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CNN Wolf Blitzer Reports

Security Concerns Cited for Cancelled British Flight; Troops Rotating in Iraq; University Releases List of Overused Words

Aired January 01, 2004 - 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.


KYRA PHILLIPS, HOST: Happening now, protecting the port, as the U.S. Coast Guard takes action in Alaska as code orange continues through 2004.
And action at the airport. An international flight canceled from London to the United States.

Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

New year fears. The party's over, but the terror concerns are still very real, as some airline passengers are finding out.

A new era with Iran? A devastating tragedy leads to an easing of hostility.

KENT WATTS, FAIRFAX, VIRGINIA, FIRE AND RESCUE: We're just hoping that maybe possibly this will warm the relationships between the two countries in some way, shape, or form.

PHILLIPS: And looking ahead, what the new year will bring in Iraq, in the courtroom, and in the presidential campaign.

(END VIDEOTAPE)

ANNOUNCER: This is WOLF BLITZER REPORTS for Thursday, January 1, 2004.

PHILLIPS: Hello, everyone. I'm Kyra Phillips. Wolf is off today.

New Year's celebrations have come and gone without major incidents, but with intelligence chatter suggesting possible terror attacks, federal officials are taking no chances. They're keeping America on high alert.

Let's go live to CNN's Elaine Quijano at Washington's Reagan National Airport -- Elaine.

ELAINE QUIJANO, CNN CORRESPONDENT: Hello to you, Kyra.

Well, security continues to be tight at the nation's airports, especially here around the nation's capital. And today, another sign of the times, an international flight incoming into this area was canceled.

(BEGIN VIDEOTAPE)

QUIJANO (voice-over): One day after fighter jets escorted a British Airways flight en route from London to Washington, the airline canceled the same flight due to security concerns at the request, company officials said, of the British government.

New Year's Eve, roughly 240 passengers were kept on board that British Airways plane while it sat on the tarmac at Dulles International Airport outside Washington, D.C. Passengers were interviewed for several hours before being allowed off.

The reason? A U.S. law enforcement official says about a dozen names on the flight's passenger list appeared to match names on a terror watch list. But in the end, authorities determined the people in question posed no threat.

In California, decades of tradition blended with modern reminders of the raised threat level. At places expecting large crowds, like the annual Tournament of Rose Parade and the many college bowl games, stepped-up security surrounds the events.

KELLY MCCANN, SECURITY/COUNTERTERRORISM EXPERT: Security is dynamic. At threat goes up, of course, countermeasures go up. And then as threat drops back and recedes, so do countermeasures.

QUIJANO: More than 1,000 federal and local law enforcement officers kept a close watch at the annual Rose Parade. Although there have been no specific threats, police used bomb-sniffing dogs, video surveillance, and helicopters to monitor the area.

And in the airspace above the Rose Bowl, authorities restricted flights to only police and military aircraft.

The precautions stretched to all corners of the country. In Alaska, the increased threat level prompted the U.S. Coast Guard to temporarily halt the transfer of oil onto tankers from the port of Valdez.

But the heightened security didn't keep Americans from ringing in the new year in places like New York City's Times Square and the Las Vegas Strip.

Still, officials aren't letting down their guard, staying focused on possible targets.

PASQUALE D'AMURO, FBI: The airline industry, transportation modes, subway systems, those still remain at a very high alert for this country.

(END VIDEOTAPE)

QUIJANO: As for the New Year's Eve delay at Dulles, a law enforcement official calls it, quote, "an unfortunate disadvantage to the passengers," but said safety is the utmost concern. Meantime, as for the code orange alert, law enforcement officials say it is likely to last for most of January, Kyra.

PHILLIPS: Elaine Quijano, thank you. Thank you.

On vacation in Texas this New Year's Day, President Bush went quail hunting with his father, then took questions from reporters on topics ranging from Iran, to Pakistan, to the war on terror.

Let's go live to CNN White House correspondent Suzanne Malveaux. She's in Crawford, Texas -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hi, Kyra.

President Bush spending the holiday, as you had mentioned before, quail hunting with his father. Also having lunch with special envoy James Baker. And then he took a couple questions from reporters. It really was dominated by international policy. He talked about security around the world, including Iraq, Iran, as well as Pakistan.

The president talked about this new cooperation between the United States and Iran, the temporary lifting of sanctions to allow Americans to contribute aid to some of those earthquake victims, and the possibility that this opens up to new diplomatic relations between the two countries.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: What we're doing in Iran is, we're, is we're showing the Iranian people the American people care, that we've got great compassion for human suffering. And ease restrictions in order to be able to get humanitarian aid into the country.

The Iranian government must listen to the voices of those who long for freedom, must turn over al Qaeda that, that are in their custody, and must abandon their nuclear weapons program.

(END VIDEO CLIP)

MALVEAUX: Now, the president also talked about the importance of Pakistan, the importance of stability in that country, a nuclear power, and the fact that its leader, Pervez Musharraf, has survived two assassination attempts in two weeks.

(BEGIN VIDEO CLIP)

BUSH: Obviously terrorists are after him, and he sounded very confident that his security forces would be able to deal with the threat. President Musharraf has been a friend of the United States. He's been a standup guy when it comes to dealing with the terrorists. We are making progress against al Qaeda because of his cooperation.

(END VIDEO CLIP)

MALVEAUX: Now, President Bush said that he was going to be focusing on continuing on working on the state of the economy as well as peace around the world. The president has denied that he has started the campaign season, but earlier videos shows certainly a lot of handshaking and kissing those babies. Certainly looks like the campaign season has started in earnest.

The first thing the president is going to do, a trip to St. Louis, Missouri, where he's going to be doing some fund raising, Kyra.

PHILLIPS: Suzanne Malveaux, thank you.

Meanwhile, dozens of Americans are in Bam, joining teams from 20 other countries trying to help with the rescue and relief efforts.

CNN's Ryan Chilcote is there.

(BEGIN VIDEOTAPE)

RYAN CHILCOTE, CNN CORRESPONDENT (voice-over): After days on the road, U.S. aid workers pull into the Iranian Revolutionary Guard's barracks. With bewildered soldiers looking on, they set up what will be their home for the next week.

UNIDENTIFIED FEMALE: This is it. We made it.

CHILCOTE: The aid workers well aware that this mission is a special one.

KENT WATTS, FAIRFAX, VIRGINIA, FIRE AND RESCUE: We know that there has been tension between the two countries for several years, and we're just hoping that maybe possibly this will warm the relationships between the two countries in some way, shape, or form.

CHILCOTE: By nightfall, Kent Watts and David Taylor, firefighters from Fairfax, Virginia, are already in the thick of it, joining Iranian and Danish teams to clear wreckage after a search dog indicated signs of life.

After several frantic hours of digging, no one is found.

The next morning, the firefighters set out to map out their sector and size up the community's needs.

BOB DUBE, EMERGENCY WORKER: You've got the GPS, so you're going to do all the...

CHILCOTE: Bob Dube is a veteran emergency worker.

DUBE: What we've seen in -- throughout the city is, everything is completely either damaged or completely destroyed. What we're trying to really do is get a handle on what we can offer for assistance from what we brought with us and what the U.N. has to offer.

CHILCOTE (on camera): Absolutely everything about this trip is extraordinary. This is the first time that a U.S. delegation has visited this country in more than two decades. (voice-over): U.S.-Iranian relations have been virtually nonexistent since Iran's Islamic revolution a quarter-century ago, got even poorer after the U.S. president, George W. Bush, included Iran as part of the so-called axis of evil, something that doesn't concern Bob.

DUBE: I'm not a politician, I'm a rescue worker. So I'm glad to be here.

CHILCOTE: Glad to be part of something that could begin to reconstruct U.S.-Iranian relations.

UNIDENTIFIED MALE: ... (UNINTELLIGIBLE), sutures, suture sets, and (UNINTELLIGIBLE)...

CHILCOTE: Ryan Chilcote, CNN, Bam, Iran.

(END VIDEOTAPE)

PHILLIPS: Meanwhile, sobs and grief filled the air at a cemetery outside that city. Today marks seven days since the quake, and Iranian Shi'ite Muslims traditionally observe a mourning period for a deceased relative a week after the death. While some gathered around the burial mounds and mass graves, other watched three laptop computers displaying a slide show of unidentified victims.

Police say the grim display has helped identify 30 bodies.

Now, here is your turn to weigh in on this important story. Our Web question of the day is this, Do you think the U.S. should normalize relations with Iran? You can vote right now at cnn.com/wolf. We'll have the results later in the broadcast.

And while you're there, we'd like to hear directly from you. Send us your comments any time. We might read some of them at the end of the program.

Straight ahead, a pledge for giving up control of Iraq.

(BEGIN VIDEO CLIP)

DAN SENOR, COALITION AUTHORITY SPOKESPERSON: The timeline is a result of decisions made by the Iraqi Governing Council, not a result of decisions made initially by the coalition.

(END VIDEO CLIP)

PHILLIPS: Questions about whether peace will really have a chance, and when American troops will be able to come home.

The election year is here, the start of the presidential primary season just weeks away. Hear who still has a shot landing the Democratic ticket.

And are you tired of hearing people talk about bling-bling? My producer, Rob Shefny (ph), is. That and several other terms made this year's word alert list. We'll run it down a little later.

You're watching WOLF BLITZER REPORTS.

(COMMERCIAL BREAK)

PHILLIPS: In Iraq, the new year was ushered in last night by the deadly bombing of a Baghdad restaurant, and New Year's Day brought no change in the situation for U.S. troops, who were either on guard or on the offensive. But big changes are planned in the year ahead.

Let's go live to Karl Penhaul. He's in Baghdad -- Karl.

KARL PENHAUL, CNN CORRESPONDENT: Hi, Kyra.

I've spent most of the day talking to U.S. coalition administrators about the plans to hand over political control of Iraq to an Iraqi government within the next six months.

Now, that timetable is a lot faster than was originally foreseen, and technically, that will put an end to the occupation of Iraq by coalition forces.

Critics are calling this planned pull-out a quick exit strategy. Coalition officials, on the other hand, are calling it a tactical adjustment.

(BEGIN VIDEOTAPE)

PENHAUL (voice-over): The main mission in Iraq has been completed. Saddam was toppled. Now he's captured. A guerrilla war is still raging, but the U.S.-led coalition is laying plans to wind down the occupation. It's pledged to hand over the political reins to transitional Iraqi government by July 1.

That's a change of gear. Until recently, coalition control of Iraq seemed likely to last into 2005, though no firm deadlines had been set. Coalition officials call it a tactical adjustment.

DAN SENOR, COALITION AUTHORITY SPOKESPERSON: The more accelerated timeline is a result of decisions made by the Iraqi Governing Council, not a result of decisions made initially by the coalition.

PENHAUL: The rush towards Iraqi self-rule means the coalition won't now supervise the drafting of a new constitution, the road map of Iraq's political and economic future. That's not due to be completed until late 2005.

Reconstruction will not be complete, the shift from state-run economy to free market will only just be beginning. But the current president of Iraq's Governing Council assembled by the U.S. doesn't feel the Americans are getting ready to run.

ADNAN PACHACHI, PRESIDENT, IRAQI GOVERNING COUNCIL: Not backing off from their commitment, but I think they are reassessing some of their plans, which, of course, is the proper thing to do. PENHAUL: The coalition has been training Iraqi security forces to control the streets of Baghdad by spring. Few expect the insurgency to slow enough to permit American soldiers to leave at the same time as coalition administrators. But by midyear, the occupation could technically be over.

U.S. troops will remain by invitation of the newly sovereign Iraq government, an invitation the coalition takes as automatic.

BRIG. GEN. MARTIN DEMPSEY, U.S. ARMY: And we're not going far, by the way. And when we talk about achieving what we call local stand-off, we're talking kilometers, you know, not time zones.

PENHAUL: Coalition authorities are hopeful guerrilla violence will be on the wane by the time the new Iraqi government takes office.

SENOR: There will be good days and bad days. The important point is that the good days outnumber the bad days.

PENHAUL (on camera): More good days than bad? Well, in the week preceding that interview, there were at least 13 fatal bombings against civilian and military targets that killed at least 23 Iraqis and 12 coalition soldiers...

(voice-over): ... casualties of a messy guerrilla war, but one which coalition authorities insist is not the motivation for the fast- track political pullout.

(END VIDEOTAPE)

PENHAUL: I think we'll only see debate growing about the motives behind this political pullout faster than expected, Kyra, because critics are very definitely suspecting that this has been motivated in order to avoid a backlash ahead of the U.S. presidential elections.

PHILLIPS: Karl Penhaul in Baghdad, thank you.

Well, what's next for U.S. troops in Iraq? Is there an end in sight?

Joining me now, retired Army sergeant major Eric Haney, founding member, of course, of the elite Delta force.

Great to have you with us.

SGT. MAJ. ERIC HANEY (RET.), U.S. ARMY: Thank you.

PHILLIPS: Karl Penhaul talked about, OK, waiting for the Iraqi government, therefore that'll help bring down the guerrilla warfare. Do you agree with that?

HANEY: No, what's going to bring down the guerrilla warfare is increased stability, jobs, the situation eventually evolving. And the people carrying out the attacks -- not those former lieutenant colonels and colonels who are behind them, but the young men who are acting as soldiers now, realizing that they're going to have to get on with the rest of their life and be part of the new Iraq. That's going to take awhile.

PHILLIPS: Well, and there's been so much talk about why not, all these attacks that are happening on a daily basis. Why not take special warfare, special forces, special ops, bring them all in, infiltrate, and take care of the problem?

HANEY: Well, they're doing that. And when the sun goes down, the raids just start. And they're multiple raids. We're hauling in every day and every week more and more large numbers of the perpetrators of these attacks.

But once again, the guerrilla swims in the sea of the people. And no American soldiers are going to infiltrate those clans, the tribes, the villages where those people live.

PHILLIPS: Do you see an eventual end to these daily attacks? And it seems to be getting worse, but maybe that's just the perception from back here at home.

HANEY: I've been watching this very closely all along, because it's close to my heart. I was very concerned in the summer, because our tactic was, we were using more of the carrot and little stick. The attacks started to accelerate. Two months ago we shifted and said, Now you're going to feel the stick.

It's starting to pay off, but it's take another six months before we really see a difference in what's taking place right now.

I think they're subsiding. The attacks have shifted from principally against our soldiers to softer targets. We've seen that hitting the hotels, the U.N. centers, Red Cross, and just Iraqi civilians.

It will start to subside. It will never completely go away, though, as long as we have troops in Iraq.

PHILLIPS: Also, there has been so much talk too about Saddam Hussein. All right. We got Saddam Hussein, U.S. forces are saying. So now it's got to get better. You've got the head of the Mafia, as they've said it, behind bars. Now this will start to break up all the cells. Do you agree with that?

HANEY: Capturing Saddam was a great morale coup. It's a blow, because he was a figurehead. He wasn't controlling anything. Look, the man was living in a shack and hiding in a hole in the ground, and he had been doing that for a number of months. So he wasn't in operational control. He's not an operational commander, nor was he ever.

The people that we're concentrating on now, in the raids that our special operations are running, are those lieutenant colonels and colonels who know how to make things happen and that also have the sources of money. And Saddam -- one of the biggest things we want from Saddam, and apparently we're learning it now, is, where did the money go? Where is the money, where is the funding that's been used to bring off these attacks? PHILLIPS: Follow the money trail.

HANEY: You bet.

PHILLIPS: Speaking of following the money trail, Osama bin Laden. Army sources telling me, even via Iraq, via other places overseas, we know where he is, we're on him, it's just a matter of time. Do you agree with that?

HANEY: I believe he's dead.

PHILLIPS: Really?

HANEY: I'm 98 percent positive that we killed him in December of 2001, during the Tora Bora campaign. I've seen no proof of life since then. Regardless of these tapes that are cobbled together, the audiotapes, if he were a kidnap victim, and I was hired to go after him, on the evidence that's there, I'd say I wouldn't do it because there is no proof of life. I'm still convinced professionally that we killed him.

PHILLIPS: But then have you Saddam Hussein that was going from spider hole to spider hole. And it was finally someone within that group of his that tipped off -- and -- but -- and then you've got Afghanistan, this wide-open terrain. You don't think he could be in a cave somewhere?

HANEY: No, he could. But I don't think so. If he is alive, if he's alive, looking at it again from professional point of view, he is in the tribal area on the borders of Pakistan, which the government of Pakistan is incapable of controlling.

If he is in there, he's ineffective. There is nothing he can do. He's not in charge of anything. And al Qaeda at present, in order to bring off any kind of operation, has to revert back to the most primitive means of communication, which is by messenger. Now, that's the most secure means of communication, but it slows up your ability to operate tremendously.

And then if anything happens, such as happened last week when the U.S. says, Hey, we're going to have marshals on flights from overseas, now they have to react to that. If they were planning something, they say, Oh, well, that game's up. What do we do next? And it has to go by passing notes across continents. It's very hard, and it's slow.

PHILLIPS: Interesting. Eric Haney, we're going to bring you back.

HANEY: OK.

PHILLIPS: We're going to talk more about this Osama bin Laden.

HANEY: (UNINTELLIGIBLE).

PHILLIPS: You got a lot of really from many of us here.

HANEY: Sure.

PHILLIPS: Thank you.

HANEY: You bet.

PHILLIPS: Well, can anyone stop the Dean machine, the Democratic front runner's prospects, and the challenges for the other candidates? They'll all be addressed as we look ahead to the crucial political year ahead.

Also, the year ahead in Iraq. Which divisions will bear the greatest burden of a dangerous mission? We'll go live to the Pentagon.

And which will be the hottest legal cases of 2004? There are plenty to choose from. We'll look at which courtrooms you'll want to keep an eye on just ahead.

(COMMERCIAL BREAK)

PHILLIPS: Democrats face a challenging election year ahead. It's a make-it-or-break-it race in the primaries, with votes just weeks away in Iowa and New Hampshire.

Our senior political correspondent, Candy Crowley, is staying on top of the campaign movements Washington. Candy, good to see you.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Good to see you. Happy New Year.

PHILLIPS: Happy New Year. Yes. Oh, let's hope it's a good 2004. Will it will be a good 2004 for Howard Dean? That's what a lot of people are wondering.

CROWLEY: Well, it'll either be really good or really horrible. How is that for a prediction?

PHILLIPS: That's fair.

CROWLEY: You know, look, I mean, if you're going to say who would you bet on right now, if you were a betting person, you'd bet on Howard Dean. He's got the most money, he's got the best poll numbers, and he has the most passionate supporters.

But every year, every election year in January, it seems, there always is some kind of surprise. Bill Clinton, you remember, came in second in New Hampshire. President Bush had trouble from Ross Perot in New Hampshire.

So there were a lot of different things that could come up. The campaigns, you know, sort of count on there being big surprises. Add to that the fact that there are huge numbers of people in Iowa and New Hampshire that say they're not decided yet.

So a slip of the tongue here, or, you know, a brilliant performance there, or just sort of the sleeper voters that are just now waking up really could change things.

I'll tell you, though, if they don't change things right away, then Howard Dean pretty much begins to run away with it.

PHILLIPS: Are you starting to see a division in the Democratic Party?

CROWLEY: Well, I've been seeing for some time, sure. I mean, there -- you know, and I must say that the divisions are always there, whether it's Republicans or Democrats. I remember when Bob Dole was campaigning in '96, it was all about the heart and soul of the Republican Party because Pat Buchanan had beaten him in New Hampshire, and he was much more conservative.

Now we have sort of the same thing in the Democratic Party, because Howard Dean has gotten so much of his adrenaline from not just bashing the president, but bashing the Democrats, saying, You know, I'm a real Democrat, these people aren't real Democrats. They're going around and agreeing with President Bush. It's time to bring back -- you know, I'm the Democratic wing of the Democratic Party, it's time to bring back the Democratic Party.

And then there are those like Joe Lieberman and John Edwards, to a lesser extent John Kerry -- he right now going after the Dean vote -- that are more centrist, that say, We cannot win an election from the left. We have to win it in the center.

So, yes, there is a struggle going on right now. It is more bitter earlier than I remember these sorts of things. Will they patch it up? Yes, because in the end, the Democrats want to beat George Bush. But will it be patchable to the extent they'll be able to do that?

Ask me in, say, late October.

PHILLIPS: OK. I'm going to remember this. I'm going to take notes. Now, you're saying there are a number of things that are making George Bush vulnerable in this campaign.

CROWLEY: Well, you know, here is what we don't know about what's going to make George Bush vulnerable. And that is, more than most presidents, he is tied to events. I mean, usually campaigns are driven by outside events to a great extent. But if you watch George Bush's poll numbers, when the war appears to be going well, when Saddam Hussein is captured, his poll numbers go up. When things are going badly, they begin to fall.

You've now got people looking at Musharraf and Pakistan. What should happen if something happens to him? What goes on in Pakistan? Will that affect Bush's numbers?

The economy, same thing. If the economy appears to be going well, which now it is, Bush's poll numbers goes up. And again, to a certain extent, this always happens to a president, because it's really a referendum on the state of play at the moment. But to a larger extent, with George Bush, it's almost as though people aren't quite sure. They sort of go for him when things are going well, and kind of back off a little. So depending on what happens, what the state of play is in the international arena and in the economy, that obviously is going to influence very much what happens to George Bush.

But let me say this. He leaves 2003 very, very strong, and he looks very formidable at this point.

PHILLIPS: Candy Crowley, you're going to have a busy year in 2004.

CROWLEY: It's going to be great.

PHILLIPS: Thank you.

CNN is your election year headquarters, of course. You can tune in Sunday for the "Des Moines Register"'s Democratic presidential debate. We'll carry it live for you at 3:00 Eastern, noon Pacific.

Straight ahead, the terror alert. It's now affecting a crucial American port and oil transport facility. We'll have details when we come back.

The children of Iraq. How they're facing the current dangers in the streets. It's a riveting story.

And an American classic, with a sleek new redesign. Can you recognize it? We'll take a closer look just ahead.

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

An apparent stalemate in efforts to draw up a new constitution for Afghanistan. Almost half the delegates to the Loya Jurga (ph) or Grand Council drafting the document refused to vote in the latest balloting in protest. Critics say the proposed constitution gives the president too much power.

A bomb killed at least 10 people and injured dozens at a New Year's Eve concert in Indonesia's Achi (ph) Province, where rebels have been fighting for independence for decades. The country's military blames the separatists for the attack. They deny involvement.

Eight British tourists to South Africa died when their minibus overturned 150 miles southwest of Johannesburg. Police say the driver swerved to try to avoid a pedestrian, who also was killed.

And Egyptian President Hosni Mubarak says he will not pass on power to his son. There has been debate over a successor since the 75-year-old Mubarak recently became ill. He tells state television Egypt is a republic where power is not inherited.

And that's our look around the world. (COMMERCIAL BREAK)

PHILLIPS: Welcome back to CNN.

The Pentagon is planning to shuffle U.S. forces in Iraq. We'll have a live report from there in just a moment.

First, a quick check of the latest headlines.

A heightened terror alert puts a hold on oil shipments from Alaska. The U.S. Coast Guard has stopped crude oil from being loaded onto tankers at Alaska's Port of Valdez. Officials say that it's part of a Code Orange effort to secure major U.S. seaports.

A plea agreement could set a convicted teenaged killer in Florida free within weeks. Lionel Tate and his mother have signed off on a plea deal. With it the 16-year-old avoids a new trial. He'll be released soon to a year of house arrest, followed by ten years probation.

A potential new lead in a series of related shootings in Ohio. Authorities want to question the owners of four vehicles that appear on a gas station security tape. They were at the station on December 15th about the time shots were fired at a nearby house. Authorities say the owners are not considered suspects.

A pilot and his passenger are dead after their single engine plane crashed into a Dallas neighborhood. It hit two homes, setting them ablaze. Fire crews were able to put the fires out quickly. No injuries were reported on the ground. The cause is still under investigation.

Another look now at our top story.

Terror concerns are keeping America on Code Orange, and that high alert will apparently continue beyond the holiday period.

Once again, here's CNN's Elaine Quijano, from Washington's Reagan National Airport.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN CORRESPONDENT: Officials with British Airwaves say they canceled their Flight No. 223 from London to Washington at the request of the British government.

Now, U.S. authorities are not commenting, but a spokesperson for British Airways says that security concerns prompted that cancellation.

The move comes on the heels of an incidents New Year's Eve when the same flight was escorted to Washington by fighter jets. And the 240-some passengers were kept on board that plane for several hours as it sat on the tarmac at Dulles International Airport.

The reason? A U.S. law enforcement official says about a dozen names on the passenger list appeared to match names on a terror watch list. But after conducting interviews, authorities determined the people posed no threat.

The precautions, meantime, stretched to all corners of the country.

In Alaska, the increased threat level prompted the U.S. Coast Guard to temporarily halt the transfer of oil on to tankers from the Port of Valdez. Authorities say they'll continue to assess that security situation of the ports as appropriate.

Elaine Quijano, CNN, Reagan National Airport.

(END VIDEOTAPE)

PHILLIPS: Back to Iraq now.

As the U.S.-led coalition prepares to hand over political control to Iraqis in the months ahead, U.S. troops are preparing to be hand over their duties to other U.S. troops in a massive rotation of forces.

Let's go live to CNN's senior Pentagon correspondent, Jamie McIntyre, for more -- Jamie.

JAMIE MCINTYRE, CNN CORRESPONDENT: Well, Kyra, over the next three months, some 130,000 battle-weary U.S. troops will be coming home from Iraq, many having served a much longer tour of duty than they expected.

And they will be replaced by fresh troops who will also face an arduous task of quelling an insurgency and helping a new Iraqi government take control of the country.

The rotation will take place even -- place more of a burden on the Guard and Reserves, the so-called citizen soldiers, who signed up to help in time of war and emergency, but many of whom are finding the toll on their personal lives hard to accept.

The current force in Iraq is made up of about 20 percent Guard and Reserve volunteers. But by the end of spring, that proportion will nearly double to nearly 40 percent.

Already, we're seeing the Guard and Reserve troops taking a much higher percentage of casualties since the start of the war last March. Fourteen percent of all deaths have been members of the Army Guard or Reserve. In December, 39 soldiers were killed and ten -- roughly 25 percent -- from the Guard and Reserve.

The reliance on the Reserves to ease the strain on active duty troops is beginning to show signs of a looming crisis. The Army is beginning to have trouble recruiting and retaining enough Guard troops for two reasons.

One, many troops now in the Reserves are finding the long deployments in Iraq, Afghanistan and other places are taking a huge toll on their personal lives and finances.

And two, the Army has issued stop-loss orders. They prevent some active duty troops from retiring, and that is a prime source of troops for the Reserves.

The Pentagon says it's working hard to make sure that during this time when the military force is stressed, that it isn't stretched to the breaking point. Many members of Congress, though, are arguing that the problem is simply the military is too small.

The Pentagon insists that increasing the size of the force, say, by adding a couple of Army divisions, would be too expensive, wouldn't provide enough help for several years, by which time, the active troops might not be needed.

But Kyra, one thing seems for certain. To paraphrase Donald Rumsfeld, the U.S. appears to be for another long, hard slog in Iraq in 2004 -- Kyra.

PHILLIPS: Jamie McIntyre, thank you.

At least three Iraqi children have been killed over the last few days in roadside explosions set off by insurgents across Baghdad. The violence has left other children frightened and many confused.

Our correspondent in Baghdad Satinder Bindra has their story.

(BEGIN VIDEOTAPE)

SATINDER BINDRA, CNN CORRESPONDENT (voice-over): Hanging out for a handout. Thirteen-year-old Shareen Mura (ph) picks up about $3 a day from car drivers at this busy intersection.

Heavily armed U.S. soldiers also drive by, but Shareen (ph) is not scared. She says these days in Baghdad, it's mainly Iraqis who are killing their own people.

"I feel OK about the Americans," she says, "because they don't do anything to us. It's all because of the Iraqis."

Instead of being in school, Shareen's (ph) been on the streets for months. She says her father is ill, and her earnings help raise ten younger siblings.

"There are no jobs available here," says Shareen (ph). "Our situation is hopeless. Our hope is only with God."

A few blocks away, other Iraqi children are busy at play. Eight- year-old Meena Jaffa (ph) could be a kid anywhere, until she starts talking about the nighttime U.S. raids against insurgents.

UNIDENTIFIED FEMALE (through translator): When we hear the sirens going off, we get scared. Then we hurry on downstairs to wrap ourselves in blankets so we won't hear a thing. We stay down there crying, trying to sleep.

BINDRA: Meena Jaffa (ph) and her friends are confused about what's happening around them.

UNIDENTIFIED FEMALE (through translator): I ask my mother why there is so much bombing. We haven't done anything. Why are they so mean? There are poor and innocent people who could die.

BINDRA (on camera): Iraqi children are dying every day in this ongoing insurgency.

In the past five days in Baghdad alone, three kids have been killed as roadside bombs planted by insurgents have exploded in residential neighborhoods.

(voice-over) Other children like 12-year-old Ayad Ali (ph) have been hurt by cluster bombs. Ayad (ph) says he was walking near his home when a small object exploded. When he woke up in hospital, he realized he was blinded in his right eye.

UNIDENTIFIED MALE (through translator): My eyes are hurting me. There is something stuck in them.

BINDRA: Ayad (ph) no longer has the concentration to attend school.

Many Iraqi children are simply pleading for a normal life.

UNIDENTIFIED FEMALE (through translator): I wish God would save my mother, father, brothers and aunt. I wish nothing bad happens and the war stops.

BINDRA: A wish that seems unlikely to be granted any time soon.

Satinder Bindra, CNN, Baghdad.

(END VIDEOTAPE)

PHILLIPS: Well, straight ahead, we certainly had our share of celebrity legal troubles in 2003. Didn't we? But in most cases, the courtroom battle hasn't even begun. We'll look at what's on the docket in the next several weeks.

Overused and abused. Terms like bling-bling and metrosexual. Scholars release the list of words they say should not be carried into the new year.

And a look back like no other. CNN reflections, the most memorable moments of 2003 just ahead.

(COMMERCIAL BREAK)

PHILLIPS: When it comes to high-profile courtroom drama, the docket is quite full for 2004. Upcoming trials include those of Martha Stewart, Kobe Bryant, Robert Blake, Scott Peterson. That's just to name a few.

Here to talk about these cases, as well as Michael Jackson, of course, his arraignment is coming up. Trial lawyer Linley Jones. Great to see you.

LINLEY JONES, TRIAL LAWYER: Thank you.

PHILLIPS: All right. Let's hit on Michael Jackson. This is like a war of credibility.

JONES: It is. And it could be the sensational celebrity trial of the century, pitting a superstar against a child.

And that's really the tragedy of the story, is that regardless of the outcome here, this child will be victimized just by the system and having to participate in such a controversial, high-profile trial.

PHILLIPS: Martha Stewart. I mean, so many major business people being held accountable, but not being held accountable last year.

JONES: Right. And the crackdown on corporate corruption. And where does Martha Stewart really fit into that, or was her crime more after cocktail party crime of knowing a little too much because she knew the right people a little too well?

And that's going to be for a jury to decide. But there are other players in her story that a jury may find more culpable, like her investment broker.

PHILLIPS: Kobe Bryant. The issue of special treatment. I wonder if this will affect other cases as this one plays on.

JONES: Well, there may be special treatment here. There may not be.

The big issue here is that he's certainly deflecting attention to the accuser and making the trial about the accuser and not about him and what he did. And it will be interesting to see this year how that plays out at his trial.

PHILLIPS: Scott Peterson. Why are we so fascinated -- well, we shouldn't say we, because there comes a point where, OK, this is too much. But seriously, the nation is sort of fixed on this case. Why?

JONES: And why is the nation transfixed on this case when there are so many cases like this that go on all the time, cases of serious domestic abuse?

And I really think it's because people can really relate to Laci Peterson. They can really relate in many cases to Scott Peterson, and they're shocked and appalled that this could happen in such a seemingly normal household.

PHILLIPS: Meanwhile, you look at all these cases. Robert Blake. Kind of seems like that's sort of fallen off the media attention. What's your take on that one?

JONES: It has. Well, the Robert Blake case became a lot less fascinating when he was no longer being considered for the death penalty. When it was just a jail time case, it became less fascinating.

But it's going to be an interesting trial, because he's a loose cannon. He'll say what he thinks. And when he gets in that courtroom, there's no telling if his lawyer's going to be able to keep him off the stand or keep him saying what they need and want him to say.

PHILLIPS: All right. I'm curious. Looking at all these cases we just addressed, what will you be watching the most? What's interesting to you?

JONES: I have done so much of the child molestation work that I'm very closely watching the Michael Jackson case.

And yet, every one of these cases is fascinating to us lawyers. So we have a lot to watch this coming year.

PHILLIPS: Could the Michael Jackson case somehow have an effect on future cases with regard to child molestation?

JONES: It may. It may. I mean there are, unfortunately, cases like this all the time.

And if it does anything, it may bring to the public's attention and educate the public about the child molestation problem that we have in the United States and the various problems that there are in the system for children that are victims and parties to litigation and to criminal cases.

PHILLIPS: All right. Linley Jones, trial attorney, thank you.

JONES: Thank you.

PHILLIPS: Happy New Year.

JONES: Thanks.

PHILLIPS: All right.

Well, Chevrolet has unveiled the next generation of Corvette. We're going to take a peek in just a bit.

And from the year just passed, the news stories you'll always remember and those you'd rather forget. The whole year reviewed in just minutes when we come back.

(COMMERCIAL BREAK)

PHILLIPS: Time to sit back and rewind to 2003.

Go back with us to this time last year. The terror threat level was on its way to orange. The markets were down and the drumbeat of war was growing louder.

(BEGIN VIDEOTAPE)

PHILLIPS (voice-over): As January begins, a pregnant woman in California is missing. Her family, desperate to find her.

UNIDENTIFIED MALE: My confidence is so high that Scott had nothing to do with it, I'm not really that concerned.

PHILLIPS: A child is found dead in a Newark basement.

UNIDENTIFIED MALE: It is easy to make a child. The real question is can you take care of a child.

PHILLIPS: And Saddam Hussein says he's ready for war.

SADDAM HUSSEIN (through translator): The people and the rulers of Baghdad have resolved to compel the Mongols of this age to commit suicide on its walls.

PHILLIPS: Ten days later, a United Nations report indicates Iraq has hidden chemical weapons.

The first day of February. A setback for exploration. The Shuttle Columbia breaks up over the southwest.

The country still mourning the loss of Columbia's crew, the president gives what many think is a final warning to Saddam Hussein and a standby to America's troops.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Saddam Hussein will be stopped.

PHILLIPS: Just days later, another of America's adversaries urges Muslims to fight.

WOLF BLITZER, CNN ANCHOR: A short while ago the Arabic television network Al Jazeera aired an audiotape said to be the voice of the al Qaeda leader.

PHILLIPS: On the 12th of March, Elizabeth Smart, snatched from her home in the dead of night, missing for ten months, is found. Alive.

BLITZER: The 15-year-old girl, Elizabeth Smart, has been found alive and well.

PHILLIPS: But soon our attention is riveted by events thousands of miles away.

UNIDENTIFIED MALE: CIA director George Tenet was able to report to the president that intelligence officials believe the crew's missile and bomb attacks that started the war did kill some top Iraqi leaders, who U.S. officials say they were sleeping in the compound that was attacked. But not apparently Saddam Hussein.

UNIDENTIFIED MALE: Hello, Wolf. The U.S. Army's 7th Cavalry has had its first hostile contact with the Iraqis on the other side of the border.

UNIDENTIFIED MALE: You can hear the sirens, the horns going off. We're going to go put our stuff on, as well, and jump into that bunker -- Wolf.

BLITZER: CNN received the first pictures of American soldiers killed and captured in action in Iraq. CNN has made a decision not to show the video of those killed and will instead use this single image with no identifiable features.

First of all, there was a huge explosion that rocked, apparently, the ministry of information in downtown Baghdad. But I want our viewers to take a look at this one.

MOHAMMED SAEED AL-SAHAF, IRAQI INFORMATION MINISTER: We besieged them, and we killed most of them. I think that we will finish them soon.

DONALD RUMSFELD, SECRETARY OF DEFENSE: It isn't a complete success. We've got a lot of difficult work yet to do. Today was a very good day. It's wonderful to see the faces of people being liberated.

UNIDENTIFIED MALE: What is the situation with Saddam Hussein?

UNIDENTIFIED MALE: I don't know. I have no relationship with Saddam, so I can't tell you.

PHILLIPS: On May 1, 43 days after the opening night of the war, President Bush declares an end to major combat.

In June, America's domestic diva, Martha Stewart, is indicted on charges of insider trading.

Then, insurgents in Iraq prove they can do as much harm as Saddam's Army.

BLITZER: ... where it was the bloodiest day for coalition forces since President Bush declared an end to major combat.

PHILLIPS: July. NBA basketball star Kobe Bryant is charged with sexual assault in Colorado.

Two rampage shootings leave four people dead. One of the shootings occurs inside New York City's city hall.

UNIDENTIFIED MALE: How does a gunman after 9/11 get into city council while there is a city council in session? How does he get in and fire off at least a couple of rounds?

BLITZER: Want to show our viewers a picture that we're getting in from San Antonio, Texas, as well, where there's been another shooting.

San Antonio police say two women have been killed and another woman was wounded after gunfire broke out at an office complex. The gunman is on the loose.

PHILLIPS: The guerrilla war in Iraq continues. Saddam Hussein's sons die in a fierce gun battle with U.S. troops in Mosul. Their bodies offered as proof to uncertain Iraqis.

In August, the city that never sleeps goes dark. A massive blackout strikes huge sections of the east and Midwest.

BLITZER: Crisis that left 50 million people in the dark.

PHILLIPS: Mid September, Hurricane Isabel threatens to terrorize the East Coast and inflicts more than $1 billion in damage.

In October, Ray Horn of Siegfried and Roy is mauled by a tiger on stage during a performance.

And the people of California vote to recall their governor and replace him with a movie star.

BLITZER: We can report that the next governor of California will be Arnold Schwarzenegger.

PHILLIPS: November. The man dubbed the Green River Killer admits to murdering 48 women and so avoids a death sentence.

UNIDENTIFIED MALE: I remember leaving each woman's body in the place where she was found. Is that true?

GARY RIDGWAY, GREEN RIVER KILLER: Yes.

PHILLIPS: Michael Jackson posts $3 million bail after being booked on charges of child molestation in California.

And justice for Washingtonians. A year after the nation's capital reeled with fear, this time from domestic terrorism, sniper suspects are brought to trial and convicted, John Allen Muhammad sentenced to die.

The following month, Lee Malvo is sentenced to life in prison.

Then, the most stunning image of the year. Saddam Hussein is captured.

(END VIDEOTAPE)

PHILLIPS: We can only imagine what will happen in 2004.

Well, remember Ginger? Now she's just known as the Segway. Not quite the revolution in transportation you were expecting. Well, just wait until you see the next generation Corvette. We'll have that next.

And you've been waiting all hour for this. Our hot Web question of the day is this: "Do you think the U.S. should normalize relations with Iran?" Vote right now: CNN.com/wolf is the place. The results for you when we come back.

(COMMERCIAL BREAK)

PHILLIPS: A new car for the new year rides into our picture of the day.

General Motors is unveiling its 6th generation Corvette. The 2005 model makes its debut this month at the Detroit auto show, with full-scale production scheduled to begin this fall.

The last series rolled in 1997, making this Corvette the first designed in the new millennium.

Well, every year Michigan's Lake Superior State University puts out a list of words or phrases it thinks ought to be banned as overused, or silly, or just wrong.

CNN national correspondent Bruce Morton looks at this year's list.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): No. 1 word on the list, "metrosexual," which means urban men interested in clothes and good grooming.

But other words mean that, and critics note that in Washington or Paris, where the subway is called metro, it sounds like a name for somebody who only does it underground.

"X" is on the lose-it list, as in "X-treme," "X-Files" and so on. Exasperated is still OK.

"Punked," meaning "to dupe" is on the list, and it should go. Punk used to be a noun referring to lime-haired kids and punk rock. Nothing duplicitous about them.

"Bling-bling" for flashy jewelry. What's wrong with just calling it flashy?

"Embedded journalists"?

UNIDENTIFIED MALE: We are in the city of Najaf in central Iraq...

MORTON: Well, we know what that was, reporters traveling with the military in Iraq. But it always sounded as if were you in bed with your source.

"Lol" is on the list. That's e-mail for "laugh out loud." But years ago it meant little old ladies, like the voters who turned out for Barry Goldwater when he ran for president.

"Shots rang out" is on the list, and shots probably don't ring. But Snoopy in Charles Schultz' "Peanuts" always used it when he was writing a novel. You think we could keep it?

"Hand-crafted latte" is on the list, but the trouble is, Americans don't understand latte, hand-crafted or not. In Italy, it's hot coffee and hot milk mixed. Here they always foam it. The university objects to "sanitary landfill" and prefers "dump." OK. The two man-made things you can see from outer space are the Great Wall of China and the dump in Staten Island.

"Sweat like a pig" ought to go, the university says, because fact is, pigs don't sweat. Oops.

"Captured alive" is on the list because, face it, it's hard to capture a corpse.

And the list makers confess one error. Their 2003 list urged a ban on "frozen tundra" as redundant. But as any Green Bay Packers fan can tell you, tundra is sometimes down right squishy. They only freeze it for the big games.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: All right. Here's how you're weighing in on our Web question of the day. Remember, we've been asking you, "Do you think the U.S. should normalize relations with Iran?"

Take a look at this. Seventy-nine percent of you say yes, while 21 percent of you say no. As always, this is not, of course, a scientific poll. You can find the exact vote tally and continue to vote, by the way, on our web site, CNN.com/Wolf.

And here are some of your thoughts and wishes for the new year.

Dale writes, "Enjoy this new year and remember that only the people have the power to make their country and communities safer, better places to live."

And from Mazin: "Our wish is that 2004 will bring more truths and justice and less lies like the ones we heard in 2003 about WMDs and the war on Iraq being part of the war on terrorism."

And from Adolf: "My hope is that this year the U.S. and other countries will promote peace and love instead of more war and violence."

And a reminder: you can always catch WOLF BLITZER REPORTS weekdays at this time, 5 Eastern. We'll also see you again tomorrow.

"LOU DOBBS TONIGHT" is next after a quick check of the headlines.

(NEWSBREAK)

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Troops Rotating in Iraq; University Releases List of Overused Words>


Aired January 1, 2004 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, HOST: Happening now, protecting the port, as the U.S. Coast Guard takes action in Alaska as code orange continues through 2004.
And action at the airport. An international flight canceled from London to the United States.

Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

New year fears. The party's over, but the terror concerns are still very real, as some airline passengers are finding out.

A new era with Iran? A devastating tragedy leads to an easing of hostility.

KENT WATTS, FAIRFAX, VIRGINIA, FIRE AND RESCUE: We're just hoping that maybe possibly this will warm the relationships between the two countries in some way, shape, or form.

PHILLIPS: And looking ahead, what the new year will bring in Iraq, in the courtroom, and in the presidential campaign.

(END VIDEOTAPE)

ANNOUNCER: This is WOLF BLITZER REPORTS for Thursday, January 1, 2004.

PHILLIPS: Hello, everyone. I'm Kyra Phillips. Wolf is off today.

New Year's celebrations have come and gone without major incidents, but with intelligence chatter suggesting possible terror attacks, federal officials are taking no chances. They're keeping America on high alert.

Let's go live to CNN's Elaine Quijano at Washington's Reagan National Airport -- Elaine.

ELAINE QUIJANO, CNN CORRESPONDENT: Hello to you, Kyra.

Well, security continues to be tight at the nation's airports, especially here around the nation's capital. And today, another sign of the times, an international flight incoming into this area was canceled.

(BEGIN VIDEOTAPE)

QUIJANO (voice-over): One day after fighter jets escorted a British Airways flight en route from London to Washington, the airline canceled the same flight due to security concerns at the request, company officials said, of the British government.

New Year's Eve, roughly 240 passengers were kept on board that British Airways plane while it sat on the tarmac at Dulles International Airport outside Washington, D.C. Passengers were interviewed for several hours before being allowed off.

The reason? A U.S. law enforcement official says about a dozen names on the flight's passenger list appeared to match names on a terror watch list. But in the end, authorities determined the people in question posed no threat.

In California, decades of tradition blended with modern reminders of the raised threat level. At places expecting large crowds, like the annual Tournament of Rose Parade and the many college bowl games, stepped-up security surrounds the events.

KELLY MCCANN, SECURITY/COUNTERTERRORISM EXPERT: Security is dynamic. At threat goes up, of course, countermeasures go up. And then as threat drops back and recedes, so do countermeasures.

QUIJANO: More than 1,000 federal and local law enforcement officers kept a close watch at the annual Rose Parade. Although there have been no specific threats, police used bomb-sniffing dogs, video surveillance, and helicopters to monitor the area.

And in the airspace above the Rose Bowl, authorities restricted flights to only police and military aircraft.

The precautions stretched to all corners of the country. In Alaska, the increased threat level prompted the U.S. Coast Guard to temporarily halt the transfer of oil onto tankers from the port of Valdez.

But the heightened security didn't keep Americans from ringing in the new year in places like New York City's Times Square and the Las Vegas Strip.

Still, officials aren't letting down their guard, staying focused on possible targets.

PASQUALE D'AMURO, FBI: The airline industry, transportation modes, subway systems, those still remain at a very high alert for this country.

(END VIDEOTAPE)

QUIJANO: As for the New Year's Eve delay at Dulles, a law enforcement official calls it, quote, "an unfortunate disadvantage to the passengers," but said safety is the utmost concern. Meantime, as for the code orange alert, law enforcement officials say it is likely to last for most of January, Kyra.

PHILLIPS: Elaine Quijano, thank you. Thank you.

On vacation in Texas this New Year's Day, President Bush went quail hunting with his father, then took questions from reporters on topics ranging from Iran, to Pakistan, to the war on terror.

Let's go live to CNN White House correspondent Suzanne Malveaux. She's in Crawford, Texas -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hi, Kyra.

President Bush spending the holiday, as you had mentioned before, quail hunting with his father. Also having lunch with special envoy James Baker. And then he took a couple questions from reporters. It really was dominated by international policy. He talked about security around the world, including Iraq, Iran, as well as Pakistan.

The president talked about this new cooperation between the United States and Iran, the temporary lifting of sanctions to allow Americans to contribute aid to some of those earthquake victims, and the possibility that this opens up to new diplomatic relations between the two countries.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: What we're doing in Iran is, we're, is we're showing the Iranian people the American people care, that we've got great compassion for human suffering. And ease restrictions in order to be able to get humanitarian aid into the country.

The Iranian government must listen to the voices of those who long for freedom, must turn over al Qaeda that, that are in their custody, and must abandon their nuclear weapons program.

(END VIDEO CLIP)

MALVEAUX: Now, the president also talked about the importance of Pakistan, the importance of stability in that country, a nuclear power, and the fact that its leader, Pervez Musharraf, has survived two assassination attempts in two weeks.

(BEGIN VIDEO CLIP)

BUSH: Obviously terrorists are after him, and he sounded very confident that his security forces would be able to deal with the threat. President Musharraf has been a friend of the United States. He's been a standup guy when it comes to dealing with the terrorists. We are making progress against al Qaeda because of his cooperation.

(END VIDEO CLIP)

MALVEAUX: Now, President Bush said that he was going to be focusing on continuing on working on the state of the economy as well as peace around the world. The president has denied that he has started the campaign season, but earlier videos shows certainly a lot of handshaking and kissing those babies. Certainly looks like the campaign season has started in earnest.

The first thing the president is going to do, a trip to St. Louis, Missouri, where he's going to be doing some fund raising, Kyra.

PHILLIPS: Suzanne Malveaux, thank you.

Meanwhile, dozens of Americans are in Bam, joining teams from 20 other countries trying to help with the rescue and relief efforts.

CNN's Ryan Chilcote is there.

(BEGIN VIDEOTAPE)

RYAN CHILCOTE, CNN CORRESPONDENT (voice-over): After days on the road, U.S. aid workers pull into the Iranian Revolutionary Guard's barracks. With bewildered soldiers looking on, they set up what will be their home for the next week.

UNIDENTIFIED FEMALE: This is it. We made it.

CHILCOTE: The aid workers well aware that this mission is a special one.

KENT WATTS, FAIRFAX, VIRGINIA, FIRE AND RESCUE: We know that there has been tension between the two countries for several years, and we're just hoping that maybe possibly this will warm the relationships between the two countries in some way, shape, or form.

CHILCOTE: By nightfall, Kent Watts and David Taylor, firefighters from Fairfax, Virginia, are already in the thick of it, joining Iranian and Danish teams to clear wreckage after a search dog indicated signs of life.

After several frantic hours of digging, no one is found.

The next morning, the firefighters set out to map out their sector and size up the community's needs.

BOB DUBE, EMERGENCY WORKER: You've got the GPS, so you're going to do all the...

CHILCOTE: Bob Dube is a veteran emergency worker.

DUBE: What we've seen in -- throughout the city is, everything is completely either damaged or completely destroyed. What we're trying to really do is get a handle on what we can offer for assistance from what we brought with us and what the U.N. has to offer.

CHILCOTE (on camera): Absolutely everything about this trip is extraordinary. This is the first time that a U.S. delegation has visited this country in more than two decades. (voice-over): U.S.-Iranian relations have been virtually nonexistent since Iran's Islamic revolution a quarter-century ago, got even poorer after the U.S. president, George W. Bush, included Iran as part of the so-called axis of evil, something that doesn't concern Bob.

DUBE: I'm not a politician, I'm a rescue worker. So I'm glad to be here.

CHILCOTE: Glad to be part of something that could begin to reconstruct U.S.-Iranian relations.

UNIDENTIFIED MALE: ... (UNINTELLIGIBLE), sutures, suture sets, and (UNINTELLIGIBLE)...

CHILCOTE: Ryan Chilcote, CNN, Bam, Iran.

(END VIDEOTAPE)

PHILLIPS: Meanwhile, sobs and grief filled the air at a cemetery outside that city. Today marks seven days since the quake, and Iranian Shi'ite Muslims traditionally observe a mourning period for a deceased relative a week after the death. While some gathered around the burial mounds and mass graves, other watched three laptop computers displaying a slide show of unidentified victims.

Police say the grim display has helped identify 30 bodies.

Now, here is your turn to weigh in on this important story. Our Web question of the day is this, Do you think the U.S. should normalize relations with Iran? You can vote right now at cnn.com/wolf. We'll have the results later in the broadcast.

And while you're there, we'd like to hear directly from you. Send us your comments any time. We might read some of them at the end of the program.

Straight ahead, a pledge for giving up control of Iraq.

(BEGIN VIDEO CLIP)

DAN SENOR, COALITION AUTHORITY SPOKESPERSON: The timeline is a result of decisions made by the Iraqi Governing Council, not a result of decisions made initially by the coalition.

(END VIDEO CLIP)

PHILLIPS: Questions about whether peace will really have a chance, and when American troops will be able to come home.

The election year is here, the start of the presidential primary season just weeks away. Hear who still has a shot landing the Democratic ticket.

And are you tired of hearing people talk about bling-bling? My producer, Rob Shefny (ph), is. That and several other terms made this year's word alert list. We'll run it down a little later.

You're watching WOLF BLITZER REPORTS.

(COMMERCIAL BREAK)

PHILLIPS: In Iraq, the new year was ushered in last night by the deadly bombing of a Baghdad restaurant, and New Year's Day brought no change in the situation for U.S. troops, who were either on guard or on the offensive. But big changes are planned in the year ahead.

Let's go live to Karl Penhaul. He's in Baghdad -- Karl.

KARL PENHAUL, CNN CORRESPONDENT: Hi, Kyra.

I've spent most of the day talking to U.S. coalition administrators about the plans to hand over political control of Iraq to an Iraqi government within the next six months.

Now, that timetable is a lot faster than was originally foreseen, and technically, that will put an end to the occupation of Iraq by coalition forces.

Critics are calling this planned pull-out a quick exit strategy. Coalition officials, on the other hand, are calling it a tactical adjustment.

(BEGIN VIDEOTAPE)

PENHAUL (voice-over): The main mission in Iraq has been completed. Saddam was toppled. Now he's captured. A guerrilla war is still raging, but the U.S.-led coalition is laying plans to wind down the occupation. It's pledged to hand over the political reins to transitional Iraqi government by July 1.

That's a change of gear. Until recently, coalition control of Iraq seemed likely to last into 2005, though no firm deadlines had been set. Coalition officials call it a tactical adjustment.

DAN SENOR, COALITION AUTHORITY SPOKESPERSON: The more accelerated timeline is a result of decisions made by the Iraqi Governing Council, not a result of decisions made initially by the coalition.

PENHAUL: The rush towards Iraqi self-rule means the coalition won't now supervise the drafting of a new constitution, the road map of Iraq's political and economic future. That's not due to be completed until late 2005.

Reconstruction will not be complete, the shift from state-run economy to free market will only just be beginning. But the current president of Iraq's Governing Council assembled by the U.S. doesn't feel the Americans are getting ready to run.

ADNAN PACHACHI, PRESIDENT, IRAQI GOVERNING COUNCIL: Not backing off from their commitment, but I think they are reassessing some of their plans, which, of course, is the proper thing to do. PENHAUL: The coalition has been training Iraqi security forces to control the streets of Baghdad by spring. Few expect the insurgency to slow enough to permit American soldiers to leave at the same time as coalition administrators. But by midyear, the occupation could technically be over.

U.S. troops will remain by invitation of the newly sovereign Iraq government, an invitation the coalition takes as automatic.

BRIG. GEN. MARTIN DEMPSEY, U.S. ARMY: And we're not going far, by the way. And when we talk about achieving what we call local stand-off, we're talking kilometers, you know, not time zones.

PENHAUL: Coalition authorities are hopeful guerrilla violence will be on the wane by the time the new Iraqi government takes office.

SENOR: There will be good days and bad days. The important point is that the good days outnumber the bad days.

PENHAUL (on camera): More good days than bad? Well, in the week preceding that interview, there were at least 13 fatal bombings against civilian and military targets that killed at least 23 Iraqis and 12 coalition soldiers...

(voice-over): ... casualties of a messy guerrilla war, but one which coalition authorities insist is not the motivation for the fast- track political pullout.

(END VIDEOTAPE)

PENHAUL: I think we'll only see debate growing about the motives behind this political pullout faster than expected, Kyra, because critics are very definitely suspecting that this has been motivated in order to avoid a backlash ahead of the U.S. presidential elections.

PHILLIPS: Karl Penhaul in Baghdad, thank you.

Well, what's next for U.S. troops in Iraq? Is there an end in sight?

Joining me now, retired Army sergeant major Eric Haney, founding member, of course, of the elite Delta force.

Great to have you with us.

SGT. MAJ. ERIC HANEY (RET.), U.S. ARMY: Thank you.

PHILLIPS: Karl Penhaul talked about, OK, waiting for the Iraqi government, therefore that'll help bring down the guerrilla warfare. Do you agree with that?

HANEY: No, what's going to bring down the guerrilla warfare is increased stability, jobs, the situation eventually evolving. And the people carrying out the attacks -- not those former lieutenant colonels and colonels who are behind them, but the young men who are acting as soldiers now, realizing that they're going to have to get on with the rest of their life and be part of the new Iraq. That's going to take awhile.

PHILLIPS: Well, and there's been so much talk about why not, all these attacks that are happening on a daily basis. Why not take special warfare, special forces, special ops, bring them all in, infiltrate, and take care of the problem?

HANEY: Well, they're doing that. And when the sun goes down, the raids just start. And they're multiple raids. We're hauling in every day and every week more and more large numbers of the perpetrators of these attacks.

But once again, the guerrilla swims in the sea of the people. And no American soldiers are going to infiltrate those clans, the tribes, the villages where those people live.

PHILLIPS: Do you see an eventual end to these daily attacks? And it seems to be getting worse, but maybe that's just the perception from back here at home.

HANEY: I've been watching this very closely all along, because it's close to my heart. I was very concerned in the summer, because our tactic was, we were using more of the carrot and little stick. The attacks started to accelerate. Two months ago we shifted and said, Now you're going to feel the stick.

It's starting to pay off, but it's take another six months before we really see a difference in what's taking place right now.

I think they're subsiding. The attacks have shifted from principally against our soldiers to softer targets. We've seen that hitting the hotels, the U.N. centers, Red Cross, and just Iraqi civilians.

It will start to subside. It will never completely go away, though, as long as we have troops in Iraq.

PHILLIPS: Also, there has been so much talk too about Saddam Hussein. All right. We got Saddam Hussein, U.S. forces are saying. So now it's got to get better. You've got the head of the Mafia, as they've said it, behind bars. Now this will start to break up all the cells. Do you agree with that?

HANEY: Capturing Saddam was a great morale coup. It's a blow, because he was a figurehead. He wasn't controlling anything. Look, the man was living in a shack and hiding in a hole in the ground, and he had been doing that for a number of months. So he wasn't in operational control. He's not an operational commander, nor was he ever.

The people that we're concentrating on now, in the raids that our special operations are running, are those lieutenant colonels and colonels who know how to make things happen and that also have the sources of money. And Saddam -- one of the biggest things we want from Saddam, and apparently we're learning it now, is, where did the money go? Where is the money, where is the funding that's been used to bring off these attacks? PHILLIPS: Follow the money trail.

HANEY: You bet.

PHILLIPS: Speaking of following the money trail, Osama bin Laden. Army sources telling me, even via Iraq, via other places overseas, we know where he is, we're on him, it's just a matter of time. Do you agree with that?

HANEY: I believe he's dead.

PHILLIPS: Really?

HANEY: I'm 98 percent positive that we killed him in December of 2001, during the Tora Bora campaign. I've seen no proof of life since then. Regardless of these tapes that are cobbled together, the audiotapes, if he were a kidnap victim, and I was hired to go after him, on the evidence that's there, I'd say I wouldn't do it because there is no proof of life. I'm still convinced professionally that we killed him.

PHILLIPS: But then have you Saddam Hussein that was going from spider hole to spider hole. And it was finally someone within that group of his that tipped off -- and -- but -- and then you've got Afghanistan, this wide-open terrain. You don't think he could be in a cave somewhere?

HANEY: No, he could. But I don't think so. If he is alive, if he's alive, looking at it again from professional point of view, he is in the tribal area on the borders of Pakistan, which the government of Pakistan is incapable of controlling.

If he is in there, he's ineffective. There is nothing he can do. He's not in charge of anything. And al Qaeda at present, in order to bring off any kind of operation, has to revert back to the most primitive means of communication, which is by messenger. Now, that's the most secure means of communication, but it slows up your ability to operate tremendously.

And then if anything happens, such as happened last week when the U.S. says, Hey, we're going to have marshals on flights from overseas, now they have to react to that. If they were planning something, they say, Oh, well, that game's up. What do we do next? And it has to go by passing notes across continents. It's very hard, and it's slow.

PHILLIPS: Interesting. Eric Haney, we're going to bring you back.

HANEY: OK.

PHILLIPS: We're going to talk more about this Osama bin Laden.

HANEY: (UNINTELLIGIBLE).

PHILLIPS: You got a lot of really from many of us here.

HANEY: Sure.

PHILLIPS: Thank you.

HANEY: You bet.

PHILLIPS: Well, can anyone stop the Dean machine, the Democratic front runner's prospects, and the challenges for the other candidates? They'll all be addressed as we look ahead to the crucial political year ahead.

Also, the year ahead in Iraq. Which divisions will bear the greatest burden of a dangerous mission? We'll go live to the Pentagon.

And which will be the hottest legal cases of 2004? There are plenty to choose from. We'll look at which courtrooms you'll want to keep an eye on just ahead.

(COMMERCIAL BREAK)

PHILLIPS: Democrats face a challenging election year ahead. It's a make-it-or-break-it race in the primaries, with votes just weeks away in Iowa and New Hampshire.

Our senior political correspondent, Candy Crowley, is staying on top of the campaign movements Washington. Candy, good to see you.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Good to see you. Happy New Year.

PHILLIPS: Happy New Year. Yes. Oh, let's hope it's a good 2004. Will it will be a good 2004 for Howard Dean? That's what a lot of people are wondering.

CROWLEY: Well, it'll either be really good or really horrible. How is that for a prediction?

PHILLIPS: That's fair.

CROWLEY: You know, look, I mean, if you're going to say who would you bet on right now, if you were a betting person, you'd bet on Howard Dean. He's got the most money, he's got the best poll numbers, and he has the most passionate supporters.

But every year, every election year in January, it seems, there always is some kind of surprise. Bill Clinton, you remember, came in second in New Hampshire. President Bush had trouble from Ross Perot in New Hampshire.

So there were a lot of different things that could come up. The campaigns, you know, sort of count on there being big surprises. Add to that the fact that there are huge numbers of people in Iowa and New Hampshire that say they're not decided yet.

So a slip of the tongue here, or, you know, a brilliant performance there, or just sort of the sleeper voters that are just now waking up really could change things.

I'll tell you, though, if they don't change things right away, then Howard Dean pretty much begins to run away with it.

PHILLIPS: Are you starting to see a division in the Democratic Party?

CROWLEY: Well, I've been seeing for some time, sure. I mean, there -- you know, and I must say that the divisions are always there, whether it's Republicans or Democrats. I remember when Bob Dole was campaigning in '96, it was all about the heart and soul of the Republican Party because Pat Buchanan had beaten him in New Hampshire, and he was much more conservative.

Now we have sort of the same thing in the Democratic Party, because Howard Dean has gotten so much of his adrenaline from not just bashing the president, but bashing the Democrats, saying, You know, I'm a real Democrat, these people aren't real Democrats. They're going around and agreeing with President Bush. It's time to bring back -- you know, I'm the Democratic wing of the Democratic Party, it's time to bring back the Democratic Party.

And then there are those like Joe Lieberman and John Edwards, to a lesser extent John Kerry -- he right now going after the Dean vote -- that are more centrist, that say, We cannot win an election from the left. We have to win it in the center.

So, yes, there is a struggle going on right now. It is more bitter earlier than I remember these sorts of things. Will they patch it up? Yes, because in the end, the Democrats want to beat George Bush. But will it be patchable to the extent they'll be able to do that?

Ask me in, say, late October.

PHILLIPS: OK. I'm going to remember this. I'm going to take notes. Now, you're saying there are a number of things that are making George Bush vulnerable in this campaign.

CROWLEY: Well, you know, here is what we don't know about what's going to make George Bush vulnerable. And that is, more than most presidents, he is tied to events. I mean, usually campaigns are driven by outside events to a great extent. But if you watch George Bush's poll numbers, when the war appears to be going well, when Saddam Hussein is captured, his poll numbers go up. When things are going badly, they begin to fall.

You've now got people looking at Musharraf and Pakistan. What should happen if something happens to him? What goes on in Pakistan? Will that affect Bush's numbers?

The economy, same thing. If the economy appears to be going well, which now it is, Bush's poll numbers goes up. And again, to a certain extent, this always happens to a president, because it's really a referendum on the state of play at the moment. But to a larger extent, with George Bush, it's almost as though people aren't quite sure. They sort of go for him when things are going well, and kind of back off a little. So depending on what happens, what the state of play is in the international arena and in the economy, that obviously is going to influence very much what happens to George Bush.

But let me say this. He leaves 2003 very, very strong, and he looks very formidable at this point.

PHILLIPS: Candy Crowley, you're going to have a busy year in 2004.

CROWLEY: It's going to be great.

PHILLIPS: Thank you.

CNN is your election year headquarters, of course. You can tune in Sunday for the "Des Moines Register"'s Democratic presidential debate. We'll carry it live for you at 3:00 Eastern, noon Pacific.

Straight ahead, the terror alert. It's now affecting a crucial American port and oil transport facility. We'll have details when we come back.

The children of Iraq. How they're facing the current dangers in the streets. It's a riveting story.

And an American classic, with a sleek new redesign. Can you recognize it? We'll take a closer look just ahead.

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

An apparent stalemate in efforts to draw up a new constitution for Afghanistan. Almost half the delegates to the Loya Jurga (ph) or Grand Council drafting the document refused to vote in the latest balloting in protest. Critics say the proposed constitution gives the president too much power.

A bomb killed at least 10 people and injured dozens at a New Year's Eve concert in Indonesia's Achi (ph) Province, where rebels have been fighting for independence for decades. The country's military blames the separatists for the attack. They deny involvement.

Eight British tourists to South Africa died when their minibus overturned 150 miles southwest of Johannesburg. Police say the driver swerved to try to avoid a pedestrian, who also was killed.

And Egyptian President Hosni Mubarak says he will not pass on power to his son. There has been debate over a successor since the 75-year-old Mubarak recently became ill. He tells state television Egypt is a republic where power is not inherited.

And that's our look around the world. (COMMERCIAL BREAK)

PHILLIPS: Welcome back to CNN.

The Pentagon is planning to shuffle U.S. forces in Iraq. We'll have a live report from there in just a moment.

First, a quick check of the latest headlines.

A heightened terror alert puts a hold on oil shipments from Alaska. The U.S. Coast Guard has stopped crude oil from being loaded onto tankers at Alaska's Port of Valdez. Officials say that it's part of a Code Orange effort to secure major U.S. seaports.

A plea agreement could set a convicted teenaged killer in Florida free within weeks. Lionel Tate and his mother have signed off on a plea deal. With it the 16-year-old avoids a new trial. He'll be released soon to a year of house arrest, followed by ten years probation.

A potential new lead in a series of related shootings in Ohio. Authorities want to question the owners of four vehicles that appear on a gas station security tape. They were at the station on December 15th about the time shots were fired at a nearby house. Authorities say the owners are not considered suspects.

A pilot and his passenger are dead after their single engine plane crashed into a Dallas neighborhood. It hit two homes, setting them ablaze. Fire crews were able to put the fires out quickly. No injuries were reported on the ground. The cause is still under investigation.

Another look now at our top story.

Terror concerns are keeping America on Code Orange, and that high alert will apparently continue beyond the holiday period.

Once again, here's CNN's Elaine Quijano, from Washington's Reagan National Airport.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN CORRESPONDENT: Officials with British Airwaves say they canceled their Flight No. 223 from London to Washington at the request of the British government.

Now, U.S. authorities are not commenting, but a spokesperson for British Airways says that security concerns prompted that cancellation.

The move comes on the heels of an incidents New Year's Eve when the same flight was escorted to Washington by fighter jets. And the 240-some passengers were kept on board that plane for several hours as it sat on the tarmac at Dulles International Airport.

The reason? A U.S. law enforcement official says about a dozen names on the passenger list appeared to match names on a terror watch list. But after conducting interviews, authorities determined the people posed no threat.

The precautions, meantime, stretched to all corners of the country.

In Alaska, the increased threat level prompted the U.S. Coast Guard to temporarily halt the transfer of oil on to tankers from the Port of Valdez. Authorities say they'll continue to assess that security situation of the ports as appropriate.

Elaine Quijano, CNN, Reagan National Airport.

(END VIDEOTAPE)

PHILLIPS: Back to Iraq now.

As the U.S.-led coalition prepares to hand over political control to Iraqis in the months ahead, U.S. troops are preparing to be hand over their duties to other U.S. troops in a massive rotation of forces.

Let's go live to CNN's senior Pentagon correspondent, Jamie McIntyre, for more -- Jamie.

JAMIE MCINTYRE, CNN CORRESPONDENT: Well, Kyra, over the next three months, some 130,000 battle-weary U.S. troops will be coming home from Iraq, many having served a much longer tour of duty than they expected.

And they will be replaced by fresh troops who will also face an arduous task of quelling an insurgency and helping a new Iraqi government take control of the country.

The rotation will take place even -- place more of a burden on the Guard and Reserves, the so-called citizen soldiers, who signed up to help in time of war and emergency, but many of whom are finding the toll on their personal lives hard to accept.

The current force in Iraq is made up of about 20 percent Guard and Reserve volunteers. But by the end of spring, that proportion will nearly double to nearly 40 percent.

Already, we're seeing the Guard and Reserve troops taking a much higher percentage of casualties since the start of the war last March. Fourteen percent of all deaths have been members of the Army Guard or Reserve. In December, 39 soldiers were killed and ten -- roughly 25 percent -- from the Guard and Reserve.

The reliance on the Reserves to ease the strain on active duty troops is beginning to show signs of a looming crisis. The Army is beginning to have trouble recruiting and retaining enough Guard troops for two reasons.

One, many troops now in the Reserves are finding the long deployments in Iraq, Afghanistan and other places are taking a huge toll on their personal lives and finances.

And two, the Army has issued stop-loss orders. They prevent some active duty troops from retiring, and that is a prime source of troops for the Reserves.

The Pentagon says it's working hard to make sure that during this time when the military force is stressed, that it isn't stretched to the breaking point. Many members of Congress, though, are arguing that the problem is simply the military is too small.

The Pentagon insists that increasing the size of the force, say, by adding a couple of Army divisions, would be too expensive, wouldn't provide enough help for several years, by which time, the active troops might not be needed.

But Kyra, one thing seems for certain. To paraphrase Donald Rumsfeld, the U.S. appears to be for another long, hard slog in Iraq in 2004 -- Kyra.

PHILLIPS: Jamie McIntyre, thank you.

At least three Iraqi children have been killed over the last few days in roadside explosions set off by insurgents across Baghdad. The violence has left other children frightened and many confused.

Our correspondent in Baghdad Satinder Bindra has their story.

(BEGIN VIDEOTAPE)

SATINDER BINDRA, CNN CORRESPONDENT (voice-over): Hanging out for a handout. Thirteen-year-old Shareen Mura (ph) picks up about $3 a day from car drivers at this busy intersection.

Heavily armed U.S. soldiers also drive by, but Shareen (ph) is not scared. She says these days in Baghdad, it's mainly Iraqis who are killing their own people.

"I feel OK about the Americans," she says, "because they don't do anything to us. It's all because of the Iraqis."

Instead of being in school, Shareen's (ph) been on the streets for months. She says her father is ill, and her earnings help raise ten younger siblings.

"There are no jobs available here," says Shareen (ph). "Our situation is hopeless. Our hope is only with God."

A few blocks away, other Iraqi children are busy at play. Eight- year-old Meena Jaffa (ph) could be a kid anywhere, until she starts talking about the nighttime U.S. raids against insurgents.

UNIDENTIFIED FEMALE (through translator): When we hear the sirens going off, we get scared. Then we hurry on downstairs to wrap ourselves in blankets so we won't hear a thing. We stay down there crying, trying to sleep.

BINDRA: Meena Jaffa (ph) and her friends are confused about what's happening around them.

UNIDENTIFIED FEMALE (through translator): I ask my mother why there is so much bombing. We haven't done anything. Why are they so mean? There are poor and innocent people who could die.

BINDRA (on camera): Iraqi children are dying every day in this ongoing insurgency.

In the past five days in Baghdad alone, three kids have been killed as roadside bombs planted by insurgents have exploded in residential neighborhoods.

(voice-over) Other children like 12-year-old Ayad Ali (ph) have been hurt by cluster bombs. Ayad (ph) says he was walking near his home when a small object exploded. When he woke up in hospital, he realized he was blinded in his right eye.

UNIDENTIFIED MALE (through translator): My eyes are hurting me. There is something stuck in them.

BINDRA: Ayad (ph) no longer has the concentration to attend school.

Many Iraqi children are simply pleading for a normal life.

UNIDENTIFIED FEMALE (through translator): I wish God would save my mother, father, brothers and aunt. I wish nothing bad happens and the war stops.

BINDRA: A wish that seems unlikely to be granted any time soon.

Satinder Bindra, CNN, Baghdad.

(END VIDEOTAPE)

PHILLIPS: Well, straight ahead, we certainly had our share of celebrity legal troubles in 2003. Didn't we? But in most cases, the courtroom battle hasn't even begun. We'll look at what's on the docket in the next several weeks.

Overused and abused. Terms like bling-bling and metrosexual. Scholars release the list of words they say should not be carried into the new year.

And a look back like no other. CNN reflections, the most memorable moments of 2003 just ahead.

(COMMERCIAL BREAK)

PHILLIPS: When it comes to high-profile courtroom drama, the docket is quite full for 2004. Upcoming trials include those of Martha Stewart, Kobe Bryant, Robert Blake, Scott Peterson. That's just to name a few.

Here to talk about these cases, as well as Michael Jackson, of course, his arraignment is coming up. Trial lawyer Linley Jones. Great to see you.

LINLEY JONES, TRIAL LAWYER: Thank you.

PHILLIPS: All right. Let's hit on Michael Jackson. This is like a war of credibility.

JONES: It is. And it could be the sensational celebrity trial of the century, pitting a superstar against a child.

And that's really the tragedy of the story, is that regardless of the outcome here, this child will be victimized just by the system and having to participate in such a controversial, high-profile trial.

PHILLIPS: Martha Stewart. I mean, so many major business people being held accountable, but not being held accountable last year.

JONES: Right. And the crackdown on corporate corruption. And where does Martha Stewart really fit into that, or was her crime more after cocktail party crime of knowing a little too much because she knew the right people a little too well?

And that's going to be for a jury to decide. But there are other players in her story that a jury may find more culpable, like her investment broker.

PHILLIPS: Kobe Bryant. The issue of special treatment. I wonder if this will affect other cases as this one plays on.

JONES: Well, there may be special treatment here. There may not be.

The big issue here is that he's certainly deflecting attention to the accuser and making the trial about the accuser and not about him and what he did. And it will be interesting to see this year how that plays out at his trial.

PHILLIPS: Scott Peterson. Why are we so fascinated -- well, we shouldn't say we, because there comes a point where, OK, this is too much. But seriously, the nation is sort of fixed on this case. Why?

JONES: And why is the nation transfixed on this case when there are so many cases like this that go on all the time, cases of serious domestic abuse?

And I really think it's because people can really relate to Laci Peterson. They can really relate in many cases to Scott Peterson, and they're shocked and appalled that this could happen in such a seemingly normal household.

PHILLIPS: Meanwhile, you look at all these cases. Robert Blake. Kind of seems like that's sort of fallen off the media attention. What's your take on that one?

JONES: It has. Well, the Robert Blake case became a lot less fascinating when he was no longer being considered for the death penalty. When it was just a jail time case, it became less fascinating.

But it's going to be an interesting trial, because he's a loose cannon. He'll say what he thinks. And when he gets in that courtroom, there's no telling if his lawyer's going to be able to keep him off the stand or keep him saying what they need and want him to say.

PHILLIPS: All right. I'm curious. Looking at all these cases we just addressed, what will you be watching the most? What's interesting to you?

JONES: I have done so much of the child molestation work that I'm very closely watching the Michael Jackson case.

And yet, every one of these cases is fascinating to us lawyers. So we have a lot to watch this coming year.

PHILLIPS: Could the Michael Jackson case somehow have an effect on future cases with regard to child molestation?

JONES: It may. It may. I mean there are, unfortunately, cases like this all the time.

And if it does anything, it may bring to the public's attention and educate the public about the child molestation problem that we have in the United States and the various problems that there are in the system for children that are victims and parties to litigation and to criminal cases.

PHILLIPS: All right. Linley Jones, trial attorney, thank you.

JONES: Thank you.

PHILLIPS: Happy New Year.

JONES: Thanks.

PHILLIPS: All right.

Well, Chevrolet has unveiled the next generation of Corvette. We're going to take a peek in just a bit.

And from the year just passed, the news stories you'll always remember and those you'd rather forget. The whole year reviewed in just minutes when we come back.

(COMMERCIAL BREAK)

PHILLIPS: Time to sit back and rewind to 2003.

Go back with us to this time last year. The terror threat level was on its way to orange. The markets were down and the drumbeat of war was growing louder.

(BEGIN VIDEOTAPE)

PHILLIPS (voice-over): As January begins, a pregnant woman in California is missing. Her family, desperate to find her.

UNIDENTIFIED MALE: My confidence is so high that Scott had nothing to do with it, I'm not really that concerned.

PHILLIPS: A child is found dead in a Newark basement.

UNIDENTIFIED MALE: It is easy to make a child. The real question is can you take care of a child.

PHILLIPS: And Saddam Hussein says he's ready for war.

SADDAM HUSSEIN (through translator): The people and the rulers of Baghdad have resolved to compel the Mongols of this age to commit suicide on its walls.

PHILLIPS: Ten days later, a United Nations report indicates Iraq has hidden chemical weapons.

The first day of February. A setback for exploration. The Shuttle Columbia breaks up over the southwest.

The country still mourning the loss of Columbia's crew, the president gives what many think is a final warning to Saddam Hussein and a standby to America's troops.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Saddam Hussein will be stopped.

PHILLIPS: Just days later, another of America's adversaries urges Muslims to fight.

WOLF BLITZER, CNN ANCHOR: A short while ago the Arabic television network Al Jazeera aired an audiotape said to be the voice of the al Qaeda leader.

PHILLIPS: On the 12th of March, Elizabeth Smart, snatched from her home in the dead of night, missing for ten months, is found. Alive.

BLITZER: The 15-year-old girl, Elizabeth Smart, has been found alive and well.

PHILLIPS: But soon our attention is riveted by events thousands of miles away.

UNIDENTIFIED MALE: CIA director George Tenet was able to report to the president that intelligence officials believe the crew's missile and bomb attacks that started the war did kill some top Iraqi leaders, who U.S. officials say they were sleeping in the compound that was attacked. But not apparently Saddam Hussein.

UNIDENTIFIED MALE: Hello, Wolf. The U.S. Army's 7th Cavalry has had its first hostile contact with the Iraqis on the other side of the border.

UNIDENTIFIED MALE: You can hear the sirens, the horns going off. We're going to go put our stuff on, as well, and jump into that bunker -- Wolf.

BLITZER: CNN received the first pictures of American soldiers killed and captured in action in Iraq. CNN has made a decision not to show the video of those killed and will instead use this single image with no identifiable features.

First of all, there was a huge explosion that rocked, apparently, the ministry of information in downtown Baghdad. But I want our viewers to take a look at this one.

MOHAMMED SAEED AL-SAHAF, IRAQI INFORMATION MINISTER: We besieged them, and we killed most of them. I think that we will finish them soon.

DONALD RUMSFELD, SECRETARY OF DEFENSE: It isn't a complete success. We've got a lot of difficult work yet to do. Today was a very good day. It's wonderful to see the faces of people being liberated.

UNIDENTIFIED MALE: What is the situation with Saddam Hussein?

UNIDENTIFIED MALE: I don't know. I have no relationship with Saddam, so I can't tell you.

PHILLIPS: On May 1, 43 days after the opening night of the war, President Bush declares an end to major combat.

In June, America's domestic diva, Martha Stewart, is indicted on charges of insider trading.

Then, insurgents in Iraq prove they can do as much harm as Saddam's Army.

BLITZER: ... where it was the bloodiest day for coalition forces since President Bush declared an end to major combat.

PHILLIPS: July. NBA basketball star Kobe Bryant is charged with sexual assault in Colorado.

Two rampage shootings leave four people dead. One of the shootings occurs inside New York City's city hall.

UNIDENTIFIED MALE: How does a gunman after 9/11 get into city council while there is a city council in session? How does he get in and fire off at least a couple of rounds?

BLITZER: Want to show our viewers a picture that we're getting in from San Antonio, Texas, as well, where there's been another shooting.

San Antonio police say two women have been killed and another woman was wounded after gunfire broke out at an office complex. The gunman is on the loose.

PHILLIPS: The guerrilla war in Iraq continues. Saddam Hussein's sons die in a fierce gun battle with U.S. troops in Mosul. Their bodies offered as proof to uncertain Iraqis.

In August, the city that never sleeps goes dark. A massive blackout strikes huge sections of the east and Midwest.

BLITZER: Crisis that left 50 million people in the dark.

PHILLIPS: Mid September, Hurricane Isabel threatens to terrorize the East Coast and inflicts more than $1 billion in damage.

In October, Ray Horn of Siegfried and Roy is mauled by a tiger on stage during a performance.

And the people of California vote to recall their governor and replace him with a movie star.

BLITZER: We can report that the next governor of California will be Arnold Schwarzenegger.

PHILLIPS: November. The man dubbed the Green River Killer admits to murdering 48 women and so avoids a death sentence.

UNIDENTIFIED MALE: I remember leaving each woman's body in the place where she was found. Is that true?

GARY RIDGWAY, GREEN RIVER KILLER: Yes.

PHILLIPS: Michael Jackson posts $3 million bail after being booked on charges of child molestation in California.

And justice for Washingtonians. A year after the nation's capital reeled with fear, this time from domestic terrorism, sniper suspects are brought to trial and convicted, John Allen Muhammad sentenced to die.

The following month, Lee Malvo is sentenced to life in prison.

Then, the most stunning image of the year. Saddam Hussein is captured.

(END VIDEOTAPE)

PHILLIPS: We can only imagine what will happen in 2004.

Well, remember Ginger? Now she's just known as the Segway. Not quite the revolution in transportation you were expecting. Well, just wait until you see the next generation Corvette. We'll have that next.

And you've been waiting all hour for this. Our hot Web question of the day is this: "Do you think the U.S. should normalize relations with Iran?" Vote right now: CNN.com/wolf is the place. The results for you when we come back.

(COMMERCIAL BREAK)

PHILLIPS: A new car for the new year rides into our picture of the day.

General Motors is unveiling its 6th generation Corvette. The 2005 model makes its debut this month at the Detroit auto show, with full-scale production scheduled to begin this fall.

The last series rolled in 1997, making this Corvette the first designed in the new millennium.

Well, every year Michigan's Lake Superior State University puts out a list of words or phrases it thinks ought to be banned as overused, or silly, or just wrong.

CNN national correspondent Bruce Morton looks at this year's list.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): No. 1 word on the list, "metrosexual," which means urban men interested in clothes and good grooming.

But other words mean that, and critics note that in Washington or Paris, where the subway is called metro, it sounds like a name for somebody who only does it underground.

"X" is on the lose-it list, as in "X-treme," "X-Files" and so on. Exasperated is still OK.

"Punked," meaning "to dupe" is on the list, and it should go. Punk used to be a noun referring to lime-haired kids and punk rock. Nothing duplicitous about them.

"Bling-bling" for flashy jewelry. What's wrong with just calling it flashy?

"Embedded journalists"?

UNIDENTIFIED MALE: We are in the city of Najaf in central Iraq...

MORTON: Well, we know what that was, reporters traveling with the military in Iraq. But it always sounded as if were you in bed with your source.

"Lol" is on the list. That's e-mail for "laugh out loud." But years ago it meant little old ladies, like the voters who turned out for Barry Goldwater when he ran for president.

"Shots rang out" is on the list, and shots probably don't ring. But Snoopy in Charles Schultz' "Peanuts" always used it when he was writing a novel. You think we could keep it?

"Hand-crafted latte" is on the list, but the trouble is, Americans don't understand latte, hand-crafted or not. In Italy, it's hot coffee and hot milk mixed. Here they always foam it. The university objects to "sanitary landfill" and prefers "dump." OK. The two man-made things you can see from outer space are the Great Wall of China and the dump in Staten Island.

"Sweat like a pig" ought to go, the university says, because fact is, pigs don't sweat. Oops.

"Captured alive" is on the list because, face it, it's hard to capture a corpse.

And the list makers confess one error. Their 2003 list urged a ban on "frozen tundra" as redundant. But as any Green Bay Packers fan can tell you, tundra is sometimes down right squishy. They only freeze it for the big games.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: All right. Here's how you're weighing in on our Web question of the day. Remember, we've been asking you, "Do you think the U.S. should normalize relations with Iran?"

Take a look at this. Seventy-nine percent of you say yes, while 21 percent of you say no. As always, this is not, of course, a scientific poll. You can find the exact vote tally and continue to vote, by the way, on our web site, CNN.com/Wolf.

And here are some of your thoughts and wishes for the new year.

Dale writes, "Enjoy this new year and remember that only the people have the power to make their country and communities safer, better places to live."

And from Mazin: "Our wish is that 2004 will bring more truths and justice and less lies like the ones we heard in 2003 about WMDs and the war on Iraq being part of the war on terrorism."

And from Adolf: "My hope is that this year the U.S. and other countries will promote peace and love instead of more war and violence."

And a reminder: you can always catch WOLF BLITZER REPORTS weekdays at this time, 5 Eastern. We'll also see you again tomorrow.

"LOU DOBBS TONIGHT" is next after a quick check of the headlines.

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Troops Rotating in Iraq; University Releases List of Overused Words>