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CNN Wolf Blitzer Reports

Interview With Pat Roberts, John Rockefeller; Will Israel Tear Down West Bank Barrier?

Aired July 09, 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.


(BEGIN VIDEOTAPE)
MILES O'BRIEN, CNN ANCHOR (voice-over): Fatal errors. A scathing report on the intelligence leading up to the war in Iraq.

SEN. PAT ROBERTS (R-KS), CHRM., INTELLIGENCE CMTE.: Today we these assessments were wrong.

SEN. JOHN ROCKEFELLER (D-WV), VICE CHRM., INTELLIGENCE CMTE.: As a direct consequence, our nation is more vulnerable today that ever before.

O'BRIEN: I'll speak with the chairman and vice chairman of the Senate Intelligence Committee.

West Bank barrier. The world court calls it illegal. Will Israel tear it down?

The stars come out for Kerry and Edwards. But did some go too far? I'll ask an adviser to four presidents, David Gergen.

Cold War romance. They fell in love after a kidnapping and a defection. Will there be a happy ending?

ANNOUNCER: This is WOLF BLITZER REPORTS for Friday, July 9, 2004.

(END VIDEOTAPE)

O'BRIEN: Hello. I'm Miles O'Brien at the CNN Center in Atlanta. Wolf is off again today.

In a stunning rebuke of the nation's spy agencies, the Senate Intelligence Committee said the case for war against Iraq was built on flawed information. But does it let the administration off the hook?

We go live to our White House correspondent Dana Bash. But we begin with CNN national security correspondent David Ensor -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Miles, the Senate panel's report, as you said, is blunt. It says the justification for war in Iraq, that Saddam Hussein had weapons of mass destruction, was just plain wrong. And that the U.S. intelligence community was to blame for that mistake.

(BEGIN VIDEO CLIP)

ROBERTS: Well, today we know the assessments were wrong. And as our inquiry will show they were also unreasonable and largely unsupported by the available intelligence.

(END VIDEO CLIP)

ENSOR: At the CIA, the deputy director took the unusual step of holding a news conference to respond, saying that steps have already been taken to make sure that such mistakes are never made again.

(BEGIN VIDEO CLIP)

JOHN MCLAUGHLIN, ACTING CIA DIRECTOR: So my first message to you is a very simple one -- we get it.

Although we think the judgments were not unreasonable when they were made nearly two years ago, we understand with all that we have learned since then that we could have done better.

(END VIDEO CLIP)

ENSOR: Committee staffers called the CIA, quote, "risk adverse," (UNINTELLIGIBLE) quote. And report says U.S. intelligence did not have a single officer in Iraq before the war working on weapons of mass destruction issues.

(BEGIN VIDEO CLIP)

MCLAUGHLIN: If it's intended to convey a timidity on the part of the officers in terms of working in dangerous environments, I would just reject that totally out of hand. I mean we put stars on the wall out here this year. We put stars on the wall out here this year.

(END VIDEO CLIP)

ENSOR: The stars in the CIA's front hall honoring officers killed in the line of duty.

For his part, Democrat Jay Rockefeller complained that the Republicans refused to included in this report anything on the alleged misuse of intelligence by President Bush and his team. That will have to wait for a second phase of the report which is unlikely to be completed before the presidential election in November -- Miles.

O'BRIEN: David Ensor in Washington.

Some Democrats suggest the Senate report is little more than a whitewash for the White House. Let's go live to the North Lawn and Dana Bash -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Miles, if you weren't sure how important the Iraq debate is this election year, all you had to do was watch the president in a critical state talking about this report at every stop.

(BEGIN VIDEOTAPE)

BASH (voice-over): Campaigning in Pennsylvania, the president stressed the point he wasn't the only one who got it wrong.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Listen, we thought there was going to be stockpiles of weapons. I thought so, Congress thought so, U.N. thought so.

BASH: Iraq already is a defining issue in the campaign. A majority of Americans now say it was not worth going to war. Bad intelligence or not, the president said he still made the right decision.

BUSH: He was a dangerous man. The world is better off without Saddam Hussein in power.

BASH: But Democrats say the new 511 Senate report tells only half the story. Phase two will study whether the president misused intelligence he did have in making his case for war.

Some Democrats think they already know the answer.

SEN. DIANE FEINSTEIN (D), CALIFORNIA: Unless administration officials from the president on down had information not made available to the Senate Intelligence Committee, there was clearly an exaggeration of either an imminent or a grave and growing threat.

BASH: The president's prewar case was unambiguous.

BUSH: Saddam Hussein's regime is a grave and gathering danger. To suggest otherwise is to hope against the evidence.

BASH: And critics say even though the flawed intelligence did not support dramatic statements like this one.

BUSH: Facing clear evidence of peril. We cannot wait for the final proof, the smoking gun that could come in the form of a mushroom cloud.

BASH: In a report addendum, Democrats say the administration exaggerated the threat and twisted arms to shape intelligence. The White House says nonsense.

DAN BARTLETT, WHITE HOUSE COMM. DIR.: The administration didn't put pressure or try to get them to change their analyses at the CIA or other intelligence agency.

(END VIDEOTAPE)

BASH: Democrats complain that because Iraq is such a defining issue this election year, waiting for phase two of this report, which does look at the White House until after the election, does a disservice to voters -- Miles.

O'BRIEN: Dana Bash at the White House. A short while ago I spoke with Kansas Republican Pat Roberts, chairman of the Senate Intelligence Committee. And vice chairman, West Virginia Democrat Jay Rockefeller.

(BEGIN VIDEOTAPE)

O'BRIEN: Senators, thank you both very much for being with us. I want to begin with you, Senator Roberts. The report focuses a lot of attention on the intelligence community. The Central Intelligence Agency, specifically.

Falls short of people offer criticizing of the reading the intelligence. Isn't there also a problem there somewhere in the interpretation of this intelligence or at least in the fact that the people reading the intelligence weren't really asking in the way of due diligence what was behind these reports?

ROBERTS: Well, you've actually summarized one of our conclusions. We said exactly that, that, unfortunately, we find the agency in sort of a mode of self-denial. And the managers there really not performing up to standard in regards to the analysts.

It's sort of a culture of self-denial and layering evidence that is not accurate, that you get into sort of an assumption train. And then that train sort of runs away with flawed intelligence.

It is not only in the United States. Every agency all throughout the world and other countries made the same assumption. We really have to change that. And both Senator Rockefeller and I will be listening to wise heads to determine how we can change that structure and make sure that it doesn't happen again.

O'BRIEN: Senator Rockefeller, is it a matter of simply not challenging assumptions? That term group think comes to mind here. Or is it a matter the administration seeking out an answer, a specific answer which would justify a war?

ROCKEFELLER: It could be both. I agree with Chairman Roberts when he talks about the need for less group think.

There's a term called red team which is very important. A red team is a group within the Central Intelligence Agency which does sort of contrarian questioning of all analysis. And they just question everything anybody suggests to trying to disprove it so as to raise the level.

I think the basic question was that the -- we went to war on the basis of weapons of mass destruction and the use of terrorism or links between al Qaeda and Saddam Hussein or whether Saddam Hussein had anything to do with the disaster of 9/11. And I think that Pat and I would both agree on the weapons of mass destruction. They were -- you know, they just didn't appear.

Before 9/11 we were talking about connecting the dots -- or right after 9/11 we were talking about connecting the dots when it came to weapons of mass destruction. There were no dots. There weren't weapons of mass destruction, there aren't weapons of mass destruction. That leaves terrorism.

And I think we came down in the report with the general view that there wasn't the proper intelligence to sustain the theory or the idea that al Qaeda and Saddam Hussein had been working together.

So then the question is, if all of those were, in fact, the reasons we went to war and were given to the American people speaking through the Congress, why was it that we went to war? And that's a really hard question for me to answer.

I voted to give the president that discretion after going through the United Nations. If I had to make that vote today, knowing the intelligence that we all know now, I would have voted no. And I think that the majority of Congress would have voted no.

And we would not have been at war in Iraq and would have been still working in Afghanistan. And, most importantly, working against the war on terrorism which is our major challenge for the next generation or two.

O'BRIEN: Senator Roberts, would you, too, have voted no, knowing what you know now?

ROBERTS: It is pretty difficult to go back over two years and then take a hindsight vote. It is easy to look in the rearview mirror with 20/20 hindsight and say how you would have voted. There were two other aspects to this. One was the threat to regional stability.

One thing that the CIA did get accurate is that he did have missile capability over 150 kilometers. And I think that David Kay who is in charge of the Iraq survey group, the one that was looking for the weapons of mass destruction pointed out that Iraq had become sort of a grand central station with no discipline whatsoever in regards to weapons of mass destruction.

You had people who had the ability to reconstitute it. What the intelligence committee said is that that was ongoing. That's not correct. But they did have the capability.

Then there's the human rights violations. If you go to war in Kosovo on the basis of human rights, there are 500,000 people who died at the hands of Saddam. I think the world is a better place and Iraq hopefully achieves stability and will be a better place without Saddam Hussein.

So it is a difficult call. I really think we need to look forward as opposed again to looking in that rearview mirror with 20/20 hindsight and say, all right, what do we do to fix the intelligence community and what do we do to make sure that any policy or any possible policy (UNINTELLIGIBLE) if we think our national security is at threat is the correct one.

O'BRIEN: Senator Rockefeller, a final thought here. Given all of the extent of this. Given the fact that it is a $40 billion infrastructure there for intelligence and that it failed us so miserably, shouldn't more heads roll here? Shouldn't the American taxpayers be entitled to finding out just who is responsible, not just the CIA? This is bigger than that, isn't it?

ROCKEFELLER: Pat Roberts often says that this isn't just about pointing fingers. And I think he's right about that. It is about systems and the difficulty of 15 different intelligence agencies. But I would have to say that I think that George Tenet holds his section of the blame for this not working. I think he can prove the CIA in many respects.

But on the other hand, one thing I can say is that it is not up to the director of the Central Intelligence Agency to decide whether or not to go to war. That decision resides elsewhere in Washington.

O'BRIEN: Senators Rockefeller and Roberts, thank you very much for your time.

ROCKEFELLER: Thank you.

ROBERTS: Thank you.

(END VIDEOTAPE)

O'BRIEN: Here is your turn to weigh in on this important story. Our web question of the day is this. "Does the Senate report on prewar intelligence change your opinion of the Iraq war?" You can vote right now. CNN.com/wolf is the place. We'll have the results a little later in the broadcast.

Blasts shatter the quiet in Baghdad near our Baghdad bureau.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: What did you think that was? Get down.

(END VIDEO CLIP)

O'BRIEN: We'll have the latest on the violence in Iraq.

Americans allegedly running a private prison in Afghanistan now being detained.

Plus, the Democrats' racy fund-raiser. Why the Bush campaign calls it a star-studded hate fest.

(COMMERCIAL BREAK)

O'BRIEN: No let-up in Iraq. Shattering blasts shook the heart of Baghdad today as rockets or mortar rounds fell near a hotel used by American contractors. The strike reportedly killed a child. At least two were wounded. It was a little too close for comfort for our Baghdad bureau chief Jane Arraf.

(BEGIN VIDEO CLIP)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: What do you think that was?

Get down. Down, down.

Do you see that?

(END VIDEO CLIP)

O'BRIEN: Jane Arraf and her crew were not hurt in that attack, glad to tell you.

Two U.S. allies are working to free their citizens held hostage in Iraq. Kidnappers have threatened to behead two Bulgarian truck drivers if the U.S. does not release prisoners in Iraq. Bulgaria which has troops in Iraq says it won't change its policies. An Islamic group says it will kill a Filipino truck driver if his nation doesn't withdraw its troops from Iraq. Manila has sent an envoy to deal with that crisis.

Well, he has been reported missing, listed as a deserter and listed as captured. His official status now, returned to military control. But that's not the end of the story for this U.S. marine who will be flown to Camp LeJeune in North Carolina. CNN Pentagon correspondent Barbara Starr reports.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): As Marine Corporal Wassef Ali Hassoun arrived in Landstuhl, Germany, to a medical evaluation, officials said they hope to learn what happened to the man who left his post near Fallujah, Iraq, on June 20 and turned up in Lebanon on July 8. Hassoun will undergo a medical and psychological evaluation first and then be questioned closely. Hassoun's brother defended the marine.

MOHAMAD HASSOUN, MARINE'S BROTHER: We do not need a lawyer. We haven't done anything wrong that we would need a lawyer for.

STARR: For the first time the U.S. Central Command acknowledged it had classified Hassoun as a deserter after he left his unit in June. The military statement noting, "a preliminary inquiry into his absence indicated he had deserted and as a result he was subsequently characterized as a deserter."

Hassoun was then reclassified on June 28 as captured after appearing on this videotape with a sword held over his head. Military sources say the initial finding of desertion was based in part on interviews with other marines at the base. Sources also say the intelligence community was able to monitor some of Hassoun's phone calls after he left the unit. If the investigation finds Hassoun did dessert, legal action is certain to take place.

MAJ. GEN. DON SHEPPERD (RET.), CNN MILITARY ANALYST: The key will be in a court-martial IS did a person go absent without leave or did he desert. Absent without leave means you probably intend to come back. Desertion means you intend to leave forever. And that can be punishable in time of war, even up to death.

STARR: The full interrogation of Corporal Hassoun will begin only after medical and psychological professionals give their approval. Officials stress they still do not know what happened to Hassoun from the time he left his unit in Iraq until he reappeared in Lebanon. Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

O'BRIEN: On the campaign trail, President Bush gets help from the family in a battleground state.

Unlikely romance. It began in the Cold War. Can they find a happy ending?

And the West Bank barrier. The World Court weighs in. Will Israel tear it down?

(COMMERCIAL BREAK)

O'BRIEN: President Bush brought his re-election campaign to a battleground state. He also brought along one of his daughters. Let's go to the trail.

(BEGIN VIDEOTAPE)

O'BRIEN (voice-over): In her campaign debut, Jenna Bush accompanied her dad today to battleground Pennsylvania, a state he lost to the Democrats four years ago but hopes to put in his column this November. After schmoozing breakfast patrons at a diner this morning, the president began a day-long tour through three small towns.

In an "Ask the President" forum at Kutztown University, he served up economic optimism.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Now this tax relief is working. The thing that is necessary to make sure it continues to work is not raise your taxes.

O'BRIEN: He also rolled out a new values pitch today, one of his targets: gay marriage.

BUSH: History has shown us that a marriage between men and women have served society well. And any redefinition by itself will weaken marriage.

O'BRIEN: Though Al Gore won the Keystone State by 4 points in 2000, the latest polls show this year's race between Bush and John Kerry to be a toss-up. And in a new "TIME" magazine poll out today, the national picture looks much the same: a near statistical dead heat.

After a rowdy New York fund-raiser last night, Kerry and running mate John Edwards got to an early start on day three of their tour with two morning fund-raisers in New York. Countering Bush on values, Kerry offered his own definition.

SEN. JOHN KERRY, (D-MA), PRESIDENTIAL CANDIDATE: Values are something you live, in the choices of your budget, in the people that you choose to help, in the things that you do, in your energy to lift America and take it to a better place.

O'BRIEN: Then it was off to a rally in West Virginia for the two Johns, and later they will head for New Mexico.

Back East, some post-July 4 fireworks in the first debate of the campaign, one that did not include Bush or Kerry. Ralph Nader, an independent candidate feared by Democrats as a possible spoiler, faced off against former candidate Howard Dean at the National Press Club in Washington.

The topic was electoral reform. And the former Democratic wildcard did not disappoint.

HOWARD DEAN (D), FMR. PRESIDENTIAL CANDIDATE: You have the right to run. You can get in bed with whoever you want to. But don't call the Democratic Party full of corporate interests. They have their problems. We all have ours. None of us are pure, and this campaign of yours is far from pure.

(END VIDEOTAPE)

O'BRIEN: Now, for a look behind this week's political headlines, let's go to CNN political analyst Carlos Watson. He joins us with "Inside Edge."

Carlos, good to see you.

CARLOS WATSON, CNN POLITICAL ANALYST: Miles, good to see you.

O'BRIEN: All right. Three days now since the Democratic ticket has been officially christened, getting some pretty good reviews. What is the thinking now?

WATSON: Three things. First of all, Miles, it is a clear win. They have introduced him well. You don't have the Dan Quayle-like problems that you had in 1988 where your vice presidential nominee looked a little bit uncertain on the national stage for the first time. Instead, you had a beautiful, almost Kennedy-esque photo op. So i think that probably helped.

Number two, I think by next week we'll start to even more definitive polls that will suggest that the bounce was not as good as Al Gore in 1992 when they got an 11-point bounce, but certainly better than the Dick Cheney 3-point bounce. I'm expecting kind of a mid- single-digit, maybe high-single-digit bounce.

And last but not least, on foreign policy, I actually think Republicans may be in for a little bit of a surprise here. A lot has been said about John Edwards' lack of experience. But don't forget, this is a guy who has made north of $36 million as a trial attorney, a guy who has been on the Senate Intelligence Committee for four years.

And while he certainly doesn't have the resume that Dick Cheney has, to underestimate his ability to debate on foreign policy issues I think would be a real mistake, particularly as you add foreign policy issues that have maybe a domestic spin to them.

For example, the need for more troops, the cost of the entire war effort and whether or not we told the truth. So I think all of those will be real issues.

O'BRIEN: Well, he clearly has some communication skills, definitely. Let's talk about that Senate Intelligence Committee report. The president so far calling it useful. Nevertheless, could be a political hot potato depending on how it is handled. How do you think the Bush White House will deal with it?

WATSON: Well, they're doing the best they can. And you saw the president speak to it in Pennsylvania. But I'm starting to get a little deja vu going back to 1992.

You recall, Miles, that during President Bush's father's campaign, he argues that in many ways he was sunk by negative reports, in this case a report from then special prosecutor Lawrence Walsh who wrote about the Iran-Contra affair five or six days before the election.

And once again, every time President Bush gets ready to put forth his message, whether it's on community colleges, health savings accounts or the economy generally, it seems like it gets stamped out by another negative report or hearing.

This is a tough place to be. And the last thing they want to see is this last all the way up until late August, until they finally get a chance to speak at the Republican Convention.

O'BRIEN: All right. Final thought here. Ralph Nader just keeps going, runs better than an old Corvair I guess. I'm curious what you think about that and whether he really will he play the spoiler?

WATSON: I'm going to give you a strange one and you're going to hear it here first, Miles. In a strange way I think he's rallying the Democratic base more and more. John Kerry is able to point to him and say that we need to raise more money and be more together. So stay tuned on that story. He may not hurt Democrats as much as they expect.

O'BRIEN: All right. A little revisionist history in the making. All right. Carlos Watson, that's your "Inside Edge." You have a good weekend.

WATSON: Hey, great to see you. Have a good one.

O'BRIEN: All right. Take care. Were they soldiers of fortune accused of holding prisoners at a house? Three Americans now held in Afghanistan. Details of their stories ahead.

Profanity and politics. Why a star-studded Democratic fund- raiser raised a few eyebrows.

Plus this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I don't know what it is to have money. So I don't know what I'd change. I hope I stay the same.

(END VIDEO CLIP)

O'BRIEN: We hope so, too, Gerry. Meet America's newest multi- millionaire.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back.

It is a story of alleged desertion, kidnapping and reunion. We'll explain why it is only a temporary fix for this couple whose marriage is caught in a diplomatic web.

But, first, a quick check of the stories now in the news.

The deputy director of the CIA says, we get it. The spy agency held a rare news conference just a few hours ago to respond to a harsh criticism in a Senate Intelligence Committee report. It cites numerous failures in intelligence leading up to the war in Iraq.

A mistrial for the son of Adelphia Cable's founder. A New York jury deadlocked on 17 charges against former operations chief Michael Rigas. Prosecutors indicated they will seek a retrial. Yesterday, Rigas' father and brother were convicted of stealing millions from Adelphia, one of the nation's largest cable operators.

Just a few hours ago, Colombian police announced that one of that country's top country's drug lords has been arrested. They say Luis Hernando Gomez Bustamante was nabbed in Cuba. He is accused of smuggling tons of cocaine into the U.S. and could be extradited here as soon as this weekend.

Keeping you informed, CNN, the most trusted name in news.

Three Americans are being held by Afghan authorities. The men are suspected of being freelance soldiers in the war on terror. The problem is, they're not soldiers at all.

CNN's Brian Todd is in Washington. He has the story -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Miles, this is a tangled story that we're still getting information on. It came to light in the streets of Kabul just a few days ago.

(BEGIN VIDEOTAPE)

TODD (voice-over): At a house in Kabul, three American citizens accused of running a private prison, part of an alleged freelance operation outside any U.S. or Afghan official control. These pictures from the Associated Press of what it says is the house.

CNN terrorism analyst Peter Bergen spoke with an Afghan Interior Ministry official, who said the American citizens were detaining men with long beards who they suspected, based on their appearance, to be members of al Qaeda. Associated Press spoke with Afghanistan's interior minister.

ALI AHMAD JALALI, AFGHAN INTERIOR MINISTER (through translator): They arrested illegally eight people and some were in Kabul. And they put them in prison.

TODD: Peter Bergen spoke to us from Kabul and relayed what Afghan officials told him about how the prisoners were allegedly treated.

PETER BERGEN, CNN TERRORISM ANALYST: I talked to two separate Afghan officials, one of whom talked about some beatings that were administered in this private prison by these Americans. Another one talked about how these prisoners were hung from a ceiling.

TODD: The house was raided late Sunday night, according to an Afghan official, who says the three Americans are being detained and interrogated by Afghan intelligence. The State Department confirmed the identities of two of the Americans, with an important caveat.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: Let me make clear, first of all, the U.S. government does not employ or sponsor these men. Two of the men have signed Privacy Act waivers, Mr. Jonathan Idema and Brent Bennett. The third has not signed a Privacy Act waiver, so I can't give you more information.

TODD: An Afghan official tells Peter Bergen says Jonathan Idema also never worked for the Afghan government or the Northern Alliance. According to an official, Idema and his colleagues told Afghan authorities they were operating the prison because they wanted to take part in the war on terror.

We spoke to Jonathan Idema's attorney, John Tiffany, who says the allegations are ridiculous. Tiffany also spoke on camera to a CNN affiliate.

JOHN TIFFANY, ATTORNEY FOR JONATHAN IDEMA: What I want people to realize and recognize is that this is not a guy that's out there running roughshod over the country, getting in the way of the military.

TODD: Tiffany told us he believes the FBI is behind Idema's detention. He says the FBI has a vendetta against Idema going back years and -- quote -- "The FBI wants to nail Jack up on a cross."

An FBI official told us, the bureau cannot comment on those allegations at this time. We asked CNN military intelligence analyst Ken Robinson how pervasive freelancers are in the war on terror.

KEN ROBINSON, CNN NATIONAL SECURITY ANALYST: We have seen in Afghanistan, in Iraq and other places many people who did not get picked up to be contractors showing up on the battlefield and offering their services.

(END VIDEOTAPE)

TODD: Peter Bergen tells us it is not clear what the three Americans are being charged with or if they'll be charged at all. An official in Kabul says the eight prisoners who were rounded up by the Americans are being debriefed by Afghan intelligence and that that agency is also looking for several locals who were allegedly helping the Americans -- Miles.

O'BRIEN: Brian, it seems the motivation a bit mysterious here. Are they bounty hunters, or is there some other motivation?

TODD: Well, I spoke with to Jonathan Idema's attorney again just a few moments ago. John Tiffany is his name. He tells me that this client was really there only motivated by doing something worthwhile in the war on terror, contributing to the American cause. He says his client is a former member of the special forces, specifically a Green Beret.

CNN cannot confirm that at this time. But he says his client did try to reenlist with the military a couple of years ago.

O'BRIEN: Brian Todd in Washington, thanks much.

In some places, it is a towering concrete wall. In others, it is a fence or a ditch. Israel says its West Bank barrier has virtually stopped the suicide bombings which have taken hundreds of lives, but it has also kept Palestinians from their homes, schools and land. And the U.N.'s highest court today said the barrier should come down.

CNN's John Vause has the story from Jerusalem.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT: This is a powerful moral victory for the Palestinians. Not only did the court say the barrier must be torn down, but it also said that Israel must pay compensation to Palestinians who have suffered property damage and whose land was confiscated.

The court rejected the Israeli argument that the barrier was only a means of self-defense, saying that because Israel exercises control in the West Bank, it must find other ways which do not violate international law to stop the Palestinian militants. It was also critical of the route, saying the chosen path was not necessarily for security.

From the very beginning, the Israelis refused to recognize the court's jurisdiction. They boycotted the three days of hearings back in February and now they have no intention of abiding by the court's findings. In this case, the International Court of Justice issued a nonbinding advisory opinion only, one which will now go to the U.N. Security Council to decide how best to make Israel comply.

John Vause, CNN, Jerusalem.

(END VIDEOTAPE) O'BRIEN: Well, he says it was just playful teasing. But critics say it was just plain tasteless. Hear what the former L.A. Mayor Richard Riordan said to a little girl that has so many so angry.

Plus, some celebrities helped raise a lot of cash for John Kerry last night. But they also raised a lot of eyebrows among Republicans. Did some of the stars go too far?

And later, a Cold War romance. They fell in love after a kidnapping and a defection, now an emotional reunion.

(COMMERCIAL BREAK)

O'BRIEN: Some Republicans are furious about last night's Kerry campaign fund-raising concert in New York. They call the concert a star-studded hate fest.

(BEGIN VIDEOTAPE)

CHEVY CHASE, COMEDIAN: I don't trust him. I don't like him. And I think he's venal.

O'BRIEN: (voice-over): That's what comedian Chevy Chase said to reporters about President Bush after a fund-raising concert for the campaign. Performing at the concert, Chase went further saying -- and we quote -- "This guy's as bright as an egg timer."

John Mellencamp sang a song that referred to the president as a cheap thug. Paul Newman labeled the administration's tax cuts borderline criminal and added, "There is serious and dangerous stuff out there and something has got to change." Actress Jessica Lange asked the audience -- quote -- "Are we going to continue to follow a self-serving regime of deceit, hypocrisy and belligerence?"

JESSICA LANGE, ACTRESS: We are in desperate need of new leadership.

O'BRIEN: There was comedian Whoopi Goldberg, who made some jokes about the president's surname we can't repeat here. The concert at New York's Radio City Music Hall raised $7.5 million for the Kerry campaign and the Democratic National Committee.

But it also raised the ire of Republicans. Bush campaign manager Ken Mehlman called the event of a star-studded hate fest. Terry Holt with the Bush-Cheney campaign added this.

TERRY HOLT, BUSH CAMPAIGN SPOKESMAN: Well, after all of the disgusting and bizarre things that were said last night at New York's fund-raiser, John Kerry said that that group embraced his values, that they were American values. Well, I'm here to tell you that the liberal cultural elite that attended that multimillion-dollar fund- raiser last night does not share the values of most Americans.

O'BRIEN: The Kerry campaign says John Kerry did not approve some of the remarks made at the concert. Said campaign manager Mary Beth Cahill: "The performers last night speak for themselves. And John Kerry and John Edwards have made it very clear over the last week of what they think American values are and what they're going to be fighting for in this general election campaign."

(END VIDEOTAPE)

O'BRIEN: Here to talk about the race for the White House and more is former presidential adviser David Gergen, now editor at large of "U.S. News & World Report." He joins us from Boston.

Mr. Gergen, good to see you again, sir.

DAVID GERGEN, HARVARD UNIVERSITY: It's good to see you.

O'BRIEN: All right, let's talk about that.

Of course, the fact that none of this was captured on videotape is probably pretty significant. We should talk about that. But just based on what you heard there, did those folks go over the line? And, perhaps more importantly, did the candidate make a mistake by sitting through it all?

GERGEN: I think that Whoopi Goldberg definitely went over the line. And some of them obviously came up close or went over it, barely over. But I think she clearly did.

You know, scatological humor in a presidential campaign and particularly by going after the other -- President Bush, I think is way over the line. And, yes, I think that John Kerry should have distanced himself more quickly and more forcefully than he did.

But I have to tell you, we're -- and I think the Democrats are darn lucky it was not recorded, because they would be playing it over and over and over again, well, pieces of it. They couldn't even put some of it on the air. But the truth is that Dick Cheney is also very lucky that he was not recorded in what he told Pat Leahy, Senator Leahy, on the floor of the Senate.

That had a -- it was very personal, very strong. And we all know what he said, but it wasn't printed in most newspapers because it was not printable. And he said, afterwards, of course he felt better for it. I don't think John Kerry ought to say he feels better for Whoopi Goldberg. I think both sides will be, hey, look, we need to get the whole quality of this debate up. This has all drifted downhill pretty fast.

O'BRIEN: Well, yes, awfully early on, I guess you could say.

But to the extent that this kind of gets into a whole discussion about values, does this -- do you get the sense that this is going to be a core of these campaigns?

GERGEN: Well, there's no question that the Republicans have in the past won very strongly and been very effective at this, going back all the way to Ronald Reagan and before, in invoking values, and because so many people who are in the lower class, in fact, are not doing all that well economically resonate with the values argument and these more traditional values, especially people in the rural communities that will be so heavily fought over this year.

And I think that Bill Clinton understood that the Democrats have got to get back into the values game. He started talking about that. Now John Kerry and John Edwards are embracing it full-time. And what's that all about? It is the fact that there are people in this country who have decided that maybe the president isn't responsible for the economy and whether they have a job or don't have a job, their income is going up or going down.

But they do want somebody in that office with whom they can associate through their value structure, whether it is a matter of patriotism or religion or social values. We all know that people who go to church regularly, people who own guns tend to vote very heavily Republican. People who are more secular, people that don't own guns tend to be very heavily for Democrats.

Women who are married tend to vote for a Republican presidential. Women who are unmarried tend to vote Democratic.

O'BRIEN: But, David, when there is an utterance, whether it's recorded or not, by a candidate which kind of runs afoul of those stated goals, what's the advice a person like you gives a candidate? How do you get out of a situation like that?

(CROSSTALK)

GERGEN: The advice is, shut up. Don't go there.

(CROSSTALK)

GERGEN: Because once you start launching a values conversation and then you engage in sort of crudity and sort of barbarous language, it sounds like very hypocritical. It sounds like, well, you know, on one hand, you're going to tell us one thing in public, but in private, you have got a very different value system. And I think that both sides would be well advised to cool it.

O'BRIEN: And a final thought here, because we've certainly seen this throughout the history of political campaigning in this country. Do Americans kind of forgive and forget these gaffes generally?

GERGEN: They tend to forgive and forget. But it affects the way they think about people.

I will tell you something. Ronald Reagan was the first person out very strongly in this value stuff. It is unimaginable, unimaginable, that Reagan would engage some of in this kind of language or be at an event where these kind of things were said.

I'll tell you something. Harry Truman would have gotten up and walked out on some of this stuff, would think it's beneath the dignity of the office. And that's why I think both sides need to pay attention. If they really care about the values, then they should care about the respect people have for those who sit in the Oval Office and for people who are positions of high power. You can't have it both ways in this game. O'BRIEN: It's hard to walk out on $7.5 million, I suppose.

GERGEN: It is. Harry Truman would have done that.

O'BRIEN: Well, David Gergen, thank you very much. Appreciate your time.

GERGEN: Thank you.

O'BRIEN: Controversy in California over a remark Former Los Angeles Mayor Richard Riordan made to a 6-year-old girl. Riordan, who is now the state education secretary, was visiting a library in Santa Barbara last week when the exchange occurred.

Now, the girl, named Isis, asked Riordan if he knew what her name means.

(BEGIN VIDEO CLIP)

RICHARD RIORDAN, FORMER LOS ANGELES MAYOR: Erica?

UNIDENTIFIED FEMALE: No, Isis. Did you know my name actually means an Egyptian goddess?

RIORDAN: It means -- it means stupid dirty girl.

UNIDENTIFIED FEMALE: No.

(END VIDEO CLIP)

O'BRIEN: Well, the California State Conference of the NAACP is calling for Riordan to be removed from office, saying -- and we -- quote -- "It is abusive to use such language toward a child, regardless of the gender, race, socioeconomic background or national heritage. To say that he was only kidding or joking suggests that Mr. Riordan knows nothing about children and has even less respect for them."

But Governor Arnold Schwarzenegger, who made Riordan his first Cabinet appointment, stands by him, saying: "Secretary Riordan's comments were unacceptable in any context. I am satisfied that his apology is sincere. And I know he deeply regrets having made these unfortunate remarks."

Our call to Riordan's office was not returned.

It was a very unusual reunion in Indonesia today. The husband is American. The wife is Japanese. They last saw each other in North Korea. We'll tell you about it just ahead.

(COMMERCIAL BREAK)

O'BRIEN: Here is an unusual story out of Indonesia. It involves love, Cold War politics, a reunion and an uncertain future.

We get the story from CNN Jakarta bureau chief Maria Ressa. (BEGIN VIDEOTAPE)

MARIA RESSA, CNN JAKARTA BUREAU CHIEF (voice-over): In the most unlikely of places, they meet again, a Japanese woman and an American man who met and fell in love in North Korea.

Hitomi Soga was kidnapped by North Korean agents in 1978; 24 years later, she returned to her homeland after North Korea finally admitted it had systemically kidnapped Japanese nationals for its espionage program. Her husband and two daughters stayed behind, for good reason.

American Charles Robert Jenkins is wanted by U.S. authorities, accused of deserting his Army unit in 1965 and defecting to North Korea.

LAWRENCE DI RITA, PRINCIPAL DEPUTY ASSISTANT SECRETARY OF DEFENSE FOR PUBLIC AFFAIRS: Our long-standing view had been that he was a -- he was alleged to have violated the Uniform Code of Military Justice and it was our view that he should be brought to justice.

RESSA: Because it has no extradition treaty with the U.S., Indonesia is hosting the family reunion. Soga arrived from Japan on Thursday. Early Friday, Jenkins and his daughters boarded a Japanese charter plane from North Korea. This is the first time he has set foot outside the reclusive kingdom in nearly 40 years.

The question now is, how long can they stay together?

HASSAN WIRAJUDA, INDONESIAN FOREIGN MINISTER: They are allowed to stay one month. Of course, we'll be flexible if the family needs more time to stay longer in Indonesia.

RESSA: Soga says she wants to convince her husband to return to Japan.

(on camera): Jenkins must decide if he will do as his wife wishes and risk possible arrest. For now, Indonesia offers a neutral sanctuary, giving this family a chance to plot a happy ending.

Maria Ressa, CNN, Jakarta.

(END VIDEOTAPE)

O'BRIEN: Just ahead on WOLF BLITZER REPORTS:

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I just said, oh, God, let it be, let it be.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

O'BRIEN: Yes, she has 294 million reasons to be happy.

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

(BEGIN VIDEOTAPE)

O'BRIEN (voice-over): National Security Adviser Condoleezza Rice used a visit to South Korea to offer an incentive to North Korea. Rice said, if the North would only agree to drop its atomic weapons program, it could reap, in her words, surprise rewards.

China floods. Floods and mudslides are blamed for at least 17 deaths in southwest China and almost 4,000 people have been evacuated. This year, floods across China have affected about 33 million people.

Gore. Four people, including two Americans, were gored in today's running of the bulls in Pamplona, Spain. This was day three of the dangerous but popular annual event, but the first day marred by serious injuries. Witnesses say the bulls were running faster today and the course was more crowded.

Greece fire. After traveling through 26 countries, the Olympic flame has returned to Greece, the home of this year's Summer Games. It will arrive at the Olympic Stadium in Athens for the beginning of the Games August 13.

And that is our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

O'BRIEN: Web question of the day, here's how you're weighing in on it. Does the Senate report on prewar intelligence change your opinion of the war in Iraq? That's the question; 20 percent say of you yes; 80 percent say no. This is not a scientific poll.

Our picture of the day is an image of victory. A retired custodian from Lowell, Massachusetts, today claimed a $294 million Mega Millions jackpot. It's the second largest lottery jackpot ever to go to a single individual, in North America, that is.

Here she is.

(BEGIN VIDEO CLIP)

GERALDINE WILLIAMS, LOTTERY WINNER: I just looked -- stared at the TV and I said, oh, God. Oh, God.

I'm holding the ticket and I'm like -- I'm reading the numbers to him, but he -- he was in disbelief, too, because he says, are you sure it's the right date? Are you sure? Like we don't believe each other anyway.

I did go to the mall yesterday and tried to pick up some clothes to wear, but nothing -- I was just so nervous I didn't really enjoy shopping even yesterday.

I was a janitor at U Lowell. And I was not really in charge of two buildings, but they -- at times I had three building to do. I was at south, south campus.

I don't know. I don't know what it is to have money. So I don't know what I'd change. I hope I stay the same.

(END VIDEOTAPE)

O'BRIEN: We hope so, too.

Thanks for joining us. Wolf returns for Sunday's "LATE EDITION." He'll speak with Lynne Cheney.

"LOU DOBBS TONIGHT" starts right now.

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


Aired July 9, 2004 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
MILES O'BRIEN, CNN ANCHOR (voice-over): Fatal errors. A scathing report on the intelligence leading up to the war in Iraq.

SEN. PAT ROBERTS (R-KS), CHRM., INTELLIGENCE CMTE.: Today we these assessments were wrong.

SEN. JOHN ROCKEFELLER (D-WV), VICE CHRM., INTELLIGENCE CMTE.: As a direct consequence, our nation is more vulnerable today that ever before.

O'BRIEN: I'll speak with the chairman and vice chairman of the Senate Intelligence Committee.

West Bank barrier. The world court calls it illegal. Will Israel tear it down?

The stars come out for Kerry and Edwards. But did some go too far? I'll ask an adviser to four presidents, David Gergen.

Cold War romance. They fell in love after a kidnapping and a defection. Will there be a happy ending?

ANNOUNCER: This is WOLF BLITZER REPORTS for Friday, July 9, 2004.

(END VIDEOTAPE)

O'BRIEN: Hello. I'm Miles O'Brien at the CNN Center in Atlanta. Wolf is off again today.

In a stunning rebuke of the nation's spy agencies, the Senate Intelligence Committee said the case for war against Iraq was built on flawed information. But does it let the administration off the hook?

We go live to our White House correspondent Dana Bash. But we begin with CNN national security correspondent David Ensor -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Miles, the Senate panel's report, as you said, is blunt. It says the justification for war in Iraq, that Saddam Hussein had weapons of mass destruction, was just plain wrong. And that the U.S. intelligence community was to blame for that mistake.

(BEGIN VIDEO CLIP)

ROBERTS: Well, today we know the assessments were wrong. And as our inquiry will show they were also unreasonable and largely unsupported by the available intelligence.

(END VIDEO CLIP)

ENSOR: At the CIA, the deputy director took the unusual step of holding a news conference to respond, saying that steps have already been taken to make sure that such mistakes are never made again.

(BEGIN VIDEO CLIP)

JOHN MCLAUGHLIN, ACTING CIA DIRECTOR: So my first message to you is a very simple one -- we get it.

Although we think the judgments were not unreasonable when they were made nearly two years ago, we understand with all that we have learned since then that we could have done better.

(END VIDEO CLIP)

ENSOR: Committee staffers called the CIA, quote, "risk adverse," (UNINTELLIGIBLE) quote. And report says U.S. intelligence did not have a single officer in Iraq before the war working on weapons of mass destruction issues.

(BEGIN VIDEO CLIP)

MCLAUGHLIN: If it's intended to convey a timidity on the part of the officers in terms of working in dangerous environments, I would just reject that totally out of hand. I mean we put stars on the wall out here this year. We put stars on the wall out here this year.

(END VIDEO CLIP)

ENSOR: The stars in the CIA's front hall honoring officers killed in the line of duty.

For his part, Democrat Jay Rockefeller complained that the Republicans refused to included in this report anything on the alleged misuse of intelligence by President Bush and his team. That will have to wait for a second phase of the report which is unlikely to be completed before the presidential election in November -- Miles.

O'BRIEN: David Ensor in Washington.

Some Democrats suggest the Senate report is little more than a whitewash for the White House. Let's go live to the North Lawn and Dana Bash -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Miles, if you weren't sure how important the Iraq debate is this election year, all you had to do was watch the president in a critical state talking about this report at every stop.

(BEGIN VIDEOTAPE)

BASH (voice-over): Campaigning in Pennsylvania, the president stressed the point he wasn't the only one who got it wrong.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Listen, we thought there was going to be stockpiles of weapons. I thought so, Congress thought so, U.N. thought so.

BASH: Iraq already is a defining issue in the campaign. A majority of Americans now say it was not worth going to war. Bad intelligence or not, the president said he still made the right decision.

BUSH: He was a dangerous man. The world is better off without Saddam Hussein in power.

BASH: But Democrats say the new 511 Senate report tells only half the story. Phase two will study whether the president misused intelligence he did have in making his case for war.

Some Democrats think they already know the answer.

SEN. DIANE FEINSTEIN (D), CALIFORNIA: Unless administration officials from the president on down had information not made available to the Senate Intelligence Committee, there was clearly an exaggeration of either an imminent or a grave and growing threat.

BASH: The president's prewar case was unambiguous.

BUSH: Saddam Hussein's regime is a grave and gathering danger. To suggest otherwise is to hope against the evidence.

BASH: And critics say even though the flawed intelligence did not support dramatic statements like this one.

BUSH: Facing clear evidence of peril. We cannot wait for the final proof, the smoking gun that could come in the form of a mushroom cloud.

BASH: In a report addendum, Democrats say the administration exaggerated the threat and twisted arms to shape intelligence. The White House says nonsense.

DAN BARTLETT, WHITE HOUSE COMM. DIR.: The administration didn't put pressure or try to get them to change their analyses at the CIA or other intelligence agency.

(END VIDEOTAPE)

BASH: Democrats complain that because Iraq is such a defining issue this election year, waiting for phase two of this report, which does look at the White House until after the election, does a disservice to voters -- Miles.

O'BRIEN: Dana Bash at the White House. A short while ago I spoke with Kansas Republican Pat Roberts, chairman of the Senate Intelligence Committee. And vice chairman, West Virginia Democrat Jay Rockefeller.

(BEGIN VIDEOTAPE)

O'BRIEN: Senators, thank you both very much for being with us. I want to begin with you, Senator Roberts. The report focuses a lot of attention on the intelligence community. The Central Intelligence Agency, specifically.

Falls short of people offer criticizing of the reading the intelligence. Isn't there also a problem there somewhere in the interpretation of this intelligence or at least in the fact that the people reading the intelligence weren't really asking in the way of due diligence what was behind these reports?

ROBERTS: Well, you've actually summarized one of our conclusions. We said exactly that, that, unfortunately, we find the agency in sort of a mode of self-denial. And the managers there really not performing up to standard in regards to the analysts.

It's sort of a culture of self-denial and layering evidence that is not accurate, that you get into sort of an assumption train. And then that train sort of runs away with flawed intelligence.

It is not only in the United States. Every agency all throughout the world and other countries made the same assumption. We really have to change that. And both Senator Rockefeller and I will be listening to wise heads to determine how we can change that structure and make sure that it doesn't happen again.

O'BRIEN: Senator Rockefeller, is it a matter of simply not challenging assumptions? That term group think comes to mind here. Or is it a matter the administration seeking out an answer, a specific answer which would justify a war?

ROCKEFELLER: It could be both. I agree with Chairman Roberts when he talks about the need for less group think.

There's a term called red team which is very important. A red team is a group within the Central Intelligence Agency which does sort of contrarian questioning of all analysis. And they just question everything anybody suggests to trying to disprove it so as to raise the level.

I think the basic question was that the -- we went to war on the basis of weapons of mass destruction and the use of terrorism or links between al Qaeda and Saddam Hussein or whether Saddam Hussein had anything to do with the disaster of 9/11. And I think that Pat and I would both agree on the weapons of mass destruction. They were -- you know, they just didn't appear.

Before 9/11 we were talking about connecting the dots -- or right after 9/11 we were talking about connecting the dots when it came to weapons of mass destruction. There were no dots. There weren't weapons of mass destruction, there aren't weapons of mass destruction. That leaves terrorism.

And I think we came down in the report with the general view that there wasn't the proper intelligence to sustain the theory or the idea that al Qaeda and Saddam Hussein had been working together.

So then the question is, if all of those were, in fact, the reasons we went to war and were given to the American people speaking through the Congress, why was it that we went to war? And that's a really hard question for me to answer.

I voted to give the president that discretion after going through the United Nations. If I had to make that vote today, knowing the intelligence that we all know now, I would have voted no. And I think that the majority of Congress would have voted no.

And we would not have been at war in Iraq and would have been still working in Afghanistan. And, most importantly, working against the war on terrorism which is our major challenge for the next generation or two.

O'BRIEN: Senator Roberts, would you, too, have voted no, knowing what you know now?

ROBERTS: It is pretty difficult to go back over two years and then take a hindsight vote. It is easy to look in the rearview mirror with 20/20 hindsight and say how you would have voted. There were two other aspects to this. One was the threat to regional stability.

One thing that the CIA did get accurate is that he did have missile capability over 150 kilometers. And I think that David Kay who is in charge of the Iraq survey group, the one that was looking for the weapons of mass destruction pointed out that Iraq had become sort of a grand central station with no discipline whatsoever in regards to weapons of mass destruction.

You had people who had the ability to reconstitute it. What the intelligence committee said is that that was ongoing. That's not correct. But they did have the capability.

Then there's the human rights violations. If you go to war in Kosovo on the basis of human rights, there are 500,000 people who died at the hands of Saddam. I think the world is a better place and Iraq hopefully achieves stability and will be a better place without Saddam Hussein.

So it is a difficult call. I really think we need to look forward as opposed again to looking in that rearview mirror with 20/20 hindsight and say, all right, what do we do to fix the intelligence community and what do we do to make sure that any policy or any possible policy (UNINTELLIGIBLE) if we think our national security is at threat is the correct one.

O'BRIEN: Senator Rockefeller, a final thought here. Given all of the extent of this. Given the fact that it is a $40 billion infrastructure there for intelligence and that it failed us so miserably, shouldn't more heads roll here? Shouldn't the American taxpayers be entitled to finding out just who is responsible, not just the CIA? This is bigger than that, isn't it?

ROCKEFELLER: Pat Roberts often says that this isn't just about pointing fingers. And I think he's right about that. It is about systems and the difficulty of 15 different intelligence agencies. But I would have to say that I think that George Tenet holds his section of the blame for this not working. I think he can prove the CIA in many respects.

But on the other hand, one thing I can say is that it is not up to the director of the Central Intelligence Agency to decide whether or not to go to war. That decision resides elsewhere in Washington.

O'BRIEN: Senators Rockefeller and Roberts, thank you very much for your time.

ROCKEFELLER: Thank you.

ROBERTS: Thank you.

(END VIDEOTAPE)

O'BRIEN: Here is your turn to weigh in on this important story. Our web question of the day is this. "Does the Senate report on prewar intelligence change your opinion of the Iraq war?" You can vote right now. CNN.com/wolf is the place. We'll have the results a little later in the broadcast.

Blasts shatter the quiet in Baghdad near our Baghdad bureau.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: What did you think that was? Get down.

(END VIDEO CLIP)

O'BRIEN: We'll have the latest on the violence in Iraq.

Americans allegedly running a private prison in Afghanistan now being detained.

Plus, the Democrats' racy fund-raiser. Why the Bush campaign calls it a star-studded hate fest.

(COMMERCIAL BREAK)

O'BRIEN: No let-up in Iraq. Shattering blasts shook the heart of Baghdad today as rockets or mortar rounds fell near a hotel used by American contractors. The strike reportedly killed a child. At least two were wounded. It was a little too close for comfort for our Baghdad bureau chief Jane Arraf.

(BEGIN VIDEO CLIP)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: What do you think that was?

Get down. Down, down.

Do you see that?

(END VIDEO CLIP)

O'BRIEN: Jane Arraf and her crew were not hurt in that attack, glad to tell you.

Two U.S. allies are working to free their citizens held hostage in Iraq. Kidnappers have threatened to behead two Bulgarian truck drivers if the U.S. does not release prisoners in Iraq. Bulgaria which has troops in Iraq says it won't change its policies. An Islamic group says it will kill a Filipino truck driver if his nation doesn't withdraw its troops from Iraq. Manila has sent an envoy to deal with that crisis.

Well, he has been reported missing, listed as a deserter and listed as captured. His official status now, returned to military control. But that's not the end of the story for this U.S. marine who will be flown to Camp LeJeune in North Carolina. CNN Pentagon correspondent Barbara Starr reports.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): As Marine Corporal Wassef Ali Hassoun arrived in Landstuhl, Germany, to a medical evaluation, officials said they hope to learn what happened to the man who left his post near Fallujah, Iraq, on June 20 and turned up in Lebanon on July 8. Hassoun will undergo a medical and psychological evaluation first and then be questioned closely. Hassoun's brother defended the marine.

MOHAMAD HASSOUN, MARINE'S BROTHER: We do not need a lawyer. We haven't done anything wrong that we would need a lawyer for.

STARR: For the first time the U.S. Central Command acknowledged it had classified Hassoun as a deserter after he left his unit in June. The military statement noting, "a preliminary inquiry into his absence indicated he had deserted and as a result he was subsequently characterized as a deserter."

Hassoun was then reclassified on June 28 as captured after appearing on this videotape with a sword held over his head. Military sources say the initial finding of desertion was based in part on interviews with other marines at the base. Sources also say the intelligence community was able to monitor some of Hassoun's phone calls after he left the unit. If the investigation finds Hassoun did dessert, legal action is certain to take place.

MAJ. GEN. DON SHEPPERD (RET.), CNN MILITARY ANALYST: The key will be in a court-martial IS did a person go absent without leave or did he desert. Absent without leave means you probably intend to come back. Desertion means you intend to leave forever. And that can be punishable in time of war, even up to death.

STARR: The full interrogation of Corporal Hassoun will begin only after medical and psychological professionals give their approval. Officials stress they still do not know what happened to Hassoun from the time he left his unit in Iraq until he reappeared in Lebanon. Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

O'BRIEN: On the campaign trail, President Bush gets help from the family in a battleground state.

Unlikely romance. It began in the Cold War. Can they find a happy ending?

And the West Bank barrier. The World Court weighs in. Will Israel tear it down?

(COMMERCIAL BREAK)

O'BRIEN: President Bush brought his re-election campaign to a battleground state. He also brought along one of his daughters. Let's go to the trail.

(BEGIN VIDEOTAPE)

O'BRIEN (voice-over): In her campaign debut, Jenna Bush accompanied her dad today to battleground Pennsylvania, a state he lost to the Democrats four years ago but hopes to put in his column this November. After schmoozing breakfast patrons at a diner this morning, the president began a day-long tour through three small towns.

In an "Ask the President" forum at Kutztown University, he served up economic optimism.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Now this tax relief is working. The thing that is necessary to make sure it continues to work is not raise your taxes.

O'BRIEN: He also rolled out a new values pitch today, one of his targets: gay marriage.

BUSH: History has shown us that a marriage between men and women have served society well. And any redefinition by itself will weaken marriage.

O'BRIEN: Though Al Gore won the Keystone State by 4 points in 2000, the latest polls show this year's race between Bush and John Kerry to be a toss-up. And in a new "TIME" magazine poll out today, the national picture looks much the same: a near statistical dead heat.

After a rowdy New York fund-raiser last night, Kerry and running mate John Edwards got to an early start on day three of their tour with two morning fund-raisers in New York. Countering Bush on values, Kerry offered his own definition.

SEN. JOHN KERRY, (D-MA), PRESIDENTIAL CANDIDATE: Values are something you live, in the choices of your budget, in the people that you choose to help, in the things that you do, in your energy to lift America and take it to a better place.

O'BRIEN: Then it was off to a rally in West Virginia for the two Johns, and later they will head for New Mexico.

Back East, some post-July 4 fireworks in the first debate of the campaign, one that did not include Bush or Kerry. Ralph Nader, an independent candidate feared by Democrats as a possible spoiler, faced off against former candidate Howard Dean at the National Press Club in Washington.

The topic was electoral reform. And the former Democratic wildcard did not disappoint.

HOWARD DEAN (D), FMR. PRESIDENTIAL CANDIDATE: You have the right to run. You can get in bed with whoever you want to. But don't call the Democratic Party full of corporate interests. They have their problems. We all have ours. None of us are pure, and this campaign of yours is far from pure.

(END VIDEOTAPE)

O'BRIEN: Now, for a look behind this week's political headlines, let's go to CNN political analyst Carlos Watson. He joins us with "Inside Edge."

Carlos, good to see you.

CARLOS WATSON, CNN POLITICAL ANALYST: Miles, good to see you.

O'BRIEN: All right. Three days now since the Democratic ticket has been officially christened, getting some pretty good reviews. What is the thinking now?

WATSON: Three things. First of all, Miles, it is a clear win. They have introduced him well. You don't have the Dan Quayle-like problems that you had in 1988 where your vice presidential nominee looked a little bit uncertain on the national stage for the first time. Instead, you had a beautiful, almost Kennedy-esque photo op. So i think that probably helped.

Number two, I think by next week we'll start to even more definitive polls that will suggest that the bounce was not as good as Al Gore in 1992 when they got an 11-point bounce, but certainly better than the Dick Cheney 3-point bounce. I'm expecting kind of a mid- single-digit, maybe high-single-digit bounce.

And last but not least, on foreign policy, I actually think Republicans may be in for a little bit of a surprise here. A lot has been said about John Edwards' lack of experience. But don't forget, this is a guy who has made north of $36 million as a trial attorney, a guy who has been on the Senate Intelligence Committee for four years.

And while he certainly doesn't have the resume that Dick Cheney has, to underestimate his ability to debate on foreign policy issues I think would be a real mistake, particularly as you add foreign policy issues that have maybe a domestic spin to them.

For example, the need for more troops, the cost of the entire war effort and whether or not we told the truth. So I think all of those will be real issues.

O'BRIEN: Well, he clearly has some communication skills, definitely. Let's talk about that Senate Intelligence Committee report. The president so far calling it useful. Nevertheless, could be a political hot potato depending on how it is handled. How do you think the Bush White House will deal with it?

WATSON: Well, they're doing the best they can. And you saw the president speak to it in Pennsylvania. But I'm starting to get a little deja vu going back to 1992.

You recall, Miles, that during President Bush's father's campaign, he argues that in many ways he was sunk by negative reports, in this case a report from then special prosecutor Lawrence Walsh who wrote about the Iran-Contra affair five or six days before the election.

And once again, every time President Bush gets ready to put forth his message, whether it's on community colleges, health savings accounts or the economy generally, it seems like it gets stamped out by another negative report or hearing.

This is a tough place to be. And the last thing they want to see is this last all the way up until late August, until they finally get a chance to speak at the Republican Convention.

O'BRIEN: All right. Final thought here. Ralph Nader just keeps going, runs better than an old Corvair I guess. I'm curious what you think about that and whether he really will he play the spoiler?

WATSON: I'm going to give you a strange one and you're going to hear it here first, Miles. In a strange way I think he's rallying the Democratic base more and more. John Kerry is able to point to him and say that we need to raise more money and be more together. So stay tuned on that story. He may not hurt Democrats as much as they expect.

O'BRIEN: All right. A little revisionist history in the making. All right. Carlos Watson, that's your "Inside Edge." You have a good weekend.

WATSON: Hey, great to see you. Have a good one.

O'BRIEN: All right. Take care. Were they soldiers of fortune accused of holding prisoners at a house? Three Americans now held in Afghanistan. Details of their stories ahead.

Profanity and politics. Why a star-studded Democratic fund- raiser raised a few eyebrows.

Plus this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I don't know what it is to have money. So I don't know what I'd change. I hope I stay the same.

(END VIDEO CLIP)

O'BRIEN: We hope so, too, Gerry. Meet America's newest multi- millionaire.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back.

It is a story of alleged desertion, kidnapping and reunion. We'll explain why it is only a temporary fix for this couple whose marriage is caught in a diplomatic web.

But, first, a quick check of the stories now in the news.

The deputy director of the CIA says, we get it. The spy agency held a rare news conference just a few hours ago to respond to a harsh criticism in a Senate Intelligence Committee report. It cites numerous failures in intelligence leading up to the war in Iraq.

A mistrial for the son of Adelphia Cable's founder. A New York jury deadlocked on 17 charges against former operations chief Michael Rigas. Prosecutors indicated they will seek a retrial. Yesterday, Rigas' father and brother were convicted of stealing millions from Adelphia, one of the nation's largest cable operators.

Just a few hours ago, Colombian police announced that one of that country's top country's drug lords has been arrested. They say Luis Hernando Gomez Bustamante was nabbed in Cuba. He is accused of smuggling tons of cocaine into the U.S. and could be extradited here as soon as this weekend.

Keeping you informed, CNN, the most trusted name in news.

Three Americans are being held by Afghan authorities. The men are suspected of being freelance soldiers in the war on terror. The problem is, they're not soldiers at all.

CNN's Brian Todd is in Washington. He has the story -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Miles, this is a tangled story that we're still getting information on. It came to light in the streets of Kabul just a few days ago.

(BEGIN VIDEOTAPE)

TODD (voice-over): At a house in Kabul, three American citizens accused of running a private prison, part of an alleged freelance operation outside any U.S. or Afghan official control. These pictures from the Associated Press of what it says is the house.

CNN terrorism analyst Peter Bergen spoke with an Afghan Interior Ministry official, who said the American citizens were detaining men with long beards who they suspected, based on their appearance, to be members of al Qaeda. Associated Press spoke with Afghanistan's interior minister.

ALI AHMAD JALALI, AFGHAN INTERIOR MINISTER (through translator): They arrested illegally eight people and some were in Kabul. And they put them in prison.

TODD: Peter Bergen spoke to us from Kabul and relayed what Afghan officials told him about how the prisoners were allegedly treated.

PETER BERGEN, CNN TERRORISM ANALYST: I talked to two separate Afghan officials, one of whom talked about some beatings that were administered in this private prison by these Americans. Another one talked about how these prisoners were hung from a ceiling.

TODD: The house was raided late Sunday night, according to an Afghan official, who says the three Americans are being detained and interrogated by Afghan intelligence. The State Department confirmed the identities of two of the Americans, with an important caveat.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: Let me make clear, first of all, the U.S. government does not employ or sponsor these men. Two of the men have signed Privacy Act waivers, Mr. Jonathan Idema and Brent Bennett. The third has not signed a Privacy Act waiver, so I can't give you more information.

TODD: An Afghan official tells Peter Bergen says Jonathan Idema also never worked for the Afghan government or the Northern Alliance. According to an official, Idema and his colleagues told Afghan authorities they were operating the prison because they wanted to take part in the war on terror.

We spoke to Jonathan Idema's attorney, John Tiffany, who says the allegations are ridiculous. Tiffany also spoke on camera to a CNN affiliate.

JOHN TIFFANY, ATTORNEY FOR JONATHAN IDEMA: What I want people to realize and recognize is that this is not a guy that's out there running roughshod over the country, getting in the way of the military.

TODD: Tiffany told us he believes the FBI is behind Idema's detention. He says the FBI has a vendetta against Idema going back years and -- quote -- "The FBI wants to nail Jack up on a cross."

An FBI official told us, the bureau cannot comment on those allegations at this time. We asked CNN military intelligence analyst Ken Robinson how pervasive freelancers are in the war on terror.

KEN ROBINSON, CNN NATIONAL SECURITY ANALYST: We have seen in Afghanistan, in Iraq and other places many people who did not get picked up to be contractors showing up on the battlefield and offering their services.

(END VIDEOTAPE)

TODD: Peter Bergen tells us it is not clear what the three Americans are being charged with or if they'll be charged at all. An official in Kabul says the eight prisoners who were rounded up by the Americans are being debriefed by Afghan intelligence and that that agency is also looking for several locals who were allegedly helping the Americans -- Miles.

O'BRIEN: Brian, it seems the motivation a bit mysterious here. Are they bounty hunters, or is there some other motivation?

TODD: Well, I spoke with to Jonathan Idema's attorney again just a few moments ago. John Tiffany is his name. He tells me that this client was really there only motivated by doing something worthwhile in the war on terror, contributing to the American cause. He says his client is a former member of the special forces, specifically a Green Beret.

CNN cannot confirm that at this time. But he says his client did try to reenlist with the military a couple of years ago.

O'BRIEN: Brian Todd in Washington, thanks much.

In some places, it is a towering concrete wall. In others, it is a fence or a ditch. Israel says its West Bank barrier has virtually stopped the suicide bombings which have taken hundreds of lives, but it has also kept Palestinians from their homes, schools and land. And the U.N.'s highest court today said the barrier should come down.

CNN's John Vause has the story from Jerusalem.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT: This is a powerful moral victory for the Palestinians. Not only did the court say the barrier must be torn down, but it also said that Israel must pay compensation to Palestinians who have suffered property damage and whose land was confiscated.

The court rejected the Israeli argument that the barrier was only a means of self-defense, saying that because Israel exercises control in the West Bank, it must find other ways which do not violate international law to stop the Palestinian militants. It was also critical of the route, saying the chosen path was not necessarily for security.

From the very beginning, the Israelis refused to recognize the court's jurisdiction. They boycotted the three days of hearings back in February and now they have no intention of abiding by the court's findings. In this case, the International Court of Justice issued a nonbinding advisory opinion only, one which will now go to the U.N. Security Council to decide how best to make Israel comply.

John Vause, CNN, Jerusalem.

(END VIDEOTAPE) O'BRIEN: Well, he says it was just playful teasing. But critics say it was just plain tasteless. Hear what the former L.A. Mayor Richard Riordan said to a little girl that has so many so angry.

Plus, some celebrities helped raise a lot of cash for John Kerry last night. But they also raised a lot of eyebrows among Republicans. Did some of the stars go too far?

And later, a Cold War romance. They fell in love after a kidnapping and a defection, now an emotional reunion.

(COMMERCIAL BREAK)

O'BRIEN: Some Republicans are furious about last night's Kerry campaign fund-raising concert in New York. They call the concert a star-studded hate fest.

(BEGIN VIDEOTAPE)

CHEVY CHASE, COMEDIAN: I don't trust him. I don't like him. And I think he's venal.

O'BRIEN: (voice-over): That's what comedian Chevy Chase said to reporters about President Bush after a fund-raising concert for the campaign. Performing at the concert, Chase went further saying -- and we quote -- "This guy's as bright as an egg timer."

John Mellencamp sang a song that referred to the president as a cheap thug. Paul Newman labeled the administration's tax cuts borderline criminal and added, "There is serious and dangerous stuff out there and something has got to change." Actress Jessica Lange asked the audience -- quote -- "Are we going to continue to follow a self-serving regime of deceit, hypocrisy and belligerence?"

JESSICA LANGE, ACTRESS: We are in desperate need of new leadership.

O'BRIEN: There was comedian Whoopi Goldberg, who made some jokes about the president's surname we can't repeat here. The concert at New York's Radio City Music Hall raised $7.5 million for the Kerry campaign and the Democratic National Committee.

But it also raised the ire of Republicans. Bush campaign manager Ken Mehlman called the event of a star-studded hate fest. Terry Holt with the Bush-Cheney campaign added this.

TERRY HOLT, BUSH CAMPAIGN SPOKESMAN: Well, after all of the disgusting and bizarre things that were said last night at New York's fund-raiser, John Kerry said that that group embraced his values, that they were American values. Well, I'm here to tell you that the liberal cultural elite that attended that multimillion-dollar fund- raiser last night does not share the values of most Americans.

O'BRIEN: The Kerry campaign says John Kerry did not approve some of the remarks made at the concert. Said campaign manager Mary Beth Cahill: "The performers last night speak for themselves. And John Kerry and John Edwards have made it very clear over the last week of what they think American values are and what they're going to be fighting for in this general election campaign."

(END VIDEOTAPE)

O'BRIEN: Here to talk about the race for the White House and more is former presidential adviser David Gergen, now editor at large of "U.S. News & World Report." He joins us from Boston.

Mr. Gergen, good to see you again, sir.

DAVID GERGEN, HARVARD UNIVERSITY: It's good to see you.

O'BRIEN: All right, let's talk about that.

Of course, the fact that none of this was captured on videotape is probably pretty significant. We should talk about that. But just based on what you heard there, did those folks go over the line? And, perhaps more importantly, did the candidate make a mistake by sitting through it all?

GERGEN: I think that Whoopi Goldberg definitely went over the line. And some of them obviously came up close or went over it, barely over. But I think she clearly did.

You know, scatological humor in a presidential campaign and particularly by going after the other -- President Bush, I think is way over the line. And, yes, I think that John Kerry should have distanced himself more quickly and more forcefully than he did.

But I have to tell you, we're -- and I think the Democrats are darn lucky it was not recorded, because they would be playing it over and over and over again, well, pieces of it. They couldn't even put some of it on the air. But the truth is that Dick Cheney is also very lucky that he was not recorded in what he told Pat Leahy, Senator Leahy, on the floor of the Senate.

That had a -- it was very personal, very strong. And we all know what he said, but it wasn't printed in most newspapers because it was not printable. And he said, afterwards, of course he felt better for it. I don't think John Kerry ought to say he feels better for Whoopi Goldberg. I think both sides will be, hey, look, we need to get the whole quality of this debate up. This has all drifted downhill pretty fast.

O'BRIEN: Well, yes, awfully early on, I guess you could say.

But to the extent that this kind of gets into a whole discussion about values, does this -- do you get the sense that this is going to be a core of these campaigns?

GERGEN: Well, there's no question that the Republicans have in the past won very strongly and been very effective at this, going back all the way to Ronald Reagan and before, in invoking values, and because so many people who are in the lower class, in fact, are not doing all that well economically resonate with the values argument and these more traditional values, especially people in the rural communities that will be so heavily fought over this year.

And I think that Bill Clinton understood that the Democrats have got to get back into the values game. He started talking about that. Now John Kerry and John Edwards are embracing it full-time. And what's that all about? It is the fact that there are people in this country who have decided that maybe the president isn't responsible for the economy and whether they have a job or don't have a job, their income is going up or going down.

But they do want somebody in that office with whom they can associate through their value structure, whether it is a matter of patriotism or religion or social values. We all know that people who go to church regularly, people who own guns tend to vote very heavily Republican. People who are more secular, people that don't own guns tend to be very heavily for Democrats.

Women who are married tend to vote for a Republican presidential. Women who are unmarried tend to vote Democratic.

O'BRIEN: But, David, when there is an utterance, whether it's recorded or not, by a candidate which kind of runs afoul of those stated goals, what's the advice a person like you gives a candidate? How do you get out of a situation like that?

(CROSSTALK)

GERGEN: The advice is, shut up. Don't go there.

(CROSSTALK)

GERGEN: Because once you start launching a values conversation and then you engage in sort of crudity and sort of barbarous language, it sounds like very hypocritical. It sounds like, well, you know, on one hand, you're going to tell us one thing in public, but in private, you have got a very different value system. And I think that both sides would be well advised to cool it.

O'BRIEN: And a final thought here, because we've certainly seen this throughout the history of political campaigning in this country. Do Americans kind of forgive and forget these gaffes generally?

GERGEN: They tend to forgive and forget. But it affects the way they think about people.

I will tell you something. Ronald Reagan was the first person out very strongly in this value stuff. It is unimaginable, unimaginable, that Reagan would engage some of in this kind of language or be at an event where these kind of things were said.

I'll tell you something. Harry Truman would have gotten up and walked out on some of this stuff, would think it's beneath the dignity of the office. And that's why I think both sides need to pay attention. If they really care about the values, then they should care about the respect people have for those who sit in the Oval Office and for people who are positions of high power. You can't have it both ways in this game. O'BRIEN: It's hard to walk out on $7.5 million, I suppose.

GERGEN: It is. Harry Truman would have done that.

O'BRIEN: Well, David Gergen, thank you very much. Appreciate your time.

GERGEN: Thank you.

O'BRIEN: Controversy in California over a remark Former Los Angeles Mayor Richard Riordan made to a 6-year-old girl. Riordan, who is now the state education secretary, was visiting a library in Santa Barbara last week when the exchange occurred.

Now, the girl, named Isis, asked Riordan if he knew what her name means.

(BEGIN VIDEO CLIP)

RICHARD RIORDAN, FORMER LOS ANGELES MAYOR: Erica?

UNIDENTIFIED FEMALE: No, Isis. Did you know my name actually means an Egyptian goddess?

RIORDAN: It means -- it means stupid dirty girl.

UNIDENTIFIED FEMALE: No.

(END VIDEO CLIP)

O'BRIEN: Well, the California State Conference of the NAACP is calling for Riordan to be removed from office, saying -- and we -- quote -- "It is abusive to use such language toward a child, regardless of the gender, race, socioeconomic background or national heritage. To say that he was only kidding or joking suggests that Mr. Riordan knows nothing about children and has even less respect for them."

But Governor Arnold Schwarzenegger, who made Riordan his first Cabinet appointment, stands by him, saying: "Secretary Riordan's comments were unacceptable in any context. I am satisfied that his apology is sincere. And I know he deeply regrets having made these unfortunate remarks."

Our call to Riordan's office was not returned.

It was a very unusual reunion in Indonesia today. The husband is American. The wife is Japanese. They last saw each other in North Korea. We'll tell you about it just ahead.

(COMMERCIAL BREAK)

O'BRIEN: Here is an unusual story out of Indonesia. It involves love, Cold War politics, a reunion and an uncertain future.

We get the story from CNN Jakarta bureau chief Maria Ressa. (BEGIN VIDEOTAPE)

MARIA RESSA, CNN JAKARTA BUREAU CHIEF (voice-over): In the most unlikely of places, they meet again, a Japanese woman and an American man who met and fell in love in North Korea.

Hitomi Soga was kidnapped by North Korean agents in 1978; 24 years later, she returned to her homeland after North Korea finally admitted it had systemically kidnapped Japanese nationals for its espionage program. Her husband and two daughters stayed behind, for good reason.

American Charles Robert Jenkins is wanted by U.S. authorities, accused of deserting his Army unit in 1965 and defecting to North Korea.

LAWRENCE DI RITA, PRINCIPAL DEPUTY ASSISTANT SECRETARY OF DEFENSE FOR PUBLIC AFFAIRS: Our long-standing view had been that he was a -- he was alleged to have violated the Uniform Code of Military Justice and it was our view that he should be brought to justice.

RESSA: Because it has no extradition treaty with the U.S., Indonesia is hosting the family reunion. Soga arrived from Japan on Thursday. Early Friday, Jenkins and his daughters boarded a Japanese charter plane from North Korea. This is the first time he has set foot outside the reclusive kingdom in nearly 40 years.

The question now is, how long can they stay together?

HASSAN WIRAJUDA, INDONESIAN FOREIGN MINISTER: They are allowed to stay one month. Of course, we'll be flexible if the family needs more time to stay longer in Indonesia.

RESSA: Soga says she wants to convince her husband to return to Japan.

(on camera): Jenkins must decide if he will do as his wife wishes and risk possible arrest. For now, Indonesia offers a neutral sanctuary, giving this family a chance to plot a happy ending.

Maria Ressa, CNN, Jakarta.

(END VIDEOTAPE)

O'BRIEN: Just ahead on WOLF BLITZER REPORTS:

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I just said, oh, God, let it be, let it be.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

O'BRIEN: Yes, she has 294 million reasons to be happy.

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

(BEGIN VIDEOTAPE)

O'BRIEN (voice-over): National Security Adviser Condoleezza Rice used a visit to South Korea to offer an incentive to North Korea. Rice said, if the North would only agree to drop its atomic weapons program, it could reap, in her words, surprise rewards.

China floods. Floods and mudslides are blamed for at least 17 deaths in southwest China and almost 4,000 people have been evacuated. This year, floods across China have affected about 33 million people.

Gore. Four people, including two Americans, were gored in today's running of the bulls in Pamplona, Spain. This was day three of the dangerous but popular annual event, but the first day marred by serious injuries. Witnesses say the bulls were running faster today and the course was more crowded.

Greece fire. After traveling through 26 countries, the Olympic flame has returned to Greece, the home of this year's Summer Games. It will arrive at the Olympic Stadium in Athens for the beginning of the Games August 13.

And that is our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

O'BRIEN: Web question of the day, here's how you're weighing in on it. Does the Senate report on prewar intelligence change your opinion of the war in Iraq? That's the question; 20 percent say of you yes; 80 percent say no. This is not a scientific poll.

Our picture of the day is an image of victory. A retired custodian from Lowell, Massachusetts, today claimed a $294 million Mega Millions jackpot. It's the second largest lottery jackpot ever to go to a single individual, in North America, that is.

Here she is.

(BEGIN VIDEO CLIP)

GERALDINE WILLIAMS, LOTTERY WINNER: I just looked -- stared at the TV and I said, oh, God. Oh, God.

I'm holding the ticket and I'm like -- I'm reading the numbers to him, but he -- he was in disbelief, too, because he says, are you sure it's the right date? Are you sure? Like we don't believe each other anyway.

I did go to the mall yesterday and tried to pick up some clothes to wear, but nothing -- I was just so nervous I didn't really enjoy shopping even yesterday.

I was a janitor at U Lowell. And I was not really in charge of two buildings, but they -- at times I had three building to do. I was at south, south campus.

I don't know. I don't know what it is to have money. So I don't know what I'd change. I hope I stay the same.

(END VIDEOTAPE)

O'BRIEN: We hope so, too.

Thanks for joining us. Wolf returns for Sunday's "LATE EDITION." He'll speak with Lynne Cheney.

"LOU DOBBS TONIGHT" starts right now.

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