you know, this was -- I mean, Madison, Wisconsin, where Bruce Springsteen first showed up -- and I think that's what you're seeing on your TV screen. It's hard for me to tell -- a huge crowd there. They estimated 80,000.

That is Wisconsin. That's Madison, Wisconsin, that you're looking at.

Look, there's nothing -- I mean, if you've ever seen reporters as groupies, we don't do that easily. We're cynical about everything.

But last night, when we were in Miami, Bruce Springsteen also appearing there. Afterwards, he came and stuck his head in the press camp, and, you know, you would have thought the millionaire had come to hand us all checks.

So, you know, we're all kind of around that age, and Bruce Springsteen is kind of ageless in that sense. So it's certainly -- look, any time, if you ask them like on a serious note, "Hey, does Bruce Springsteen or John Bon Jovi or any of these people bring people out to vote?" And the answer, is look, they're not going to change votes.

But after this Springsteen concert in Wisconsin, they had big signs, "Follow me." And took people to the voting booth.

They took them to go ahead and vote, because they can vote early there. So insofar as you've got this captive audience that comes to see Bruce Springsteen, they go, "Hey, while you're here, let's go to the voting booth." It can be very effective.

WALLACE: Candy, what's your sense, too, though, following the Springsteen days of the crowd Senator Kerry is getting? I was somewhat surprised yesterday, West Palm Beach not filling that entire space.

And you can see behind me here in Appleton, Wisconsin -- again, this is an area President Bush -- or George W. Bush won by about 10 points against Al Gore. Not going to fill this capacity here. What's your sense of the crowds he's been getting lately, Candy?

CROWLEY: You know, I have the same -- the same feel that you did yesterday looking at the crowd in West Palm, which should be really big and enthusiastic. Even in Miami, where, there were empty spaces. But, look, first of all, crowds never tell you anything other than the ability of either side to actually drive people to the event. They didn't have to try too hard when Bruce Springsteen was there.

The other thing talking with some of the people last night is they may have candidate fatigue. I mean, let's face it, these guys are in and out of about six states. And, you know, once you've -- I mean, with all due respect to these gentlemen, if you've seen them three or four times, you've heard it.

So it could be that. I don't -- you know, I'm always cautious about reading a whole lot into how many or how passionate the crowd is.

I mean, sometimes you can tell, hey, the candidate was off this time, he was flat. But they may just be suffering from a little candidate fatigue in Florida. Love to know, you know, how many times they've been in these same places.

So it could be that. It could tell us something. I'm just always really cautious about those crowds.

STARR: Candy, Kelly, either one of you, you know, watching this from afar in Washington, once again, what are we going to see in these final hours? A lot of movement through the same swing states, I know, but is there going to be any final sharpening of the message? Are the next couple of days going to just be negative messages, you know, the final swing at each other?

WALLACE: Well, I'll jump in first, then Candy.

CROWLEY: Go ahead, Kelly.

WALLACE: OK. Clearly, they're all spending a lot of time in Wisconsin and Iowa and Minnesota, Ohio.

Barbara, the sense, though, is trying to stay on message and not make any news, not get away from that message. And trying to kind of hammer away at the messages they've been putting forward, certainly for Senator Kerry.

He tried to do it yesterday, where is his aides say try to bring together all his arguments both on domestic and international issues, why he believes the choice now should be for John Kerry and not for President Bush. So also, Barbara, as you know, and Candy, of course, it's get out the vote time.

It's energize those supporters, get them out, get them excited. You have former President Clinton out today in New Mexico. It's bring out the surrogates to try and get more excitement, get people more motivated to go out on Tuesday.

Candy, I'm sure you agree there, right?

CROWLEY: Absolutely. It's sort of campaign in a capsule time. And you -- where once you get a long speech on the economy, now you get a paragraph, because there's a paragraph on health care and there's a paragraph on the war on terrorism. But then this is also the time to start being a little inspirational.

So we're getting some, you know, and the sun is rising and, you know, the future is ahead of us, and it's bright. So we're getting a little Ronald Reaganesque at the end, because you not only have to drive the voters to the polls -- and the best way on the Kerry side to do that is pound President Bush, and there's a lot of that. But there's also, "I've got a vision, I've got a plan."

So you really get this combination, the "Reader's Digest" version of every speech that's been given over the last two years in a shorter version because you want to hit as many places as you can.

HAYS: I'm wondering which of you two may have been nearest to the campaign when John Edwards had a little more excitement than he wanted on a plane that was forced to have the forced landing. How -- I was just thinking of his family and his wife and his kids, obviously must have shook everybody else up.

But another person not mentioned yet, Ralph Nader. Are there worries in the Kerry camp about, you know, Nader siphoning off some votes that could make differences in these very close states?

CROWLEY: The short answer is absolutely.

WALLACE: Go ahead, Candy.

CROWLEY: Sorry. The short answer is absolutely.

Look, it's not that he's -- that they mention him a lot. But there are people that are working with the Kerry campaign to reach out to the Nader voters and say, "You want to waste your vote?" You know, because rember what happened in Florida. So they've been trying very hard to tamp down that vote.

Early on, they tried to get him out of race. I mean, they tried to, you know, sweet talk him out of race. I think Ralph Nader is immune to sweet talk. And he's in it.

So basically, what they've been doing is reaching out to the Green Party, reaching out to the natural Nader voters, saying, "Waste of a vote here." But look, if you're looking at these polls and you're seeing one, two points, and then you see that Ralph Nader can draw one or two points, that's a concern. Having said that, he's not in every battleground state, so he is less of a concern than he was for Al Gore.

WALLACE: Yes. And Candy, of course, big concern.

The other thing that's so interesting, and you're hearing it from both sides -- particularly, though, more from the Democrats -- all these new voters who are registered. Also, young voters.

Will we see young voters turn out in record numbers? Will we see new registered voters turn out in record numbers? And what impact that will have on these polls that we've been watching.

Will they show that those polls are meaningless? And that's something both sides are watching very carefully on Tuesday.

STARR: Well, Kelly, we know you're getting right back on the campaign trail. And for all of us, a reminder, an unexpected reminder this week of how international events can intrude at any time.

Palestinian leader Yasser Arafat rushed to a Paris hospital. His health and Mideast politics in peril. We're back on that story with State Department correspondent Andrea Koppel after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We are very relieved that he was able to travel. He arrive in good shape, conscious. I talked to him. He expressed his appreciation and his thanks for the French government for having allowed him to be in the proper hospital.

(END VIDEO CLIP)

ANDREA KOPPEL, CNN STATE DEPT. CORRESPONDENT: Lila Shaheed (ph), Palestinian spokeswoman, talking about Yasser Arafat's arrival in France. His health, of course, is uncertain, and as the political situation he leaves behind is also uncertain.

Welcome back. I'm Andrea Koppel, and we're ON THE STORY.

STARR: Now, Andrea, there's been some developments this morning on his medical condition?

KOPPEL: This is something that is going to be developing until the bitter end. And we don't know when that will be.

Christiane Amanpour has spoken to her sources, unnamed Palestinian officials who are telling her that the post-Arafat succession period has begun and that Yasser Arafat is mentally incapacitated. I spoke to two Palestinian sources who said a word that I can't repeat on television, but it has to do with manure. They said that the fact is nobody knows.

Yasser Arafat is a very sick man. That much we do know. He is in hospital right now.

One indicator of just how sick he is the fact that he agreed to leave Ramallah, not just his headquarters where he had been holed up for two-and-a-half years, but to leave the Palestinian territories for the first time in several years. The fact that the Israeli government has let him leave and assured that he can return is an indicator of just how sick he is.

But guys, we don't know what's wrong with him. That is why the doctors in Paris are giving him the several times over to try to see is this terminal or is this something that can be treated? HAYS: Well, and the question is, of course, if it's any cancer like leukemia, anyone who's known a leukemia patient knows this can take time, it can go either way. So obviously the horse race has begun.

KOPPEL: The horse race has begun. And one of the reasons for that is that Yasser Arafat say master tactician. He's been at the head and the founding member of the PLO for 50 years. That is no accident.

He has been able to keep all of his potential suspected opponents off -- off balance. He has not hand picked his successor, and that's what we're watching right now.

Yasser Arafat could be around for a number of years to come, but what we're seeing right now, at least for the short term, are behind- the-scenes jockeying for power. As you said, the horse race has begun.

If Yasser Arafat were to die, there is a Palestinian constitution in place. What would happen is that the head of -- the speaker of the Palestinian Legislative Council would have -- would be the temporary president for about 60 days, and then there would be elections. But most likely, what most experts say would happen is that there would never be another Yasser Arafat, someone like a Mao Tse-tung, who had -- wore all of the hats and controlled all of the power.

Most likely, what you would se is a collective or a kind of collegial leadership in which a number of people help to run the Palestinian Authority. But he is the symbol of the Palestinian national movement.

CROWLEY: Andrea, that sort of sounds like a recipe, you know, for disaster for peace in the Middle East, if you have a collective speaking for the Palestinian side. On the other hand, obviously, the Bush administration won't even talk to Yasser Arafat. So moving this forward, does the change in leadership help or hurt the Middle East process?

KOPPEL: Most people -- most analysts that I've spoken with say in the short term there would be no change. It also depends -- my gosh, we're three days away from an election in this country, Candy. So we don't know who the next president will be.

If it's George Bush, you're absolutely right. They've already ruled out having any contact with Yasser Arafat. But if it's a John Kerry, per se, and it's a new Palestinian leadership, could that change things? And it might change things for the Bush administration.

Nobody knows at this time. But again, in the short term, most believe that there will be no change on the ground.

HAYS: Andrea, we know that you have to scoot along the ground, get to your next assignment here on CNN. We're glad you could join us and tell us about the latest on Yasser Arafat. KOPPEL: My pleasure.

HAYS: From the Middle East and Europe to Wall Street, some people are looking at economic numbers to predict Tuesday's voting numbers. I'm back on that story after this and a check on what's making news right now.

Also coming up, Barbara Starr and the latest on the hundreds of tons of missing munitions in Iraq. And Baghdad bureau chief Jane Arraf is ON THE STORY in Iraq.

Stay with ON THE STORY.

(COMMERCIAL BREAK)

HARRIS: I'm Tony Harris at the CNN Center. "Now in the News," an explosion in Baghdad this morning. The blast struck the offices of Al Arabiya.

The Arab TV network says several of its workers have been hurt. There is no immediate report of casualties. Iraqi police tell CNN a car bomb caused the explosion which happened in an area that also houses political parties.

A devastating loss this morning for the 1st Marine Expeditionary Force in Iraq. Eight U.S. Marines have been killed and nine have been wounded in heavy fighting in Falluja. Some of those Marines were killed when a homemade bomb exploded in a vehicle.

Sources close to Yasser Arafat tell CNN that the ailing Palestinian leader suffers from dementia, most likely has leukemia, and can no longer lead the Palestinian Authority. Palestinian officials are meeting in Ramallah today to prepare for new leadership. Medical specialists in Paris have not yet made a formal diagnosis.

And steady and resolved, that's how President Bush described himself in today's last weekly radio address before Election Day. The president appeared and appealed for votes by highlighting his leadership of the war on terror.

(BEGIN AUDIO CLIP)

BUSH: The direction of the war on terror is at stake in the election of 2004. And when you go to the polls on Tuesday, rember this: I will do whatever it takes to defend America and prevail in the war on terror. And I will always support the men and women who do the fighting.

(END AUDIO CLIP)

HARRIS: He did not mention the new tape of Osama bin Laden.

I'm Tony Harris. Now back to ON THE STORY.

(BEGIN VIDEO CLIP) KERRY: When I am president of the United States, I want an economy where Americans aren't just working for the economy, the economy is working for Americans.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: The president and I will not be satisfied until every American wants to work and find a job. But this is a strong, growing economy. Don't let the Democrats tell you otherwise.

(END VIDEO CLIP)

HAYS: No surprise, the economy was part of the campaign back- and-forth this week. Just yesterday, new economic growth numbers. The last we'll see before Election Day showed expansion, but not as much as many experts had predicted.

Welcome back. We're ON THE STORY.

CROWLEY: Kathleen, when you look at Wall Street as a predictor of what's going to happen in the election, what does the crystal ball say?

HAYS: Well, actually, it's interesting. A lot of people, of course, Candy, everyone is trying to figure out what's going on. And so we don't have crystal balls.

We look at the past. We look at all kinds of gauges to say what the numbers say about who's the next president.

Interestingly enough, Wall Street, if you look at some work done by the "Stock Traders Almanac," who look at every election since 1904, focusing on October, the last month before the election, if the stock market is up more than 3.3 percent, they found the incumbent always wins. If it's down more than a half percentage point, the incumbent always loses.

You know how the stock market finished this time for the month of October? Down something like 0.53 percent. It's a very close signal. A lot of things in the economy right now are like that.

A lot of political scientists say GDP is strong enough to really -- really point towards a Bush victory pretty solidly. But if you look at jobs, which have grown very slowly, if you look at consumer confidence, the latest number below 100. That suggests narrowly that there's a favor for John Kerry in the economic numbers right now.

STARR: Well, it's interesting. Go back to jobs for a second, because that's what we keep hearing so much about.

We heard about it in the debates. The Kerry campaign certainly trying to make the case that jobs -- the jobs picture under Bush has not been a good one, but yet Bush still saying it's OK, we're making progress.

HAYS: Jobs have been created, jobs are growing. The GDP grew 3.7 percent. That's a perfectly respectable GDP number. It's pretty healthy, actually.

Incomes are growing. But the economy that we have now doesn't create jobs very easily because we're productive, because a lot of businesses are cautious.

So depending on where you put the emphasis, you really could say that either candidate has -- is not lying. They're not making it up. But they emphasize different things.

Another one of these let's massage the numbers, let's dissect the numbers. If you look at jobs growth in the last six months before an election, according to (UNINTELLIGIBLE), if it's below an average of around 1 percent, at an annualized rate -- I'm giving you a lot of numbers. Basically, he says right now the jobs growth is just weak enough to say, you know, it probably gives the edge to Kerry.

But again, so many things are close. And I think we really see it reflected in the polls and what you hear from a lot of voters.

CROWLEY: Kathleen, let me talk about oil prices a second. And that is, is there anything in those? I mean, my -- my common sense says oil prices sends up gas prices, and everybody sees gas prices. Therefore, as they go higher, that's bad for George Bush. Anything else in the oil prices that's going on that predicts?

HAYS: Well, right now with oil prices -- we had such an interesting week in the oil market because, you know, oil has been one of the biggest stories for the stock market. The election uncertainty and oil, those are two things really weighing on the stocks in the last several weeks.

We saw numbers suggesting that crude oil inventories, with the Saudis pumping a ton out, OPEC pumping a ton out, finally starting to build. Heating oil inventories, though, are still low. There is a lot of demand right now for heating oil and diesel. That's a problem.

The impact of the hurricane still creeping refineries somewhat. The numbers are starting to come back up, Candy.

But another big story, if you really want to get your mind in this geopolitical oil spin was China. China raised interest rates for the first time in nine years.

They're one of the big gobblers, big guzzlers of gas. So for a while the stock market rallied, "Oh, boy, China is going to slow down. We won't be using so much oil in the world."

And then people said, "You know what? But they only raised interest rates a little bit."

And China is growing. They're going to keep consuming oil. So I think that one of the main predictions now, get used to high oil prices. Because if they come down, they won't come down much.

STARR: Amidst all this serious business -- and serious it is -- there was one funny little thing in the economy this week, the Red Sox?

HAYS: The Red Sox. You know, and I think like John Kerry said, if the Red Sox win, it seems like anything can happen.

This is -- of course the World Series really enthralled the country. Certainly people on Wall Street staying up late every night and going to work bleary-eyed.

There is the parade right now. People still celebrating. But you know who else is celebrating is Fox, one of those other news channels.

It was something like the fourth most watched series in nine years or 19 years. Let me just say that people really tuned into watch this. So they were very happy.

The Red Sox next year are going to be talking dollars and cents. They're going to have something like -- I think it's 16 or 18 -- about a dozen and a half, let me be safe -- players up as free agents. And they've already committed a lot of their money to some of their star players.

But this includes people like Pedro Martinez, one of the star pitchers. I think it includes Derek Lowe. They've already got money committed to some big players like Manny Ramirez, who's one of the great batters in this series.

So that is going to be an issue for the Sox, if they see it they can come back and do this again. In fact, one sports writer called this the new curse for the Red Sox. That now that they've won, it's going to be tough to keep the players they've got, who've become free agents, without putting up the money.

But one final point. Fenway Park is an old, small park. They're already filled to capacity. It's tough to really add on any space to bring in the money.

We'll see how it goes for the Sox. But what a week. It was certainly one of the uplifting things, for Boston, that is, this week ahead of the elections.

STARR: Well, Kathleen Hays, sports reporter, who knew?

From the business world to Iraq, Baghdad bureau chief Jane Arraf and I are back ON THE STORY after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KERRY: The bottom line about these weapons that have disappeared, here's the bottom line. They're not where they're supposed to be. You were warned to guard them. You didn't guard them. They're not secure.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BUSH: A president needs to get all the facts before jumping to politically-motivated conclusions.

(END VIDEO CLIP)

STARR: Well, that was the story at the Pentagon this week. The case of the missing explosives provided both presidential candidates with plenty of ammunition, and it left plenty of questions by the end of the week about what happened, when, and what is the impact on security in Iraq.

Welcome back. We're ON THE STORY.

HAYS: Well, you know, Barbara, I think there's some cynical news watchers and voters out there who said, "What a surprise if some explosives are missing." Obviously, though, this was a huge amount, enough that could blow up all kinds of things.

But I'm very confused now. I think a lot of people are, too. Who took what? Who has it? What was the latest? And does it really mean anything later?

STARR: Well, as we now refer to the Pentagon, every once in a while we call it mystery science theater, especially with this story. You have two threads going on here.

You have technically what did happen to this amount explosives. And that may be unknowable at the end of the day.

It was a war zone. It may be that a variety of things happened. Some may have been destroyed it. Some have been looted. It might have been before the war, it might have been after the war.

It's going to wind up being a big "Who knows?" But there is the political side, of course.

All sides, both campaigns, and the Pentagon, clearly making this a political issue, and responding to it at the Pentagon with a political overtone. Trying to prove a case for the administration, but never quite able to settle on what they thought really happened to all of this stuff.

So it was a very entertaining week. A lot of theater, not a lot of facts.

CROWLEY: Barbara, it's interesting to me that on the campaign trail, John Kerry, at least, has already stopped talking about that. We have moved on, although not on the stump, to the bin Laden tape.

What, looking at that, do U.S. officials see on the tape? Have they picked up any hints? You know, what do they make of the tape? STARR: Candy, the tape did not come as a surprise to any senior military or intelligence officials. It was really what they might have expected.

They have looked at this tape and there are several interesting things as you look at it. Bin Laden looks to be in pretty good shape. Dick Cheney said he was hiding somewhere in a cave. He's looking pretty good.

His clothing is clean, tidy. He appears to be in much better health than the last time we saw him on tape.

And if you look at the physical surroundings, you can't tell much. But you can tell some things.

He does not appear to be in a cave. There is good lighting. There is good sound. There are production values to this tape.

So somewhere he is surrounded by people. He was either brought to this location or a television film crew came to him.

Our own CNN TV crews, our technical people, have looked at this, and they're commenting like, "Hey, look, he's got lighting, he's the got sound." There's got to be people on the other side of that camera.

Some very interesting things about what bin Laden said. One of the biggest hints was he spoke about the fact 1,000 U.S. deaths in Iraq. The U.S. fatality rate reached 1,000 somewhere around September 7. So there is a very great possibility this tape is very recent, at least since September 7.

It has a timestamp on it that would have indicated last Sunday. No one is really sure if it was, that was just slapped on. But there's every indication this tape is quite recent.

HAYS: Well, and I think one of the frightening speculations that's been raised is its release now, because it contains some hidden signal to start some big attack right before the election.

STARR: Well, the tapes by the al Qaeda leadership, in fact, have been -- in the past, when they have emerged on the international stage, there have been attacks that followed. Not always, sometimes. And that is clearly what they are looking for.

And, in fact, that is one of the reasons that the U.S. government had pressed Al-Jazeera and the Qatar government not to broadcast the tape. They wanted to really, you know, put a lid on it and not have it out there as some international signal.

But look at the tape. It gives you every indication that bin Laden himself has some level of communications left somewhere with the outside world.

He refers to John Kerry. He refers to relatively recent events. He seems to know what's going on. Whether he controls the same network he used to remains to be seen.

HAYS: Obviously getting some help somewhere along the line or he wouldn't still be alive.

Well, we're back on -- with more on Iraq with Baghdad bureau chief Jane Arraf in just a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I at least know I'm fighting for what I believe in. I'm fighting with the guys who I'd rather be with.

(END VIDEO CLIP)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: That was Specialist Nicholas Cruz (ph), talking about his motivation to keep fighting for his buddies to make sure they all get home alive.

Welcome backs. We're ON THE STORY.

CROWLEY: Jane, I know, obviously, those soldiers' primary mission right now is to stay alive and to move this war forward. But you've been out and about. Are they talking about the election, viewing the election? What's the conversation like about that?

ARRAF: Well, it takes a little while to get it rolling, because there is a natural hesitancy to talk about the stuff. But they do talk about it among themselves. And once you get them going, it is hard to get them stop. And yes, they are talking about it.

Now, a lot of them say it does not make any difference to them, and they don't even plan to vote. But the ones who do have opinions have quite strong opinions. And one of the things I was struck by is that there does seem to be more sympathy than I would have thought for John Kerry.

Maybe it's the experience they've had here, maybe it's the fact that they're glued to the Internet when they're not out there fighting. But that is a definite undercurrent out there.

STARR: Now, Jane, here, we've just heard in the last hour or so about casualties today out west of Baghdad, near Falluja, eight troops killed, nine injured. The Falluja area continues to be of great concern to the U.S. military, and a sense -- a sense here that sooner or later they're going to have to go beyond the air campaign that they've been waging out there.

ARRAF: That ground campaign is definitely coming, Barbara. The Iraqi officials here, all the way from the prime minister on down, have been pretty clear. If people in Falluja do not hand over what they believe are a large number of foreign insurgents they say tied to the Zarqawi network, they are essentially going in there.

We've had Marines, for instance, Marine officials talking in Marine speak, saying that they are going to wack the city. What that means is either it's a threat designed to get people out there, designed to get local people to give up the insurgents, or they seem to be about to do what they say they will do, which is massing forces for an all-out offensive on that city -- Barbara.

HAYS: Jane, I want to ask you again about the mood among the troops and the extent to which they're following the election. You noted people on the Internet a lot.

In these last few days ahead of the election, some very striking political ads, using families of soldiers. Certainly one on the Kerry side, where a woman whose brother died is out there very prominently. A lot of commentary on that.

Do soldiers see these kinds of ads? Do they have any opinion on whether they feel they are being used or this is an appropriate way to be getting votes?

ARRAF: You know, one of the stories we've been doing is basically how soldiers feel about death. Because it has become such a political issue in the states. And you would think that the people who feel it the strongly -- the most strongly are those troops out there who are losing young men and women who have become like brothers and sisters to them over the last few months in Iraq.

But, in fact, what you find is that they seem to take it for granted that people are going to die, that they could die. Much more so than you find in the U.S.

CROWLEY: Jane, we saw in Afghanistan, when they got a chance to vote, that there was a great passion for it when the day finally came. As we move toward what we hope will be obviously elections in Iraq, on the street, are they looking forward to that, or does that look like another time for people to be in great danger?

ARRAF: Probably the latter. You're absolutely right.

Now, people desperately do want to vote. But they don't want to give up their lives for it. And right now, what they're looking at is the prospect that elections could perhaps even be delayed.

This has all been overlooked. But just a couple days from now, registration starts, registration of Iraqi voters. They're supposed to go and get their ballots and start that ball rolling. But with the violence going on, it's really not entirely clear to most people whether elections can take place, whether parties can get their act together, whether these could be real elections in any sense at all.

STARR: Jane, we all seem to be talking about elections in a whole lot of different countries right now. But getting back to the U.S. presidential election, explain to people, are the soldiers out in Iraq able to vote? Have they cast their absentee ballots? Do they feel like they're participating?

ARRAF: A lot of them have been able to vote. Some of them didn't -- never got the absentee allots. There was a real effort made to register voters.

In the units we were with, the sergeants major would go out and make sure people were registered. But most of them did seem to be able to vote, those who wanted to. But again, there is great deal of apathy, a lot of soldiers saying it just won't make any difference.

STARR: Well, Jane, thank you. And we're all back ON THE STORY after this.

(COMMERCIAL BREAK)

HAYS: Thanks to my colleagues. Thank you for watching ON THE STORY. We'll be back next week.

Still ahead, "PEOPLE IN THE NEWS" focusing this week on Laura Bush and Teresa Kerry.

Straight ahead, a check of what's making news right now.

And we're going to leave you with some very fun pictures. It's the celebration, the Red Sox victory in Boston. Look at all those people celebrating the end of an 86-year curse.

The curse of the bambino, it's over. The Bostonians feel very happy.

And we're happy you joined us today as well.

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