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CNN Wolf Blitzer Reports

Pentagon Denies Saddam Photo Release; South Koreans Produce Stem Cells; Muslims in London Demonstrate in Street; Bin Laden Hunt Continues; Economy in Good Shape, Says Greenspan; First Lady Continues Travels

Aired May 20, 2005 - 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, CNN ANCHOR: Happening now. Is the terror trail leading the U.S. intelligence community closer to Osama bin Laden? Some analysts say the answer may be yes.
Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Saddam Hussein shamed. Newspapers show photos of the ex-dictator in his underwear. As the Pentagon investigates, I'll speak with Saddam's lawyer.

UNIDENTIFIED MALE: He's not a happy man. No one likes to be in custody. To a certain extent, he still considers himself to be the president of the country.

BLITZER: Desecration demonstration.

UNIDENTIFIED MALE: Nuke, nuke Washington.

CROWD: Nuke, nuke, Washington.

UNIDENTIFIED MALE; Bomb, bomb Pentagon!

CROWD: Bomb, bomb Pentagon.

BLITZER: Blood-curdling calls echo in the capital of America's closest ally.

Stem cell standoff: South Koreans report a cloning breakthrough funded by their government.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm very concerned about cloning.

BLITZER: The president adds a warning about government funding in this country.

ANNOUNCER: This is WOLF BLITZER REPORTS for Friday, May 20, 2005.

(END VIDEOTAPE)

BLITZER: Thanks for joining us. On the cover of a tabloid newspaper for all the world to see, a photograph of Saddam Hussein stripped to his underwear. It's embarrassing for the ex-dictator, but that ex-dictator is also a prisoner entitled to certain legal protections, and that makes it an embarrassment for the U.S. military. We begin with our senior Pentagon correspondent Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well Wolf, the U.S. military quickly reacted, issuing a statement insisting that this was not an authorized release.

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): The "Sun" newspaper splashed the picture of the underwear-clad former dictator on its front page. The British tabloid claimed the photo, along with several others showing Saddam Hussein in captivity, were handed over by U.S. military sources who had said they hoped to deal a body blow to the resistance in Iraq.

Instead, the unauthorized release dealt the U.S. military another public relations nightmare by provoking outrage from many Iraqis.

UNIDENTIFIED FEMALE (through translator): It is not acceptable to show a president in such way. They must respect the name of a president all over the world regardless of if he is a dictator.

UNIDENTIFIED MALE (through translator): What we saw on TV is not right. Saddam Hussein is an Iraqi, and we are a civilized country.

MCINTYRE: In a statement, the U.S. military in Baghdad said "the photos were taken in clear violation of DOD directives and possibly Geneva convention guidelines," and expressed disappointment that "someone responsible for the security, welfare and detention of Saddam would provide these photos for public release."

Military sources tell CNN, based on the way Saddam looks and the backgrounds, the images appear to have been taken between January and April of 2004 and may have come from a security camera that monitors Saddam around the clock. The military says it's taking the unauthorized release very seriously.

The last thing the U.S. needs is a repeat of the violent demonstrations that followed a report, since retracted by "Newsweek" magazine, that military investigators confirmed U.S. interrogators desecrated a Koran. A prospect President Bush downplayed.

BUSH: I don't think a photo inspires murderers. I think they're inspired by an ideology that is so barbaric and backwards that it's hard for many in the western world to comprehend how they think.

(END VIDEOTAPE)

MCINTYRE: Wolf, only a small number of people have access to the super-secure jail where Saddam Hussein is being held. And no personal cameras are allowed in that facility. That narrows the number of suspects who could have leaked these pictures. The U.S. military is promising an aggressive investigation -- Wolf. BLITZER: Is there any doubt about the authenticity, Jamie, of these photographs? Has the Pentagon confirmed that they have not been doctored, that they are real?

MCINTYRE: They have not confirmed that. But they have said, as far as they can tell, they do appear to have been genuine and have been taken early last year. Based on that, they are conducting the investigation.

BLITZER: Jamie McIntyre at the Pentagon. Thanks, Jamie, very much.

The humiliating photos of Saddam Hussein earned little more than a shrug from the visiting Kuwaiti foreign minister, Mohammed al-Sabah, whose nation was overrun by Iraqi forces in 1990. We spoke earlier today.

(BEGIN VIDEOTAPE)

MOHAMMED AL-SABAH, KUWAITI FOREIGN MINISTER: I was a little bit disappointed that the press is picking up an issue of not really major relevance. Yesterday, Wolf, we buried five of our people who we discovered in Iraqi grave -- mass grave yards in Iraq.

BLITZER: Five Kuwaitis?

AL-SABAH: Five Kuwaitis. That's the big story really, the sort of horrors that Saddam inflicted on his people and our people.

BLITZER: He invaded your country, your small country, in August, 1990, occupied it for months until the war started in January, 1991. What do you hope happens to him?

AL-SABAH: To get a fair trial. And to record it in history that those who committed atrocities against their own people and against their neighborhood will pay a price for that.

BLITZER: Do you hope he gets the ultimate price, which is the death sentence?

AL-SABAH: I cannot imagine -- I think that he's going to go to hell. What happens to him on this Earth is really of minor a consequences. But I certainly believe in my heart of hearts that he's going to go to hell.

BLITZER: You hate his guts, don't you?

AL-SABAH: He is a villain. I cannot -- it's not a matter of hate. He destroyed his country. He destroyed his neighborhood. He destroyed the reputation of Arabs and Muslims. He gave a bad impression about us.

(END VIDEOTAPE)

BLITZER: My entire conversation with the foreign minister, Mohammed al-Sabah will air this Sunday. He'll be among my guests on LATE EDITION. That begins Sunday, noon Eastern, 9:00 a.m. Pacific.

Saddam Hussein's attorneys aren't happy about the photos showing the ex-dictator robbed of his dignity. But they're more concerned about the slow pace of legal proceedings a year and-a-half after his capture. Earlier, Saddam Hussein's legal counsel, Giovanni Di Stefano joined me from London.

(BEGIN VIDEOTAPE)

BLITZER: Mr. Di Stefano, thanks very much for joining us. What do you make of this...

GIOVANNI DI STEFANO, SADDAM HUSSEIN'S ATTORNEY: Good afternoon.

BLITZER: ...publication? First of all, have you confirmed, do you believe these photos to be authentic?

DI STEFANO: Well, whether they're authentic or not is actually quite irrelevant. The important issue -- and it's regrettable that something like this has happened -- the important issue is the statement made that we've just heard from the Kuwaiti foreign minister that he is expecting a fair trial.

The other important issue, of course, is the whole question of when is this man going to be charged? This is what the whole world wants.

Never mind about photographs of Saddam Hussein in his underpants. That will be dealt with by the Pentagon and their aggressive inquiry. But I would suggest that Mr. Rumsfeld and President Bush's aggressive inquiry is into why no charges have still been laid against President Saddam Hussein after 19 months in custody and only two legal visits within that 19 months. When is that going to happen? Doesn't matter whether he's in...

BLITZER: I was going to say, you've had access to Saddam Hussein, you and your co-counsels, your other defense attorneys. When you meet with him, what does he look like? What does he sound like? What does he say to you?

DI STEFANO: Well, that's been well documented already. I mean, he's not a happy man. No one likes to be in custody. To a certain extent, he still considers himself to be the president of the country.

The whole question, Wolf, is this -- 19 months and no charges. If there was evidence that this man had committed the crimes that the foreign minister had said from Kuwait -- and that may or may not be so -- why not bring charges?

The whole world is now beginning to have its doubts, not only on the legality of the war. But if the war was so legal, why not charge this man? Where are the charges? 19 months, not a single charge. Not one count. Why not charge him with murder? Rape? Genocide? War crimes? Let's have something. Because until such time...

BLITZER: I suspect, Mr. Di Stefano, that those charges are going to be made because certainly almost all of the Iraqi leaders of the new government -- and I have interviewed many of them -- they say those charges will be forthcoming as soon as they prepare and have their war crimes tribunal in place.

He did make that appearance in the court. And we're showing our viewers some pictures, when he showed up in the court before the presiding judge. What you want are the specific charges.

DI STEFANO: Well, Wolf, the problem -- there's another problem there that's the reason. That court is not the special tribunal. We have subsequently found out that that court is the central criminal court of Baghdad, which is an institution that was formulated by the coalition provisional authority, a body that no longer exists. What they didn't do is have transitionary powers to transfer him and other potential indictees to the special tribunal. That is the problem.

After millions of dollars that have been spent, 19 months, there is not a single American citizen that would stand for anyone in America or in the free world to be 19 months in custody without a charge. That is simply not correct.

BLITZER: Well, there are a lot of detainees being held at the U.S. Naval Base at Guantanamo Bay in Cuba and detainees being held elsewhere that haven't formally been charged with anything either.

DI STEFANO: That's not -- the issue here is the question of Saddam Hussein. There is a special tribunal. There are special statutes that were formulated and drafted by Salaam Chalabi. One is Article 20, which is a fair trial. And it's very, very important to note that the foreign minister of Kuwait, a country that Saddam Hussein invaded -- whether he did it right or wrong is yet to be seen -- he has asked for a fair trial. We at the defense ask for a trial. Never mind at the moment -- we would make do with a trial. In fact, we would make do with a charge. We've got nothing.

BLITZER: Well, let me ask you one -- let me ask you this question.

DI STEFANO: We have a man -- nothing.

BLITZER: Mr. Di Stefano, let me ask you this question about the charges that have been leveled against Saddam Hussein. One specific charge: He ordered the gassing of thousands of Kurds, poison gas in the late 1980s in the northern part of Iraq, in effect committing genocide against Kurds. Is that something that you accept?

DI STEFANO: I will accept any charge, even one of stealing a bicycle at this stage, because at the moment, we actually only have speculation. We do not have an indictment. This man must be properly charged, must be properly indicted, and everything has to be done properly in accordance with international law. If we want to preach democracy and the gospel according to democracy in other countries, we've got to start with doing things properly.

BLITZER: So you realize that a lot of our viewers in the United States and around the world hearing you now saying Saddam Hussein deserves these legal rights will argue, you know, this is a brutal dictator who, when he was in power for those decades, he didn't care at all about anyone's rights. If someone just looked at him in the wrong way, he ordered them dead. Why should he get some rights that he never granted anyone else?

DI STEFANO: Let us not then have a masquerade of hip chrisy. Let us be a country that simply shoots him. Even that solution may be acceptable to some. But we cannot preach the gospel of democracy; we can't say we're going on a mission of peace and bring soldiers there and say we want to bring freedom, and then not respect that freedom, because that is what we are bringing to Iraq. And the foreign minister of Kuwait -- I've said a third time now -- wants a fair trial. We are happy with a trial. We are happy at this stage with a charge. A single charge would be sufficient. And then the reputation of America and those holding him would be much higher.

BLITZER: I think you'll probably get that sooner rather than later, but we will find out. Giovanni di Stefano is a criminal defense attorney representing Saddam Hussein, and clearly has strong feelings on this subject, as he well should. Mr. di Stefano, thanks very much for spending a few moments with us here on CNN.

DI STEFANO: Thanks, Wolf.

BLITZER: When we come back, a breakthrough in stem cell research and human cloning research abroad, and it's raising some new ethical and medical questions here in the United States. At the same time, the president issuing a strong warning. We'll have details.

Also ahead --

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Nuke, nuke Washington.

CROWD: Nuke, nuke Washington.

UNIDENTIFIED MALE: Bomb, bomb Pentagon.

CROWD: Bomb, bomb Pentagon.

(END VIDEO CLIP)

BLITZER: Call to attack. Muslims calling for the killing of Americans and British people and their elected leaders.

And Laura Bush on the road today. The first lady showing off her independent side and going ahead and contradicting what some White House officials have been saying.

(COMMERCIAL BREAK)

BLITZER: Welcome back. South Korean scientists are announcing a controversial breakthrough. They've created the first embryonic stem cells that are exact genetic matches of individuals, in this case, sick and injured patients. The hope is the stem cells could be used to grow tissues that would not be rejected by the patients' own bodies. But the scientists caution such benefits are years, maybe even decades away. President Bush is expressing some concern about the South Korean research and is threatening to veto legislation in this country that would expand public funding of embryonic stem cell research.

Our White House correspondent, Dana Bash joining us now live with details.

Dana?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, the president's rare public threat is an indication the White House is concerned that there is growing momentum for changing the law, even among Republicans.

(BEGIN VIDEOTAPE)

BASH (voice over): In the Oval Office, a warning to lawmakers trying to lift the president's limits on federal funding for embryonic stem cell research.

GEORGE W. BUSH, U.S. PRESIDENT: The use of federal money, taxpayers' money to promote science which destroys life in order to save life is -- I'm against that. And therefore if the bill does that, I will veto it.

BASH: Four-plus years in office, the president's never used his veto pen. But Mr. Bush made the rare veto threat to try to blunt growing support for a bill the House will take up next week with nearly four dozen Republican sponsors.

REP. MICHAEL CASTLE (R), DELAWARE: We're essentially saying there are excess embryos in the in vitro fertilization process, and that we should be able to use those excess embryos to harvest stem cells.

BUSH: ... creating ongoing opportunities for research.

BASH: In 2001, Mr. Bush decided to allow federal funding for embryonic stem cell research for the first time, but strictly limited it to existing lines. Scientists complained many of those lines were contaminated and unusable in their search to cure diseases like Alzheimer's.

Laura Bush, the daughter of an Alzheimer's victim speaks out in support of her husband's position. But Nancy Reagan is among Mr. Bush's high-profile opponents on the issue. And a Republican group's TV ad argues current policy stymies medical research.

The president hopes to rally conservatives to his side with the argument, destroying embryos is tantamount to destroying life. But a nationwide GOP poll just last month found six in 10 Republicans support embryonic stem cell research. Only 40 percent described it as a right-to-life issue, while 54 percent say they considered it a scientific issue. Supporters of lifting limits concede they do not have enough votes to override a veto. But Bush allies still call his early active role critical.

REP. MIKE PENCE (R), INDIANA: I believe that an unambiguous statement by the president of the United States is of incalculable value to those of us that would like to defend the sanctity of life.

(END VIDEOTAPE)

BASH: The president also raised concerns about a report scientists in South Korea have succeeded in cloning human embryos. And the White House says that this idea of cloning just for the purpose of research is another step on a slippery slope. And, Wolf, that's one of the president fears would put science ahead of human life and dignity -- Wolf.

BLITZER: Dana Bash at the White House. Thanks, Dana.

New clues and hints that a capture perhaps could happen sometime soon. An update on the hunt for Osama bin Laden and what all the whispers are really all about.

Some very candid comments: The first lady Laura Bush showing a bolder, more independent side, as she hits the road.

Star Wars piracy: Illegal copies already on the Internet. Can Hollywood stomp down on downloading?

(COMMERCIAL BREAK)

BLITZER: Welcome back.

The first lady Laura Bush is in Jordan. Her first stop at a five-day tour of the Middle East designed to put a kinder, gentler face on U.S. policy in the region. Our White House correspondent Suzanne Malveaux is traveling with the first lady and spoke with her aboard her plane.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): The first lady arrives in the Middle East to promote democracy, women's rights and education reform. Her first stop, Jordan. But as the U.S. ambassador of good will, she acknowledged en route, in the Arab world she's got a tough message to sell.

LAURA BUSH, FIRST LADY: We've had terrible happenings that have really, really hurt our image in the United States. And they're not -- they were very atypical.

MALVEAUX: Mrs. Bush singled out the Abu Ghraib Prison abuse scandal, and more recently, the deadly riots over the erroneous "Newsweek" report that interrogators at Guantanamo Bay Prison had flushed the Koran down the toilet to rattle detainees. The Mrs. Bush said "Newsweek," which has since retracted the story is only partly to blame.

L. BUSH: In the United States, when there's a terrible report, people don't riot and kill other people. And you can't excuse what they did because of a mistake. You know, you can't blame it all on "Newsweek." But at the same time, it was irresponsible, and that's -- it's too bad.

MALVEAUX: Despite the first lady's itinerary to hot spots in Jerusalem and the West Bank, Mrs. Bush dismissed any security concerns.

L. BUSH: I think we'll all be safe.

MALVEAUX: And downplayed the report of a grenade discovered at the site where her husband spoke recently in Tblisi, Georgia.

L. BUSH: Thank God no one was hurt from that.

MALVEAUX: But the first lady did express misgivings that Mr. Bush wasn't interrupted while taking a leisurely bike ride in suburban, Maryland, when massive evacuations were taking place in Washington.

Last week, the White House went to red alert and Mrs. Bush to an emergency bunker when a small prop plane came within three miles of the grounds.

The White House says the president was satisfied Secret Service protocols were followed despite the fact he wasn't notified about the emergency until after it was all over.

L. BUSH: Well, I'm sure -- I mean, I think you should have been interrupted. But I'm not going to guess the Secret Service that were with him.

MALVEAUX: Suzanne Malveaux, CNN, Amman, Jordan.

(END VIDEOTAPE)

BLITZER: Will soaring home prices soon simmer down in various communities around the country? That's the prediction of the Federal Reserve Chairman Alan Greenspan who spoke today on what some say is a housing bubble that could pop, at least in certain areas of the United States. CNN's Kathleen Hays is on the story. She's in New York -- Kathleen.

KATHLEEN HAYS, CNN CORRESPONDENT: Well yes, Wolf, I'm on this story. Because this is certainly a very important story for people across the country. We know that for many of us, our home is no longer just where we live, it's an investment. The fed chairman for a long time has been saying he doesn't think there is a bubble.

Again today, in answers to questions on his speech, he said maybe he sees some froth in the housing market. No national bubble, but he did say there are a lot of local bubbles. He didn't name names, but he says he sees more speculation, more people reaching financially to buy homes.

I'll also be on the story of the latest report suggesting that inflation remains low and mortgage rates can stay low. And that is so important to preventing any kind of housing bubble, whatever you want to call it, from bursting, Wolf. We'll be on that story and a lot more.

BLITZER: Kathleen always has news all of us can use. Kathleen Hays, thanks very much.

And this important programming note to our viewers. "ON THE STORY" airs each Sunday, 10:00 a.m. Eastern here on CNN. This Sunday, you'll be able to see Suzanne Malveaux on the road in the Middle East. Kathleen Hays, she'll be here along with the rest of the panel this Sunday on the story, 10:00 a.m. Eastern.

The hunt for Osama bin Laden. Is the U.S. intelligence community closing in on the world's most wanted terrorist? We'll have a report. Plus this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Death to Tony Blair.

CROWD: Death to Tony Blair.

UNIDENTIFIED MALE: Death to George Bush.

CROWD: Death to George Bush.

(END VIDEO CLIP)

BUSH: Violent words. How British officials reacted to protesters chanting -- get this -- for another 9/11.

And storm watch: Tens of thousands flee their homes to avoid this season's first hurricane. We'll have an update on Adrian's path. That's coming up.

(COMMERCIAL BREAK)

ANNOUNCER: From our studios in Washington, once again, Wolf Blitzer.

BLITZER: Welcome back. The hype and the hunt for Osama bin Laden. Why some intelligence officials are becoming increasingly optimistic they're closing in on the al Qaeda leader. We'll have details.

First, though, a quick check of some other stories now in the news.

Another dead end in the search for two missing Idaho siblings. Police were tipped to a possible sighting of Dylan and Shasta Groene outside a store in Northern Idaho. But they now call that lead invalid. The children have been missing since their teenage brother, mother and her boyfriend were found murdered on Monday.

The Justice Department is working on a national public sex offender registry. It would link together existing state registries, allowing people to get information on sex offenders outside their area. Officials hope to have the Web site up and running by mid-July.

At least one person is dead in an avalanche in Colorado in a ski area there. It happened this morning on a closed run, although other parts of the mountain were open. At last report, no word on possible other victims. Continuing avalanche threats were keeping search crews off the slope.

Pakistan's foreign minister was quoted today as saying Osama bin Laden is moving from place to place with a small band of fighters. There's been some speculation that Pakistani forces actually may be closing in on him. Our Pentagon correspondent Barbara Starr has been looking into all of this.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): A number of knowledgeable present and former intelligence officials tell CNN it would not surprise them if Osama bin Laden is found soon. But are those statements just hype?

There are reasons for cautious optimism. Intelligence officials say al Qaeda has been shaken by recent events. The working assumption in many intelligence quarters is that since the company capture of al Qaeda's alleged No. 3, Abu Faraj al Libbi, bin Laden has moved hideouts.

JOHN MCLAUGHLIN, CNN NATL. SECURITY ADVISER: Bin Laden and his entourage probably feel some necessity to move around. They're probably taking precautions. But once they begin to move, then there is always the possibility of seeing some dust kicked up and getting some leads.

STARR: Pakistani troops recently searched known al Qaeda safe houses and found evidence of hasty departures, according to U.S. officials. One intelligence source says it's an indicator al Qaeda feels vulnerable.

Military sources tell CNN Pakistani troops are now deep into the tribal areas in previously unsearched locations. A CIA drone firing a Hellfire missile killed another bin Laden associate, Hafamal Yemeni inside Pakistan earlier this month.

Why bother to kill him? Bin Laden has a similar tribal background to al Yemeni and may have trusted him enough to let him get close.

PETER BERGEN, CNN TERRORISM ANALYST: Something that would add credence to the notion that this attack on -- the hellfire attack on al Yemeni was related in some way to bin Laden's actual presence.

STARR: But shaken up or not, few believe bin Laden will get sloppy.

MCLAUGHLIN: My hunch is that his communications at this point are so tightly buttoned down that you're not likely to engage him.

STARR (on camera): Just this week, Defense Secretary Donald Rumsfeld declined to predict when Osama bin Laden might be caught. No one knows if bin Laden really is feeling the pressure, but that is the hope.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

BLITZER: The reason for the rally was the alleged desecration of the Koran, but the result was a series of blood curdling threats, about as violent as words can get. The setting was not Afghanistan, but the streets of London. Our senior international correspondent Walter Rogers is there. And he filed this report.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE; Down, down USA.

CROWD: Down, down, USA.

WALTER RODGERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: About 300 Muslims gathered outside the U.S. embassy in London, showing a less than merciful face to political Islam. They called for the killing of Americans, the death of the president of the United States, the death of the British prime minister, the bombing of Britain and the unthinkable in the U.S. capital.

UNIDENTIFIED MALE; Nuke, nuke, Washington.

CROWD: Nuke, nuke Washington.

UNIDENTIFIED MALE: Bomb, bomb Pentagon.

CROWD: Bomb, bomb Pentagon.

RODGERS: Some of the militant Islamic rhetoric smacked of incitement to commit murder.

UNIDENTIFIED MALE: Death to Tony Blair.

CROWD: Death to Tony Blair.

UNIDENTIFIED MALE; Death to George Bush.

CROWD: Death to George Bush.

RODGERS: A British policeman said the language was offensive and unpleasant in the extreme, but they overlook that. Also overlooked, the fact that more than a few of the young men in the crowd covered their faces technically a violation of British law, again, according to police. UNIDENTIFIED MALE; The only language we speak today is the language of Jihad.

RODGERS: Ostensibly, these British Muslims are protesting the alleged desecration of their holy book, the Koran, at the American detention center at Guantanamo, that story now retracted by "Newsweek." Still, this former Guantanamo detainee made this accusation.

UNIDENTIFIED MALE: The soldier picked up the Koran and threw it on the floor.

RODGERS: Holding their Korans high, they called for death and mayhem, praising the destruction of New York's Twin Towers, saying the White House is next.

UNIDENTIFIED MALE; The desecration of the White House is to follow as promised. George Bush, you will pay.

CROWD: George Bush, you will pay.

UNIDENTIFIED MALE: With your blood. With your blood.

CROWD: With you blood. With you blood.

RODGERS: This rally, remarkable not so much for the size of the crowd, but for the ferocity and virulence of the things said. And before they broke up and went home, meditation. They all prayed.

Walter Rodgers, CNN, London.

(END VIDEOTAPE)

BLITZER: Let's take a quick look at some other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Unrest in southern Iraq. Where supporters of Shiite cleric Muqtada al-Sadr staged anti-American protests. The demonstrators also want members of al-Sadr's militia put on the provisional police force. Six injuries are reported.

Historic meeting: Hundreds of political dissidents met in Havana. It was the first big opposition gathering inside Cuba since Fidel Castro took power in 1959. And one participant said he was surprised Castro allowed it to take place.

First hurricane: The first storm of the Pacific hurricane season hit El Salvador forcing thousands to leave their homes. Hurricane Adrian made landfall with sustained winds near 75 miles an hour. But it weakened quickly as it crossed Central America.

And that's our look around the world.

(END VIDEOTAPE) BLITZER: Partners in the war on terror: A close U.S. ally in a key corner of Europe. The Greek prime minister visiting Washington. He'll visit with us. We'll talk about his meeting with President Bush at the White House. Plus more.

And the Senate standoff and the long term implications, our Carlos Watson joins us with the "Inside Edge."

And later, the latest Star Wars movie now playing -- get this -- on a computer near you. Why some think it was an inside job.

(COMMERCIAL BREAK)

BLITZER: A key NATO ally with an important role ranging from the Balkans to Afghanistan, the Greek prime minister Costas Karamanlis paid a visit to the White House today. And shortly after that, he sat down with me.

(BEGIN VIDEOTAPE)

BLITZER: Prime minister, welcome back to Washington. Good to have you here at CNN.

COSTAS KARAMANLIS, GREEK PRIME MINISTER: Good to see you again, Mr. Blitzer.

BLITZER: Let's talk about attitudes towards America in Greece. We hear a lot in this country about anti-American attitudes. What's it like from your perspective among the Greek people.

I think the average Greek citizen has a very positive attitude.

BLITZER: And the war in Iraq...

KARAMANLIS: ...about Americans.

BLITZER: Did the war in Iraq change that?

KARAMANLIS: One has not to mix different things. It's very natural that people not only in Greece, all over the world, might have one or another attitude on specific issues or decisions on foreign policy or international behavior of not only United States -- but the United States being a super power, the great power of the world, is naturally attracting all the focus on its own moves. So I would say I wouldn't put it in black and white.

BLITZER: The war in Iraq, was it popular in Greece?

KARAMANLIS: No, it wasn't popular all over Europe. That's known and clear. But I wouldn't say that one should infer, make easy conclusions, about the general attitude the Greek people, or for that matter, any European people, hates the American and American people.

BLITZER They still like Americans, but not necessarily the policy as far as Iraq is concerned?

KARAMANLIS: Not always all the policies.

BLITZER: All right. Let's talk a little about the new Iraq. There's a government, elections. Is your government prepared to change its policy and become more actively involved, perhaps even militarily, in helping this new Iraqi government against the insurgency?

KARAMANLIS: Let me tell you something, one shouldn't look back. Now we have a positive development -- elections, a new president, a new prime minister. And we are very hopeful that these process will move speedily towards a fell Democraticization and a society which is based in the rule of law.

BLITZER: Can Greece help?

KARAMANLIS: We are already helping.

BLITZER: What are you doing?

KARAMANLIS: Economically. We are participating in training Iraqi forces. So, we are involved not only in Iraq, but in the broader effort to promote democracy, stability, the rule of law, civil society throughout the broad region.

BLITZER: You're more actively involved in Afghanistan than in Iraq.

KARAMANLIS: That's true.

BLITZER: Why? What's the difference between Afghanistan and Iraq right now?

KARAMANLIS: The difference was initially that Afghanistan was clearly under the auspices of the United Nations. So in Iraq, the war, as you remember, was opposed by Europe, the European Union, et cetera.

But that's all back. What we need to do is focus on the priorities we have. And the priority is a full and speedy Democraticization of Iraq and, of course, the spreading of the basic principles of civility and democracy throughout the broader region.

BLITZER: So on that, you're on the same page when it comes to democracy and President Bush. Did you see that picture today of Saddam Hussein in his underwear?

KARAMANLIS: No, I didn't.

BLITZER: You haven't seen it yet?

KARAMANLIS: No.

BLITZER: Because it's all over the media, the tabloids. The photograph, Saddam Hussein in prison. But there's a picture, we don't know if it's authentic, of him in his underwear.

KARAMANLIS: I haven't seen it.

BLITZER: The people of Iraq, you believe, are better off without Saddam Hussein?

KARAMANLIS: I believe every people has the right to a ascertain it's own rights on liberty, democracy and an open society. And what now the priority for them, and I think for all the world is, is to move on to the next day. And the next day is an Iraq which is governed by itself, has a democratically elected government and takes a role in construction and eventually prosperity.

BLITZER: You spent some time at the White House with the president of the United States today. Are there any serious problems in U.S.-Greek relations that came up during this meeting?

KARAMANLIS: No, there are no serious problems. At this stage, I think we have a good understanding, a very good level of bilateral relations and of course, quite a number of issues of mutual concern which are, broadly speaking, the international. Balkans, for example, Middle East, Cyprus. So there are issues which are of mutual interest to promote our common goals.

BLITZER: Welcome to Washington, Mr. Prime Minister. Always good to see you when you're here.

KARAMANLIS: Thank you very much, Mr. Blitzer.

(END VIDEOTAPE)

BLITZER: Coming up at the top of the hour, LOU DOBBS TONIGHT. Lou is standing by in New York with a little bit of a preview -- Lou.

LOU DOBBS, CNN ANCHOR: Thank you very much, Wolf.

At 6:00 p.m. Eastern here on CNN, we'll be reporting on two major new breakthroughs on embryonic stem cell research. But President Bush today declared he will never support science that destroys life to save life.

Also, Saddam Hussein exposed: a British tabloid publishes photographs of Saddam Hussein in his underwear in captivity. The Pentagon says it is furious about that. We'll have the report.

And our special report tonight, "Heroes," our salute to men and women in uniform. Tonight, a true example of bravery under fire. The story of a U.S. Marine shot seven times in Fallujah. He survived, and he saved his comrades. All of that and more in just a few minutes. Please join us.

Now back to you, Wolf.

BLITZER: Thanks very much. Certainly sounds like a good hero to profile. Appreciate it so much. "LOU DOBBS TONIGHT" coming up at the top of the hour.

A new chapter in stem cell politics as President Bush threatens to veto a bill expanding public funding for research.

Stealing Star Wars, the blockbuster already available -- get this -- on the Internet.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Every Friday, Carlos Watson joins us with the "Inside Edge." He's here in Washington today. Let's talk about various issues, starting with the Democrats, the filibuster, the long term impact. What do you see, Carlos?

CARLOS WATSON, CNN POLITICAL ANALYST: Wolf, as you know, the public still hasn't really engaged in this. This is still kind of a Washington and political junkie story.

But two interesting implications I think to think about over the long term. On the one hand, you see a lot of Republicans, including people like Trent Lott, Lindsay Graham, and others, kind of jumping into the fray. And in some ways you're saying, maybe that's good, they're looking for a deal. But in other way, if you're Bill Frist, your saying if you lose this battle ultimately over the filibuster, you may be a lame duck even before you leave the Senate after 2006. So that's one part of it.

The other implication, though, is what if Republicans win? What is becoming increasingly clear is that what Clarence Thomas went through, what Judge Bork went through, what John Tower went through, people -- personal scandals and people's past will be brought up in a significant way if the filibuster goes away.

BLITZER: All right. Let's jump from the filibuster to South Korea and this very dramatic announcement yesterday that they've got this break through in stem cell research. You've been looking into that .

WATSON: You know what's so interesting, Wolf. You know, when we think about globalization, we think about jobs. Being that jobs are going overseas. Maybe we think about the NBA becoming much more global. We think about the fact that our movies now come from around the world.

But it's now clear that even science and technology, really, there's a very global marketplace. And for the U.S., and frankly for the U.S. government, it puts us in an interesting position.

When we've got more and more dilemmas that pit ethics and science and put those two together, can we really make decisions by ourselves in a vacuum? Or, just as people now often cross the border into Canada to get prescription drugs or treatment, or people now go overseas to adopt kids, will this become part of the story too? And if so, how do we handle it?

I think the thing to look for is when does the U.S. begin to call for something that is, if you will, the equivalent of the WTO, the World Trade organization? An international body that brokers these kind of scientific and ethic disputes, something to talk about over the next year or two.

BLITZER: We'll be talking about the globalization of the scientific community, I think it exists. Democracy in Africa. The president is pushing democracy all over the world, but recently in Africa the trend is not necessarily been all that great.

WATSON: Not all that great. You know, what's interesting, as you know, Mrs. Bush took off on a five-day trip, visiting Egypt, among other places, at the tip of Africa.

There is a lot of focus, understandably, on the Middle East as a place where the president and others want to promote democracy abroad. But this may be a real moment in Africa to take advantage of.

While we saw independence movements in the '50s and '60s, and we saw a lot of coups in the '70s and '80s and unstable governments, and we're seeing a lot of bad news in places like Sudan and Somalia and Niger and Congo.

There are about a half dozen places, Wolf, where we're starting to see some Democratic transitions. Talking about Senegal, talking Botswana, talking about South Africa. This will be an interesting time for the president and for Congress to really make democracy in Africa a focus, and frankly use the help of religious groups who are sending north of $5 billion a year in various donations.

BLITZER: Carlos Watson, every Friday has the "Inside Edge." Thanks, Carlos.

WATSON: Good to join you.

BLITZER: Have a great weekend.

WATSON: You to.

BLITZER: When we come back, piracy problems. Loyal Star Wars fans parading into theaters around the country and around the world to see the film. But illegal copies of that movie have already hit the Internet. Our Mary Snow standing by with the story.

(COMMERCIAL BREAK)

BLITZER: Studio officials say the new Star Wars movie, "The Revenge Of The Sith," took in $50 million on its first day alone, a new box office record. Despite that, some people have found a way to see the movie without buying a ticket. Our Mary Snow is standing in New York. She has details -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well Wolf, it is pirates, not aliens, proving to be the dark force of this latest Star Wars movie as Hollywood tries to fend off what it says is a significant problem in the movie industry.

BEGIN VIDEOTAPE)

SNOW (voice-over): As fans lined up around the country to see the final chapter of Star Wars, the movie made an illegal debut on the Internet. This fan, who asked not to be identified, says it was available on specific down downloading sites Thursday.

UNIDENTIFIED MALE; I click one button, and it's done within an hour and a half, DVD quality.

SNOW: The Motion Picture Association of America says it's working aggressively to investigate how the film got on the Internet.

DEAN GARFIELD, MPAA: The last time we checked, there are tens of thousands of people who have downloaded it.

SNOW: The film's distributor, 20th Century FOX and its maker, Lucas Film, are also investigating. In a statement, Lucas Film says "it will pursue anyone involved with the unauthorized sale or purchase of copyrighted materials and ensure they are prosecuted to the full extent of the law."

The MPAA says penalties range from hefty fines to possible criminal charges. The group says there were time codes on the movie, which are used by Hollywood studios, that's different from someone videotaping an advanced screening, which is usually the source of illegal DVDs.

GARFIELD: There may be some likelihood that the source of the movie was someone who was involved in the post-production of the movie. That is not clear, but it may, in fact, be the case.

SNOW: Downloading movies is not new, but the downloading of Star Wars is gaining a lot of attention.

UNIDENTIFIED MALE; It's a geek movie. And the geeks are really into this stuff. And the geeks are the ones using this technology. So, it's sort of viewed as a test case to exactly how exposed is Hollywood to online downloading.

SNOW: Clive Thompson of "Wired" magazine says for now, Hollywood's exposure is limited, because downloading movies takes top end tools and is harder than downloading music. Still, he says, it's a challenge for film makers.

CLIVE THOMPSON, WIRED: The genie is out of the bottle, and I think Hollywood is going to have to figure out how to make money out it.

SNOW: He says downloading today can be compared to the threat to the movie industry posed 20 years ago by the VHS tape, which now makes millions for the industry.

(END VIDEOTAPE)

SNOW: And movie makers are trying to avoid what happened to the music industry, which claims it lost hundreds of millions of dollars by illegal downloading -- Wolf.

BLITZER: Mary Snow reporting from New York. Mary, thanks very much.

I'll be back Sunday on CNN's "LATE EDITION." Among my guests this Sunday, Hamid Karzai, the president of Afghanistan. "LATE EDITION" airs Sunday, noon Eastern. Also, Mohammed al-Sabah, the Kuwaiti foreign minister.

Until then, thanks very much for joining us. "LOU DOBBS TONIGHT" starts right now. And Lou is standing by in New York -- Lou.

END

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 May 20, 2005 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Happening now. Is the terror trail leading the U.S. intelligence community closer to Osama bin Laden? Some analysts say the answer may be yes.
Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Saddam Hussein shamed. Newspapers show photos of the ex-dictator in his underwear. As the Pentagon investigates, I'll speak with Saddam's lawyer.

UNIDENTIFIED MALE: He's not a happy man. No one likes to be in custody. To a certain extent, he still considers himself to be the president of the country.

BLITZER: Desecration demonstration.

UNIDENTIFIED MALE: Nuke, nuke Washington.

CROWD: Nuke, nuke, Washington.

UNIDENTIFIED MALE; Bomb, bomb Pentagon!

CROWD: Bomb, bomb Pentagon.

BLITZER: Blood-curdling calls echo in the capital of America's closest ally.

Stem cell standoff: South Koreans report a cloning breakthrough funded by their government.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm very concerned about cloning.

BLITZER: The president adds a warning about government funding in this country.

ANNOUNCER: This is WOLF BLITZER REPORTS for Friday, May 20, 2005.

(END VIDEOTAPE)

BLITZER: Thanks for joining us. On the cover of a tabloid newspaper for all the world to see, a photograph of Saddam Hussein stripped to his underwear. It's embarrassing for the ex-dictator, but that ex-dictator is also a prisoner entitled to certain legal protections, and that makes it an embarrassment for the U.S. military. We begin with our senior Pentagon correspondent Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well Wolf, the U.S. military quickly reacted, issuing a statement insisting that this was not an authorized release.

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): The "Sun" newspaper splashed the picture of the underwear-clad former dictator on its front page. The British tabloid claimed the photo, along with several others showing Saddam Hussein in captivity, were handed over by U.S. military sources who had said they hoped to deal a body blow to the resistance in Iraq.

Instead, the unauthorized release dealt the U.S. military another public relations nightmare by provoking outrage from many Iraqis.

UNIDENTIFIED FEMALE (through translator): It is not acceptable to show a president in such way. They must respect the name of a president all over the world regardless of if he is a dictator.

UNIDENTIFIED MALE (through translator): What we saw on TV is not right. Saddam Hussein is an Iraqi, and we are a civilized country.

MCINTYRE: In a statement, the U.S. military in Baghdad said "the photos were taken in clear violation of DOD directives and possibly Geneva convention guidelines," and expressed disappointment that "someone responsible for the security, welfare and detention of Saddam would provide these photos for public release."

Military sources tell CNN, based on the way Saddam looks and the backgrounds, the images appear to have been taken between January and April of 2004 and may have come from a security camera that monitors Saddam around the clock. The military says it's taking the unauthorized release very seriously.

The last thing the U.S. needs is a repeat of the violent demonstrations that followed a report, since retracted by "Newsweek" magazine, that military investigators confirmed U.S. interrogators desecrated a Koran. A prospect President Bush downplayed.

BUSH: I don't think a photo inspires murderers. I think they're inspired by an ideology that is so barbaric and backwards that it's hard for many in the western world to comprehend how they think.

(END VIDEOTAPE)

MCINTYRE: Wolf, only a small number of people have access to the super-secure jail where Saddam Hussein is being held. And no personal cameras are allowed in that facility. That narrows the number of suspects who could have leaked these pictures. The U.S. military is promising an aggressive investigation -- Wolf. BLITZER: Is there any doubt about the authenticity, Jamie, of these photographs? Has the Pentagon confirmed that they have not been doctored, that they are real?

MCINTYRE: They have not confirmed that. But they have said, as far as they can tell, they do appear to have been genuine and have been taken early last year. Based on that, they are conducting the investigation.

BLITZER: Jamie McIntyre at the Pentagon. Thanks, Jamie, very much.

The humiliating photos of Saddam Hussein earned little more than a shrug from the visiting Kuwaiti foreign minister, Mohammed al-Sabah, whose nation was overrun by Iraqi forces in 1990. We spoke earlier today.

(BEGIN VIDEOTAPE)

MOHAMMED AL-SABAH, KUWAITI FOREIGN MINISTER: I was a little bit disappointed that the press is picking up an issue of not really major relevance. Yesterday, Wolf, we buried five of our people who we discovered in Iraqi grave -- mass grave yards in Iraq.

BLITZER: Five Kuwaitis?

AL-SABAH: Five Kuwaitis. That's the big story really, the sort of horrors that Saddam inflicted on his people and our people.

BLITZER: He invaded your country, your small country, in August, 1990, occupied it for months until the war started in January, 1991. What do you hope happens to him?

AL-SABAH: To get a fair trial. And to record it in history that those who committed atrocities against their own people and against their neighborhood will pay a price for that.

BLITZER: Do you hope he gets the ultimate price, which is the death sentence?

AL-SABAH: I cannot imagine -- I think that he's going to go to hell. What happens to him on this Earth is really of minor a consequences. But I certainly believe in my heart of hearts that he's going to go to hell.

BLITZER: You hate his guts, don't you?

AL-SABAH: He is a villain. I cannot -- it's not a matter of hate. He destroyed his country. He destroyed his neighborhood. He destroyed the reputation of Arabs and Muslims. He gave a bad impression about us.

(END VIDEOTAPE)

BLITZER: My entire conversation with the foreign minister, Mohammed al-Sabah will air this Sunday. He'll be among my guests on LATE EDITION. That begins Sunday, noon Eastern, 9:00 a.m. Pacific.

Saddam Hussein's attorneys aren't happy about the photos showing the ex-dictator robbed of his dignity. But they're more concerned about the slow pace of legal proceedings a year and-a-half after his capture. Earlier, Saddam Hussein's legal counsel, Giovanni Di Stefano joined me from London.

(BEGIN VIDEOTAPE)

BLITZER: Mr. Di Stefano, thanks very much for joining us. What do you make of this...

GIOVANNI DI STEFANO, SADDAM HUSSEIN'S ATTORNEY: Good afternoon.

BLITZER: ...publication? First of all, have you confirmed, do you believe these photos to be authentic?

DI STEFANO: Well, whether they're authentic or not is actually quite irrelevant. The important issue -- and it's regrettable that something like this has happened -- the important issue is the statement made that we've just heard from the Kuwaiti foreign minister that he is expecting a fair trial.

The other important issue, of course, is the whole question of when is this man going to be charged? This is what the whole world wants.

Never mind about photographs of Saddam Hussein in his underpants. That will be dealt with by the Pentagon and their aggressive inquiry. But I would suggest that Mr. Rumsfeld and President Bush's aggressive inquiry is into why no charges have still been laid against President Saddam Hussein after 19 months in custody and only two legal visits within that 19 months. When is that going to happen? Doesn't matter whether he's in...

BLITZER: I was going to say, you've had access to Saddam Hussein, you and your co-counsels, your other defense attorneys. When you meet with him, what does he look like? What does he sound like? What does he say to you?

DI STEFANO: Well, that's been well documented already. I mean, he's not a happy man. No one likes to be in custody. To a certain extent, he still considers himself to be the president of the country.

The whole question, Wolf, is this -- 19 months and no charges. If there was evidence that this man had committed the crimes that the foreign minister had said from Kuwait -- and that may or may not be so -- why not bring charges?

The whole world is now beginning to have its doubts, not only on the legality of the war. But if the war was so legal, why not charge this man? Where are the charges? 19 months, not a single charge. Not one count. Why not charge him with murder? Rape? Genocide? War crimes? Let's have something. Because until such time...

BLITZER: I suspect, Mr. Di Stefano, that those charges are going to be made because certainly almost all of the Iraqi leaders of the new government -- and I have interviewed many of them -- they say those charges will be forthcoming as soon as they prepare and have their war crimes tribunal in place.

He did make that appearance in the court. And we're showing our viewers some pictures, when he showed up in the court before the presiding judge. What you want are the specific charges.

DI STEFANO: Well, Wolf, the problem -- there's another problem there that's the reason. That court is not the special tribunal. We have subsequently found out that that court is the central criminal court of Baghdad, which is an institution that was formulated by the coalition provisional authority, a body that no longer exists. What they didn't do is have transitionary powers to transfer him and other potential indictees to the special tribunal. That is the problem.

After millions of dollars that have been spent, 19 months, there is not a single American citizen that would stand for anyone in America or in the free world to be 19 months in custody without a charge. That is simply not correct.

BLITZER: Well, there are a lot of detainees being held at the U.S. Naval Base at Guantanamo Bay in Cuba and detainees being held elsewhere that haven't formally been charged with anything either.

DI STEFANO: That's not -- the issue here is the question of Saddam Hussein. There is a special tribunal. There are special statutes that were formulated and drafted by Salaam Chalabi. One is Article 20, which is a fair trial. And it's very, very important to note that the foreign minister of Kuwait, a country that Saddam Hussein invaded -- whether he did it right or wrong is yet to be seen -- he has asked for a fair trial. We at the defense ask for a trial. Never mind at the moment -- we would make do with a trial. In fact, we would make do with a charge. We've got nothing.

BLITZER: Well, let me ask you one -- let me ask you this question.

DI STEFANO: We have a man -- nothing.

BLITZER: Mr. Di Stefano, let me ask you this question about the charges that have been leveled against Saddam Hussein. One specific charge: He ordered the gassing of thousands of Kurds, poison gas in the late 1980s in the northern part of Iraq, in effect committing genocide against Kurds. Is that something that you accept?

DI STEFANO: I will accept any charge, even one of stealing a bicycle at this stage, because at the moment, we actually only have speculation. We do not have an indictment. This man must be properly charged, must be properly indicted, and everything has to be done properly in accordance with international law. If we want to preach democracy and the gospel according to democracy in other countries, we've got to start with doing things properly.

BLITZER: So you realize that a lot of our viewers in the United States and around the world hearing you now saying Saddam Hussein deserves these legal rights will argue, you know, this is a brutal dictator who, when he was in power for those decades, he didn't care at all about anyone's rights. If someone just looked at him in the wrong way, he ordered them dead. Why should he get some rights that he never granted anyone else?

DI STEFANO: Let us not then have a masquerade of hip chrisy. Let us be a country that simply shoots him. Even that solution may be acceptable to some. But we cannot preach the gospel of democracy; we can't say we're going on a mission of peace and bring soldiers there and say we want to bring freedom, and then not respect that freedom, because that is what we are bringing to Iraq. And the foreign minister of Kuwait -- I've said a third time now -- wants a fair trial. We are happy with a trial. We are happy at this stage with a charge. A single charge would be sufficient. And then the reputation of America and those holding him would be much higher.

BLITZER: I think you'll probably get that sooner rather than later, but we will find out. Giovanni di Stefano is a criminal defense attorney representing Saddam Hussein, and clearly has strong feelings on this subject, as he well should. Mr. di Stefano, thanks very much for spending a few moments with us here on CNN.

DI STEFANO: Thanks, Wolf.

BLITZER: When we come back, a breakthrough in stem cell research and human cloning research abroad, and it's raising some new ethical and medical questions here in the United States. At the same time, the president issuing a strong warning. We'll have details.

Also ahead --

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Nuke, nuke Washington.

CROWD: Nuke, nuke Washington.

UNIDENTIFIED MALE: Bomb, bomb Pentagon.

CROWD: Bomb, bomb Pentagon.

(END VIDEO CLIP)

BLITZER: Call to attack. Muslims calling for the killing of Americans and British people and their elected leaders.

And Laura Bush on the road today. The first lady showing off her independent side and going ahead and contradicting what some White House officials have been saying.

(COMMERCIAL BREAK)

BLITZER: Welcome back. South Korean scientists are announcing a controversial breakthrough. They've created the first embryonic stem cells that are exact genetic matches of individuals, in this case, sick and injured patients. The hope is the stem cells could be used to grow tissues that would not be rejected by the patients' own bodies. But the scientists caution such benefits are years, maybe even decades away. President Bush is expressing some concern about the South Korean research and is threatening to veto legislation in this country that would expand public funding of embryonic stem cell research.

Our White House correspondent, Dana Bash joining us now live with details.

Dana?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, the president's rare public threat is an indication the White House is concerned that there is growing momentum for changing the law, even among Republicans.

(BEGIN VIDEOTAPE)

BASH (voice over): In the Oval Office, a warning to lawmakers trying to lift the president's limits on federal funding for embryonic stem cell research.

GEORGE W. BUSH, U.S. PRESIDENT: The use of federal money, taxpayers' money to promote science which destroys life in order to save life is -- I'm against that. And therefore if the bill does that, I will veto it.

BASH: Four-plus years in office, the president's never used his veto pen. But Mr. Bush made the rare veto threat to try to blunt growing support for a bill the House will take up next week with nearly four dozen Republican sponsors.

REP. MICHAEL CASTLE (R), DELAWARE: We're essentially saying there are excess embryos in the in vitro fertilization process, and that we should be able to use those excess embryos to harvest stem cells.

BUSH: ... creating ongoing opportunities for research.

BASH: In 2001, Mr. Bush decided to allow federal funding for embryonic stem cell research for the first time, but strictly limited it to existing lines. Scientists complained many of those lines were contaminated and unusable in their search to cure diseases like Alzheimer's.

Laura Bush, the daughter of an Alzheimer's victim speaks out in support of her husband's position. But Nancy Reagan is among Mr. Bush's high-profile opponents on the issue. And a Republican group's TV ad argues current policy stymies medical research.

The president hopes to rally conservatives to his side with the argument, destroying embryos is tantamount to destroying life. But a nationwide GOP poll just last month found six in 10 Republicans support embryonic stem cell research. Only 40 percent described it as a right-to-life issue, while 54 percent say they considered it a scientific issue. Supporters of lifting limits concede they do not have enough votes to override a veto. But Bush allies still call his early active role critical.

REP. MIKE PENCE (R), INDIANA: I believe that an unambiguous statement by the president of the United States is of incalculable value to those of us that would like to defend the sanctity of life.

(END VIDEOTAPE)

BASH: The president also raised concerns about a report scientists in South Korea have succeeded in cloning human embryos. And the White House says that this idea of cloning just for the purpose of research is another step on a slippery slope. And, Wolf, that's one of the president fears would put science ahead of human life and dignity -- Wolf.

BLITZER: Dana Bash at the White House. Thanks, Dana.

New clues and hints that a capture perhaps could happen sometime soon. An update on the hunt for Osama bin Laden and what all the whispers are really all about.

Some very candid comments: The first lady Laura Bush showing a bolder, more independent side, as she hits the road.

Star Wars piracy: Illegal copies already on the Internet. Can Hollywood stomp down on downloading?

(COMMERCIAL BREAK)

BLITZER: Welcome back.

The first lady Laura Bush is in Jordan. Her first stop at a five-day tour of the Middle East designed to put a kinder, gentler face on U.S. policy in the region. Our White House correspondent Suzanne Malveaux is traveling with the first lady and spoke with her aboard her plane.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): The first lady arrives in the Middle East to promote democracy, women's rights and education reform. Her first stop, Jordan. But as the U.S. ambassador of good will, she acknowledged en route, in the Arab world she's got a tough message to sell.

LAURA BUSH, FIRST LADY: We've had terrible happenings that have really, really hurt our image in the United States. And they're not -- they were very atypical.

MALVEAUX: Mrs. Bush singled out the Abu Ghraib Prison abuse scandal, and more recently, the deadly riots over the erroneous "Newsweek" report that interrogators at Guantanamo Bay Prison had flushed the Koran down the toilet to rattle detainees. The Mrs. Bush said "Newsweek," which has since retracted the story is only partly to blame.

L. BUSH: In the United States, when there's a terrible report, people don't riot and kill other people. And you can't excuse what they did because of a mistake. You know, you can't blame it all on "Newsweek." But at the same time, it was irresponsible, and that's -- it's too bad.

MALVEAUX: Despite the first lady's itinerary to hot spots in Jerusalem and the West Bank, Mrs. Bush dismissed any security concerns.

L. BUSH: I think we'll all be safe.

MALVEAUX: And downplayed the report of a grenade discovered at the site where her husband spoke recently in Tblisi, Georgia.

L. BUSH: Thank God no one was hurt from that.

MALVEAUX: But the first lady did express misgivings that Mr. Bush wasn't interrupted while taking a leisurely bike ride in suburban, Maryland, when massive evacuations were taking place in Washington.

Last week, the White House went to red alert and Mrs. Bush to an emergency bunker when a small prop plane came within three miles of the grounds.

The White House says the president was satisfied Secret Service protocols were followed despite the fact he wasn't notified about the emergency until after it was all over.

L. BUSH: Well, I'm sure -- I mean, I think you should have been interrupted. But I'm not going to guess the Secret Service that were with him.

MALVEAUX: Suzanne Malveaux, CNN, Amman, Jordan.

(END VIDEOTAPE)

BLITZER: Will soaring home prices soon simmer down in various communities around the country? That's the prediction of the Federal Reserve Chairman Alan Greenspan who spoke today on what some say is a housing bubble that could pop, at least in certain areas of the United States. CNN's Kathleen Hays is on the story. She's in New York -- Kathleen.

KATHLEEN HAYS, CNN CORRESPONDENT: Well yes, Wolf, I'm on this story. Because this is certainly a very important story for people across the country. We know that for many of us, our home is no longer just where we live, it's an investment. The fed chairman for a long time has been saying he doesn't think there is a bubble.

Again today, in answers to questions on his speech, he said maybe he sees some froth in the housing market. No national bubble, but he did say there are a lot of local bubbles. He didn't name names, but he says he sees more speculation, more people reaching financially to buy homes.

I'll also be on the story of the latest report suggesting that inflation remains low and mortgage rates can stay low. And that is so important to preventing any kind of housing bubble, whatever you want to call it, from bursting, Wolf. We'll be on that story and a lot more.

BLITZER: Kathleen always has news all of us can use. Kathleen Hays, thanks very much.

And this important programming note to our viewers. "ON THE STORY" airs each Sunday, 10:00 a.m. Eastern here on CNN. This Sunday, you'll be able to see Suzanne Malveaux on the road in the Middle East. Kathleen Hays, she'll be here along with the rest of the panel this Sunday on the story, 10:00 a.m. Eastern.

The hunt for Osama bin Laden. Is the U.S. intelligence community closing in on the world's most wanted terrorist? We'll have a report. Plus this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Death to Tony Blair.

CROWD: Death to Tony Blair.

UNIDENTIFIED MALE: Death to George Bush.

CROWD: Death to George Bush.

(END VIDEO CLIP)

BUSH: Violent words. How British officials reacted to protesters chanting -- get this -- for another 9/11.

And storm watch: Tens of thousands flee their homes to avoid this season's first hurricane. We'll have an update on Adrian's path. That's coming up.

(COMMERCIAL BREAK)

ANNOUNCER: From our studios in Washington, once again, Wolf Blitzer.

BLITZER: Welcome back. The hype and the hunt for Osama bin Laden. Why some intelligence officials are becoming increasingly optimistic they're closing in on the al Qaeda leader. We'll have details.

First, though, a quick check of some other stories now in the news.

Another dead end in the search for two missing Idaho siblings. Police were tipped to a possible sighting of Dylan and Shasta Groene outside a store in Northern Idaho. But they now call that lead invalid. The children have been missing since their teenage brother, mother and her boyfriend were found murdered on Monday.

The Justice Department is working on a national public sex offender registry. It would link together existing state registries, allowing people to get information on sex offenders outside their area. Officials hope to have the Web site up and running by mid-July.

At least one person is dead in an avalanche in Colorado in a ski area there. It happened this morning on a closed run, although other parts of the mountain were open. At last report, no word on possible other victims. Continuing avalanche threats were keeping search crews off the slope.

Pakistan's foreign minister was quoted today as saying Osama bin Laden is moving from place to place with a small band of fighters. There's been some speculation that Pakistani forces actually may be closing in on him. Our Pentagon correspondent Barbara Starr has been looking into all of this.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): A number of knowledgeable present and former intelligence officials tell CNN it would not surprise them if Osama bin Laden is found soon. But are those statements just hype?

There are reasons for cautious optimism. Intelligence officials say al Qaeda has been shaken by recent events. The working assumption in many intelligence quarters is that since the company capture of al Qaeda's alleged No. 3, Abu Faraj al Libbi, bin Laden has moved hideouts.

JOHN MCLAUGHLIN, CNN NATL. SECURITY ADVISER: Bin Laden and his entourage probably feel some necessity to move around. They're probably taking precautions. But once they begin to move, then there is always the possibility of seeing some dust kicked up and getting some leads.

STARR: Pakistani troops recently searched known al Qaeda safe houses and found evidence of hasty departures, according to U.S. officials. One intelligence source says it's an indicator al Qaeda feels vulnerable.

Military sources tell CNN Pakistani troops are now deep into the tribal areas in previously unsearched locations. A CIA drone firing a Hellfire missile killed another bin Laden associate, Hafamal Yemeni inside Pakistan earlier this month.

Why bother to kill him? Bin Laden has a similar tribal background to al Yemeni and may have trusted him enough to let him get close.

PETER BERGEN, CNN TERRORISM ANALYST: Something that would add credence to the notion that this attack on -- the hellfire attack on al Yemeni was related in some way to bin Laden's actual presence.

STARR: But shaken up or not, few believe bin Laden will get sloppy.

MCLAUGHLIN: My hunch is that his communications at this point are so tightly buttoned down that you're not likely to engage him.

STARR (on camera): Just this week, Defense Secretary Donald Rumsfeld declined to predict when Osama bin Laden might be caught. No one knows if bin Laden really is feeling the pressure, but that is the hope.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

BLITZER: The reason for the rally was the alleged desecration of the Koran, but the result was a series of blood curdling threats, about as violent as words can get. The setting was not Afghanistan, but the streets of London. Our senior international correspondent Walter Rogers is there. And he filed this report.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE; Down, down USA.

CROWD: Down, down, USA.

WALTER RODGERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: About 300 Muslims gathered outside the U.S. embassy in London, showing a less than merciful face to political Islam. They called for the killing of Americans, the death of the president of the United States, the death of the British prime minister, the bombing of Britain and the unthinkable in the U.S. capital.

UNIDENTIFIED MALE; Nuke, nuke, Washington.

CROWD: Nuke, nuke Washington.

UNIDENTIFIED MALE: Bomb, bomb Pentagon.

CROWD: Bomb, bomb Pentagon.

RODGERS: Some of the militant Islamic rhetoric smacked of incitement to commit murder.

UNIDENTIFIED MALE: Death to Tony Blair.

CROWD: Death to Tony Blair.

UNIDENTIFIED MALE; Death to George Bush.

CROWD: Death to George Bush.

RODGERS: A British policeman said the language was offensive and unpleasant in the extreme, but they overlook that. Also overlooked, the fact that more than a few of the young men in the crowd covered their faces technically a violation of British law, again, according to police. UNIDENTIFIED MALE; The only language we speak today is the language of Jihad.

RODGERS: Ostensibly, these British Muslims are protesting the alleged desecration of their holy book, the Koran, at the American detention center at Guantanamo, that story now retracted by "Newsweek." Still, this former Guantanamo detainee made this accusation.

UNIDENTIFIED MALE: The soldier picked up the Koran and threw it on the floor.

RODGERS: Holding their Korans high, they called for death and mayhem, praising the destruction of New York's Twin Towers, saying the White House is next.

UNIDENTIFIED MALE; The desecration of the White House is to follow as promised. George Bush, you will pay.

CROWD: George Bush, you will pay.

UNIDENTIFIED MALE: With your blood. With your blood.

CROWD: With you blood. With you blood.

RODGERS: This rally, remarkable not so much for the size of the crowd, but for the ferocity and virulence of the things said. And before they broke up and went home, meditation. They all prayed.

Walter Rodgers, CNN, London.

(END VIDEOTAPE)

BLITZER: Let's take a quick look at some other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Unrest in southern Iraq. Where supporters of Shiite cleric Muqtada al-Sadr staged anti-American protests. The demonstrators also want members of al-Sadr's militia put on the provisional police force. Six injuries are reported.

Historic meeting: Hundreds of political dissidents met in Havana. It was the first big opposition gathering inside Cuba since Fidel Castro took power in 1959. And one participant said he was surprised Castro allowed it to take place.

First hurricane: The first storm of the Pacific hurricane season hit El Salvador forcing thousands to leave their homes. Hurricane Adrian made landfall with sustained winds near 75 miles an hour. But it weakened quickly as it crossed Central America.

And that's our look around the world.

(END VIDEOTAPE) BLITZER: Partners in the war on terror: A close U.S. ally in a key corner of Europe. The Greek prime minister visiting Washington. He'll visit with us. We'll talk about his meeting with President Bush at the White House. Plus more.

And the Senate standoff and the long term implications, our Carlos Watson joins us with the "Inside Edge."

And later, the latest Star Wars movie now playing -- get this -- on a computer near you. Why some think it was an inside job.

(COMMERCIAL BREAK)

BLITZER: A key NATO ally with an important role ranging from the Balkans to Afghanistan, the Greek prime minister Costas Karamanlis paid a visit to the White House today. And shortly after that, he sat down with me.

(BEGIN VIDEOTAPE)

BLITZER: Prime minister, welcome back to Washington. Good to have you here at CNN.

COSTAS KARAMANLIS, GREEK PRIME MINISTER: Good to see you again, Mr. Blitzer.

BLITZER: Let's talk about attitudes towards America in Greece. We hear a lot in this country about anti-American attitudes. What's it like from your perspective among the Greek people.

I think the average Greek citizen has a very positive attitude.

BLITZER: And the war in Iraq...

KARAMANLIS: ...about Americans.

BLITZER: Did the war in Iraq change that?

KARAMANLIS: One has not to mix different things. It's very natural that people not only in Greece, all over the world, might have one or another attitude on specific issues or decisions on foreign policy or international behavior of not only United States -- but the United States being a super power, the great power of the world, is naturally attracting all the focus on its own moves. So I would say I wouldn't put it in black and white.

BLITZER: The war in Iraq, was it popular in Greece?

KARAMANLIS: No, it wasn't popular all over Europe. That's known and clear. But I wouldn't say that one should infer, make easy conclusions, about the general attitude the Greek people, or for that matter, any European people, hates the American and American people.

BLITZER They still like Americans, but not necessarily the policy as far as Iraq is concerned?

KARAMANLIS: Not always all the policies.

BLITZER: All right. Let's talk a little about the new Iraq. There's a government, elections. Is your government prepared to change its policy and become more actively involved, perhaps even militarily, in helping this new Iraqi government against the insurgency?

KARAMANLIS: Let me tell you something, one shouldn't look back. Now we have a positive development -- elections, a new president, a new prime minister. And we are very hopeful that these process will move speedily towards a fell Democraticization and a society which is based in the rule of law.

BLITZER: Can Greece help?

KARAMANLIS: We are already helping.

BLITZER: What are you doing?

KARAMANLIS: Economically. We are participating in training Iraqi forces. So, we are involved not only in Iraq, but in the broader effort to promote democracy, stability, the rule of law, civil society throughout the broad region.

BLITZER: You're more actively involved in Afghanistan than in Iraq.

KARAMANLIS: That's true.

BLITZER: Why? What's the difference between Afghanistan and Iraq right now?

KARAMANLIS: The difference was initially that Afghanistan was clearly under the auspices of the United Nations. So in Iraq, the war, as you remember, was opposed by Europe, the European Union, et cetera.

But that's all back. What we need to do is focus on the priorities we have. And the priority is a full and speedy Democraticization of Iraq and, of course, the spreading of the basic principles of civility and democracy throughout the broader region.

BLITZER: So on that, you're on the same page when it comes to democracy and President Bush. Did you see that picture today of Saddam Hussein in his underwear?

KARAMANLIS: No, I didn't.

BLITZER: You haven't seen it yet?

KARAMANLIS: No.

BLITZER: Because it's all over the media, the tabloids. The photograph, Saddam Hussein in prison. But there's a picture, we don't know if it's authentic, of him in his underwear.

KARAMANLIS: I haven't seen it.

BLITZER: The people of Iraq, you believe, are better off without Saddam Hussein?

KARAMANLIS: I believe every people has the right to a ascertain it's own rights on liberty, democracy and an open society. And what now the priority for them, and I think for all the world is, is to move on to the next day. And the next day is an Iraq which is governed by itself, has a democratically elected government and takes a role in construction and eventually prosperity.

BLITZER: You spent some time at the White House with the president of the United States today. Are there any serious problems in U.S.-Greek relations that came up during this meeting?

KARAMANLIS: No, there are no serious problems. At this stage, I think we have a good understanding, a very good level of bilateral relations and of course, quite a number of issues of mutual concern which are, broadly speaking, the international. Balkans, for example, Middle East, Cyprus. So there are issues which are of mutual interest to promote our common goals.

BLITZER: Welcome to Washington, Mr. Prime Minister. Always good to see you when you're here.

KARAMANLIS: Thank you very much, Mr. Blitzer.

(END VIDEOTAPE)

BLITZER: Coming up at the top of the hour, LOU DOBBS TONIGHT. Lou is standing by in New York with a little bit of a preview -- Lou.

LOU DOBBS, CNN ANCHOR: Thank you very much, Wolf.

At 6:00 p.m. Eastern here on CNN, we'll be reporting on two major new breakthroughs on embryonic stem cell research. But President Bush today declared he will never support science that destroys life to save life.

Also, Saddam Hussein exposed: a British tabloid publishes photographs of Saddam Hussein in his underwear in captivity. The Pentagon says it is furious about that. We'll have the report.

And our special report tonight, "Heroes," our salute to men and women in uniform. Tonight, a true example of bravery under fire. The story of a U.S. Marine shot seven times in Fallujah. He survived, and he saved his comrades. All of that and more in just a few minutes. Please join us.

Now back to you, Wolf.

BLITZER: Thanks very much. Certainly sounds like a good hero to profile. Appreciate it so much. "LOU DOBBS TONIGHT" coming up at the top of the hour.

A new chapter in stem cell politics as President Bush threatens to veto a bill expanding public funding for research.

Stealing Star Wars, the blockbuster already available -- get this -- on the Internet.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Every Friday, Carlos Watson joins us with the "Inside Edge." He's here in Washington today. Let's talk about various issues, starting with the Democrats, the filibuster, the long term impact. What do you see, Carlos?

CARLOS WATSON, CNN POLITICAL ANALYST: Wolf, as you know, the public still hasn't really engaged in this. This is still kind of a Washington and political junkie story.

But two interesting implications I think to think about over the long term. On the one hand, you see a lot of Republicans, including people like Trent Lott, Lindsay Graham, and others, kind of jumping into the fray. And in some ways you're saying, maybe that's good, they're looking for a deal. But in other way, if you're Bill Frist, your saying if you lose this battle ultimately over the filibuster, you may be a lame duck even before you leave the Senate after 2006. So that's one part of it.

The other implication, though, is what if Republicans win? What is becoming increasingly clear is that what Clarence Thomas went through, what Judge Bork went through, what John Tower went through, people -- personal scandals and people's past will be brought up in a significant way if the filibuster goes away.

BLITZER: All right. Let's jump from the filibuster to South Korea and this very dramatic announcement yesterday that they've got this break through in stem cell research. You've been looking into that .

WATSON: You know what's so interesting, Wolf. You know, when we think about globalization, we think about jobs. Being that jobs are going overseas. Maybe we think about the NBA becoming much more global. We think about the fact that our movies now come from around the world.

But it's now clear that even science and technology, really, there's a very global marketplace. And for the U.S., and frankly for the U.S. government, it puts us in an interesting position.

When we've got more and more dilemmas that pit ethics and science and put those two together, can we really make decisions by ourselves in a vacuum? Or, just as people now often cross the border into Canada to get prescription drugs or treatment, or people now go overseas to adopt kids, will this become part of the story too? And if so, how do we handle it?

I think the thing to look for is when does the U.S. begin to call for something that is, if you will, the equivalent of the WTO, the World Trade organization? An international body that brokers these kind of scientific and ethic disputes, something to talk about over the next year or two.

BLITZER: We'll be talking about the globalization of the scientific community, I think it exists. Democracy in Africa. The president is pushing democracy all over the world, but recently in Africa the trend is not necessarily been all that great.

WATSON: Not all that great. You know, what's interesting, as you know, Mrs. Bush took off on a five-day trip, visiting Egypt, among other places, at the tip of Africa.

There is a lot of focus, understandably, on the Middle East as a place where the president and others want to promote democracy abroad. But this may be a real moment in Africa to take advantage of.

While we saw independence movements in the '50s and '60s, and we saw a lot of coups in the '70s and '80s and unstable governments, and we're seeing a lot of bad news in places like Sudan and Somalia and Niger and Congo.

There are about a half dozen places, Wolf, where we're starting to see some Democratic transitions. Talking about Senegal, talking Botswana, talking about South Africa. This will be an interesting time for the president and for Congress to really make democracy in Africa a focus, and frankly use the help of religious groups who are sending north of $5 billion a year in various donations.

BLITZER: Carlos Watson, every Friday has the "Inside Edge." Thanks, Carlos.

WATSON: Good to join you.

BLITZER: Have a great weekend.

WATSON: You to.

BLITZER: When we come back, piracy problems. Loyal Star Wars fans parading into theaters around the country and around the world to see the film. But illegal copies of that movie have already hit the Internet. Our Mary Snow standing by with the story.

(COMMERCIAL BREAK)

BLITZER: Studio officials say the new Star Wars movie, "The Revenge Of The Sith," took in $50 million on its first day alone, a new box office record. Despite that, some people have found a way to see the movie without buying a ticket. Our Mary Snow is standing in New York. She has details -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well Wolf, it is pirates, not aliens, proving to be the dark force of this latest Star Wars movie as Hollywood tries to fend off what it says is a significant problem in the movie industry.

BEGIN VIDEOTAPE)

SNOW (voice-over): As fans lined up around the country to see the final chapter of Star Wars, the movie made an illegal debut on the Internet. This fan, who asked not to be identified, says it was available on specific down downloading sites Thursday.

UNIDENTIFIED MALE; I click one button, and it's done within an hour and a half, DVD quality.

SNOW: The Motion Picture Association of America says it's working aggressively to investigate how the film got on the Internet.

DEAN GARFIELD, MPAA: The last time we checked, there are tens of thousands of people who have downloaded it.

SNOW: The film's distributor, 20th Century FOX and its maker, Lucas Film, are also investigating. In a statement, Lucas Film says "it will pursue anyone involved with the unauthorized sale or purchase of copyrighted materials and ensure they are prosecuted to the full extent of the law."

The MPAA says penalties range from hefty fines to possible criminal charges. The group says there were time codes on the movie, which are used by Hollywood studios, that's different from someone videotaping an advanced screening, which is usually the source of illegal DVDs.

GARFIELD: There may be some likelihood that the source of the movie was someone who was involved in the post-production of the movie. That is not clear, but it may, in fact, be the case.

SNOW: Downloading movies is not new, but the downloading of Star Wars is gaining a lot of attention.

UNIDENTIFIED MALE; It's a geek movie. And the geeks are really into this stuff. And the geeks are the ones using this technology. So, it's sort of viewed as a test case to exactly how exposed is Hollywood to online downloading.

SNOW: Clive Thompson of "Wired" magazine says for now, Hollywood's exposure is limited, because downloading movies takes top end tools and is harder than downloading music. Still, he says, it's a challenge for film makers.

CLIVE THOMPSON, WIRED: The genie is out of the bottle, and I think Hollywood is going to have to figure out how to make money out it.

SNOW: He says downloading today can be compared to the threat to the movie industry posed 20 years ago by the VHS tape, which now makes millions for the industry.

(END VIDEOTAPE)

SNOW: And movie makers are trying to avoid what happened to the music industry, which claims it lost hundreds of millions of dollars by illegal downloading -- Wolf.

BLITZER: Mary Snow reporting from New York. Mary, thanks very much.

I'll be back Sunday on CNN's "LATE EDITION." Among my guests this Sunday, Hamid Karzai, the president of Afghanistan. "LATE EDITION" airs Sunday, noon Eastern. Also, Mohammed al-Sabah, the Kuwaiti foreign minister.

Until then, thanks very much for joining us. "LOU DOBBS TONIGHT" starts right now. And Lou is standing by in New York -- Lou.

END

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