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CNN Wolf Blitzer Reports

Air France Flights Cancelled Into LAX; Mad Cow Disease Scares Off U.S. Beef Buyers; Americans Urged To Be Vigilant Over Holiday Season

Aired December 24, 2003 - 17:00 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.

CAROL LIN, CNN ANCHOR: Happening now, Christmas Eve cancellations in the name of security. You're looking at live pictures out of Los Angeles International Airport. This was supposed to be the destination for three international flights, but fears of terror kept them from the West Coast.
Stand by for hard news on WOLF BLITZER.

Grounded. (UNINTELLIGIBLE) for al Qaeda, as France cancels flights to the U.S.

Nightmare scenario. Military experts stand by to deal with a worst-case threat.

Mad cow. Other nations steer clear of U.S. beef. What should you do?

ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, December 24, 2003.

LIN: Good afternoon. I'm Carol Lin, sitting in for Wolf Blitzer.

Americans are on high alert this holiday. And all that tight security has just gotten a lot tighter. Concern about an al Qaeda attack from the skies has airports buttoned up. And now terror threat has led France to cancel three U.S.-bound flights.

This comes as military teams are ordered to prepare for possible attacks using chemical, biological, or nuclear materials.

CNN's Barbara Starr is standing by live at the Pentagon.

But we begin in our Washington bureau first with national security correspondent David Ensor. David, what's the latest there?

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Carol, the cancellation of the Air France flights from Paris to Los Angeles comes amid fears of possible al Qaeda terrorism against aircraft.

(BEGIN VIDEOTAPE)

ENSOR (voice-over): The cancellation announcement came amid concerns about the threat of terrorism at Los Angeles airport, and of al Qaeda trying to infiltrate an Air France flight. The French decision to cancel the three Paris-to-Los Angeles flights was made after consultations with U.S. officials.

A senior U.S. administration official says the decision was based on security concerns about these flights and was related to the information which led to the decision to go to code orange. In fact, sources say, one of the canceled flight numbers was mentioned in the intelligence chatter of recent days.

In addition to concerns about Air France flights, U.S. officials are also working closely with Mexican authorities concerning flights from their country to the United States.

Amid the tightened security nationwide, Los Angeles airport authorities have said there can be no curbside drop-offs by private cars until further notice, although our camera saw some of them going on anyway.

HAROLD JOHNSON, LAX SPOKESMAN: We're just trying to minimize the risk associated with unattended vehicles at the curbside.

ENSOR: In addition, U.S. officials say some non-U.S. air crews are being interviewed extensively on arrival in the United States. Officials have long expressed concern about the possibility of a pro- al Qaeda pilot.

Passengers and air crews on all commercial and cargo planes arriving into the U.S. from international destinations are also undergoing more scrutiny, according to U.S. officials, both on departure and at arrival. Authorities are sifting through intelligence trying to both prevent hijacking and to stop a would-be terrorist from bringing weapons into this country.

DAN BENJAMIN, FORMER COUNTERTERROR OFFICIAL: Putting together intelligence, especially when you have a high volume of it, as we have now, is incredibly challenging. It's typically the case that there may be a lot of people talking and giving no or next to no operational details, and so making heads or tails of what you're seeing is really quite difficult.

(END VIDEOTAPE)

ENSOR: The information leading to flight cancellations and extraordinary code orange security nationwide comes from a wide variety of sources, say U.S. officials, including more than one intelligence informant with specific information that was deemed credible enough that they felt that action was unavoidable, Carol.

LIN: All right, thank you very much. David Ensor.

Just a few minutes ago, I did an exclusive telephone interview with Jean-Claude Mallet, the French secretary general for national defense. And I asked him what specific threat would it take in order for them to prompt Air France to cancel those flights?

JEAN-CLAUDE MALLET, FRENCH SECRETARY GENERAL FOR NATIONAL DEFENSE (via telephone): We have received specific information, and we needed to take decisions which were targeted at specific flights, of course. LIN: Has anybody, either crew or passengers, on these airplanes been arrested, detained, or questioned?

MALLET: I cannot enter into details. I'm not aware that anybody has been arrested, as you said. But, of course, questions have been asked. As you know, we exchange the procedure of profiling with United States services and other services, such as British or German or others. And, of course, some elements of these profilings have led us to ask questions to some people.

LIN: What was the status of these flights when they were canceled? Were they ready to take off? Were they midair?

MALLET: Well, that's really a question to ask to an Air France speaker. What I can tell you is that the midday flight to Los Angeles was stopped. I mean, I understand that the passengers had not get into the plane, and it was delayed, and then it was canceled, that is for the midday flight to Los Angeles.

And tonight's flight, I suppose the passengers have not been in status of being checking in or -- but I'm not sure of that. You need to check that with Air France.

LIN: All right, will do. Mr. Secretary General, do you have any evidence to believe or to confirm that al Qaeda has in any way infiltrated your airline?

MALLET: Oh, I do not have anything of this kind in my file. What we have is, we have an alert which is on air security. And you certainly know that your homeland security office has taken several decisions aiming at several countries of origin. I've read in your press that people from air flights from Mexico or other countries could be targeted.

And I'm -- it's not -- the company, as far as I know, is certainly not in our focus. The focus is on the threat from Islamic groups that could come aboard flights.

LIN: So as far as the future is concerned, are there going to be additional cancellations?

MALLET: I will not comment on that. What I can tell you is that we have a continued process of threat assessment. We are making that particularly at the prime minister's office and with the president's advisers, and the home office here and the intelligence services.

We have constant exchanges, and we suddenly need to (UNINTELLIGIBLE) -- excuse me, to emphasize and strengthen our cooperation with the services of the United States, which is being done right at the moment where I speak.

And this is going to be a continuous process of review. And I don't -- I'm not aware that we have other decisions. But it is a constant process of assessment, as well as it is in the United States.

As I told you, we have raised the level of our security already early December, around the first of December. Decision was taken by the French president and French prime minister. And we adapt our alert status to the level of threat.

LIN: I understand. Thank you very much, Mr. Secretary General, Jean-Claude Mallet.

And there are different other kinds of terrorist threats to consider. Military teams trained to respond to chemical, biological, nuclear attacks have been now put on alert.

We are going to go live now to the Pentagon, where correspondent Barbara Starr has that story. Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Carol, if the unthinkable were to occur, and terrorists launched an attack using chemical, biological, or nuclear or even radiological weapons, there are now special teams waiting in the wings.

(BEGIN VIDEOTAPE)

STARR (voice-over): As the threat of a terrorist attack using a hijacked airliner or even a so-called dirty bomb or radiological device continues, the military has put a number of specialized teams on alert, all part of the Department of Homeland Security's code orange plan.

TOM RIDGE, HOMELAND SECURITY SECRETARY: All federal departments and agencies are implementing action plans in response to the increase in the threat level.

STARR: Pentagon officials will not be specific, but there are two key military teams that could be sent to an attack involving weapons of mass destruction.

The Marine Corps Chemical-Biological Incident Response Force can respond within hours to any attack, including a nuclear, radiological, or conventional weapon. Its job? Identify what agent has been used, and immediately begin medical assistance to victims.

The Army's Technical Escort Unit can deploy immediately to an attack site, isolate a weapon, package it, and render it safe for disarming.

At the Department of Energy, teams are available to respond specifically to incidents involving nuclear weapons or radiological devices, including disposal teams. It is these units that are most likely to deal with a dirty bomb, a conventional weapon packed with radioactive material.

Response teams have been placed on standby in the past at events such as the Salt Lake City Olympics, the Super Bowl, and the State of the Union address.

(END VIDEOTAPE)

STARR: And Carol, now the hope is, certainly, that the country will get through this holiday season with these special teams remaining only on alert, only on standby, Carol.

LIN: That's what we all hope for. Thank you very much, Barbara Starr, live at the Pentagon.

Another U.S. city is looking to the skies with concern. The Federal Aviation Administration ordered a no-fly zone over downtown Chicago today. A spokesman says the move was requested by the Homeland Security Department. The move bars aircraft from flying below 3,000 feet. A spokesman says it does not affect planes from O'Hare and Midway Airports, which fly above that altitude.

All right, now to Iraq. There was a shattering blast in the heart of Baghdad this Christmas eve. The attack was aimed at a hotel used by Westerners. It came on a bloody day for U.S. troops.

CNN's Satinder Bindra is in the Iraqi capital.

(BEGIN VIDEOTAPE)

SATINDER BINDRA, CNN CORRESPONDENT (voice-over): (UNINTELLIGIBLE) have been flying over downtown Baghdad, this after an explosion went off just to my left in the direction of the Sheraton Hotel, which is just across the road from us. U.S. military sources saying someone fired a 60-millimeter mortar in the direction of the Sheraton Hotel, but this mortar missed its target and fell instead on metal barriers.

Now, shortly after this explosion, there was a burst of automatic gunfire. U.S. forces saying this was security guards firing back at the attackers, who fled the scene. There's been no major damage to the Sheraton Hotel, and we have no reports of casualties.

Our cameras were rolling at the time of this explosion, and this is what they recorded.

Now, the net result of this blast is to further add to the mood of panic that prevails here in Baghdad.

Also today, there were three other major blasts across Iraq, one in the northern part of Iraq, in Irbil, in which one suicide bomber drove his vehicle into the side of a government building. The suicide bomber was killed and so too was one civilian. There was also another roadside blast in Samarra, just north of Baghdad, killing three soldiers. And finally, in Baghdad itself, a bomb killed a bus driver and a passenger.

Satinder Bindra, CNN, Baghdad.

(END VIDEOTAPE)

LIN: Mad cow in the United States. Fears prompt the biggest markets for U.S. beef to close their borders. Should it be on your plate?

(BEGIN VIDEO CLIP) HUGH PENNINGTON, BSE EXPERT: We acted too late. We did the right things, but we did them a bit late, and we had a much bigger problem as a consequence.

(END VIDEO CLIP)

LIN: The disease devastated Britain. What lessons can be learned from their handling of the epidemic?

A nation on alert, but the messages seem mixed.

An international airline flights grounds flights bound for the U.S., while many Americans continue with their holiday plans. Should you be more concerned?

(COMMERCIAL BREAK)

LIN: It will be at least three days before tests confirm what's believed to be the first case of mad cow disease in the U.S. But already, the beef industry and companies that rely on it are taking a considerable hit, and consumers are wondering how concerned should they be.

Here's some answers, CNN medical correspondent Holly Firfer. Holly, what have you learned?

HOLLY FIRFER, CNN MEDICAL CORRESPONDENT: Well, Carol, the USDA is reassuring consumers that they believe the beef in the U.S. is safe. Even so, it has many wondering, can we really be sure?

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Till we find out more, I certainly will be cutting back. But think I'll still stick with a prime rib for Christmas.

UNIDENTIFIED FEMALE: I guess I don't have all my confidence, but enough that I'll continue to eat meat.

FIRFER (voice-over): Even as the announcement of what appears to be the first case of mad cow disease in the U.S. was made, the beef industry was quick to say U.S. beef is safe.

CHANDLER KEYES, NATIONAL CATTLEMAN'S BEEF ASSOCIATION: We have firewalls in place. This cow was caught. The infected agents are not in the beef system.

FIRFER: The USDA is adamant that the food supply is safe because of precautions added in the 1990s when mad cow disease was wreaking havoc in the United Kingdom.

ANN VENEMAN, AGRICULTURE SECRETARY: In this country, we take every precaution. We have had a response plan in place since the early '90s, the -- since 1990, looking at all of the high-risk areas for BSE. We've done -- we've banned ruminant-to-ruminant feeding. We've had a testing program. FIRFER: But that firewall depends on companies who make animal food being compliant with USDA rules. And those rules ban feeding animals other animal remnants that could be infected with mad cow disease.

Because this cow was somehow infected after that ban was in place, the USDA now must investigate whether companies are being compliant.

In 1998, they asked the Harvard Center for Risk Analysis to study whether their safety net was adequate to protect Americans should an outbreak happen.

DAVID ROPIER, HARVARD CENTER FOR RISK ANALYSIS: We found different findings for different scenarios. But even in the worst- case scenario, the disease dies off, chokes off, goes away, very few additional animals get sick. And the risk to humans is exceptionally low.

(END VIDEOTAPE)

FIRFER: The Harvard study did show, however, that the problem lies in that animal feed. And they are calling on the USDA to redouble their efforts to enforce compliance, Carol.

LIN: All right, thanks very much. Holly Firfer for that.

Now, within hours of the news, some of the biggest U.S. trading partners began banning imports of American beef. And some U.S. companies that rely on it suffered today on Wall Street.

CNN's Chris Huntington is in New York with that part of the story. Chris?

CHRIS HUNTINGTON, CNN CORRESPONDENT: Well, Carol, in the absence of any concrete answers about the spread, possible spread of mad cow disease in the United States, traders on Wall Street, in the stockyards in Chicago, and among our trading partners overseas took matters into their own hands.

(BEGIN VIDEOTAPE)

HUNTINGTON (voice-over): The biggest overseas market for U.S. beef wasted no time shutting its doors to the possibility of mad cow disease. Japan imposed a ban on all U.S. beef products just hours after U.S. officials announced that a cow in Washington state had tested positive.

YASUO FUKUDA, JAPANESE GOVERNMENT SPOKESMAN (through translator): Japan will stop imports of U.S. beef starting from today.

HUNTINGTON: Japan bought more than one-third of the $3.5 billion worth of U.S. beef exported this year, followed by Mexico, South Korea, South Korea, Russia, and Canada, which have all decided to either block or restrict U.S. beef imports. GREGG DOWD, U.S. CATTLEMEN'S ASSOCIATION: Well, in the short term, this is going to have a significant -- the export situation is going to have a significant effect on the value of the live animal, probably reducing it by 10 or 15 percent.

HUNTINGTON: At the Chicago Mercantile Exchange, prices for cattle futures fell the maximum allowed in a single session. After the close, the Merck announced emergency measures to increase that sell-off limit when the markets reopen on Friday.

Beef-related stocks took a big hit as well as investors dumped shares of McDonald's, Wendy's, Tyson Foods, Outback Steak House, and restaurant operator Rare Hospitality. Several of those companies issued statements trying to distance themselves from the mad cow scare.

Tyson Foods, the nation's biggest meat packer, said it, quote, "has not bought any meat from plants in Washington state identified by the USDA in the report of mad cow disease."

McDonald's says it has "absolutely no connection," Wendy's "not affiliated," and Burger King claimed the producers in question "do not supply meat to the Burger King system."

But critics of the U.S. beef industry say the current scare is the result of inadequate safeguards.

(END VIDEOTAPE)

HUNTINGTON: Now, 90 percent of U.S. beef production is sold domestically. So if U.S. consumers continue buying, and, indeed, if the mad cow spread is limited, then the U.S. beef industry, which was on track to have one of its best years in a decade, should suffer only a minor setback, Carol.

LIN: All right, thank you very much, Chris Huntington.

Well, here is your turn to weigh in on this important story. Our Web question of the day is this. Which is the bigger topic of discussion with your family during this holiday, the mad cow case or the terror alert? You can vote right now at cnn.com/wolf. We'll have the results later in this broadcast.

All right, lessons to learn. Mad cow disease ravaged Britain's beef industry. How can the U.S. protect itself?

Secret intelligence. The information that prompted officials to ground three Air France flights bound for the Los Angeles airport.

Terror target. Is Washington, D.C., one of them? How people in the nation's capital are preparing for the worst.

(COMMERCIAL BREAK)

LIN: During this orange alert, Americans have been warned to be on the lookout for suspicious activity. But what, in specific, should we be looking for?

Also, of course, we have the terror alert, and the cancellation of Air France flights.

Lots to talk about with Steven Simon, who is a terrorism analyst with the Rand Corporation and co-author of "The Age of Sacred Terror."

Steven, thank you very much for being with us.

STEVEN SIMON, RAND SENIOR ANALYST: Glad to be here.

LIN: First and foremost, let's talk about the cancellation of these Air France flights. I spoke exclusively a few moments ago with the secretary general of France's national defense. He said he did not know of anything specific about al Qaeda infiltrating the airline. So what sort of concrete evidence would France need in order -- from the United States in order to cancel these flights?

SIMON: Well, France would need some accumulation of evidence. It might not be any one specific thing. It was more likely to be three or four very worrisome bits of intelligence that, when taken together, added up to a severe enough threat to warrant cancellation of the flights.

LIN: Where do you think this information is coming from?

SIMON: The information is more than likely coming from multiple sources. It would come from intercepted communications. It would come from informants. And it would come also from material picked up from people who were arrested, telephone books, material they have in their pockets, the results of interrogations.

All these, the results of all these things are combined to form an intelligence assessment.

LIN: Perhaps it is not any one event that may be concerning Americans, but, collectively, look at what's happened just in the last four days. You have the raise to high alert for the terror status of the nation. You have now the government sending out nuclear experts to vulnerable sites around the country in case there's a dirty bomb attack, The Air France cancellations.

Is there something different about this time around with the government raising the terror level to orange alert? Is there something about the way the nature, the way the government is handling the situation that you find different?

SIMON: Well, up until six months ago, there were quite a few of these alerts. And they really had the effect of jading the public, and not probably raising our security very much. And at that time, the U.S. government decided that it would raise the bar. It would raise the threshold on launching these kinds of alerts.

So the very fact that they have chosen to launch an alert now, against the background of the higher threshold, indicates there's a more serious threat. LIN: So how should Americans respond to this threat? I mean, there isn't a lot for Americans to feel very good about in terms of their overall safety this holiday season.

SIMON: No, I would agree. Apparently there's just a massive amount of information that suggests that some kind of attack will take place. The authorities clearly are unsure of what kind of attack they are to be on the lookout for.

On the one hand, there's an aviation threat. It looks like it's coming from either Mexico or France or both, or perhaps other places. There are worries about an attack with a radiological device.

There's just a lot of information out there right now. And what the public can do about it, I think, is just keep their heads, stay cool, be vigilant, and let the government go about trying to do what it needs to do to protect the American people.

LIN: All right. Thank you very much, Steven Simon. Let's hope it is a safe and secure holiday for all of us.

SIMON: I hope so too.

LIN: You bet.

All right, well, hectic holiday travel. What impact is it having on security in the midst of a code orange terror alert? We are going check in with cities from coast to coast.

Case confirmed. With mad cow now possibly in the United States, questions about the disease abound. We'll tell you what you need to know.

Christmas campaigning. The holidays haven't stopped some of the presidential candidates from getting out their message. Find out who as we go on the campaign trail later this hour.

(COMMERCIAL BREAK)

LIN: Welcome back to CNN.

Grounded. The French government cancels Air France flights bound for Los Angeles, amid fears of a possible terrorist attack.

More on this developing story. But first, a quick check of the latest headlines.

Pakistani President Pervez Musharraf says he'll give up his role as head of the country's armed forces by the end of 2004. The move is part of a deal with opposition parties to end months of parliamentary gridlock. Musharraf came to power in a 1999 coup. He'll keep his role as president.

Florida prosecutors won't be able to see Rush Limbaugh's medical records just yet. A circuit judge issued a stay on Tuesday's ruling granting them access while Limbaugh appeals. Prosecutors are probing whether Limbaugh illegally got multiple prescriptions from multiple doctors during his admitted addiction to painkillers.

A federal appeals court is blocking Bush administration changes to the Clean Air Act that were to take effect this week. They would make it easier for industrial facilities to increase capacity without increasing pollution controls. Twelve states joined environmental and health groups in suing to block the changes.

And now back to our top story.

You are looking or about to see live pictures of the Los Angeles International Airport. It is the focus of extraordinary security efforts and deep concern after hints of a terror threat led to the grounding of three flights bound from Paris to Los Angeles.

Let's go live now to CNN's Miguel Marquez at LAX. Miguel, have you seen any change in activity there?

MIGUEL MARQUEZ, CNN CORRESPONDENT: Oh, we've certainly seen change in activity. And what's interesting, that this is the -- probably about the highest-security situation we've had here at LAX since September 11, even though this is the fifth time the country has gone to an orange level security. This is the first time that they've done what I'm going to show you here.

You can see these orange pylons here along the terminal floor at LAX. There are no private vehicles now being allowed to drop off passengers. That person obviously not doing what they're supposed to be doing. But you have only commercial vehicles allowed to drop off passengers here at LAX because of security concerns.

And certainly one of the most serious situations they've had here in some time. And that seems to be bearing out. Air France here today, we talked to the station manager for Air France here at LAX a short time ago. And he said that all flights into and out of LAX for today, the 24th, and tomorrow, the 25th, have been canceled due to security concerns.

It's not clear whether other days, at this point, may be canceled as well. Says that these were 747 planes, and a total of about 2,000 passengers will be affected.

I asked him if, in his 22 years with Air France, if he had ever seen that sort of type of blanket cancellation. He said only September 11 was a time that he remembered where that many cancellations were made into one single airport in one day.

We also understand a different flight, a different Air France flight going into Cincinnati, has also been canceled, all of those today.

Back to you.

LIN: All right, thank you very much. Miguel Marquez at LAX.

CNN's Charles Feldman has been working law enforcement and aviation sources, and he joins us now from Los Angeles. Charles, what have you learned?

CHARLES FELDMAN, CNN CORRESPONDENT: Carol, everyone I talk to is taking this alleged threat very seriously. For example, this morning, the Federal Aviation Administration in Washington placed an emergency phone call to its regional offices, instructing them to refer any questions from the press regarding security or terrorism today to the Office of Homeland Security in D.C.

Federal and local law enforcement officials were in and out of meetings and telephone conference calls as the news started spreading that Air France had canceled three flights from Paris to Los Angeles.

A Pentagon official told our colleague Barbara Starr that military teams with expertise in chemical, biological, and nuclear attacks are on alert and may already be deployed to key locations.

When we asked whether -- when we asked officials here whether any of those teams had been deployed near LAX airport, they emphatically declined to comment.

Law enforcement officials are saying that another area of concern is Mexico, concern that certain flights from there may pose a hazard to the United States, Carol.

LIN: All right. Thank you very much, Charles Feldman, continuing to work his sources out there.

Let's check in on the opposite coast. CNN's Deborah Feyerick is at New York's Kennedy International Airport.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Inside JFK's International Airport, the mood is relaxed. Passengers are arriving early, they're moving through security. Federal agents from the TSA taking extra precautions to make sure everybody is screened properly.

The U.S. government has reached out to international airlines, including those in France and Mexico. They are urging everyone to boost security.

MARION BLAKEY, FAA ADMINISTRATOR: We're getting very good cooperation from the foreign carriers. I think everyone understands that security these days is something that, again, cuts across the Atlantic and Pacific. Terrorism is as much a worry on their side as it is on ours. So we find that both in terms of our security and law enforcement branches, they're working well together.

FEYERICK: The problem, experts say, is that security really varies widely from country to country, airport to airport. Airline experts say terrorists might try to travel through a weaker airport someplace overseas with the intention of striking a U.S. target.

Now, government sources tell CNN that flight crews from international carriers have been stopped and questioned. Experts say the hardest thing really is just controlling access to the airports in general, vendors, caterers, even some cargo handlers are hired by outside companies. And it's those outside companies that do the background checks.

Deborah Feyerick, CNN, New York.

(END VIDEOTAPE)

LIN: The orange alert brings new concerns that Washington is, once again, a possible terror target. But despite the warnings, visitors and residents we spoke with are focused on enjoying the holiday season in the nation's capital.

(BEGIN VIDEO CLIPS)

MAYOR ANTHONY WILLIAMS, WASHINGTON, D.C.: We are in a whole new world since September 11. There is a war against terrorism. Unfortunately, we're one of the centers, if you will, of that war.

UNIDENTIFIED MALE: I hope this is a center on the war on terrorism. I hope that, of all places, that we're going after them hard here.

UNIDENTIFIED MALE: There is nothing to be scared from. Everything seems good. I mean, we are Muslims, we are Arabic. And we find peace here, and we love to be here.

UNIDENTIFIED MALE: I haven't really given it a thought. The city seems calm. And I'm at peace here, so I don't see any problem. People are moving around and going about their days. But I can definitely feel the -- that I'm in the epicenter of the, you know, the people who are trying to protect the country.

WILLIAMS: The police forces have to take extra caution. We've brought together our joint operations center and stood that up, and that's prepared. We're working closely with surrounding counties and states in terms of preparedness and getting our deployment where it needs to be.

UNIDENTIFIED FEMALE: I walk on Capitol Hill every day, and unless I'm oblivious, I haven't really noticed more security than has been in the past. But I haven't felt unsecure at all.

UNIDENTIFIED FEMALE: I just was kind of raised that, you know, despite whatever warnings they might put up, really, the danger is kind of always there, you know? And you just got to live your life.

(END VIDEO CLIPS)

LIN: And here's something else to consider. Remember President Bush's State of the Union claim that Saddam Hussein was trying to buy uranium? Well, it's led to a little more fallout this Christmas Eve.

Let's go live to CNN's White House correspondent Dana Bash. Dana?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Carol, you remember the White House admitted over the summer that the president really never should have made that claim during his State of the Union address, that Iraq was trying to purchase uranium from Africa, they said at the time, because they realized intelligence simply didn't back it up.

The question still is, how did that information get into that very important address?

Well, a knowledgeable source confirms to CNN that the president's Foreign Intelligence Advisory Board has concluded that that was a questionable claim. And it got into his speech, in part, because the president's top aides simply didn't ask enough tough questions about the information.

The source, who was involved in the findings, confirms the report, first reported by "The Washington Post," that the president's own board did give him a private report after looking into the matter for a couple of months, saying that no one checked their facts carefully. And the source also saying, quote, "that the mistake was propagated by itself and that it was," as this source put it, "simply a goof."

Now, the White House won't comment on this today. They're referring it back to statements they made over the summer, that they got this information from multiple intelligence agencies, from reports coming from those agencies at the time, and even revealing some of that classified information to prove that this was information they got from intelligence agencies.

But they are, Carol, saying that they have reviewed the internal process of how speechwriting is done here, and certainly will be looking to see how that is affected -- affecting the next State of the Union, which is going to happen in about a month.

LIN: Right around the corner. Thank you very much. Dana Bash reporting live at the White House.

Fatal food, or passing panic? With mad cow now possibly closer to home, new concerns about the meat you eat. We are going to look at the origin of the disease and tell you what you need to know.

The politics of philanthropy. How Joe Lieberman is making the holidays a little happier for the New Hampshire homeland.

Subdued celebration. It's Christmas in Bethlehem. Is there new hope this year? We're going to go live later this hour.

But first, a quick look at some other news making headlines around the world.

Lighting London. Buckingham Palace is getting a holiday makeover. Special projectors are putting an image of the British flag on Queen Elizabeth's home. The palace is one of several landmarks getting special lighting displays as part of a holiday celebration called Brightening Up London. Festive France. Not to be outdone, the City of Light is shining for Christmas. The boulevards of Paris glowed as France prepared to say, Joyeux Noel.

Road sow. It's a long way from the Ed Sullivan Theater in New York. But David Letterman made a personal appearance in Iraq. The late-night TV host entertained troops with what he called his top 10 list of signs you've been in Baghdad too long, including the notion that camel tastes like chicken.

Down from the rooftop. Russia's Santa Claus, better known as Father Frost, doesn't need a chimney to slide down. This jolly old elf will climb down the side of your apartment building and come in through the window.

Christmas giving. A Japanese man who said he made millions in the stock market this month threw $5,000 off the top of an observation deck. There was chaos down below as people on the ground scrambled for the dollar bills and 100-yen notes.

And that's our look around the world.

(COMMERCIAL BREAK)

LIN: More now on the first suspected case of mad cow disease in the U.S.

To understand what's at stake, you only have to look at to the devastating outbreak that hit Britain starting in the mid-1980s.

Here's CNN's senior international correspondent, Walt Rodgers.

(BEGIN VIDEOTAPE)

WALTER RODGERS, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): These are healthy cattle.

And this is an animal with mad cow disease, or BSE. No one suffered from it as badly as British herds beginning in 1986, when it was first discovered. A decade later, it became an epidemic, 3.7 million cattle destroyed, a loss of billions of pounds. And politically, it could not have been handled worse.

In 1994, then-Prime Minister John Major.

JOHN MAJOR, FORMER BRITISH PRIME MINISTER: We are quite certain on the scientific and health advice that we are getting that British beef is safe, safe for the British, and safe for others.

(END VIDEO CLIP)

RODGERS: This former British agriculture minister typified government complacency and ignorance when he publicly fed his daughter hamburger as mad cow disease approached its peak here. Yet successive British agriculture ministers, misled by so-called scientific experts, misled the public. (BEGIN VIDEO CLIP)

DOUGLASS HOGG, FORMER BRITISH AGRICULTURE MINISTER: We believe British beef is safe. We believe people should eat it. I most certainly do, and I commend you to do the same.

(END VIDEO CLIP)

RODGERS: The British government argued for years, no link between mad cow disease and its human form, CJD. Still, 137 people in Britain died in what was described as the worst public health disaster of modern times.

HUGH PENNINGTON, BSE EXPERT: We acted too late. We did the right things, but we did them a bit late. And we had a much bigger problem as a consequence than we otherwise might have done.

RODGERS: Britain's beef industry has robustly bounced back with substantial government subsidies. Steak houses are the new eating rage in Britain these days. Most people here don't worry about British beef now.

Still, BSE, mad cow disease, has not been exterminated, 309 cases in British herds so far this year, and two years ago, more than 1,100 cases of mad cow disease. Most experts say it's caused by feeding animal byproducts to cattle.

PENNINGTON: Control this meat and bone meal, which is, you know, ground-up cows being fed up to cows, basically, control that, if necessary, to stop the spread of the infection.

LIN: The incidence of mad cow disease in Britain and Europe have fallen dramatically in the past decade. But public trust in government health assurances on just about everything has not recovered.

Walter Rodgers, CNN, London.

(END VIDEOTAPE)

LIN: The agent that causes mad cow disease is found in the animal's central nervous system. Now, under U.S. law, those parts are not marketed for human consumption. But the meat can come into contact with them during processing, becoming infected, and it's believed that's how people contact the human version of mad cow.

Human-to-human transmission is difficult, although there has been concern about possible transmission through blood transfusions. It can take 10 to 15 years for the first symptoms to appear, so tracing a person's exposure is extremely difficult.

Campaign financing has hit home for Democratic Senator John Kerry.

It's time now for a look at what's happening on the presidential campaign trail. (BEGIN VIDEOTAPE)

LIN (voice-over): 'Twas the night before Christmas, and John Kerry has mortgaged his house. Kerry is lending his campaign $6 million through the financing of his house, on top of the $850,000 he lent it last week.

Why the Christmas gift? Compared to Howard Dean, who has raised almost $15 million in the third quarter, Kerry raised $4 million.

Joe Lieberman was spreading his own holiday cheer today, volunteering his time at a homeless shelter in Washington, D.C. Lieberman and his wife, Hadassah, prepared and served meals to the homeless.

SEN. JOE LIEBERMAN (D-CT), PRESIDENTIAL CANDIDATE: When you are in that line putting that tuna casserole on the plate, you know you are doing something that is absolutely good.

LIN: And John Edwards was out and about in his state of North Carolina today, Raleigh, to be specific, where he was seen signing copies of his book, "Four Trials."

And that's our look at the 2004 presidential candidates on the trail.

(END VIDEOTAPE)

LIN: Christmas Eve celebrations. Right now, live to Bethlehem -- actually, live there to the -- that is -- Bethlehem, the Church of the Nativity. Midnight mass is under way there. We are going to take you there live.

And at the Vatican, the pope is just minutes away from beginning his special Christmas midnight mass. Live pictures there right now, and still ahead.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Hi, my name's PFC (UNINTELLIGIBLE). I just want to say merry Christmas, happy New Year, to my mom, my sister, and all my family in Florida. My fiancee, baby, I miss you. And I'll see you soon.

UNIDENTIFIED MALE: Hi, I'm Lieutenant Colonel Dallas Forsch (ph) from Peachtree City, Georgia. I want to say hello to my wife, Dolly, Justin, Jason, Aaron in Dallas, and my parents down in Seminole County, Donaldsville (ph). Merry Christmas from Baghdad, 2003.

UNIDENTIFIED FEMALE: Hi. I'm Staff Sergeant Arly (ph) Strong, (UNINTELLIGIBLE), Texas, (UNINTELLIGIBLE) merry Christmas to my family in Fort Lauderdale, Florida. I miss you guys. Hope to see you guys soon. Love you, bye.

UNIDENTIFIED FEMALE: Hi. My name's Specialist Crystal Rose (ph), and I'm from Kansas City, Missouri. I want to say hi to my husband in Heidelberg, Germany, and to my family in Kansas City, Missouri. I love you guys and I miss you, and I'll see you soon.

(END VIDEO CLIPS)

LIN: And there a very special moment. There live to Rome, where midnight mass is about to take place. The pope now making his way through the adoring crowds to lead the mass, despite experiencing some health setbacks this year. But he's looking very good there. Mass, once again, beginning to get under way.

And also, in another part of the world, in the Middle East, the Church of the Nativity. Three years of violence between Israelis and Palestinians have made for a subdued celebration there.

CNN's John Vause joins us now from Bethlehem with more. John?

JOHN VAUSE, CNN CORRESPONDENT: Carol, midnight mass is almost over here at the Church of the Nativity. But the Latin patriarch has delivered a very political homily criticizing both the Israelis and the Palestinians (UNINTELLIGIBLE) in his words, "It is the Israeli occupation which is the basis of this conflict."

(BEGIN VIDEOTAPE)

VAUSE (voice-over): Midnight in Bethlehem at the Church of the Nativity, on the site where Christians believe it all began, a message from the Latin patriarch to both Israelis and Palestinians.

"The bloodshed, the destruction must stop. God has brought together Jews, Christians, and Muslims to this holy land," he said, "and no human power can change it. Their destiny is to live together."

In the front row, an empty seat. For the third year, Palestinian President Yasser Arafat did not attend, because Israel says it will not guarantee his return to his compound in Ramallah.

Earlier, hundreds gathered in Manger Square, mostly Palestinians Christians from Bethlehem, a celebration of the birth of Jesus in the midst of a three-year-long conflict.

UNIDENTIFIED FEMALE: We don't have (UNINTELLIGIBLE) work, no, we can't, you know, we can't afford everything. We can't -- everything is missing. And it's Christmas for us.

VAUSE: But what was mostly missing this year, the pilgrims and tourists, the lifeblood of the city. A few hundred made the journey, like Dave from Iowa.

UNIDENTIFIED MALE: We're here because it is Bethlehem, and Jesus was born here, and we believe in the Holy Bible and believe the word of God, and Jesus was called the Prince of Peace. VAUSE: This was a day which began with the arrival of the Latin patriarch, the pope's envoy to Jerusalem, a pilgrimage which dates back hundreds of years. But amid the flags and banners, signs of protest from the Palestinians against Israel's barrier, which is being built around this city.

For some needy Palestinian children, both Christian and Muslim, there were gifts, but only enough for a few hundred. Many others went without.

UNIDENTIFIED FEMALE: We need to live in calm. Our children need to have fun like other children in the world.

(END VIDEOTAPE)

VAUSE: So now thoughts here turn to next Christmas, with prayers for peace and hopes of better times to come, Carol.

LIN: All right, thank you very much. John Vause reporting live from Bethlehem.

We'll be back with the results of our Web question of the day.

(COMMERCIAL BREAK)

LIN: And here are the results of the Web mail question. Of course, this is not a scientific poll. Which is the bigger topic of discussion for your family during this holiday? Well, we -- majority of you said the terror alert, and not mad cow disease.

We're going to hear from you as well as read some of your e-mail.

Dreux writes, "The cost of added security is a waste. The administration is merely continuing to falsify, justify its dog- paddling of finding high-profile terrorists while it bungles foreign policy."

Josh writes, "I find it surprising that people criticize the terror alert system and the administration's handling of it."

We wish you all a happy holiday this season.

I'm Carol Lin, in for Wolf Blitzer. A good evening to you.

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

Scares Off U.S. Beef Buyers; Americans Urged To Be Vigilant Over Holiday Season>

Aired December 24, 2003 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: Happening now, Christmas Eve cancellations in the name of security. You're looking at live pictures out of Los Angeles International Airport. This was supposed to be the destination for three international flights, but fears of terror kept them from the West Coast.
Stand by for hard news on WOLF BLITZER.

Grounded. (UNINTELLIGIBLE) for al Qaeda, as France cancels flights to the U.S.

Nightmare scenario. Military experts stand by to deal with a worst-case threat.

Mad cow. Other nations steer clear of U.S. beef. What should you do?

ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, December 24, 2003.

LIN: Good afternoon. I'm Carol Lin, sitting in for Wolf Blitzer.

Americans are on high alert this holiday. And all that tight security has just gotten a lot tighter. Concern about an al Qaeda attack from the skies has airports buttoned up. And now terror threat has led France to cancel three U.S.-bound flights.

This comes as military teams are ordered to prepare for possible attacks using chemical, biological, or nuclear materials.

CNN's Barbara Starr is standing by live at the Pentagon.

But we begin in our Washington bureau first with national security correspondent David Ensor. David, what's the latest there?

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Carol, the cancellation of the Air France flights from Paris to Los Angeles comes amid fears of possible al Qaeda terrorism against aircraft.

(BEGIN VIDEOTAPE)

ENSOR (voice-over): The cancellation announcement came amid concerns about the threat of terrorism at Los Angeles airport, and of al Qaeda trying to infiltrate an Air France flight. The French decision to cancel the three Paris-to-Los Angeles flights was made after consultations with U.S. officials.

A senior U.S. administration official says the decision was based on security concerns about these flights and was related to the information which led to the decision to go to code orange. In fact, sources say, one of the canceled flight numbers was mentioned in the intelligence chatter of recent days.

In addition to concerns about Air France flights, U.S. officials are also working closely with Mexican authorities concerning flights from their country to the United States.

Amid the tightened security nationwide, Los Angeles airport authorities have said there can be no curbside drop-offs by private cars until further notice, although our camera saw some of them going on anyway.

HAROLD JOHNSON, LAX SPOKESMAN: We're just trying to minimize the risk associated with unattended vehicles at the curbside.

ENSOR: In addition, U.S. officials say some non-U.S. air crews are being interviewed extensively on arrival in the United States. Officials have long expressed concern about the possibility of a pro- al Qaeda pilot.

Passengers and air crews on all commercial and cargo planes arriving into the U.S. from international destinations are also undergoing more scrutiny, according to U.S. officials, both on departure and at arrival. Authorities are sifting through intelligence trying to both prevent hijacking and to stop a would-be terrorist from bringing weapons into this country.

DAN BENJAMIN, FORMER COUNTERTERROR OFFICIAL: Putting together intelligence, especially when you have a high volume of it, as we have now, is incredibly challenging. It's typically the case that there may be a lot of people talking and giving no or next to no operational details, and so making heads or tails of what you're seeing is really quite difficult.

(END VIDEOTAPE)

ENSOR: The information leading to flight cancellations and extraordinary code orange security nationwide comes from a wide variety of sources, say U.S. officials, including more than one intelligence informant with specific information that was deemed credible enough that they felt that action was unavoidable, Carol.

LIN: All right, thank you very much. David Ensor.

Just a few minutes ago, I did an exclusive telephone interview with Jean-Claude Mallet, the French secretary general for national defense. And I asked him what specific threat would it take in order for them to prompt Air France to cancel those flights?

JEAN-CLAUDE MALLET, FRENCH SECRETARY GENERAL FOR NATIONAL DEFENSE (via telephone): We have received specific information, and we needed to take decisions which were targeted at specific flights, of course. LIN: Has anybody, either crew or passengers, on these airplanes been arrested, detained, or questioned?

MALLET: I cannot enter into details. I'm not aware that anybody has been arrested, as you said. But, of course, questions have been asked. As you know, we exchange the procedure of profiling with United States services and other services, such as British or German or others. And, of course, some elements of these profilings have led us to ask questions to some people.

LIN: What was the status of these flights when they were canceled? Were they ready to take off? Were they midair?

MALLET: Well, that's really a question to ask to an Air France speaker. What I can tell you is that the midday flight to Los Angeles was stopped. I mean, I understand that the passengers had not get into the plane, and it was delayed, and then it was canceled, that is for the midday flight to Los Angeles.

And tonight's flight, I suppose the passengers have not been in status of being checking in or -- but I'm not sure of that. You need to check that with Air France.

LIN: All right, will do. Mr. Secretary General, do you have any evidence to believe or to confirm that al Qaeda has in any way infiltrated your airline?

MALLET: Oh, I do not have anything of this kind in my file. What we have is, we have an alert which is on air security. And you certainly know that your homeland security office has taken several decisions aiming at several countries of origin. I've read in your press that people from air flights from Mexico or other countries could be targeted.

And I'm -- it's not -- the company, as far as I know, is certainly not in our focus. The focus is on the threat from Islamic groups that could come aboard flights.

LIN: So as far as the future is concerned, are there going to be additional cancellations?

MALLET: I will not comment on that. What I can tell you is that we have a continued process of threat assessment. We are making that particularly at the prime minister's office and with the president's advisers, and the home office here and the intelligence services.

We have constant exchanges, and we suddenly need to (UNINTELLIGIBLE) -- excuse me, to emphasize and strengthen our cooperation with the services of the United States, which is being done right at the moment where I speak.

And this is going to be a continuous process of review. And I don't -- I'm not aware that we have other decisions. But it is a constant process of assessment, as well as it is in the United States.

As I told you, we have raised the level of our security already early December, around the first of December. Decision was taken by the French president and French prime minister. And we adapt our alert status to the level of threat.

LIN: I understand. Thank you very much, Mr. Secretary General, Jean-Claude Mallet.

And there are different other kinds of terrorist threats to consider. Military teams trained to respond to chemical, biological, nuclear attacks have been now put on alert.

We are going to go live now to the Pentagon, where correspondent Barbara Starr has that story. Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Carol, if the unthinkable were to occur, and terrorists launched an attack using chemical, biological, or nuclear or even radiological weapons, there are now special teams waiting in the wings.

(BEGIN VIDEOTAPE)

STARR (voice-over): As the threat of a terrorist attack using a hijacked airliner or even a so-called dirty bomb or radiological device continues, the military has put a number of specialized teams on alert, all part of the Department of Homeland Security's code orange plan.

TOM RIDGE, HOMELAND SECURITY SECRETARY: All federal departments and agencies are implementing action plans in response to the increase in the threat level.

STARR: Pentagon officials will not be specific, but there are two key military teams that could be sent to an attack involving weapons of mass destruction.

The Marine Corps Chemical-Biological Incident Response Force can respond within hours to any attack, including a nuclear, radiological, or conventional weapon. Its job? Identify what agent has been used, and immediately begin medical assistance to victims.

The Army's Technical Escort Unit can deploy immediately to an attack site, isolate a weapon, package it, and render it safe for disarming.

At the Department of Energy, teams are available to respond specifically to incidents involving nuclear weapons or radiological devices, including disposal teams. It is these units that are most likely to deal with a dirty bomb, a conventional weapon packed with radioactive material.

Response teams have been placed on standby in the past at events such as the Salt Lake City Olympics, the Super Bowl, and the State of the Union address.

(END VIDEOTAPE)

STARR: And Carol, now the hope is, certainly, that the country will get through this holiday season with these special teams remaining only on alert, only on standby, Carol.

LIN: That's what we all hope for. Thank you very much, Barbara Starr, live at the Pentagon.

Another U.S. city is looking to the skies with concern. The Federal Aviation Administration ordered a no-fly zone over downtown Chicago today. A spokesman says the move was requested by the Homeland Security Department. The move bars aircraft from flying below 3,000 feet. A spokesman says it does not affect planes from O'Hare and Midway Airports, which fly above that altitude.

All right, now to Iraq. There was a shattering blast in the heart of Baghdad this Christmas eve. The attack was aimed at a hotel used by Westerners. It came on a bloody day for U.S. troops.

CNN's Satinder Bindra is in the Iraqi capital.

(BEGIN VIDEOTAPE)

SATINDER BINDRA, CNN CORRESPONDENT (voice-over): (UNINTELLIGIBLE) have been flying over downtown Baghdad, this after an explosion went off just to my left in the direction of the Sheraton Hotel, which is just across the road from us. U.S. military sources saying someone fired a 60-millimeter mortar in the direction of the Sheraton Hotel, but this mortar missed its target and fell instead on metal barriers.

Now, shortly after this explosion, there was a burst of automatic gunfire. U.S. forces saying this was security guards firing back at the attackers, who fled the scene. There's been no major damage to the Sheraton Hotel, and we have no reports of casualties.

Our cameras were rolling at the time of this explosion, and this is what they recorded.

Now, the net result of this blast is to further add to the mood of panic that prevails here in Baghdad.

Also today, there were three other major blasts across Iraq, one in the northern part of Iraq, in Irbil, in which one suicide bomber drove his vehicle into the side of a government building. The suicide bomber was killed and so too was one civilian. There was also another roadside blast in Samarra, just north of Baghdad, killing three soldiers. And finally, in Baghdad itself, a bomb killed a bus driver and a passenger.

Satinder Bindra, CNN, Baghdad.

(END VIDEOTAPE)

LIN: Mad cow in the United States. Fears prompt the biggest markets for U.S. beef to close their borders. Should it be on your plate?

(BEGIN VIDEO CLIP) HUGH PENNINGTON, BSE EXPERT: We acted too late. We did the right things, but we did them a bit late, and we had a much bigger problem as a consequence.

(END VIDEO CLIP)

LIN: The disease devastated Britain. What lessons can be learned from their handling of the epidemic?

A nation on alert, but the messages seem mixed.

An international airline flights grounds flights bound for the U.S., while many Americans continue with their holiday plans. Should you be more concerned?

(COMMERCIAL BREAK)

LIN: It will be at least three days before tests confirm what's believed to be the first case of mad cow disease in the U.S. But already, the beef industry and companies that rely on it are taking a considerable hit, and consumers are wondering how concerned should they be.

Here's some answers, CNN medical correspondent Holly Firfer. Holly, what have you learned?

HOLLY FIRFER, CNN MEDICAL CORRESPONDENT: Well, Carol, the USDA is reassuring consumers that they believe the beef in the U.S. is safe. Even so, it has many wondering, can we really be sure?

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Till we find out more, I certainly will be cutting back. But think I'll still stick with a prime rib for Christmas.

UNIDENTIFIED FEMALE: I guess I don't have all my confidence, but enough that I'll continue to eat meat.

FIRFER (voice-over): Even as the announcement of what appears to be the first case of mad cow disease in the U.S. was made, the beef industry was quick to say U.S. beef is safe.

CHANDLER KEYES, NATIONAL CATTLEMAN'S BEEF ASSOCIATION: We have firewalls in place. This cow was caught. The infected agents are not in the beef system.

FIRFER: The USDA is adamant that the food supply is safe because of precautions added in the 1990s when mad cow disease was wreaking havoc in the United Kingdom.

ANN VENEMAN, AGRICULTURE SECRETARY: In this country, we take every precaution. We have had a response plan in place since the early '90s, the -- since 1990, looking at all of the high-risk areas for BSE. We've done -- we've banned ruminant-to-ruminant feeding. We've had a testing program. FIRFER: But that firewall depends on companies who make animal food being compliant with USDA rules. And those rules ban feeding animals other animal remnants that could be infected with mad cow disease.

Because this cow was somehow infected after that ban was in place, the USDA now must investigate whether companies are being compliant.

In 1998, they asked the Harvard Center for Risk Analysis to study whether their safety net was adequate to protect Americans should an outbreak happen.

DAVID ROPIER, HARVARD CENTER FOR RISK ANALYSIS: We found different findings for different scenarios. But even in the worst- case scenario, the disease dies off, chokes off, goes away, very few additional animals get sick. And the risk to humans is exceptionally low.

(END VIDEOTAPE)

FIRFER: The Harvard study did show, however, that the problem lies in that animal feed. And they are calling on the USDA to redouble their efforts to enforce compliance, Carol.

LIN: All right, thanks very much. Holly Firfer for that.

Now, within hours of the news, some of the biggest U.S. trading partners began banning imports of American beef. And some U.S. companies that rely on it suffered today on Wall Street.

CNN's Chris Huntington is in New York with that part of the story. Chris?

CHRIS HUNTINGTON, CNN CORRESPONDENT: Well, Carol, in the absence of any concrete answers about the spread, possible spread of mad cow disease in the United States, traders on Wall Street, in the stockyards in Chicago, and among our trading partners overseas took matters into their own hands.

(BEGIN VIDEOTAPE)

HUNTINGTON (voice-over): The biggest overseas market for U.S. beef wasted no time shutting its doors to the possibility of mad cow disease. Japan imposed a ban on all U.S. beef products just hours after U.S. officials announced that a cow in Washington state had tested positive.

YASUO FUKUDA, JAPANESE GOVERNMENT SPOKESMAN (through translator): Japan will stop imports of U.S. beef starting from today.

HUNTINGTON: Japan bought more than one-third of the $3.5 billion worth of U.S. beef exported this year, followed by Mexico, South Korea, South Korea, Russia, and Canada, which have all decided to either block or restrict U.S. beef imports. GREGG DOWD, U.S. CATTLEMEN'S ASSOCIATION: Well, in the short term, this is going to have a significant -- the export situation is going to have a significant effect on the value of the live animal, probably reducing it by 10 or 15 percent.

HUNTINGTON: At the Chicago Mercantile Exchange, prices for cattle futures fell the maximum allowed in a single session. After the close, the Merck announced emergency measures to increase that sell-off limit when the markets reopen on Friday.

Beef-related stocks took a big hit as well as investors dumped shares of McDonald's, Wendy's, Tyson Foods, Outback Steak House, and restaurant operator Rare Hospitality. Several of those companies issued statements trying to distance themselves from the mad cow scare.

Tyson Foods, the nation's biggest meat packer, said it, quote, "has not bought any meat from plants in Washington state identified by the USDA in the report of mad cow disease."

McDonald's says it has "absolutely no connection," Wendy's "not affiliated," and Burger King claimed the producers in question "do not supply meat to the Burger King system."

But critics of the U.S. beef industry say the current scare is the result of inadequate safeguards.

(END VIDEOTAPE)

HUNTINGTON: Now, 90 percent of U.S. beef production is sold domestically. So if U.S. consumers continue buying, and, indeed, if the mad cow spread is limited, then the U.S. beef industry, which was on track to have one of its best years in a decade, should suffer only a minor setback, Carol.

LIN: All right, thank you very much, Chris Huntington.

Well, here is your turn to weigh in on this important story. Our Web question of the day is this. Which is the bigger topic of discussion with your family during this holiday, the mad cow case or the terror alert? You can vote right now at cnn.com/wolf. We'll have the results later in this broadcast.

All right, lessons to learn. Mad cow disease ravaged Britain's beef industry. How can the U.S. protect itself?

Secret intelligence. The information that prompted officials to ground three Air France flights bound for the Los Angeles airport.

Terror target. Is Washington, D.C., one of them? How people in the nation's capital are preparing for the worst.

(COMMERCIAL BREAK)

LIN: During this orange alert, Americans have been warned to be on the lookout for suspicious activity. But what, in specific, should we be looking for?

Also, of course, we have the terror alert, and the cancellation of Air France flights.

Lots to talk about with Steven Simon, who is a terrorism analyst with the Rand Corporation and co-author of "The Age of Sacred Terror."

Steven, thank you very much for being with us.

STEVEN SIMON, RAND SENIOR ANALYST: Glad to be here.

LIN: First and foremost, let's talk about the cancellation of these Air France flights. I spoke exclusively a few moments ago with the secretary general of France's national defense. He said he did not know of anything specific about al Qaeda infiltrating the airline. So what sort of concrete evidence would France need in order -- from the United States in order to cancel these flights?

SIMON: Well, France would need some accumulation of evidence. It might not be any one specific thing. It was more likely to be three or four very worrisome bits of intelligence that, when taken together, added up to a severe enough threat to warrant cancellation of the flights.

LIN: Where do you think this information is coming from?

SIMON: The information is more than likely coming from multiple sources. It would come from intercepted communications. It would come from informants. And it would come also from material picked up from people who were arrested, telephone books, material they have in their pockets, the results of interrogations.

All these, the results of all these things are combined to form an intelligence assessment.

LIN: Perhaps it is not any one event that may be concerning Americans, but, collectively, look at what's happened just in the last four days. You have the raise to high alert for the terror status of the nation. You have now the government sending out nuclear experts to vulnerable sites around the country in case there's a dirty bomb attack, The Air France cancellations.

Is there something different about this time around with the government raising the terror level to orange alert? Is there something about the way the nature, the way the government is handling the situation that you find different?

SIMON: Well, up until six months ago, there were quite a few of these alerts. And they really had the effect of jading the public, and not probably raising our security very much. And at that time, the U.S. government decided that it would raise the bar. It would raise the threshold on launching these kinds of alerts.

So the very fact that they have chosen to launch an alert now, against the background of the higher threshold, indicates there's a more serious threat. LIN: So how should Americans respond to this threat? I mean, there isn't a lot for Americans to feel very good about in terms of their overall safety this holiday season.

SIMON: No, I would agree. Apparently there's just a massive amount of information that suggests that some kind of attack will take place. The authorities clearly are unsure of what kind of attack they are to be on the lookout for.

On the one hand, there's an aviation threat. It looks like it's coming from either Mexico or France or both, or perhaps other places. There are worries about an attack with a radiological device.

There's just a lot of information out there right now. And what the public can do about it, I think, is just keep their heads, stay cool, be vigilant, and let the government go about trying to do what it needs to do to protect the American people.

LIN: All right. Thank you very much, Steven Simon. Let's hope it is a safe and secure holiday for all of us.

SIMON: I hope so too.

LIN: You bet.

All right, well, hectic holiday travel. What impact is it having on security in the midst of a code orange terror alert? We are going check in with cities from coast to coast.

Case confirmed. With mad cow now possibly in the United States, questions about the disease abound. We'll tell you what you need to know.

Christmas campaigning. The holidays haven't stopped some of the presidential candidates from getting out their message. Find out who as we go on the campaign trail later this hour.

(COMMERCIAL BREAK)

LIN: Welcome back to CNN.

Grounded. The French government cancels Air France flights bound for Los Angeles, amid fears of a possible terrorist attack.

More on this developing story. But first, a quick check of the latest headlines.

Pakistani President Pervez Musharraf says he'll give up his role as head of the country's armed forces by the end of 2004. The move is part of a deal with opposition parties to end months of parliamentary gridlock. Musharraf came to power in a 1999 coup. He'll keep his role as president.

Florida prosecutors won't be able to see Rush Limbaugh's medical records just yet. A circuit judge issued a stay on Tuesday's ruling granting them access while Limbaugh appeals. Prosecutors are probing whether Limbaugh illegally got multiple prescriptions from multiple doctors during his admitted addiction to painkillers.

A federal appeals court is blocking Bush administration changes to the Clean Air Act that were to take effect this week. They would make it easier for industrial facilities to increase capacity without increasing pollution controls. Twelve states joined environmental and health groups in suing to block the changes.

And now back to our top story.

You are looking or about to see live pictures of the Los Angeles International Airport. It is the focus of extraordinary security efforts and deep concern after hints of a terror threat led to the grounding of three flights bound from Paris to Los Angeles.

Let's go live now to CNN's Miguel Marquez at LAX. Miguel, have you seen any change in activity there?

MIGUEL MARQUEZ, CNN CORRESPONDENT: Oh, we've certainly seen change in activity. And what's interesting, that this is the -- probably about the highest-security situation we've had here at LAX since September 11, even though this is the fifth time the country has gone to an orange level security. This is the first time that they've done what I'm going to show you here.

You can see these orange pylons here along the terminal floor at LAX. There are no private vehicles now being allowed to drop off passengers. That person obviously not doing what they're supposed to be doing. But you have only commercial vehicles allowed to drop off passengers here at LAX because of security concerns.

And certainly one of the most serious situations they've had here in some time. And that seems to be bearing out. Air France here today, we talked to the station manager for Air France here at LAX a short time ago. And he said that all flights into and out of LAX for today, the 24th, and tomorrow, the 25th, have been canceled due to security concerns.

It's not clear whether other days, at this point, may be canceled as well. Says that these were 747 planes, and a total of about 2,000 passengers will be affected.

I asked him if, in his 22 years with Air France, if he had ever seen that sort of type of blanket cancellation. He said only September 11 was a time that he remembered where that many cancellations were made into one single airport in one day.

We also understand a different flight, a different Air France flight going into Cincinnati, has also been canceled, all of those today.

Back to you.

LIN: All right, thank you very much. Miguel Marquez at LAX.

CNN's Charles Feldman has been working law enforcement and aviation sources, and he joins us now from Los Angeles. Charles, what have you learned?

CHARLES FELDMAN, CNN CORRESPONDENT: Carol, everyone I talk to is taking this alleged threat very seriously. For example, this morning, the Federal Aviation Administration in Washington placed an emergency phone call to its regional offices, instructing them to refer any questions from the press regarding security or terrorism today to the Office of Homeland Security in D.C.

Federal and local law enforcement officials were in and out of meetings and telephone conference calls as the news started spreading that Air France had canceled three flights from Paris to Los Angeles.

A Pentagon official told our colleague Barbara Starr that military teams with expertise in chemical, biological, and nuclear attacks are on alert and may already be deployed to key locations.

When we asked whether -- when we asked officials here whether any of those teams had been deployed near LAX airport, they emphatically declined to comment.

Law enforcement officials are saying that another area of concern is Mexico, concern that certain flights from there may pose a hazard to the United States, Carol.

LIN: All right. Thank you very much, Charles Feldman, continuing to work his sources out there.

Let's check in on the opposite coast. CNN's Deborah Feyerick is at New York's Kennedy International Airport.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Inside JFK's International Airport, the mood is relaxed. Passengers are arriving early, they're moving through security. Federal agents from the TSA taking extra precautions to make sure everybody is screened properly.

The U.S. government has reached out to international airlines, including those in France and Mexico. They are urging everyone to boost security.

MARION BLAKEY, FAA ADMINISTRATOR: We're getting very good cooperation from the foreign carriers. I think everyone understands that security these days is something that, again, cuts across the Atlantic and Pacific. Terrorism is as much a worry on their side as it is on ours. So we find that both in terms of our security and law enforcement branches, they're working well together.

FEYERICK: The problem, experts say, is that security really varies widely from country to country, airport to airport. Airline experts say terrorists might try to travel through a weaker airport someplace overseas with the intention of striking a U.S. target.

Now, government sources tell CNN that flight crews from international carriers have been stopped and questioned. Experts say the hardest thing really is just controlling access to the airports in general, vendors, caterers, even some cargo handlers are hired by outside companies. And it's those outside companies that do the background checks.

Deborah Feyerick, CNN, New York.

(END VIDEOTAPE)

LIN: The orange alert brings new concerns that Washington is, once again, a possible terror target. But despite the warnings, visitors and residents we spoke with are focused on enjoying the holiday season in the nation's capital.

(BEGIN VIDEO CLIPS)

MAYOR ANTHONY WILLIAMS, WASHINGTON, D.C.: We are in a whole new world since September 11. There is a war against terrorism. Unfortunately, we're one of the centers, if you will, of that war.

UNIDENTIFIED MALE: I hope this is a center on the war on terrorism. I hope that, of all places, that we're going after them hard here.

UNIDENTIFIED MALE: There is nothing to be scared from. Everything seems good. I mean, we are Muslims, we are Arabic. And we find peace here, and we love to be here.

UNIDENTIFIED MALE: I haven't really given it a thought. The city seems calm. And I'm at peace here, so I don't see any problem. People are moving around and going about their days. But I can definitely feel the -- that I'm in the epicenter of the, you know, the people who are trying to protect the country.

WILLIAMS: The police forces have to take extra caution. We've brought together our joint operations center and stood that up, and that's prepared. We're working closely with surrounding counties and states in terms of preparedness and getting our deployment where it needs to be.

UNIDENTIFIED FEMALE: I walk on Capitol Hill every day, and unless I'm oblivious, I haven't really noticed more security than has been in the past. But I haven't felt unsecure at all.

UNIDENTIFIED FEMALE: I just was kind of raised that, you know, despite whatever warnings they might put up, really, the danger is kind of always there, you know? And you just got to live your life.

(END VIDEO CLIPS)

LIN: And here's something else to consider. Remember President Bush's State of the Union claim that Saddam Hussein was trying to buy uranium? Well, it's led to a little more fallout this Christmas Eve.

Let's go live to CNN's White House correspondent Dana Bash. Dana?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Carol, you remember the White House admitted over the summer that the president really never should have made that claim during his State of the Union address, that Iraq was trying to purchase uranium from Africa, they said at the time, because they realized intelligence simply didn't back it up.

The question still is, how did that information get into that very important address?

Well, a knowledgeable source confirms to CNN that the president's Foreign Intelligence Advisory Board has concluded that that was a questionable claim. And it got into his speech, in part, because the president's top aides simply didn't ask enough tough questions about the information.

The source, who was involved in the findings, confirms the report, first reported by "The Washington Post," that the president's own board did give him a private report after looking into the matter for a couple of months, saying that no one checked their facts carefully. And the source also saying, quote, "that the mistake was propagated by itself and that it was," as this source put it, "simply a goof."

Now, the White House won't comment on this today. They're referring it back to statements they made over the summer, that they got this information from multiple intelligence agencies, from reports coming from those agencies at the time, and even revealing some of that classified information to prove that this was information they got from intelligence agencies.

But they are, Carol, saying that they have reviewed the internal process of how speechwriting is done here, and certainly will be looking to see how that is affected -- affecting the next State of the Union, which is going to happen in about a month.

LIN: Right around the corner. Thank you very much. Dana Bash reporting live at the White House.

Fatal food, or passing panic? With mad cow now possibly closer to home, new concerns about the meat you eat. We are going to look at the origin of the disease and tell you what you need to know.

The politics of philanthropy. How Joe Lieberman is making the holidays a little happier for the New Hampshire homeland.

Subdued celebration. It's Christmas in Bethlehem. Is there new hope this year? We're going to go live later this hour.

But first, a quick look at some other news making headlines around the world.

Lighting London. Buckingham Palace is getting a holiday makeover. Special projectors are putting an image of the British flag on Queen Elizabeth's home. The palace is one of several landmarks getting special lighting displays as part of a holiday celebration called Brightening Up London. Festive France. Not to be outdone, the City of Light is shining for Christmas. The boulevards of Paris glowed as France prepared to say, Joyeux Noel.

Road sow. It's a long way from the Ed Sullivan Theater in New York. But David Letterman made a personal appearance in Iraq. The late-night TV host entertained troops with what he called his top 10 list of signs you've been in Baghdad too long, including the notion that camel tastes like chicken.

Down from the rooftop. Russia's Santa Claus, better known as Father Frost, doesn't need a chimney to slide down. This jolly old elf will climb down the side of your apartment building and come in through the window.

Christmas giving. A Japanese man who said he made millions in the stock market this month threw $5,000 off the top of an observation deck. There was chaos down below as people on the ground scrambled for the dollar bills and 100-yen notes.

And that's our look around the world.

(COMMERCIAL BREAK)

LIN: More now on the first suspected case of mad cow disease in the U.S.

To understand what's at stake, you only have to look at to the devastating outbreak that hit Britain starting in the mid-1980s.

Here's CNN's senior international correspondent, Walt Rodgers.

(BEGIN VIDEOTAPE)

WALTER RODGERS, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): These are healthy cattle.

And this is an animal with mad cow disease, or BSE. No one suffered from it as badly as British herds beginning in 1986, when it was first discovered. A decade later, it became an epidemic, 3.7 million cattle destroyed, a loss of billions of pounds. And politically, it could not have been handled worse.

In 1994, then-Prime Minister John Major.

JOHN MAJOR, FORMER BRITISH PRIME MINISTER: We are quite certain on the scientific and health advice that we are getting that British beef is safe, safe for the British, and safe for others.

(END VIDEO CLIP)

RODGERS: This former British agriculture minister typified government complacency and ignorance when he publicly fed his daughter hamburger as mad cow disease approached its peak here. Yet successive British agriculture ministers, misled by so-called scientific experts, misled the public. (BEGIN VIDEO CLIP)

DOUGLASS HOGG, FORMER BRITISH AGRICULTURE MINISTER: We believe British beef is safe. We believe people should eat it. I most certainly do, and I commend you to do the same.

(END VIDEO CLIP)

RODGERS: The British government argued for years, no link between mad cow disease and its human form, CJD. Still, 137 people in Britain died in what was described as the worst public health disaster of modern times.

HUGH PENNINGTON, BSE EXPERT: We acted too late. We did the right things, but we did them a bit late. And we had a much bigger problem as a consequence than we otherwise might have done.

RODGERS: Britain's beef industry has robustly bounced back with substantial government subsidies. Steak houses are the new eating rage in Britain these days. Most people here don't worry about British beef now.

Still, BSE, mad cow disease, has not been exterminated, 309 cases in British herds so far this year, and two years ago, more than 1,100 cases of mad cow disease. Most experts say it's caused by feeding animal byproducts to cattle.

PENNINGTON: Control this meat and bone meal, which is, you know, ground-up cows being fed up to cows, basically, control that, if necessary, to stop the spread of the infection.

LIN: The incidence of mad cow disease in Britain and Europe have fallen dramatically in the past decade. But public trust in government health assurances on just about everything has not recovered.

Walter Rodgers, CNN, London.

(END VIDEOTAPE)

LIN: The agent that causes mad cow disease is found in the animal's central nervous system. Now, under U.S. law, those parts are not marketed for human consumption. But the meat can come into contact with them during processing, becoming infected, and it's believed that's how people contact the human version of mad cow.

Human-to-human transmission is difficult, although there has been concern about possible transmission through blood transfusions. It can take 10 to 15 years for the first symptoms to appear, so tracing a person's exposure is extremely difficult.

Campaign financing has hit home for Democratic Senator John Kerry.

It's time now for a look at what's happening on the presidential campaign trail. (BEGIN VIDEOTAPE)

LIN (voice-over): 'Twas the night before Christmas, and John Kerry has mortgaged his house. Kerry is lending his campaign $6 million through the financing of his house, on top of the $850,000 he lent it last week.

Why the Christmas gift? Compared to Howard Dean, who has raised almost $15 million in the third quarter, Kerry raised $4 million.

Joe Lieberman was spreading his own holiday cheer today, volunteering his time at a homeless shelter in Washington, D.C. Lieberman and his wife, Hadassah, prepared and served meals to the homeless.

SEN. JOE LIEBERMAN (D-CT), PRESIDENTIAL CANDIDATE: When you are in that line putting that tuna casserole on the plate, you know you are doing something that is absolutely good.

LIN: And John Edwards was out and about in his state of North Carolina today, Raleigh, to be specific, where he was seen signing copies of his book, "Four Trials."

And that's our look at the 2004 presidential candidates on the trail.

(END VIDEOTAPE)

LIN: Christmas Eve celebrations. Right now, live to Bethlehem -- actually, live there to the -- that is -- Bethlehem, the Church of the Nativity. Midnight mass is under way there. We are going to take you there live.

And at the Vatican, the pope is just minutes away from beginning his special Christmas midnight mass. Live pictures there right now, and still ahead.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Hi, my name's PFC (UNINTELLIGIBLE). I just want to say merry Christmas, happy New Year, to my mom, my sister, and all my family in Florida. My fiancee, baby, I miss you. And I'll see you soon.

UNIDENTIFIED MALE: Hi, I'm Lieutenant Colonel Dallas Forsch (ph) from Peachtree City, Georgia. I want to say hello to my wife, Dolly, Justin, Jason, Aaron in Dallas, and my parents down in Seminole County, Donaldsville (ph). Merry Christmas from Baghdad, 2003.

UNIDENTIFIED FEMALE: Hi. I'm Staff Sergeant Arly (ph) Strong, (UNINTELLIGIBLE), Texas, (UNINTELLIGIBLE) merry Christmas to my family in Fort Lauderdale, Florida. I miss you guys. Hope to see you guys soon. Love you, bye.

UNIDENTIFIED FEMALE: Hi. My name's Specialist Crystal Rose (ph), and I'm from Kansas City, Missouri. I want to say hi to my husband in Heidelberg, Germany, and to my family in Kansas City, Missouri. I love you guys and I miss you, and I'll see you soon.

(END VIDEO CLIPS)

LIN: And there a very special moment. There live to Rome, where midnight mass is about to take place. The pope now making his way through the adoring crowds to lead the mass, despite experiencing some health setbacks this year. But he's looking very good there. Mass, once again, beginning to get under way.

And also, in another part of the world, in the Middle East, the Church of the Nativity. Three years of violence between Israelis and Palestinians have made for a subdued celebration there.

CNN's John Vause joins us now from Bethlehem with more. John?

JOHN VAUSE, CNN CORRESPONDENT: Carol, midnight mass is almost over here at the Church of the Nativity. But the Latin patriarch has delivered a very political homily criticizing both the Israelis and the Palestinians (UNINTELLIGIBLE) in his words, "It is the Israeli occupation which is the basis of this conflict."

(BEGIN VIDEOTAPE)

VAUSE (voice-over): Midnight in Bethlehem at the Church of the Nativity, on the site where Christians believe it all began, a message from the Latin patriarch to both Israelis and Palestinians.

"The bloodshed, the destruction must stop. God has brought together Jews, Christians, and Muslims to this holy land," he said, "and no human power can change it. Their destiny is to live together."

In the front row, an empty seat. For the third year, Palestinian President Yasser Arafat did not attend, because Israel says it will not guarantee his return to his compound in Ramallah.

Earlier, hundreds gathered in Manger Square, mostly Palestinians Christians from Bethlehem, a celebration of the birth of Jesus in the midst of a three-year-long conflict.

UNIDENTIFIED FEMALE: We don't have (UNINTELLIGIBLE) work, no, we can't, you know, we can't afford everything. We can't -- everything is missing. And it's Christmas for us.

VAUSE: But what was mostly missing this year, the pilgrims and tourists, the lifeblood of the city. A few hundred made the journey, like Dave from Iowa.

UNIDENTIFIED MALE: We're here because it is Bethlehem, and Jesus was born here, and we believe in the Holy Bible and believe the word of God, and Jesus was called the Prince of Peace. VAUSE: This was a day which began with the arrival of the Latin patriarch, the pope's envoy to Jerusalem, a pilgrimage which dates back hundreds of years. But amid the flags and banners, signs of protest from the Palestinians against Israel's barrier, which is being built around this city.

For some needy Palestinian children, both Christian and Muslim, there were gifts, but only enough for a few hundred. Many others went without.

UNIDENTIFIED FEMALE: We need to live in calm. Our children need to have fun like other children in the world.

(END VIDEOTAPE)

VAUSE: So now thoughts here turn to next Christmas, with prayers for peace and hopes of better times to come, Carol.

LIN: All right, thank you very much. John Vause reporting live from Bethlehem.

We'll be back with the results of our Web question of the day.

(COMMERCIAL BREAK)

LIN: And here are the results of the Web mail question. Of course, this is not a scientific poll. Which is the bigger topic of discussion for your family during this holiday? Well, we -- majority of you said the terror alert, and not mad cow disease.

We're going to hear from you as well as read some of your e-mail.

Dreux writes, "The cost of added security is a waste. The administration is merely continuing to falsify, justify its dog- paddling of finding high-profile terrorists while it bungles foreign policy."

Josh writes, "I find it surprising that people criticize the terror alert system and the administration's handling of it."

We wish you all a happy holiday this season.

I'm Carol Lin, in for Wolf Blitzer. A good evening to you.

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Scares Off U.S. Beef Buyers; Americans Urged To Be Vigilant Over Holiday Season>