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CNN Wolf Blitzer Reports

Police Name Two Suspects in London Bombing Attempts; NASA Pilot Shares Views on Tomorrow's Launch; Inside View of Iraqi Troop Training

Aired July 25, 2005 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

KYRA PHILLIPS, GUEST HOST: Happening now, London police name two suspects in last week's attempted bombings. Where's the investigation going?
Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

PHILLIPS (voice-over): Terror trail. London police reveal more about the suspects and the bombs.

PETER CLARKE, ANTI-TERRORIST BRANCH, LONDON METROPOLITAN POLICE: All of them were made using the same type of plastic food storage container.

PHILLIPS: In Egypt, police focus their hunt on foreigners.

Ready or not.

UNIDENTIFIED MALE: We've done an extensive degree of trouble shooting and analysis.

PHILLIPS: NASA still isn't sure why a sensor gave a wrong reading last time. Will it bend its own safety rules to launch the shuttle this time?

Triple digits. It may not show up on the thermometer, but it will feel like it in much of the country. Is there any relief in sight?

ANNOUNCER: This is WOLF BLITZER REPORTS for Monday, July 25, 2005.

(END VIDEOTAPE)

PHILLIPS: Thanks for joining us. I'm Kyra Phillips in Atlanta. Wolf is finally taking a vacation.

Well, police in London may have more to go on as they race to solve last week's botched bombings in the transit system. They've made more arrests and have come up with names to go along with photos of some of those suspects. They've also come up with a key clue as to how the bombs were made.

CNN's Robyn Curnow reports from London.

(BEGIN VIDEOTAPE)

ROBYN CURNOW, CNN CORRESPONDENT (voice-over): New photographs of two of the would-be bombers. Police also naming them, Muktar Said Abraham on the top right and Yasin Omar on the bottom left.

CLARKE: I would encourage anyone who has information about where these men currently are to immediately call 999 for an emergency, urgent police response.

CURNOW: Police revealing more about the four faulty bombs and a fifth device, found discarded in west London.

CLARKE: All five of these bombs have been put inside dark colored rucksacks or sports bags. All of them were made using the same type of plastic food storage container. They were manufactured in India and exported through one company into this country and then sold at approximately 100 outlets across the United Kingdom.

CURNOW: Police appealing to shopkeepers who might remember selling five of these containers.

Meanwhile, raids across the capital continue, as the manhunt intensifies for four or maybe five would-be suicide bombers, three of whom began their journeys at Stockwell Station, south London, the same station where police later shot and killed a man they thought was suspicious. Jean Charles De Menezes, a Brazilian, was later found to be unconnected to the terrorist plot, a death for which the police and prime minister have expressed regret.

TONY BLAIR, BRITISH PRIME MINISTER: We're all desperately sorry for the death of an innocent person. And I understand entirely the feelings of the young man's family. But we also have to understand the police are doing their job in very, very difficult circumstances.

CURNOW: Locals leaving messages and flowers at the scene.

(on camera) Here at Stockwell Station, the scene of the police shooting, a shrine for an innocent man. A place that's also becoming a symbol of the new challenges facing the London police, who now concede they have to shoot to kill to protect.

Robin Curnow, CNN, London.

(END VIDEOTAPE)

PHILLIPS: Police still investigating those behind the weekend bombings at a Red Sea resort which killed at least 84 people. Now the search itself has taken a bloody turn.

CNN's Chris Burns is in Sharm El-Sheik, Egypt.

(BEGIN VIDEOTAPE)

CHRIS BURNS, CNN CORRESPONDENT: The investigation has intensified here into just who drove a car full of explosives into that hotel over my shoulder, one of three attacks here over the weekend that killed scores of people.

Authorities now say this investigation has turned violent. There was a shootout in a village outside of Sharm El-Sheik as authorities were trying to round up more people. They say a number of people have been rounded up and the authorities say that there could be a Pakistani connection. They are circulating photos at checkpoints around Sharm El-Sheik, trying to find a number of people -- Pakistanis they say they were trying to look for even before the attacks.

Meanwhile, the attempt to identify bodies, including possibly the bodies of suicide attackers, is a very, very difficult process. They're trying to use DNA and any other way that they can. That is why a number of people have yet to be identified. There could be many more foreigners among the bodies.

Now the worries about the impact of these attacks on Egypt's $6 billion tourist industry are very high and also among the workers here, workers in hotels and restaurants and dive shops and so forth. They've been taking to the streets in the last couple of days, demanding an end to terrorism, demanding to fight terrorism, which the government here has vowed to do.

Chris Burns, CNN, Sharm El-Sheik, Egypt.

(END VIDEOTAPE)

PHILLIPS: President Bush today visited the Egyptian Embassy to sign a condolence book for victims of the Sharm El-Sheik attack. Let's go live to the White House. Our White House correspondent Suzanne Malveaux standing by -- Suzanne.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Kyra, over the weekend President Bush offered his condolences to Egyptian President Hosni Mubarak in a phone call to offer a personal message.

Of course, as you know, Egypt is a critical ally in the war on terror in the Middle East. The Bush administration very much invested in keeping it that way.

White House officials have also announced that they have offered help to the Egyptian people, as well as those in London, in their investigations in the bombings. Earlier today, President Bush and the first lady offered their condolences at the Egyptian Embassy, also signing that book, the president delivering this message.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... speak to your president, President Mubarak and reiterated my country's strong desire to stand shoulder to shoulder with the people of Egypt and bring justice to those who kill innocent people.

(END VIDEO CLIP)

MALVEAUX: And of course, Kyra, this comes at a critical time for the president. He is seeing the situation in Iraq deteriorate. At the same time, he is struggling to push forward his domestic agenda. That is what he is focusing on this week, pushing members of Congress, before their Friday recess, to focus on some key items, that being energy as well as free trade -- Kyra.

PHILLIPS: Suzanne Malveaux, live at the White House, thank you.

A deadly heat wave continues to move across the nation. A heat advisory in effect for Washington, D.C. Conditions were sweltering on the National Mall today, and they're expected to be even worse tomorrow.

For the first time in six years yesterday, temperatures topped the 100 degree mark in Chicago. The Chicago Fire Department reports three deaths there may have been heat related. It's a little cooler in Chicago today, but many other parts of the Midwest are still sweltering.

For a closer look now, let's go to meteorologist Jacqui Jeras here at the CNN Center.

Hi, Jacqui.

(WEATHER REPORT)

PHILLIPS: Now we're talking. Thank you so much, Jacqui.

Well, NASA is confident that the Space Shuttle Discovery will launch tomorrow, even though they don't fully understand what scrubbed the mission two weeks ago. We're going to get perspective from a shuttle veteran.

Also the biggest union rift in decades. What it means for the future of organized labor.

Plus, modern Muslims in the U.S. looking inward. We're going to show you their response to the latest terror attacks.

(COMMERCIAL BREAK)

PHILLIPS: Well, NASA may have to bend its own safety rules to launch Discovery tomorrow morning, the first shuttle mission since the Columbia disaster more than just two years ago.

Joining us from the Kennedy Space Center to talk about it, Pamela Melroy, a shuttle veteran who has piloted two of her own missions. Great to you see you, Pam.

PAM MELROY, ASTRONAUT: Yes. Hi, Kyra.

PHILLIPS: Well, you know I have to ask you this. When you hear that NASA is bending its own safety rules, you sort of sit back and go -- so I'm just wondering if that concerns you at all and if, indeed, you would launch if you were hearing that?

MELROY: Absolutely. I think you just have to understand the process. Fault try is a very robust process. You essentially get everybody together in the room, and you brainstorm every possible reason that you could have a problem. And then you kind of classify them in sort of families. And then you start shooting them down one by one, and saying could it be this? And could it be this? And you start knocking them all off. And where we're ought now is we're down to just a couple of things that it could be.

These safety rules are built so that, in case you don't know what's going on. If you do know what's going on, you can understand whether it's OK to launch or not. Since we've had enough time to try to understand what's going on, I think we've narrowed it down to a couple things that we feel very comfortable with.

PHILLIPS: So when it comes to something like a failed sensor and when the launch was control-scrubbed just a couple weeks ago, is it -- so the crew does come together, and you're schooled on the technicalities. It gets that detailed?

MELROY: Absolutely. Yes. Eileen and the crew knew more than anybody else except the people in launch control, faster than anybody else. They're the first people to get that information. They get detailed briefings. They really understand what's going on and the rationale behind the go to fly.

PHILLIPS: Let's talk about importance of this mission. Of course, this is the first time since the Columbia, that fateful day and what happened. How important is this to NASA, and even more so how important is it to you, members of the crew that will be aboard that shuttle tomorrow?

MELROY: Well, I think for NASA this is our business. This is what we do. We launch people into space. And for us, we've had a very tough time for a couple of years to try to understand what happened with Columbia, how to reduce the risk, how to really grasp the threats to the shuttle. And this is our chance actually to go and show everybody that we do understand them.

We've developed models. And we've done a lot of testing. But you have to go do it to really understand whether you've done your homework. Also, we need to get back to the space station. So we're very excited about that, and we can't wait to see them launch tomorrow.

PHILLIPS: Well, you know I have to ask you this, too. Put me in the mindset. What's it like to suit up, strap in, lie back, of course not looking in every direction around you and just getting ready? Because of course, there's a number of hours that pass before you actually get that T minus 10 and you're off. Just give me a feel for what it's like once you're in there and ready to go?

MELROY: Well, for one thing I can tell you, your back really starts to hurt after about an hour.

PHILLIPS: You need that massage therapist. Right.

MELROY: Oh, yes. Well, you know, typically you're thinking, hey, the fastest way out of this seat is to launch, so let's go. But I think it's a time for sort of focusing. It's getting your game face on. You have your notes, typically, with you. Of course, it takes a little while to get everybody in there. But that couple of hours is time to sort of review things mentally in your head, do your last dress rehearsals for all the things that you're going to have to do and you might have to do.

So it can be a very focused time for the crew. But it can also be fun and exciting, because you're about to have this great adventure.

PHILLIPS: Sure. And I can imagine the G force and the vibration at least gives you a little comfort to the back there once you're moving and going, right, Pam?

MELROY: That's right. It does feel better, actually.

PHILLIPS: Well, you've had a chance to talk to members of the crew. How are they feeling? Are they excited? Are they ready to go? What have they said to you?

MELROY: Oh, yes. They are very excited. They are very ready to go. I mean, this is a long time to actually train and prepare for a mission. Usually, it's about a year. So when you've had as long as they've had, they know this mission inside and out. They are total experts in it. And they can't wait to go and do it and actually quit talking about it, just go do it.

So they are extremely excited about this. And we're very hopeful that the weather will let us go.

PHILLIPS: Pamela Melroy, another pretty incredible astronaut. Thanks for joining me today. Appreciate your time.

MELROY: Thank you, Kyra.

PHILLIPS: Pleasure.

Of course, we're going to bring the launch of Shuttle Discovery live tomorrow morning, starting at 10 Eastern right here on CNN. You don't want to miss it.

Straight ahead, Islam looks inward. American Muslim leaders respond to the recent attacks in London and Egypt.

New developments in the stalled nomination of John Bolton as U.N. ambassador. We'll see what the White House is saying.

Plus, escalating violence in Iraq and pressure to bring U.S. troops home. When will Iraqi security forces be ready to take over?

(COMMERCIAL BREAK)

PHILLIPS: A U.S. soldier was killed in Iraq today. An improvised explosive device detonated while he was on patrol near Samarra.

The Pentagon hopes that Iraqi troops eventually will be able to defend their country by themselves.

CNN's Aneesh Raman reports from Baghdad on the efforts to train Iraqi forces.

(BEGIN VIDEOTAPE)

ANEESH RAMAN, CNN CORRESPONDENT (voice-over): A rare glimpse of the best of the best in Iraq -- the men on whom the coalition forces are counting on in order to exit this country. From Special Ops storming a mock village to police SWAT teams boarding a bus with possible insurgents, these are Iraqi security forces in training, admired this day by the prime minister, making his first visit to see troops, taking some shots himself and gauging, along with his cabinet, when Iraqi forces might be ready to take over.

UNIDENTIFIED MALE: I'll be very surprised if the coalition forces will not start pulling out by middle of next year. And...

UNIDENTIFIED MALE: In sizable numbers.

UNIDENTIFIED MALE: In sizable numbers, yes.

RAMAN: Given the recent spate of suicide bombings, the pressure is mounting on Iraqi forces to get ready quickly.

(on camera) The importance of what's happening here behind me really cannot be overstated. Any potential for a secure and stable Iraq relies heavily on the success of these men.

(voice-over) Estimates put the number trained of Iraqi security forces at about 150,000, but only a small fraction of them are currently operational in the field. And even those, by most accounts, are still unprepared for the reality on the ground.

IBRAHIM AL-JAAFARI, IRAQI PRIME MINISTER (through translator): Terrorism can take many forms. It can come to you in a market or a school or a hospital. It does not only target the military. It targets humanity itself.

RAMAN: This is, of course, an elaborate photo op, not actual combat. How they will fare there is a critical concern, as well as how they will fare without American forces by their side.

The challenge is underscored by what you don't see in these pictures: the faces of Iraqi forces. We were not allowed to show them. They fear that if seen on television, they would become targets of insurgents.

But in the presence of the prime minister, these soldiers are also demonstrating commitment. Starting an army from scratch is hard enough. Whether it can be accomplished in the face of a brutal insurgency is one of the key challenges facing Iraq.

Aneesh Raman, CNN, Baghdad.

(END VIDEOTAPE) PHILLIPS: Naming names. British investigators publicly I.D. some of the suspects in last week's botched terror attacks. We'll go live to London.

The U.S. and North Korea resuming talks. We're going to talk about what's at stake and the chances of success with world affairs analyst William Cohen.

Plus, Islam looks inward. How American Muslims are responding to the latest wave of terror.

(COMMERCIAL BREAK)

PHILLIPS: Well, just before we went to break, our Aneesh Raman in Baghdad was showing us how the Iraqi police are training and how they're getting ready and trying to take over their own country. And now we're being told that there's a new report just in at the Pentagon on the state of Iraqi forces.

Our Jamie McIntyre joining us live from the Pentagon. What does it tell us, Jamie?

JAMIE MCINTYRE, CNN CORRESPONDENT: Well, Kyra, that's right. This report from the inspector generals of both the State Department and the Pentagon is highly critical of the how the training of Iraqi police is going. In fact, it concludes that the recruitment and embedding procedures are faulty. It says that too many recruits are -- quote -- "marginally literate." Some of them show up for training with critical records or physical handicaps, and some are actually insurgents who are infiltrating the police force.

What the report says is that the recommendation is that they should stop trying to train so many recruits and spend more time doing a better job at recruits they have right now. In short, the conclusion is the U.S. and Iraqi forces ought to coordinate better and put more emphasis on quality instead of pumping out higher numbers.

PHILLIPS: Jamie, you said that some of these recruits have been identified as actual insurgents, infiltrating the Iraqi police and becoming police officers?

MCINTYRE: Well, some are suspected to be, in fact, insurgents who are infiltrating. Of course, that's not new. But that's just one of the problems that they've seen as they've gone through how the training program is going.

And they basically said, it's not going very well. They're hopeful that when Iraq takes over for a lot of the training, the ministry of interior in particular, that they'll have more input from Iraqi leaders and that will help the process -- Kyra.

PHILLIPS: All right. Jamie McIntyre at the Pentagon, thank you so much.

Let's get a quick check of other stories "Now in the News". The biggest labor organization in the U.S. suffers a serious setback. Some major unions with millions of members are pulling out of the AFL-CIO. A live report from our Mary Snow straight ahead.

The White House is hinting that President Bush may act soon to sidestep the Senate on John Bolton's nomination as U.S. ambassador to the United Nations. Democrats are holding up the nomination, saying he is unfit for the job. Lawmakers are expected to leave Friday for a summer recess and return after Labor Day. During the recess, Mr. Bush would have the constitutional authority to install Bolton as ambassador on a temporary basis.

President Bush's Supreme Court nominee, John Roberts, was back on Capitol Hill for another day of private meetings with senators. Now questions are being raised about his ties to a conservative group, the Federalist Society. The "Washington Post" says he was listed in the group leadership directory several years ago. The White House says Roberts does not recall being a member.

Republican Congressman Tom Tancredo of Colorado is under fire for some comments he made about the battle against terrorism. Hispanic and Islamic groups says that he has embarrassed Colorado by suggesting the United States bomb Islamic holy sites if terrorists launch a nuclear attack on the U.S. They're calling on him now to resign.

Back to our top story now. London police have named two suspects in last week's attempted bombings. Let's go live to CNN's Jon Mann in London.

Jon, what can you tell us about those two suspects?

JONATHAN MANN, CNN CORRESPONDENT: Kyra, police here at Scotland Yard released pictures of all four of the suspects that were taken by closed circuit televisions on the day that they tried to carry out their attacks.

Now for the first time, they have named and identified, as you said, two of them. The first one of them that we know of is Muktar Said Ibrahim. Police say he also goes by the name Muktar Mohammed Said. He's 27 years old, and police say he's the man who tried to bomb a bus last Thursday.

The second man is Yasin Hassan Omar, 24, who tried to set off his bomb in the subway, police say. They're appealing to the public to come forward if they know who these men are or where they are.

And a more intriguing appeal to the public, on a very different subject. Police say one thing that all of the attempted bombers had in common was the way their bombs were built, using the kind of plastic container that might be in any home in the United States or the United Kingdom, a plastic container you might put grain into or rice or even granola. Those containers are actually of a very specific kind in this case. They were produced in India, exported to the United Kingdom, and police say they were only available for sale in 100 different stores. They found all four bombs used those containers and a fifth bomb, that was in fact undetonated until after police found it and exploded it safely. All of them had those containers in common. Police say if anyone sold those containers, please come forward -- Kyra?

PHILLIPS: John, what more do you know about the investigation into the young Brazilian man that was shot, evidently, not tied to these other bombing suspects. Why was he shot eight times? And was he already in police hands when he was shot?

MANN: The single biggest setback to what had seemed like a really, really fast moving and successful investigation, Jean Charles de Menezes, according to police, emerged from a house that was already under observation by police wearing a suspiciously heavy jacket in the London summertime weather. He got onto a bus, he continued on into a subway where police say they challenged him. They say he tried to get away from them. He jumped over a barrier. They tried, they said, to get him to stop. When he didn't, they wrestled him to the ground and they him shot eight times.

Why exactly this happened to a man who was said to understand the English language and have nothing to fear from police is unclear. An independent investigation is underway. And as you mentioned, one of the shocking details revealed today, he was shot in that scuffle no less than eight times to be sure he was dead -- Kyra?

PHILLIPS: Jon Mann, live from London. Thanks, John. Those attacks have prompted a lot of soul searching among Muslims in Britain and here in the U.S.

CNN's Brian Todd in Washington, live, with the story.

BRIAN TODD, CNN CORRESPONDENT: It has been noticeable since those attacks at the beginning of this month in London. Muslim leaders in Britain and the U.S. who consider themselves moderate are becoming increasingly vocal about their struggles against extremism.

(BEGIN VIDEOTAPE)

TODD (voice-over): Carnage in London and Sharm el-Sheik. In Britain, pictures of young Muslim suspects who police say were involved in a series of explosions and attempted bombings.

With each new image, a growing sense of frustration in the mainstream Muslim community, and a new feeling of urgency.

MAHDI BRAY, MUSLIM AMERICAN SOCIETY: Condemnation is not enough. As some people say, been there, done that. We're on a different page.

TODD: One of largest grassroots Muslim groups in the U.S. is intensifying what its members say has been a long-standing campaign against extremism. And the Muslim American Society says an important part of this new effort will target young people.

Members of this group and other Muslim leaders in the U.S. and Britain who consider themselves moderate, tell CNN there is increasing frustration that so-called moderate imams in local mosques are not connecting to this crucial segment of the community.

ARSHAD CHAWDHRY, LEEDS MUSLIM FORUM: They don't have the ability to communicate with the congregation, particularly the younger element. So what basically happens is the, you know, the youngsters then basically go outside the mosques, and if a radical or somebody else gives them their ear, that's where they go astray.

TODD: Two Muslim leaders in the U.S., one of whom is an imam, tells CNN many so-called moderate imams are immigrants who never integrated completely outside of their communities and in many cases don't speak English well. Combine that, they say, with parents who are reluctant to discuss extremism at home, and kids are left in vulnerable positions. In Washington, one Muslim leader relays a story about of young man who recently approached him in the parking lot of their local mosque saying someone who he wouldn't identify, had tried to recruit him.

ABU MALIK-JOHARI, MUSLIM ACTIVIST: He said, whatever you tell me to do, I'll do. I said you need to alienate yourself from those people. Clearly, they have another agenda. They're saying to you that they're your friend, and that you'll be their confidante. When in reality, they're going to sell you out.

(END VIDEOTAPE)

TODD: Now it's important to point out that these are discussions with Muslim leaders who are considered to be moderate, not conservative. They tell us to cultivate a younger, more moderate Muslim community they need to build more Muslim-affiliated youth centers, and recruit younger home-grown imams in the U.S. and Britain who can understand the pull between the religion and pop culture -- Kyra?

PHILLIPS: Well, Brian, what are you hearing from the Muslim leaders about the longstanding criticism that they don't do enough to condemn these attacks right after they happen? I even interviewed a city council member there in London when these attacks happened, and he said, you know, I'm admitting as a community we've failed in not speaking out with a stronger voice.

TODD: It's true. They admit that they have not, maybe, managed that message quite as well as they should have. They haven't been aggressive enough in getting out the condemnation. But on the other hand some of them say they're frustrated with that criticism, because in their mind, the urgency has always been there, ever since 9/11, to condemn the attacks when they happen. Some of them complain that the condemnations aren't picked up in the mainstream media quite as well as they should be. But by and large, some of them do admit they've got to manage the message better, they've got to be proactive, and in fact aggressive, about getting that message out.

PHILLIPS: Thanks, Brian. Straight ahead, big labor is getting smaller. Coming up, a bitter anniversary for America's top union organization.

Also, can North Korea's leaders be convinced to abandon their nuclear plans? We're going to talk to former Defense Secretary William Cohen.

And why the Southern California desert is flooding. WOLF BLITZER REPORTS continues.

(COMMERCIAL BREAK)

PHILLIPS: After decades of falling union membership, the AFL-CIO has suffered a huge setback, and its future is more uncertain than ever. The Teamsters and another major union are pulling out of the organization.

For the latest on the labor rift and what it could mean, we turn now to CNN's Mary Snow in New York -- Mary?

MARY SNOW, CNN CORRESPONDENT: Hi there, Kyra. Tonight there are many questions about the fallout on an organization that itself on strength and unity.

(BEGIN VIDEOTAPE)

SNOW (voice over): The AFL-CIO was supposed to be a celebration of 50 years together. Instead, what's emerged is the biggest rift in organized labor since the 1930's.

JAMES HOFFA, PRESIDENT, TEAMSTERS UNION: Now that the AFL-CIO is not working, we're going to do something new.

SNOW: Teamsters Union President James Hoffa calls the move a turning point. The Teamsters and Service Workers Unions have broken ranks with the AFL-CIO to join a new coalition called Change to Win. They cited declining membership as one reason they bolted.

ANDREW STERN, PRESIDENT, SEIU: A country that once had one out of every three workers in unions, 35 percent, is now down to about 8 percent in the private sector.

SNOW: Besides the shrinking numbers, breakaway unions also say AFL-CIO President John Sweeney has put the focus on politics over its members. Sweeney calls the split a grievous insult.

JOHN SWEENEY, PRESIDENT, AFL-CIO: But most of all, it is a tragedy for working people, because at a time when our corporate and conservative adversaries have created the most powerful anti-worker political machine in the history of our country, a divided movement hurts the hopes of working families for a better life, and that makes me very angry.

SNOW: Some union leaders cite Wal-Mart as one of their biggest modern-day threats. Bruce Raynor compares this effort to one he took part in 30 years ago, organizing workers at a textile plant in North Carolina. It was an effort that inspired the 1979 movie, "Norma Rae."

BRUCE RAYNOR, PRESIDENT, UNITE HERE: We have got many companies that suppress the workers' opportunity and right to union representation. The labor laws don't work in America. So actually, the conditions of workers organizing, in many ways, is now as difficult nationally as it was in the South 30 years ago.

SNOW: Former Labor Secretary Robert Reich says while the union movement may be stronger in the long run, there's short-term pain, extending beyond union members.

ROBERT REICH, FORMER LABOR SECRETARY: It's bad for the AFL-CIO. It's bad for workers -- in the short term, certainly. And it's not all that good for Democrats.

SNOW: That's because Democrats rely mostly on the unions, not only for money but organizing efforts.

LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: The unions are big contributors to Democrats. In 2004, they spent about $92 million between contributions and independent expenditures, but that's a small amount compared to what business spent just on contributions, which is about $1.5 billion.

(END VIDEOTAPE)

SNOW: Now, the two unions that split today have about 3 million members between them. They say they expect other unions to follow suit and join this new coalition -- Kyra.

PHILLIPS: All right, Mary. Just for a moment, stepping aside from the politics, what does this mean for the rank and file and the working families?

SNOW: Well, some of the union workers -- you know, this was the annual meeting of the AFL-CIO -- and some of them were left confused and really not knowing what to do, caught in this political battle. And what the union leaders were saying is that this is all about a battle about pensions, about health care. Those issues are still the same, and the rank and file members are wondering what will happen to those issues.

PHILLIPS: Mary Snow, we'll continue to follow it, thank you.

Well, coming up at the top of hour, LOU DOBBS TONIGHT. Lou standing by in New York with a preview. Hello, Mr. Dobbs.

LOU DOBBS, HOST, LOU DOBBS TONIGHT: How are you doing, Kyra?

At 6:00 p.m. Eastern tonight, a deadly heat wave. Triple-digit temperatures in many regions of this country, a rising number of heat- related deaths. Is this global warming? My guest tonight, one of the country's leading climatologists.

NASA declares it's confident that Shuttle Discovery will blast off as scheduled tomorrow, but bad weather could delay the launch, and concerns about a fuel sensor remain. I will be talking with NASA's administrator.

And judging Roberts. I will be talking with one of the country's foremost attorneys, former federal judge, Solicitor General and Whitewater prosecutor Kenneth Starr about Judge Roberts and the White House CIA leak.

All of that, a great deal more, coming up here on CNN at the top of the hour. We hope you'll join us. Now, back to you, Kyra. PHILLIPS: Thanks, Lou. Well, North Korea gets set to return to the bargaining table. Six-party talks with the communist nation resume just hours from now. But will Kim Jong Il really give up his nukes? That story straight ahead.

Plus, terror at a world class resort. We will hear what our world affairs analyst William Cohen has to say about the bombings at Sharm el-Sheik, Egypt.

(COMMERCIAL BREAK)

PHILLIPS: North Korea walked away from talks on its nuke program last year, and has since engaged in some nuclear saber-rattling. But those six-nation talks are due to resume in just a few hours in Beijing. What happens if they fail?

North Korea is a closed society, and very unpredictable, but CNN's Stan Grant reads the tea leaves from Beijing.

(BEGIN VIDEOTAPE)

STAN GRANT, CNN CORRESPONDENT (voice-over): This is Pyongyang's public face to the world -- a land of smiling children, spectacular scenery, a glistening capital, Pyongyang. But those who spend any time there paint a very different picture -- a society under pressure, under siege, secretive and suspicious.

South Korean government sources tell CNN of power being wielded in Pyongyang by hard-line Cold War era generals, faceless figures controlling North Korea's army. Sources say they don't even know exactly who they are.

It adds urgency to the six-party nuclear talks to try to resolve what one official, speaking confidentially, termed "the runaway North Korean nuclear problem."

Sources say North Korea can appear irrational and unpredictable, operating out of fear and insecurity. Foreign businessmen trading in North Korea say Pyongyang is worried about its survival.

ROGER BARRETT, KOREA BUSINESS CONSULTANTS: Two years ago, they saw what happened in Iraq, and at the same time I believe some people were saying that America could fight two wars on two continents simultaneously.

GRANT: Added to the fear, poverty and isolation, a country unable to feed its own people.

RICHARD RAGAN, WORLD FOOD PROGRAM, NORTH KOREA: They're working day and night to try to feed themselves. And families from some of these urban areas are also traveling very long distances to barter in rural areas for food.

GRANT: Blocked off to most outsiders, those who travel to North Korea talk of signs of social breakdown. A diplomatic source tells CNN he hears more reports of theft and has noticed bars being placed on windows. He also reports an increase in prostitution.

Government officials, diplomats and aid workers all say their movements are restricted in North Korea, Kim Jong Il keeping a tight grip on security, their travel monitored and contact with ordinary people limited.

RAGAN: We don't have access to all parts of the country. We're not able to stop randomly and visit houses where our beneficiaries are.

GRANT: For all that, the World Food Program says there are signs of reform. Officials, they say, are more accessible, and the government is keen to further open up its economy. Some with close ties to Pyongyang say North Korea should be encouraged, not punished.

BARRETT: What I see is a will and a real desire for development. And I think development beats demonization every time.

GRANT (on camera): Peeking through the conflicting signals and limited intelligence on North Korea, what emerges is a desperate nation, brandishing a nuclear threat. As one South Korean official put it to me, it may soon be time to tighten the screws, setting Pyongyang a deadline to give up its weapons, or the next round of talks may well be in New York at the United Nations.

Stan Grant, CNN, Beijing.

(END VIDEOTAPE)

PHILLIPS: So can North Korea be talked into shelving its nuclear program? Joining me now from Washington, our world affairs analyst, former Defense Secretary William Cohen. He's chairman and CEO of the Cohen Group.

Mr. Secretary, nice to have you with us.

WILLIAM COHEN, CNN WORLD AFFAIRS ANALYST: Thank you, Kyra.

PHILLIPS: So what do you think? Can six-party talks work, and how strong is the trust factor?

COHEN: Well, they can work in the sense of getting the parties back to the bargaining table. I think what we have to do here is to lower any expectations of a major breakthrough. The fact that this is the first meeting in some 13 months is a positive sign. The fact that we have our Assistant Secretary of State Chris Hill meeting with their deputy foreign minister for 75 minutes on a bi-lateral base is a very positive sign.

But I think we have to really expect they'll discuss and not negotiate in this next round of meetings and then lay forth a -- lay out a framework where by they can start building these blocks of trust, but that's not going to come easily. They're not going to be trusted for some time to come in view of the fact that they've broken and breached those promises in the past. So, verification will be key. What kind of economic package, what sort of down-playing of the rhetoric, all of these major factors will be in play.

PHILLIPS: Well, talking about the trust factor and let's get down to the trust between a father and a son. Kim Jong Il's father, his dying wish was to have a no nuke region. Will Kim Jong Il listen to his father?

COHEN: Well, the South Koreans did not have nuclear weapons and so he must have been talking about North Korea at that point. And the son, for the last several years has been what appears to be on a very aggressive program to build nuclear weapons in the North.

So, hopefully if it was in fact his father's wish -- dying wish, hopefully that will play some role in his considerations. It may also be a factor he can take into account to explain to the North Koreans why there has been a shift in policy, if that's what's going to take place.

PHILLIPS: While I have you, sir, I'd love to talk about Egypt if you don't mind and the bombings that took place at Sharm el-Sheik. Does it look like al Qaeda to you?

COHEN: It's too early to tell. They have some homegrown terrorists in Egypt that President Mubarak has had to contend with for some time. They've had the bombings at Taba and Luxor; Sharm el-Sheik and they appear to be timed to really impact upon Egypt's modernization of its economy, it's resting upon tourism, to try to undermine President Mubarak, punish him for his relationship with the United States or the effort he's now making to try and stabilize the Gaza region, once there's a pullout of the Israeli settlers. So, there are a lot of homegrown terrorists that he has to contend with. It could be linked to al Qaeda, but I think we make a mistake in prejudging that.

PHILLIPS: Is there a connection with the London attacks and the Egypt attacks?

COHEN: It's hard to say at this point. We have to stop thinking about al Qaeda as being some vertically integrated operation. It has become horizontally dispersed...

PHILLIPS: Sure. It's leaderless. I mean, there are cells popping up everywhere.

COHEN: They're popping up everywhere and the notion that somehow if you cut off the head of a snake, you then kill that snake no longer applies here. This is a hydra-headed snake; many heads of the snake that are appearing all of over the world. And so it's a global war that's being waged. And for many of us, we're not really on a full wartime footing right now and that's something that the administration is going to have to contend with -- the American people and others as we see the intersection of terrorism and technology. So that we've seen actually the democratization of destructive power where a group or even an individual can bring about horrific damage just by using common fertilizer as part of the elements to blow a building up.

PHILLIPS: Former Defense Secretary William Cohen, thanks for your time.

COHEN: My pleasure.

PHILLIPS: Now here's a look at some stories you may have missed this past weekend.

(BEGIN VIDEOTAPE)

PHILLIPS (voice-over): Weekend storms brought flash floods to Southern California, water-covered roads in the Palm Desert area, and some evacuations were reported.

Hiker found. A Texas man was rescued in Hawaii after getting lost during a hike through a barren lava field near the Kilauea volcano. Forty-one-year-old Gilbert Gaedcke survived for five days by squeezing water from moss. He suffered cuts, bruises and dehydration.

Seven, and out. Lance Armstrong won his final Tour de France. The American cyclist is retiring from professional competition at the age of 33 after a record-setting run of seven straight victories in the 102-year-old bicycle classic.

And that's our "Weekend Snapshot".

(END VIDEOTAPE)

PHILLIPS: Play ball. A popular White House activity with a unique twist. That's our picture of the day. How cute are those T- ballers?

But first, he was the millionaire rouge trader turned fugitive. As part of CNN's anniversary series "Then and Now," we take a look at Nick Leeson and where he is today. Here's CNN's Paula Hancocks.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN CORRESPONDENT: He is the British trader who tried to beat the market a decade ago and lost. Twenty-eight-year-old Nick Leeson lost $1.3 billion, to be exact, of his employer's money, single-handily bankrupting the 233-year-old Barings Bank. Leeson briefly tried to run from the law before being arrested at Frankfurt Airport in 1995.

While serving almost four-and-a half years in a Singapore jail, his wife divorced him and he was diagnosed with colon cancer. Homeless and unemployed, he capitalized on his experience, penning his first book "Rogue Trader." Transferred to the silver screen, Leeson was immortalized by the actor Ewan McGregor. Now 38 and remarried, he lives in Ireland with his beautician wife and three children.

NICK LEESON, FORMER TRADER AND AUTHOR: I never wake up and feel sorry for myself. I don't wake up anymore and feel sorry for the bank or for anything that happened.

HANCOCKS: His new book, "Back from the Brink: Coping with Stress," deals with how he has moved on.

LEESON: It's done and I have to draw a line in the sand and get on with my life.

(COMMERCIAL BREAK)

PHILLIPS: T-ball at the White house. It's our picture of the day. President Bush welcomed players from the Little League's challenger division for disabled children to the South Lawn yesterday. Some current and former pro players were also on hand to help coach. The event coincides with the 15th anniversary of the Americans with Disabilities Act.

Well, you can always catch WOLF BLITZER REPORTS at this time, 5:00 p.m. Eastern. And don't forget, Wolf will anchor our new show THE SITUATION ROOM starting Monday, August 8. You don't want to miss it.

I'm Kyra Phillips. LOU DOBBS TONIGHT starts right now. Lou is standing by.

END

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