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CNN Wolf Blitzer Reports

Repblicans Ready to Support Deal on 9/11 Intelligence Reform Bill; Are Terrorists Getting Ready to Attack U.S. Food Supply?

Aired December 06, 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.


WOLF BLITZER, HOST: Happening right now in just the last few minutes, as seen live here on CNN, reluctant Republicans have come forward to announce they're ready to support a deal on the 9/11 intelligence reform bill. A plan to overhaul the nation's intelligence community finally looks like it's in motion. Stand by for hard news on WOLF BLITZER REPORTS.
(BEGIN VIDEOTAPE)

(voice-over): Americans attacked.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Terrorists are still on the move.

BLITZER: Is al Qaeda behind the siege in Saudi Arabia?

Target election.

UNIDENTIFIED MALE: Right now we're faced with the armies of darkness.

BLITZER: The insurgents take a heavy toll. But Iraqi leaders vow the vote will take place.

Friendly fire. He gave up football to fight for his country. Now new questions about the death of Pat Tillman.

Food fears. A retirement brings a dire warning. Are terrorists eying what America eats?

ANNOUNCER: This is WOLF BLITZER REPORTS for Monday, December 6, 2004.

(END VIDEOTAPE)

(on camera): With a little arm-twisting, a little hand-holding, and some creative language, congressional negotiators have reached a compromise on the bill to rebuild America's intelligence agencies. That ends a holdout by key House Republicans and clears the way for reforms sought by the 9/11 commission. Let's go straight to our congressional correspondent, Ed Henry -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good evening, Wolf. More than three years after the 9/11 terrorist attacks, Congress has finally forged a tentative deal on a major reform bill that will restructure the nation's intelligence community, the most radical restructuring in over 40 years. A House vote is expected now as early as Tuesday morning. A Senate vote probably happening on Wednesday. Central to this agreement is creation of a new director of national intelligence, a quarterback, if you will, to oversee the nation's 15 spy agencies. The 9/11 commission had said that this quarterback is central, an essential part of trying to prevent another terror attack on U.S. soil. This deal was reached in part because it got a major shot in the arm.

Just moments ago, as you mentioned, live on CNN, as we saw House armed services chairman Duncan Hunter and Senate armed services chairman John Warner come forward and say they are now endorsing this new language that was crafted late last night at the White House. We understand the language put together by Senator Susan Collins and Joe Lieberman, language clarifying that the military's chain of command will not be broken, will not be usurped by this new director of national intelligence. Now, this legislation also got an even bigger shot in the arm perhaps from the president of the United States himself. He was working all weekend on this. And this morning again he prodded Congress to act.

(BEGIN VIDEO CLIP)

BUSH: It is a good piece of legislation. It is a necessary piece of legislation. It's a piece of legislation that is important for the security of our country.

(END VIDEO CLIP)

HENRY: Now, this comes after a bit of a Republican family feud. In addition to the fact that Duncan Hunter was holding out to clarify this language on the chain of command, also Republican Congressman James Sensenbrenner has been holding out. He has refused to sign off on this conference report for weeks now because he wants tough immigration provisions added to the legislation. At this point Republicans and Democrats involved in the talks suggesting that James Sensenbrenner will be left out in the cold for now. Instead, he will just get an agreement very likely to come back in January or February and vote on those immigration provisions. But they will not be included in this deal -- Wolf.

BLITZER: Ed Henry reporting for us from Capitol Hill. Ed, thanks very much. So what does the bill boil down to in a nutshell? Most importantly, it provides for a new director of national intelligence who will oversee more than a dozen separate spy agencies along with their budgets. The bill also would boost the ability to arrest those who aid or train terrorists. Much more coming up on this story throughout this hour, indeed throughout the night here on CNN.

The attack was bold and brazen. A group of gunmen stormed the United States consulate in Jeddah, Saudi Arabia earlier today, sparking a bloody shootout with security forces. Five non-American staffers were killed. The incident drew a quick response from President Bush.

(BEGIN VIDEO CLIP) BUSH: The attacks in Saudi Arabia remind us that the terrorists are still on the move. They're interested in affecting the will of free countries. They want us to leave Saudi Arabia. They want us to leave Iraq. They want us to grow timid and weary in the face of their willingness to kill randomly and kill innocent people.

(END VIDEO CLIP)

BLITZER: CNN's Diana Muriel has more on this story. She's reporting from London.

(BEGIN VIDEOTAPE)

DIANA MURIEL, CNN CORRESPONDENT (voice-over): Smoke curls above the U.S. consulate in the Saudi port city of Jeddah Monday. According to Saudi officials, Islamic militants first attacked the heavily guarded mission with explosives, then shot their way through a side entrance in an attempt to gain control of the diplomatic compound. Saudi officials say the ensuing gun battle with Saudi security forces left three of the attackers dead and two others injured in the fighting in Saudi custody. U.S. diplomatic sources say no Americans were killed or injured and that all consulate staff were able to reach secure locations at the compound.

The building, like all U.S. diplomatic property, has been heavily fortified and guarded since a series of attacks on compounds housing non-Saudi nationals, which began last year. Last May 22 people were killed, including 19 Westerners, by al Qaeda militants who took over a resort complex in the eastern city of Khobar. The Riyadh government has pledged to crack down on Islamic militants, arresting what it says were scores of suspects linked to al Qaeda in recent months. But security experts warn big gaps remain in the country's ability to control the problem.

WILL GEDDES, ICP GROUP INTERNATIONAL: This type of threat, particularly against somewhere like the U.S. consulate, which will be held and is held within the diplomatic sort of environs, which is better secured than probably anywhere else, shows indicative problems with the intelligence gathering of the Saudis insomuch as being able to determine where these cells are operating.

MURIEL: Around 170 people, including militants and security forces as well as Westerners have been killed in attacks and clashes since the first suicide bombings began in Riyadh 18 months ago. Diana Muriel, CNN, London.

(END VIDEOTAPE)

BLITZER: And later this hour I'll speak with Prince Turki, the Saudi ambassador to the United Kingdom, the former Saudi intelligence chief. We'll get his views on what happened at the U.S. consulate in Jeddah. More on that coming up later this hour.

Meanwhile, President Bush today vowed to stand firm against violence and to keep moving toward democracy and peace in the Middle East. Those promises coming during some high-profile meetings. For that we turn to our White House correspondent Dana Bash -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, the president started the day with a meeting with the Iraqi interim president, Ghazi al-Yawar. And he is somebody who Mr. Bush praised for his leadership but also said is somebody who is very important to listen to around the world because he, like President Bush, believes that the elections scheduled in Iraq for January 30 should go on as scheduled, despite the increasing violence, despite some doubts from some even politicians in Iraq about that. Mr. Bush even linked what happened in Saudi Arabia to the elections, saying that terrorists are trying to kick the U.S. out essentially in both places, stop democracy, and that that won't happen.

(BEGIN VIDEO CLIP)

BUSH: I assured the president that my comments about the need to have elections was real and genuine. I believe it's necessary for the Iraqi people to vote on January the 30th because it provides a opportunity for people to participate in democracy.

UNIDENTIFIED MALE: We are faced with the armies of darkness, who are -- who has no objective but to undermine the political process and incite civil war in Iraq. But I want to assure the whole world that this will never, ever happen.

(END VIDEO CLIP)

BASH: Now, there you heard the Iraqi interim president talking about the armies of darkness, insisting that the violence that you see are not necessarily from Sunnis. He is a member -- he is a Sunni. And this meeting was symbolic also because of that, because there is concern among the Sunnis that they won't have the kind of power that they wanted, certainly that they had under Saddam Hussein. And that is something that they wanted to achieve here. There you see a second important meeting that the president had today. That was with Iraq's neighbor, a leader from Iraq's neighboring country, Jordan's King Abdullah. They also talked about the importance of moving forward with the Iraqi elections on time and also, as you can imagine, Wolf, talked about the Mideast peace process and eventually getting that back on track.

BLITZER: And President Bush making a major commitment to stand firm and to use a lot of his efforts to try to revitalize Israeli/Palestinian peace process over the next four years. Dana Bash, thanks very much for that report.

And to our viewers, you'll hear directly from both of these key Middle East leaders when I interview Jordan's King Abdullah tomorrow during this hour and the Iraqi interim President Ghazi Al-Yawar on Wednesday. King Abdullah tomorrow, Ghazi Al-Yawar on Wednesday.

Iraq's insurgents are waging an all-out assault aimed at sabotaging the country's January elections. The immediate result -- scores of dead in the past few days alone. CNN's Karl Penhaul reports from Baghdad.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT (voice-over): In a string of insurgent attacks over the weekend, at least 50 people were killed and more than 100 others wounded. Among the dead, U.S. servicemen. But the bulk of the dead were Iraqi security force members and also Iraqi civilians. One of the first main attacks took place Saturday in the heart of Baghdad. A car bomb exploded outside a police station close to the Green Zone. On Sunday there was a drive-by shooting in the city of Tikrit in which 17 Iraqi civilian contractors were killed by insurgents as they went to work.

All of this, of course, is adding fuel to the debate as to whether it's safe enough to hold Iraq's elections on January the 30th as scheduled. Lakhdar Brahimi, U.N. special envoy to Iraq, has said in recent days that he believes it's too violent and the elections can't possibly be held in the current climate. However, on a visit to Washington, Iraq's president, Ghazi Al-Yawar says that he believes and trusts that Iraq's elections will go ahead on January the 30th as planned.

However, we've talked to a constitutional lawyer. He believes that the debate, rather than being a political debate, is more of a legal debate. He says looking at Iraq's transitional administrative law, that's the interim constitution for Iraq, that he says that there's no legal basis for postponement of elections beyond January 31. After that date he believes there's a huge legal vacuum that could call into question the very legality of Iraq's interim government. Karl Penhaul, CNN, Baghdad.

(END VIDEOTAPE)

BLITZER: There are fresh terror concerns also in Spain, where seven bombs exploded in seven cities across the country this morning, minutes after telephoned warnings from the Basque separatist group ETA. Five people, including a child, were slightly injured. The blast follows similar attacks Friday at five gas stations in Madrid. Both the United States and the European Union consider ETA a terrorist group. It's blamed for more than 800 deaths since 1968.

Just back from Iraq, I'll talk to Senator Chuck Hagel about ongoing violence there and the upcoming elections.

Also, why the Pentagon has quietly reopened the investigation into that friendly fire death of former football pro Pat Tillman.

Plus this...

(BEGIN VIDEO CLIP)

TOMMY THOMPSON, HEALTH & HUMAN SERVICES SECRETARY: I cannot understand why the terrorists have not, you know, attacked our food supply because it is so easy to do.

(END VIDEO CLIP)

BLITZER: The health secretary sounding the alarm. So what is being done to keep all of our food supply safe?

And look at this. Dozens of homes burned outside Washington, D.C. Is terrorism, yes, is terrorism to blame? Brian Todd standing by. We'll have a closer look.

(COMMERCIAL BREAK)

BLITZER: There are new and disturbing questions about the April death of Army Corporal Pat Tillman the former NFL star who enlisted in the wake of September 11. We knew he was killed by friendly fire in Afghanistan, but now the U.S. army has reopened its investigation. Our senior Pentagon correspondent Jamie McIntyre joining us live with details -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Wolf, what Tillman's family want to know along with Senator John McCain is whether the army intentionally exaggerated Tillman's actions on the battlefield or whether it also exaggerated the mistakes that led to his death.

(BEGIN VIDEOTAPE)

(voice-over): At a memorial service in May, Army Ranger Corporal Pat Tillman, the man who turned down a $3.6 million pro football deal to serve his country after September 11, was praised for his courage and sacrifice.

UNIDENTIFIED MALE: While many of us may be blessed to live a longer life than he did, few of us will ever live a better one.

MCINTYRE: The 27-year-old former defensive back for the Arizona Cardinals was said by the army to have died in a firefight with Taliban forces in Afghanistan. It wasn't until weeks later an army general at Fort Bragg who took no questions read a statement revealing Tillman was shot by accident by his fellow rangers.

LT. GEN. PHILIP KENSINGER, U.S. ARMY: The investigation results indicate that Corporal Tillman probably died as a result of friendly fire while his unit was engaged in combat with enemy forces.

MCINTYRE: Now it's not clear there were ever Taliban fighters in the rugged Afghan region where two groups of U.S. soldiers end up mistakenly shooting at each other. A "Washington Post" investigation, which revealed dozens of witness statements, e-mails, investigation findings, log books, maps, and photographs concludes Tillman died unnecessarily after botched communications, a mistaken decision to split his platoon over the objections of its leader, and negligent shooting by pumped-up young rangers.

STEVE COLE, "THE WASHINGTON POST": They poured so much fire on the positions they thought were enemies that they essentially were indiscriminate in the judgment of the army's own investigators.

MCINTYRE: In October, well before the "Washington Post" account, Senator McCain sent a letter to the then acting army secretary pressing for answers. McCain passed along four pages of questions posed by Tillman's mother, Mary. Among them, why did it take five weeks to tell us that Pat was killed by friendly fire when it was obvious right away? Why was Pat's death so embellished by the military? And why did the military lie to the media and to us about the friendly fire?

The army insists there were enemy forces at the scene, which entitled Tillman to the silver star he was awarded posthumously.

(END VIDEOTAPE)

(on camera): The army has reprimanded three soldiers in the incident, including two officers. Four others who were in Tillman's unit have been transferred out of the elite ranger unit but are still in the army -- Wolf.

BLITZER: What a heartbreaking story indeed, all around. Jamie McIntyre at the Pentagon. Thank you very much.

The reality of Iraq. I'll talk to Senator Chuck Hagel. He's just back from a fact-finding mission, a very dangerous fact-finding mission, to Iraq. The surging violence there, the upcoming election. We'll speak about that and more.

Also, a bold attack on an American consulate in Saudi Arabia. We'll put our questions to the country's former intelligence chief. Prince Turki. He's in London. He'll join us.

And is terrorism to blame for a string of fires near the nation's capital? New information about a massive arson rampage. That's coming up as well.

(COMMERCIAL BREAK)

BLITZER: As Iraq's scheduled January elections get closer, violence again appears to be on the upswing. Four members of the United States Senate visited Iraq last week, including Chuck Hagel of Nebraska. I spoke with him just a short time ago.

(BEGIN VIDEOTAPE)

BLITZER: Senator Hagel, welcome back to the United States. Never easy going to Iraq. You've been there, what, four times?

SEN. CHUCK HAGEL (R), NEBRASKA: Been there four times. This is my fourth trip.

BLITZER: And compare the level of fear, danger on the ground, hostility, if you will, to Americans then versus now.

HAGEL: Well, I think it is really a matter of certain areas of Iraq where we've seen deterioration in the security. There are 18 provinces in Iraq. 14 of those 18 are generally in pretty good shape. The four that are not, of course represent big bulks of the population, the Baghdad area, the Sunni triangle. And I think those areas actually have deteriorated in security. There are some successes. But it's, I think, too early to tell how this all unfolds. And that's why these elections, I believe, are going to be absolutely critical, probably the most important milestone along the way to a free, democratic, independent Iraq.

BLITZER: And they have to go forward January 30, the president says, otherwise it would send the wrong message. Do you agree with him on that?

HAGEL: Well, I do. We met with the interim Iraqi president. And we spent some time with him and other Iraqi leaders, and they strongly feel that if you poll those data or if you change these, it, first of all, represents a victory for the insurgents. These are going to be imperfect elections. And we have to be careful that we don't strangle the possible success of these elections by holding them to too high a standard. If they can be reasonably legitimate, meaning most of the Iraqis participating, then I think you can have a legitimate result. But to pull them down, I don't see what you gain by that.

BLITZER: Is the security situation in these four provinces where it's really a mess getting increasingly worse? And if it is, which I believe you probably think it is, does the United States have enough troops on the ground to get the job done?

HAGEL: Well, as you know, we are going to increase our troop strength by about 12,000 to 13,000 here over the next few months. I think we need to. Some of us have felt that we didn't have enough troops going in. I think part of the problem that we are facing today in Iraq, we have been over the last 18 months, is a result of not having enough force structure in there initially. But we are where we are. The key here in my opinion, Wolf, is getting the Iraqi army and police trained up quick enough and in big enough numbers that they can eventually start taking over some of the security of that country. That's also I think the bottom line to ultimate objectives and the success of Iraq.

BLITZER: This should be what the Iraqis are doing, not what the United States or the other allies are doing. The Iraqis have to take charge.

HAGEL: Well, the Iraqis do. The outcome in Iraq is going to be decided by the Iraqis, not the United States. There's some good news here. We have been able to train up a lot of the Iraqis. Some have not worked out. Some have. I don't think we're probably doing it fast enough and with as many. We were in Egypt during our trip, had breakfast with President Mubarak yesterday, and he said, you know, I could be taking a lot more Iraqis here, training them in Egypt.

It's complicated. We made a fundamental error when we stood down the entire Iraqi army, and we've been paying a high price ever since. And we're having to reconstitute a whole new army. But the three basics, I think, the three pillars is what I call them, for success, number one, free, fair elections, training these Iraqis up to handle their own security through their police force, their military, and economic development. If success can be developed and we can make progress next year in those three areas, those three pillars, then I think there's a chance that this can turn out in some way very productive for Iraq.

BLITZER: In a related development, you've met also with Israeli and Palestinian leaders. There are elections scheduled for the Palestinians on January 9. January 30 in Iraq, January 9 for the Palestinians. There's a correlation between these two events in your mind.

HAGEL: There is, Wolf. I think it's historic. It's dramatic. That you have two very important elections, the Palestinian election, the Iraqi election, same month. These elections will very much define the future of the Middle East, the course that the Middle East takes. I think there's some hope here. I think there's some sense of optimism. I sense that in the region. Still very dangerous, still very complicated. We don't know how this is going to turn out. But if in fact the Palestinians can elect a new, responsible leader, a partner for peace, with Prime Minister Sharon, I think that brings us up on some new high ground. Then the United States is really going to have to engage as well as its quartet partners as well as the Arab leadership in the Middle East. The same in Iraq.

If we can see a fairly legitimate election that will elect a legitimate government, the Iraqi people can have a new confidence that they're in charge, that they're governing themselves, and that gives us some new hope. A lot of space in between. But I think there is some reason to believe that we have some unique historic new opportunities.

BLITZER: One final question before I let you go. Talk a little bit, as much as you can, about that flight from Baghdad upon your departure. Here you were with Senator Biden, Senator Chaffee, Senator Feinstein, and you, four important U.S. senators on a, what, a U.S. military C-130?

HAGEL: Yes. I don't know how important the four of us are. But nonetheless, we were flying late at night out of Baghdad, and for security reasons, they take many security precautions and lights out. And Senator Chaffee was up in the cockpit, and the alert went off indicating that a missile or rocket had been fired. And at that point there's a lot of evasive action that goes on, a lot of flares go off, a lot of action. And we didn't see the actual missile, if it was fired. It was indicated it was. But for a few moments there it was a -- it got our attention, Wolf.

BLITZER: You're smiling, you're laughing, but you're a Vietnam vet. I bet everybody in that plane was not laughing and smiling during those few moments when a ground-to-air missile might have been fired at you.

HAGEL: Well, Senator Biden kept talking.

BLITZER: That's typical. We're happy you're back all safe on the ground. Thanks very much.

HAGEL: Thanks, Wolf. Thank you.

(END VIDEOTAPE) BLITZER: Senator Chuck Hagel speaking with me just a little while ago here in Washington.

Gunmen launch a deadly attack on an American consulate. Saudi security troops respond with deadly force. We'll talk about it with the country's former intelligence chief. That's coming up.

Also, what's being done to keep the food all of us eat safe from terrorists? Some say not enough.

And more than 41 homes set ablaze overnight near Washington, D.C. Remarkable pictures. Is terrorism to blame? Stay with us.

(COMMERCIAL BREAK)

BLITZER: CNN security watch, the safety of America's food supply.

Outgoing Health and Human Services Secretary Tommy Thompson raised concern about the issue with a seemingly off-the-cuff comment last week about the ease with which terrorists could target the U.S. food chain.

CNN's Mary Snow is on the security watch. She's joining us live now from New York -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, late last week, Secretary Thompson said he worries every single night about the possibility of a terrorist attack on the food supply.

Today, he was asked about that comment. He tempered his remarks, but says, still, work needs to be done.

(BEGIN VIDEOTAPE)

TOMMY THOMPSON, HEALTH AND HUMAN SERVICES SECRETARY: We've come a long way, but I'm still not satisfied. I still believe we've got a ways to go.

SNOW (voice-over): The question is how much further U.S. officials must go to ensure the safety of the food supply, a provocative question to be raised by the health and human services secretary himself as he prepares to leave office.

THOMPSON: For the life of me, I cannot understand why the terrorists have not, you know, attacked our food supply, because it is so easy to do.

SNOW: Secretary Thompson three days ago cited imports from the Middle East as a potential worry. Today, he wouldn't identify a specific country. Rather, he heralded the FDA's announcement of new rules for record-keeping that the agency says will be crucial to deal effectively with food-related emergencies, such as deliberate contamination of food by terrorists. Inspections, Thompson says, have also increased. THOMPSON: We've gone from 12,000 inspections when I first arrived four years ago to this year. We're going to hit close to 100,000 inspections.

SNOW: But of the food coming into this country, the Center For Science in the Public Interest says only 2 percent is inspected.

UNIDENTIFIED FEMALE: I think Secretary Thompson was sounding an alarm to President Bush that not enough has been done. Secretary Thompson was a strong leader when it came to food safety and improving the safety and inspection of food after the September 11 attacks and the anthrax attacks that followed.

SNOW: And it's been a concern for companies that import food. Major companies were reluctant to talk about food security, but a trade group representing food processors disagrees with Thompson's assessment.

UNIDENTIFIED MALE: The U.S. food system isn't a soft target. Our companies do a tremendous amount of work and have over a period of time.

SNOW: Dole Food says, for example, it accepts raw commodities only from approved sources, among other things. Procter & Gamble says it has strict ingredient and product manufacturing in place. Coca- Cola, which does business in more than 200 countries around the world, says it's essential that security and quality standards be rigorous.

(END VIDEOTAPE)

SNOW: And the FDA's acting commissioner was asked about the threat of a terrorist attack on the food supply, saying it will always be a concern, but he added that he thinks that the FDA has a good handle on the importation of food -- Wolf.

BLITZER: CNN's Mary Snow reporting for us in New York -- Mary, thank you very much.

And CNN's in-depth coverage of your food and your safety continues tonight, 7:00 p.m. Eastern. Anderson Cooper looks at how likely it is for terrorists to poison our food supply. At 8:00, "PAULA ZAHN NOW" looks at some possible bureaucratic roadblocks that may stand in the way of food safety. And at 10:00 p.m. Eastern, Aaron Brown examines how agricultural crop-dusters could be used as a terrorism tool. Stay with CNN as this story continues to unfold.

Our security watch now continues with a look at the government's new state-of-the-art anti-terror center. It's so top secret officials won't even comment on it, but sources tell us it's now open for business.

Our national security correspondent David Ensor joining us with the story -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Wolf, CNN has learned that the National Counterterrorism Center formally opened for business today, though U.S. government spokesmen, as you mentioned, are declining comment.

Congressional and executive branch sources say, though, that the new agency, created under an executive order from President Bush, came into existence in a low-key way at a new state-of-the-art facility in northern Virginia. There's a government released video which we'll have -- there it is -- which shows what the interior of the new center was planned to look like. No cameras have been allowed into the building to date.

But this gives you some idea at least. The agency replaces the CIA's Terrorist Threat Integration Center, TTIC, which was founded after the 9/11 attacks to pull all intelligence the government has on terrorists and put it together into one place so that analysts can connect the dots. Under the intelligence reform package that's likely to be approved this week, later this week on Capitol Hill, this new NCTC would be given additional clout, sources are telling us.

A senior CIA official, John Brennan, who was director of TTIC, has been made acting director of the new agency, according to sources we're speaking to. The new building in northern Virginia -- and that's John Brennan there -- the new building in northern Virginia is not hidden away, but at the request of the CIA, CNN is showing only limited and tighter images of it for security reasons.

The launch of the new counterterrorist Center is a key part of the Bush administration's plans to prevent another 9/11 attack, but it was done without fanfare today, partly, sources say, because officials did not want to take attention away from Capitol Hill and the apparent deal reached there reforming the intelligence community leadership structure -- Wolf.

BLITZER: David Ensor reporting for us, very interesting pictures, certainly. We'll hopefully get a chance to take a look at that a little closer down the road -- David Ensor reporting.

Concern about a different kind of terrorism in suburban Washington, D.C., where dozens of new homes were damaged or destroyed in a fire that officials now suspect may have been the work of ecoterrorists.

CNN's Brian Todd joining us now with more on this -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, we're very early in the investigation still, and officials are being very cautious, but the nature of these fires, the recent history of the development involved, and the fact that federal investigators are on the scene leads officials to at least explore the idea that these fires were not accidental.

(BEGIN VIDEOTAPE)

TODD (voice-over): A smoldering subdivision and serious implications. Fire officials in southern Maryland will not come right out and say this is ecoterrorism, but federal, state, and local investigators are exploring that possibility. Local residents say they believe the fires that torched these homes were organized, and state fire officials tell CNN they've determined arson was the cause of at least four fires in the Hunters Brooke neighborhood early Monday. Officials at the scene say more than 40 homes were damaged and of those at least a dozen destroyed at the new development about 30 miles southeast of Washington, houses valued at between $400,000 and $500,000.

W. FARON TAYLOR, DEPUTY FIRE MARSHAL: Certainly, in my 20 years, this is the first time we have had this many single-family homes under construction on fire.

TODD: No one was hurt, and...

(END VIDEOTAPE)

TODD: No one was hurt in these fires, and most of the homes were not occupied. The construction had been opposed by several environmental groups who say that the construction of this subdivision had threatened a local wetlands area that was endangered.

We spoke to two different groups, the Sierra Club and a local Maryland group, that had opposed the construction of these subdivisions. They condemned this action. They say their groups were not involved in any way. No one has claimed responsibility yet. And sources say there have not been any markings found near the scene that would signify involvement by any groups known to resort to violence for environmental causes -- Wolf.

BLITZER: But a major, though, investigation under way right now right outside of the nation's capital. Brian Todd, thanks very much for that.

Terrorists also targeting Americans inside the kingdom. I'll talk with the former Saudi intelligence chief, Prince Turki al-Faisal, about the attack that occurred earlier today.

And Congress finds common ground. The U.S. is set to get the intelligence reform recommended by the 9/11 Commission. We'll get "The Inside Edge" from our Carlos Watson.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: More now on that bloody attack on the U.S. Consulate earlier today in the Saudi port city of Jeddah.

Earlier, I spoke with the former Saudi intelligence chief, Prince Turki al-Faisal, who's now that nation's ambassador to Britain. He joined me from London.

(BEGIN VIDEOTAPE)

BLITZER: Prince Turki, once again, thanks very much for joining us. What's the latest information you're getting from your government now on this attack at the U.S. Consulate in Jeddah?

PRINCE TURKI AL-FAISAL, SAUDI AMBASSADOR TO BRITAIN: The latest information I have is that eight people were killed, five of them employees of the consulate and three of the terrorists.

And there were -- my information was that there were two wounded officers, one slightly more difficult a wound than the other. This is as far as casualties is concerned. The other one is that the -- and this is -- I know there is a lot of confusion now as to whether there was penetration of the consulate or not.

You have to remember, Wolf, that the consulate in Jeddah is a compound with not only a wall around the compound, but another security wall outside the wall surrounding the compound. And what these people did is that they blew themselves into the first barrier wall outside the compound. And as they were entered -- or tried to enter the compound itself, that's where they were engaged by Saudi security forces.

And the three of them were killed. And, unfortunately, five of the employees of the consulate were killed as well.

BLITZER: Prince Turki, who did this?

(CROSSTALK)

AL-FAISAL: But these people never actually penetrated into...

BLITZER: Who are these people who did this?

AL-FAISAL: I cannot give you a definitive answer. I have not received anything from my government yet.

But it has all the hallmarks of the people we've been tracking and dealing with over the last year and a half in the kingdom, people with al Qaeda or connected to it one way or another.

BLITZER: We heard that videotape from Ayman Al-Zawahri, the No. 2 al Qaeda leader, in which he seemed to make a suggestion they were going to attack in the coming weeks, maybe around Christmas, celebrated by Christians, of course, all over the world. What's your reading of the level of anxiety that should be placed right now, given this threat?

AL-FAISAL: I believe the threat is present.

These people have managed to inflict destruction and devastation in many countries of the world, in Spain, in Saudi Arabia, in Morocco, in Indonesia, in Turkey, let alone the September 11 attack on the United States. So one should be on their guards about the capabilities of these people and never underestimate them, because they've managed to score some fantastic and very devilish and bloody attacks worldwide.

BLITZER: What's your latest information on Osama bin Laden? Where do you believe he's hiding out?

AL-FAISAL: I believe he's still hiding on the border between Afghanistan and Pakistan.

BLITZER: Do you believe that the U.S., that its allies, the Pakistani allies, the Afghan allies, are any closer to finding him today than they were a year or two or three ago?

AL-FAISAL: Well, I don't have to speculate on that.

I've been reading statements by President Pervez Musharraf of Pakistan in which he says that, unfortunately, bin Laden's trail has been lost, but that in his belief bin Laden is still on the border between Afghanistan and Pakistan. So, from a year and a half ago or a year ago, unfortunately, according to President Musharraf, his trail has been lost.

BLITZER: Prince Turki, always good to speak with you. Thanks very much for joining us.

AL-FAISAL: Thank you.

(END VIDEOTAPE)

BLITZER: Still some voters in Ohio demanding a recount. Our Carlos Watson joins us with "The Inside Edge" on what's going on right now in the buckeye state and more. Plus, no picnic at the beach. How this SUV -- look at this -- ended up taking a swim.

(COMMERCIAL BREAK)

BLITZER: The 108th Congress getting ready to call it quits here in Washington.

Let's get "The Inside Edge" on that and more from our political analyst, Carlos Watson. He's joining us from Mountain View, California.

Looks like there's an intelligence reform deal in the works right now. Is it too early, Carlos, to take a look at the political fallout from this?

CARLOS WATSON, CNN POLITICAL ANALYST: It may not be too early, assuming it actually does happen. I think, if it does happen, it's good news for the president and the White House.

And what's significant, Wolf, is that this is the third intelligence-related legislative bill during the president's first four years that he did not initially propose, but which is going to get passed, which, if it does get passed, in which he ultimately will sign that he'll get credit for. Remember, the Department of Homeland Security was not something he initially proposed and supported.

The 9/11 Commission wasn't something that he initially proposed and supported, and now this bill. But, in all three cases, if they pass and he signs them, he'll get credit. The other interesting thing to note on this issue are some of the intriguing political players who've played a role. Everyone talks about the Cabinet reshuffling. But maybe the president's most important member of the Cabinet, Vice President Cheney, once again will have shown his value on this particular issue.

The other folks who played an important role were the families of the 9/11 victims, playing an interesting role beyond what some of the members of Congress or even the members of the commission could have played.

BLITZER: And I suspect many of those family members will be at the signing ceremony when that takes place. It could be very emotional indeed.

Let's move on, Carlos, talk a little bit about voting in Ohio. For some people, the election isn't over yet, is it?

WATSON: It's not. You know that in Ohio, the latest tally, an unofficial tally by the AP and some others, show about a 119,000-vote separation, with the president still winning, but a number of people, including the Reverend Jesse Jackson, have questioned some of the long lines and some of the other problems that happened in Ohio and have questioned whether or not the Republican secretary of state and others have properly gone through the numbers.

I think the reality is that the ultimate outcome is unlikely to change, but, Wolf, stay tuned to this story. This could have a big impact on the Democratic Party in two ways. One, early next year, the Democratic Party's going to select a new chair of the DNC. I guarantee you that this will be an issue that will be put to each of the potential members. How would you respond, and will you be aggressive on these sorts of issues?

There's certainly a feeling among Reverend Jackson and some others that the conventional members of the party haven't been as forthcoming on this issue. And, secondly, don't be surprised four years down the road in 2008 if lots of civil rights groups and others say to themselves, gosh, Al Gore gave up too easily in Florida in 2000. John Kerry gave up too easily in Ohio in 2004. The next nominee won't get our full-throated support unless she or he is strongly committed to making sure that every vote counts and indeed propose some legislation to make sure their issues like electronic balloting and others work out smoothly.

So this is an issue that may have legs beyond the 2004 election.

BLITZER: And, very briefly, Carlos, any other political news that we're not necessarily paying attention to right now in this busy holiday season?

WATSON: Kind of below-the-radar stuff?

BLITZER: Yes.

WATSON: Two things in particular. Out here in California, the head of CalPERS is a guy named Sean Harrigan, who's been very active in pushing Disney and other companies toward corporate reform. Remember the Enron scandals and some others a couple years ago.

Well, he got replaced. But that story may not be over. You may hear more about corporate reform and what's happened to it early next year. The other proposal is to reform the United Nations. It sounds like a policy wonk's idea, but could have huge implications on issues of Iran, North Korea, and other places.

BLITZER: Carlos Watson, our political analyst with "The Inside Edge," thanks very much.

WATSON: Good to see you.

BLITZER: Just ahead, an SUV at sea. Look at this. A truck ended up going with the flow. We'll explain.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Now our picture of the day.

Take a look at this, proof that the penalty for illegal parking sometimes involves more than just getting a ticket. Authorities in Southern California say the folks who drove this SUV on to an Orange County beach were inside the vehicle drinking beer when the tide came in. By the time they noticed what was going on, the SUV was floating. They managed to get out safely, but they were cited for driving on the beach. Not a good idea.

That's it for me. Thanks very much for joining us.

"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 December 6, 2004 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: Happening right now in just the last few minutes, as seen live here on CNN, reluctant Republicans have come forward to announce they're ready to support a deal on the 9/11 intelligence reform bill. A plan to overhaul the nation's intelligence community finally looks like it's in motion. Stand by for hard news on WOLF BLITZER REPORTS.
(BEGIN VIDEOTAPE)

(voice-over): Americans attacked.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Terrorists are still on the move.

BLITZER: Is al Qaeda behind the siege in Saudi Arabia?

Target election.

UNIDENTIFIED MALE: Right now we're faced with the armies of darkness.

BLITZER: The insurgents take a heavy toll. But Iraqi leaders vow the vote will take place.

Friendly fire. He gave up football to fight for his country. Now new questions about the death of Pat Tillman.

Food fears. A retirement brings a dire warning. Are terrorists eying what America eats?

ANNOUNCER: This is WOLF BLITZER REPORTS for Monday, December 6, 2004.

(END VIDEOTAPE)

(on camera): With a little arm-twisting, a little hand-holding, and some creative language, congressional negotiators have reached a compromise on the bill to rebuild America's intelligence agencies. That ends a holdout by key House Republicans and clears the way for reforms sought by the 9/11 commission. Let's go straight to our congressional correspondent, Ed Henry -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good evening, Wolf. More than three years after the 9/11 terrorist attacks, Congress has finally forged a tentative deal on a major reform bill that will restructure the nation's intelligence community, the most radical restructuring in over 40 years. A House vote is expected now as early as Tuesday morning. A Senate vote probably happening on Wednesday. Central to this agreement is creation of a new director of national intelligence, a quarterback, if you will, to oversee the nation's 15 spy agencies. The 9/11 commission had said that this quarterback is central, an essential part of trying to prevent another terror attack on U.S. soil. This deal was reached in part because it got a major shot in the arm.

Just moments ago, as you mentioned, live on CNN, as we saw House armed services chairman Duncan Hunter and Senate armed services chairman John Warner come forward and say they are now endorsing this new language that was crafted late last night at the White House. We understand the language put together by Senator Susan Collins and Joe Lieberman, language clarifying that the military's chain of command will not be broken, will not be usurped by this new director of national intelligence. Now, this legislation also got an even bigger shot in the arm perhaps from the president of the United States himself. He was working all weekend on this. And this morning again he prodded Congress to act.

(BEGIN VIDEO CLIP)

BUSH: It is a good piece of legislation. It is a necessary piece of legislation. It's a piece of legislation that is important for the security of our country.

(END VIDEO CLIP)

HENRY: Now, this comes after a bit of a Republican family feud. In addition to the fact that Duncan Hunter was holding out to clarify this language on the chain of command, also Republican Congressman James Sensenbrenner has been holding out. He has refused to sign off on this conference report for weeks now because he wants tough immigration provisions added to the legislation. At this point Republicans and Democrats involved in the talks suggesting that James Sensenbrenner will be left out in the cold for now. Instead, he will just get an agreement very likely to come back in January or February and vote on those immigration provisions. But they will not be included in this deal -- Wolf.

BLITZER: Ed Henry reporting for us from Capitol Hill. Ed, thanks very much. So what does the bill boil down to in a nutshell? Most importantly, it provides for a new director of national intelligence who will oversee more than a dozen separate spy agencies along with their budgets. The bill also would boost the ability to arrest those who aid or train terrorists. Much more coming up on this story throughout this hour, indeed throughout the night here on CNN.

The attack was bold and brazen. A group of gunmen stormed the United States consulate in Jeddah, Saudi Arabia earlier today, sparking a bloody shootout with security forces. Five non-American staffers were killed. The incident drew a quick response from President Bush.

(BEGIN VIDEO CLIP) BUSH: The attacks in Saudi Arabia remind us that the terrorists are still on the move. They're interested in affecting the will of free countries. They want us to leave Saudi Arabia. They want us to leave Iraq. They want us to grow timid and weary in the face of their willingness to kill randomly and kill innocent people.

(END VIDEO CLIP)

BLITZER: CNN's Diana Muriel has more on this story. She's reporting from London.

(BEGIN VIDEOTAPE)

DIANA MURIEL, CNN CORRESPONDENT (voice-over): Smoke curls above the U.S. consulate in the Saudi port city of Jeddah Monday. According to Saudi officials, Islamic militants first attacked the heavily guarded mission with explosives, then shot their way through a side entrance in an attempt to gain control of the diplomatic compound. Saudi officials say the ensuing gun battle with Saudi security forces left three of the attackers dead and two others injured in the fighting in Saudi custody. U.S. diplomatic sources say no Americans were killed or injured and that all consulate staff were able to reach secure locations at the compound.

The building, like all U.S. diplomatic property, has been heavily fortified and guarded since a series of attacks on compounds housing non-Saudi nationals, which began last year. Last May 22 people were killed, including 19 Westerners, by al Qaeda militants who took over a resort complex in the eastern city of Khobar. The Riyadh government has pledged to crack down on Islamic militants, arresting what it says were scores of suspects linked to al Qaeda in recent months. But security experts warn big gaps remain in the country's ability to control the problem.

WILL GEDDES, ICP GROUP INTERNATIONAL: This type of threat, particularly against somewhere like the U.S. consulate, which will be held and is held within the diplomatic sort of environs, which is better secured than probably anywhere else, shows indicative problems with the intelligence gathering of the Saudis insomuch as being able to determine where these cells are operating.

MURIEL: Around 170 people, including militants and security forces as well as Westerners have been killed in attacks and clashes since the first suicide bombings began in Riyadh 18 months ago. Diana Muriel, CNN, London.

(END VIDEOTAPE)

BLITZER: And later this hour I'll speak with Prince Turki, the Saudi ambassador to the United Kingdom, the former Saudi intelligence chief. We'll get his views on what happened at the U.S. consulate in Jeddah. More on that coming up later this hour.

Meanwhile, President Bush today vowed to stand firm against violence and to keep moving toward democracy and peace in the Middle East. Those promises coming during some high-profile meetings. For that we turn to our White House correspondent Dana Bash -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, the president started the day with a meeting with the Iraqi interim president, Ghazi al-Yawar. And he is somebody who Mr. Bush praised for his leadership but also said is somebody who is very important to listen to around the world because he, like President Bush, believes that the elections scheduled in Iraq for January 30 should go on as scheduled, despite the increasing violence, despite some doubts from some even politicians in Iraq about that. Mr. Bush even linked what happened in Saudi Arabia to the elections, saying that terrorists are trying to kick the U.S. out essentially in both places, stop democracy, and that that won't happen.

(BEGIN VIDEO CLIP)

BUSH: I assured the president that my comments about the need to have elections was real and genuine. I believe it's necessary for the Iraqi people to vote on January the 30th because it provides a opportunity for people to participate in democracy.

UNIDENTIFIED MALE: We are faced with the armies of darkness, who are -- who has no objective but to undermine the political process and incite civil war in Iraq. But I want to assure the whole world that this will never, ever happen.

(END VIDEO CLIP)

BASH: Now, there you heard the Iraqi interim president talking about the armies of darkness, insisting that the violence that you see are not necessarily from Sunnis. He is a member -- he is a Sunni. And this meeting was symbolic also because of that, because there is concern among the Sunnis that they won't have the kind of power that they wanted, certainly that they had under Saddam Hussein. And that is something that they wanted to achieve here. There you see a second important meeting that the president had today. That was with Iraq's neighbor, a leader from Iraq's neighboring country, Jordan's King Abdullah. They also talked about the importance of moving forward with the Iraqi elections on time and also, as you can imagine, Wolf, talked about the Mideast peace process and eventually getting that back on track.

BLITZER: And President Bush making a major commitment to stand firm and to use a lot of his efforts to try to revitalize Israeli/Palestinian peace process over the next four years. Dana Bash, thanks very much for that report.

And to our viewers, you'll hear directly from both of these key Middle East leaders when I interview Jordan's King Abdullah tomorrow during this hour and the Iraqi interim President Ghazi Al-Yawar on Wednesday. King Abdullah tomorrow, Ghazi Al-Yawar on Wednesday.

Iraq's insurgents are waging an all-out assault aimed at sabotaging the country's January elections. The immediate result -- scores of dead in the past few days alone. CNN's Karl Penhaul reports from Baghdad.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT (voice-over): In a string of insurgent attacks over the weekend, at least 50 people were killed and more than 100 others wounded. Among the dead, U.S. servicemen. But the bulk of the dead were Iraqi security force members and also Iraqi civilians. One of the first main attacks took place Saturday in the heart of Baghdad. A car bomb exploded outside a police station close to the Green Zone. On Sunday there was a drive-by shooting in the city of Tikrit in which 17 Iraqi civilian contractors were killed by insurgents as they went to work.

All of this, of course, is adding fuel to the debate as to whether it's safe enough to hold Iraq's elections on January the 30th as scheduled. Lakhdar Brahimi, U.N. special envoy to Iraq, has said in recent days that he believes it's too violent and the elections can't possibly be held in the current climate. However, on a visit to Washington, Iraq's president, Ghazi Al-Yawar says that he believes and trusts that Iraq's elections will go ahead on January the 30th as planned.

However, we've talked to a constitutional lawyer. He believes that the debate, rather than being a political debate, is more of a legal debate. He says looking at Iraq's transitional administrative law, that's the interim constitution for Iraq, that he says that there's no legal basis for postponement of elections beyond January 31. After that date he believes there's a huge legal vacuum that could call into question the very legality of Iraq's interim government. Karl Penhaul, CNN, Baghdad.

(END VIDEOTAPE)

BLITZER: There are fresh terror concerns also in Spain, where seven bombs exploded in seven cities across the country this morning, minutes after telephoned warnings from the Basque separatist group ETA. Five people, including a child, were slightly injured. The blast follows similar attacks Friday at five gas stations in Madrid. Both the United States and the European Union consider ETA a terrorist group. It's blamed for more than 800 deaths since 1968.

Just back from Iraq, I'll talk to Senator Chuck Hagel about ongoing violence there and the upcoming elections.

Also, why the Pentagon has quietly reopened the investigation into that friendly fire death of former football pro Pat Tillman.

Plus this...

(BEGIN VIDEO CLIP)

TOMMY THOMPSON, HEALTH & HUMAN SERVICES SECRETARY: I cannot understand why the terrorists have not, you know, attacked our food supply because it is so easy to do.

(END VIDEO CLIP)

BLITZER: The health secretary sounding the alarm. So what is being done to keep all of our food supply safe?

And look at this. Dozens of homes burned outside Washington, D.C. Is terrorism, yes, is terrorism to blame? Brian Todd standing by. We'll have a closer look.

(COMMERCIAL BREAK)

BLITZER: There are new and disturbing questions about the April death of Army Corporal Pat Tillman the former NFL star who enlisted in the wake of September 11. We knew he was killed by friendly fire in Afghanistan, but now the U.S. army has reopened its investigation. Our senior Pentagon correspondent Jamie McIntyre joining us live with details -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Wolf, what Tillman's family want to know along with Senator John McCain is whether the army intentionally exaggerated Tillman's actions on the battlefield or whether it also exaggerated the mistakes that led to his death.

(BEGIN VIDEOTAPE)

(voice-over): At a memorial service in May, Army Ranger Corporal Pat Tillman, the man who turned down a $3.6 million pro football deal to serve his country after September 11, was praised for his courage and sacrifice.

UNIDENTIFIED MALE: While many of us may be blessed to live a longer life than he did, few of us will ever live a better one.

MCINTYRE: The 27-year-old former defensive back for the Arizona Cardinals was said by the army to have died in a firefight with Taliban forces in Afghanistan. It wasn't until weeks later an army general at Fort Bragg who took no questions read a statement revealing Tillman was shot by accident by his fellow rangers.

LT. GEN. PHILIP KENSINGER, U.S. ARMY: The investigation results indicate that Corporal Tillman probably died as a result of friendly fire while his unit was engaged in combat with enemy forces.

MCINTYRE: Now it's not clear there were ever Taliban fighters in the rugged Afghan region where two groups of U.S. soldiers end up mistakenly shooting at each other. A "Washington Post" investigation, which revealed dozens of witness statements, e-mails, investigation findings, log books, maps, and photographs concludes Tillman died unnecessarily after botched communications, a mistaken decision to split his platoon over the objections of its leader, and negligent shooting by pumped-up young rangers.

STEVE COLE, "THE WASHINGTON POST": They poured so much fire on the positions they thought were enemies that they essentially were indiscriminate in the judgment of the army's own investigators.

MCINTYRE: In October, well before the "Washington Post" account, Senator McCain sent a letter to the then acting army secretary pressing for answers. McCain passed along four pages of questions posed by Tillman's mother, Mary. Among them, why did it take five weeks to tell us that Pat was killed by friendly fire when it was obvious right away? Why was Pat's death so embellished by the military? And why did the military lie to the media and to us about the friendly fire?

The army insists there were enemy forces at the scene, which entitled Tillman to the silver star he was awarded posthumously.

(END VIDEOTAPE)

(on camera): The army has reprimanded three soldiers in the incident, including two officers. Four others who were in Tillman's unit have been transferred out of the elite ranger unit but are still in the army -- Wolf.

BLITZER: What a heartbreaking story indeed, all around. Jamie McIntyre at the Pentagon. Thank you very much.

The reality of Iraq. I'll talk to Senator Chuck Hagel. He's just back from a fact-finding mission, a very dangerous fact-finding mission, to Iraq. The surging violence there, the upcoming election. We'll speak about that and more.

Also, a bold attack on an American consulate in Saudi Arabia. We'll put our questions to the country's former intelligence chief. Prince Turki. He's in London. He'll join us.

And is terrorism to blame for a string of fires near the nation's capital? New information about a massive arson rampage. That's coming up as well.

(COMMERCIAL BREAK)

BLITZER: As Iraq's scheduled January elections get closer, violence again appears to be on the upswing. Four members of the United States Senate visited Iraq last week, including Chuck Hagel of Nebraska. I spoke with him just a short time ago.

(BEGIN VIDEOTAPE)

BLITZER: Senator Hagel, welcome back to the United States. Never easy going to Iraq. You've been there, what, four times?

SEN. CHUCK HAGEL (R), NEBRASKA: Been there four times. This is my fourth trip.

BLITZER: And compare the level of fear, danger on the ground, hostility, if you will, to Americans then versus now.

HAGEL: Well, I think it is really a matter of certain areas of Iraq where we've seen deterioration in the security. There are 18 provinces in Iraq. 14 of those 18 are generally in pretty good shape. The four that are not, of course represent big bulks of the population, the Baghdad area, the Sunni triangle. And I think those areas actually have deteriorated in security. There are some successes. But it's, I think, too early to tell how this all unfolds. And that's why these elections, I believe, are going to be absolutely critical, probably the most important milestone along the way to a free, democratic, independent Iraq.

BLITZER: And they have to go forward January 30, the president says, otherwise it would send the wrong message. Do you agree with him on that?

HAGEL: Well, I do. We met with the interim Iraqi president. And we spent some time with him and other Iraqi leaders, and they strongly feel that if you poll those data or if you change these, it, first of all, represents a victory for the insurgents. These are going to be imperfect elections. And we have to be careful that we don't strangle the possible success of these elections by holding them to too high a standard. If they can be reasonably legitimate, meaning most of the Iraqis participating, then I think you can have a legitimate result. But to pull them down, I don't see what you gain by that.

BLITZER: Is the security situation in these four provinces where it's really a mess getting increasingly worse? And if it is, which I believe you probably think it is, does the United States have enough troops on the ground to get the job done?

HAGEL: Well, as you know, we are going to increase our troop strength by about 12,000 to 13,000 here over the next few months. I think we need to. Some of us have felt that we didn't have enough troops going in. I think part of the problem that we are facing today in Iraq, we have been over the last 18 months, is a result of not having enough force structure in there initially. But we are where we are. The key here in my opinion, Wolf, is getting the Iraqi army and police trained up quick enough and in big enough numbers that they can eventually start taking over some of the security of that country. That's also I think the bottom line to ultimate objectives and the success of Iraq.

BLITZER: This should be what the Iraqis are doing, not what the United States or the other allies are doing. The Iraqis have to take charge.

HAGEL: Well, the Iraqis do. The outcome in Iraq is going to be decided by the Iraqis, not the United States. There's some good news here. We have been able to train up a lot of the Iraqis. Some have not worked out. Some have. I don't think we're probably doing it fast enough and with as many. We were in Egypt during our trip, had breakfast with President Mubarak yesterday, and he said, you know, I could be taking a lot more Iraqis here, training them in Egypt.

It's complicated. We made a fundamental error when we stood down the entire Iraqi army, and we've been paying a high price ever since. And we're having to reconstitute a whole new army. But the three basics, I think, the three pillars is what I call them, for success, number one, free, fair elections, training these Iraqis up to handle their own security through their police force, their military, and economic development. If success can be developed and we can make progress next year in those three areas, those three pillars, then I think there's a chance that this can turn out in some way very productive for Iraq.

BLITZER: In a related development, you've met also with Israeli and Palestinian leaders. There are elections scheduled for the Palestinians on January 9. January 30 in Iraq, January 9 for the Palestinians. There's a correlation between these two events in your mind.

HAGEL: There is, Wolf. I think it's historic. It's dramatic. That you have two very important elections, the Palestinian election, the Iraqi election, same month. These elections will very much define the future of the Middle East, the course that the Middle East takes. I think there's some hope here. I think there's some sense of optimism. I sense that in the region. Still very dangerous, still very complicated. We don't know how this is going to turn out. But if in fact the Palestinians can elect a new, responsible leader, a partner for peace, with Prime Minister Sharon, I think that brings us up on some new high ground. Then the United States is really going to have to engage as well as its quartet partners as well as the Arab leadership in the Middle East. The same in Iraq.

If we can see a fairly legitimate election that will elect a legitimate government, the Iraqi people can have a new confidence that they're in charge, that they're governing themselves, and that gives us some new hope. A lot of space in between. But I think there is some reason to believe that we have some unique historic new opportunities.

BLITZER: One final question before I let you go. Talk a little bit, as much as you can, about that flight from Baghdad upon your departure. Here you were with Senator Biden, Senator Chaffee, Senator Feinstein, and you, four important U.S. senators on a, what, a U.S. military C-130?

HAGEL: Yes. I don't know how important the four of us are. But nonetheless, we were flying late at night out of Baghdad, and for security reasons, they take many security precautions and lights out. And Senator Chaffee was up in the cockpit, and the alert went off indicating that a missile or rocket had been fired. And at that point there's a lot of evasive action that goes on, a lot of flares go off, a lot of action. And we didn't see the actual missile, if it was fired. It was indicated it was. But for a few moments there it was a -- it got our attention, Wolf.

BLITZER: You're smiling, you're laughing, but you're a Vietnam vet. I bet everybody in that plane was not laughing and smiling during those few moments when a ground-to-air missile might have been fired at you.

HAGEL: Well, Senator Biden kept talking.

BLITZER: That's typical. We're happy you're back all safe on the ground. Thanks very much.

HAGEL: Thanks, Wolf. Thank you.

(END VIDEOTAPE) BLITZER: Senator Chuck Hagel speaking with me just a little while ago here in Washington.

Gunmen launch a deadly attack on an American consulate. Saudi security troops respond with deadly force. We'll talk about it with the country's former intelligence chief. That's coming up.

Also, what's being done to keep the food all of us eat safe from terrorists? Some say not enough.

And more than 41 homes set ablaze overnight near Washington, D.C. Remarkable pictures. Is terrorism to blame? Stay with us.

(COMMERCIAL BREAK)

BLITZER: CNN security watch, the safety of America's food supply.

Outgoing Health and Human Services Secretary Tommy Thompson raised concern about the issue with a seemingly off-the-cuff comment last week about the ease with which terrorists could target the U.S. food chain.

CNN's Mary Snow is on the security watch. She's joining us live now from New York -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, late last week, Secretary Thompson said he worries every single night about the possibility of a terrorist attack on the food supply.

Today, he was asked about that comment. He tempered his remarks, but says, still, work needs to be done.

(BEGIN VIDEOTAPE)

TOMMY THOMPSON, HEALTH AND HUMAN SERVICES SECRETARY: We've come a long way, but I'm still not satisfied. I still believe we've got a ways to go.

SNOW (voice-over): The question is how much further U.S. officials must go to ensure the safety of the food supply, a provocative question to be raised by the health and human services secretary himself as he prepares to leave office.

THOMPSON: For the life of me, I cannot understand why the terrorists have not, you know, attacked our food supply, because it is so easy to do.

SNOW: Secretary Thompson three days ago cited imports from the Middle East as a potential worry. Today, he wouldn't identify a specific country. Rather, he heralded the FDA's announcement of new rules for record-keeping that the agency says will be crucial to deal effectively with food-related emergencies, such as deliberate contamination of food by terrorists. Inspections, Thompson says, have also increased. THOMPSON: We've gone from 12,000 inspections when I first arrived four years ago to this year. We're going to hit close to 100,000 inspections.

SNOW: But of the food coming into this country, the Center For Science in the Public Interest says only 2 percent is inspected.

UNIDENTIFIED FEMALE: I think Secretary Thompson was sounding an alarm to President Bush that not enough has been done. Secretary Thompson was a strong leader when it came to food safety and improving the safety and inspection of food after the September 11 attacks and the anthrax attacks that followed.

SNOW: And it's been a concern for companies that import food. Major companies were reluctant to talk about food security, but a trade group representing food processors disagrees with Thompson's assessment.

UNIDENTIFIED MALE: The U.S. food system isn't a soft target. Our companies do a tremendous amount of work and have over a period of time.

SNOW: Dole Food says, for example, it accepts raw commodities only from approved sources, among other things. Procter & Gamble says it has strict ingredient and product manufacturing in place. Coca- Cola, which does business in more than 200 countries around the world, says it's essential that security and quality standards be rigorous.

(END VIDEOTAPE)

SNOW: And the FDA's acting commissioner was asked about the threat of a terrorist attack on the food supply, saying it will always be a concern, but he added that he thinks that the FDA has a good handle on the importation of food -- Wolf.

BLITZER: CNN's Mary Snow reporting for us in New York -- Mary, thank you very much.

And CNN's in-depth coverage of your food and your safety continues tonight, 7:00 p.m. Eastern. Anderson Cooper looks at how likely it is for terrorists to poison our food supply. At 8:00, "PAULA ZAHN NOW" looks at some possible bureaucratic roadblocks that may stand in the way of food safety. And at 10:00 p.m. Eastern, Aaron Brown examines how agricultural crop-dusters could be used as a terrorism tool. Stay with CNN as this story continues to unfold.

Our security watch now continues with a look at the government's new state-of-the-art anti-terror center. It's so top secret officials won't even comment on it, but sources tell us it's now open for business.

Our national security correspondent David Ensor joining us with the story -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Wolf, CNN has learned that the National Counterterrorism Center formally opened for business today, though U.S. government spokesmen, as you mentioned, are declining comment.

Congressional and executive branch sources say, though, that the new agency, created under an executive order from President Bush, came into existence in a low-key way at a new state-of-the-art facility in northern Virginia. There's a government released video which we'll have -- there it is -- which shows what the interior of the new center was planned to look like. No cameras have been allowed into the building to date.

But this gives you some idea at least. The agency replaces the CIA's Terrorist Threat Integration Center, TTIC, which was founded after the 9/11 attacks to pull all intelligence the government has on terrorists and put it together into one place so that analysts can connect the dots. Under the intelligence reform package that's likely to be approved this week, later this week on Capitol Hill, this new NCTC would be given additional clout, sources are telling us.

A senior CIA official, John Brennan, who was director of TTIC, has been made acting director of the new agency, according to sources we're speaking to. The new building in northern Virginia -- and that's John Brennan there -- the new building in northern Virginia is not hidden away, but at the request of the CIA, CNN is showing only limited and tighter images of it for security reasons.

The launch of the new counterterrorist Center is a key part of the Bush administration's plans to prevent another 9/11 attack, but it was done without fanfare today, partly, sources say, because officials did not want to take attention away from Capitol Hill and the apparent deal reached there reforming the intelligence community leadership structure -- Wolf.

BLITZER: David Ensor reporting for us, very interesting pictures, certainly. We'll hopefully get a chance to take a look at that a little closer down the road -- David Ensor reporting.

Concern about a different kind of terrorism in suburban Washington, D.C., where dozens of new homes were damaged or destroyed in a fire that officials now suspect may have been the work of ecoterrorists.

CNN's Brian Todd joining us now with more on this -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, we're very early in the investigation still, and officials are being very cautious, but the nature of these fires, the recent history of the development involved, and the fact that federal investigators are on the scene leads officials to at least explore the idea that these fires were not accidental.

(BEGIN VIDEOTAPE)

TODD (voice-over): A smoldering subdivision and serious implications. Fire officials in southern Maryland will not come right out and say this is ecoterrorism, but federal, state, and local investigators are exploring that possibility. Local residents say they believe the fires that torched these homes were organized, and state fire officials tell CNN they've determined arson was the cause of at least four fires in the Hunters Brooke neighborhood early Monday. Officials at the scene say more than 40 homes were damaged and of those at least a dozen destroyed at the new development about 30 miles southeast of Washington, houses valued at between $400,000 and $500,000.

W. FARON TAYLOR, DEPUTY FIRE MARSHAL: Certainly, in my 20 years, this is the first time we have had this many single-family homes under construction on fire.

TODD: No one was hurt, and...

(END VIDEOTAPE)

TODD: No one was hurt in these fires, and most of the homes were not occupied. The construction had been opposed by several environmental groups who say that the construction of this subdivision had threatened a local wetlands area that was endangered.

We spoke to two different groups, the Sierra Club and a local Maryland group, that had opposed the construction of these subdivisions. They condemned this action. They say their groups were not involved in any way. No one has claimed responsibility yet. And sources say there have not been any markings found near the scene that would signify involvement by any groups known to resort to violence for environmental causes -- Wolf.

BLITZER: But a major, though, investigation under way right now right outside of the nation's capital. Brian Todd, thanks very much for that.

Terrorists also targeting Americans inside the kingdom. I'll talk with the former Saudi intelligence chief, Prince Turki al-Faisal, about the attack that occurred earlier today.

And Congress finds common ground. The U.S. is set to get the intelligence reform recommended by the 9/11 Commission. We'll get "The Inside Edge" from our Carlos Watson.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: More now on that bloody attack on the U.S. Consulate earlier today in the Saudi port city of Jeddah.

Earlier, I spoke with the former Saudi intelligence chief, Prince Turki al-Faisal, who's now that nation's ambassador to Britain. He joined me from London.

(BEGIN VIDEOTAPE)

BLITZER: Prince Turki, once again, thanks very much for joining us. What's the latest information you're getting from your government now on this attack at the U.S. Consulate in Jeddah?

PRINCE TURKI AL-FAISAL, SAUDI AMBASSADOR TO BRITAIN: The latest information I have is that eight people were killed, five of them employees of the consulate and three of the terrorists.

And there were -- my information was that there were two wounded officers, one slightly more difficult a wound than the other. This is as far as casualties is concerned. The other one is that the -- and this is -- I know there is a lot of confusion now as to whether there was penetration of the consulate or not.

You have to remember, Wolf, that the consulate in Jeddah is a compound with not only a wall around the compound, but another security wall outside the wall surrounding the compound. And what these people did is that they blew themselves into the first barrier wall outside the compound. And as they were entered -- or tried to enter the compound itself, that's where they were engaged by Saudi security forces.

And the three of them were killed. And, unfortunately, five of the employees of the consulate were killed as well.

BLITZER: Prince Turki, who did this?

(CROSSTALK)

AL-FAISAL: But these people never actually penetrated into...

BLITZER: Who are these people who did this?

AL-FAISAL: I cannot give you a definitive answer. I have not received anything from my government yet.

But it has all the hallmarks of the people we've been tracking and dealing with over the last year and a half in the kingdom, people with al Qaeda or connected to it one way or another.

BLITZER: We heard that videotape from Ayman Al-Zawahri, the No. 2 al Qaeda leader, in which he seemed to make a suggestion they were going to attack in the coming weeks, maybe around Christmas, celebrated by Christians, of course, all over the world. What's your reading of the level of anxiety that should be placed right now, given this threat?

AL-FAISAL: I believe the threat is present.

These people have managed to inflict destruction and devastation in many countries of the world, in Spain, in Saudi Arabia, in Morocco, in Indonesia, in Turkey, let alone the September 11 attack on the United States. So one should be on their guards about the capabilities of these people and never underestimate them, because they've managed to score some fantastic and very devilish and bloody attacks worldwide.

BLITZER: What's your latest information on Osama bin Laden? Where do you believe he's hiding out?

AL-FAISAL: I believe he's still hiding on the border between Afghanistan and Pakistan.

BLITZER: Do you believe that the U.S., that its allies, the Pakistani allies, the Afghan allies, are any closer to finding him today than they were a year or two or three ago?

AL-FAISAL: Well, I don't have to speculate on that.

I've been reading statements by President Pervez Musharraf of Pakistan in which he says that, unfortunately, bin Laden's trail has been lost, but that in his belief bin Laden is still on the border between Afghanistan and Pakistan. So, from a year and a half ago or a year ago, unfortunately, according to President Musharraf, his trail has been lost.

BLITZER: Prince Turki, always good to speak with you. Thanks very much for joining us.

AL-FAISAL: Thank you.

(END VIDEOTAPE)

BLITZER: Still some voters in Ohio demanding a recount. Our Carlos Watson joins us with "The Inside Edge" on what's going on right now in the buckeye state and more. Plus, no picnic at the beach. How this SUV -- look at this -- ended up taking a swim.

(COMMERCIAL BREAK)

BLITZER: The 108th Congress getting ready to call it quits here in Washington.

Let's get "The Inside Edge" on that and more from our political analyst, Carlos Watson. He's joining us from Mountain View, California.

Looks like there's an intelligence reform deal in the works right now. Is it too early, Carlos, to take a look at the political fallout from this?

CARLOS WATSON, CNN POLITICAL ANALYST: It may not be too early, assuming it actually does happen. I think, if it does happen, it's good news for the president and the White House.

And what's significant, Wolf, is that this is the third intelligence-related legislative bill during the president's first four years that he did not initially propose, but which is going to get passed, which, if it does get passed, in which he ultimately will sign that he'll get credit for. Remember, the Department of Homeland Security was not something he initially proposed and supported.

The 9/11 Commission wasn't something that he initially proposed and supported, and now this bill. But, in all three cases, if they pass and he signs them, he'll get credit. The other interesting thing to note on this issue are some of the intriguing political players who've played a role. Everyone talks about the Cabinet reshuffling. But maybe the president's most important member of the Cabinet, Vice President Cheney, once again will have shown his value on this particular issue.

The other folks who played an important role were the families of the 9/11 victims, playing an interesting role beyond what some of the members of Congress or even the members of the commission could have played.

BLITZER: And I suspect many of those family members will be at the signing ceremony when that takes place. It could be very emotional indeed.

Let's move on, Carlos, talk a little bit about voting in Ohio. For some people, the election isn't over yet, is it?

WATSON: It's not. You know that in Ohio, the latest tally, an unofficial tally by the AP and some others, show about a 119,000-vote separation, with the president still winning, but a number of people, including the Reverend Jesse Jackson, have questioned some of the long lines and some of the other problems that happened in Ohio and have questioned whether or not the Republican secretary of state and others have properly gone through the numbers.

I think the reality is that the ultimate outcome is unlikely to change, but, Wolf, stay tuned to this story. This could have a big impact on the Democratic Party in two ways. One, early next year, the Democratic Party's going to select a new chair of the DNC. I guarantee you that this will be an issue that will be put to each of the potential members. How would you respond, and will you be aggressive on these sorts of issues?

There's certainly a feeling among Reverend Jackson and some others that the conventional members of the party haven't been as forthcoming on this issue. And, secondly, don't be surprised four years down the road in 2008 if lots of civil rights groups and others say to themselves, gosh, Al Gore gave up too easily in Florida in 2000. John Kerry gave up too easily in Ohio in 2004. The next nominee won't get our full-throated support unless she or he is strongly committed to making sure that every vote counts and indeed propose some legislation to make sure their issues like electronic balloting and others work out smoothly.

So this is an issue that may have legs beyond the 2004 election.

BLITZER: And, very briefly, Carlos, any other political news that we're not necessarily paying attention to right now in this busy holiday season?

WATSON: Kind of below-the-radar stuff?

BLITZER: Yes.

WATSON: Two things in particular. Out here in California, the head of CalPERS is a guy named Sean Harrigan, who's been very active in pushing Disney and other companies toward corporate reform. Remember the Enron scandals and some others a couple years ago.

Well, he got replaced. But that story may not be over. You may hear more about corporate reform and what's happened to it early next year. The other proposal is to reform the United Nations. It sounds like a policy wonk's idea, but could have huge implications on issues of Iran, North Korea, and other places.

BLITZER: Carlos Watson, our political analyst with "The Inside Edge," thanks very much.

WATSON: Good to see you.

BLITZER: Just ahead, an SUV at sea. Look at this. A truck ended up going with the flow. We'll explain.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Now our picture of the day.

Take a look at this, proof that the penalty for illegal parking sometimes involves more than just getting a ticket. Authorities in Southern California say the folks who drove this SUV on to an Orange County beach were inside the vehicle drinking beer when the tide came in. By the time they noticed what was going on, the SUV was floating. They managed to get out safely, but they were cited for driving on the beach. Not a good idea.

That's it for me. Thanks very much for joining us.

"LOU DOBBS TONIGHT" starts right now.

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