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What We Know with Max Foster

Trump Sets Out Terms In Iran; CNN's Fred Pleitgen And Team Report From Tehran CNN Investigation Into School Strike; Qatar Minister Warning On Oil. Aired 3-4p ET

Aired March 06, 2026 - 15:00   ET

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

[15:00:33]

MAX FOSTER, CNN INTERNATIONAL HOST: No deal except surrender.

This is WHAT WE KNOW.

A busy day of developments in Iran. Donald Trump has revealed his conditions for ending the war.

We have new reporting on whether the U.S. was responsible for the deadly strike on an Iranian girls school.

And there are dire warnings about the economic fallout from a senior Gulf minister.

All of that ahead this hour, but we begin in Washington, where Donald Trump says the only way the war will end is with that country's unconditional

surrender. The statement on Truth Social appears to leave little room for negotiation. Mr. Trump also repeats his demand that he'll be consulted on

the selection of Iran's next supreme leader.

The White House press secretary says it will be up to President Trump to determine exactly when Iran has reached the point of unconditional

surrender.

(BEGIN VIDEO CLIP)

KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: What the president means is that when he, as commander in chief of the U.S. Armed Forces, determines

that Iran no longer poses a threat to the United States of America and the goals of Operation Epic Fury has been fully realized, then Iran will

essentially be in a place of unconditional surrender, whether they say it themselves or not.

(END VIDEO CLIP)

FOSTER: Let's go straight to the White House, CNN's Kristen Holmes.

Is this the president trying to push things as far as he can and then pulling back later, or is he dead serious about this, do you think?

KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: It was clear that Karoline Leavitt was sent to try and kind of smooth over those remarks. I

mean, when you heard her there, she is not talking about actual surrender from Iran. She's saying that President Trump will decide when Iran has been

decimated enough that he gets to say that they have surrendered. That's obviously not how ultimate surrender would work or unconditional surrender

would work. He is basically just saying that they have been weakened enough or they have reached their goals.

And it was clear that she was kind of trying to smooth around the edges of those remarks, as we often see her do after the president speaks. But one

thing is clear, he is not backing down right now. He has continually said that Iranians have reached out, that he has no interest in talking to them,

that they are going to continue to fight. It is unclear still how long this is going to last and what the actual end game is here, talking about the

leaders and how he wants to be a part of all of that. He's also said that he doesn't know who is going to lead or who could lead because so many of

the people that they had looked at were dead from all of these strikes.

So, it's a really precarious time in Iran in particular and in the region. But President Trump seems to kind of just be saying the same things around

in circles without any actual answers yet on where this is going.

FOSTER: Okay. Kristen, appreciate it, from the White House there.

CNN correspondent Fred Pleitgen, meanwhile, and his photojournalist and producer, Claudio Otto are in Iran's capital. CNN is the first U.S. network

in Iran since the start of this war. It's important to note that CNN is operating in Iran only with permission from the government.

Here's Fred's latest report.

(BEGIN VIDEOTAPE)

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Iran's leadership has gathered thousands of people here to Tehran after Friday

prayers to voice their anger about the U.S. and Israel's bombing campaign across the country but of course, also to mourn Iran's late supreme leader

Ayatollah Ali Khamenei. And thousands of people have indeed turned out here.

At the same time, we have to keep in mind this is just a small snapshot of Iran's society and the people who come to Friday prayers here in Tehran

usually are political conservatives and religious hardliners. At the same time, it does show that the government here is still able to mobilize

masses.

UNIDENTIFIED FEMALE: We believe that if we are killed, we are martyrs, meaning that whether we stand by the revolution or become martyrs, both are

a victory for us.

UNIDENTIFIED FEMALE: The blood of our martyr leader has been shed, but his path continues.

UNIDENTIFIED FEMALE: With these killings and these martyrdoms, they will not achieve greatness, and they will not be able to take even the smallest

piece of our land.

PLETIGEN: All this is happening, of course, as the U.S. and Israel continue their massive bombing campaign, not just here in Tehran and the vicinity,

but indeed in the entire country, the U.S. says that its hitting military positions and trying to hit Iran's religious and also political leadership,

while the Iranians say at this point in time, they are not willing to negotiate with the United States.

And they also say that they have a missile supply and drones to carry on military operations for an extended period of time.

[15:05:05]

So this is the Gandhi Hospital here in Tehran, which is pretty badly damaged after an airstrike. It seems as though a different building was

struck in the vicinity. But then this building also was damaged very badly.

I spoke to the head of Iran's Red Crescent about this. Here's what he had to say

UNIDENTIFIED MALE: Can you imagine if you were hospitalized in one of the wards here while it was attacked? How would you feel?

PLEITGEN: The people on the ground who feel these airstrikes, who hear these airstrikes, hear the jets overhead -- of course for them, it\s a

really, really difficult time to go through.

(END VIDEOTAPE)

FOSTER: Fred, reporting there with that incredible insight to what's going on on the ground in Tehran.

But now, we're going to go to Lebanon, where the prime minister is warning of a looming humanitarian disaster as hundreds of thousands of people rush

to escape intensifying Israeli airstrikes. Israel is bombing new Hezbollah targets after issuing unprecedented evacuation orders to Beirut's southern

suburbs and a large part of southern Lebanon. Israel says it struck an Iranian command center in Beirut today, amongst other targets, and Lebanon

reports at least 217 people have lost their lives in the fighting so far.

Jeremy Diamond went up to the border with Israel today, didn't you, Jeremy?

JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Yeah, that's right. I was along the Israel-Lebanon border, which was a very, very active scene today.

Just one cross attack after the next, going in both directions. At one point my team and I saw two projectiles flying directly over our heads,

hitting a location in Israel very close to our position.

Subsequently, we saw Israel responding with one artillery shell after the next. Those were also wooshing over our heads in the other direction,

hitting targets inside southern Lebanon that were really not very far from the Israel-Lebanon border.

And that was what was really so stunning about this crossfire that we witnessed today, was the fact that it suggests that Hezbollah is re-

infiltrating positions that they had abandoned or been forced out of over a year ago, amid Israel's attacks on Hezbollah at the time and the ensuing

ceasefire that resulted, Lebanon's disarmament of Hezbollah south of the Litani River. All of that seems to have been for naught to a certain

extent, given the kind of pace and the intensity of the crossfire that we saw today.

In fact, eight Israeli soldiers were wounded today, five of them seriously as a result of one of those Hezbollah attacks on an Israeli military

position in northern Israel.

Inside Lebanon, of course, we've been witnessing the intensity of Israeli airstrikes there, not only in south Lebanon. Some of what we were able to

see and hear today along the border but also in the Lebanese capital of Beirut, where yesterday the Israeli military issued this very widespread

evacuation order for almost the entirety of the Dahieh, southern suburbs of Beirut that are considered a Hezbollah stronghold. And then subsequently

overnight, the Israeli military carrying out intense airstrikes there, destroying several high-rise buildings.

And again, of course you know, this is a deepening a humanitarian crisis in Lebanon where you now have hundreds of thousands of people out of their

homes, some of them living on the streets and again, it's not clear, you know, how much more this could potentially escalate. We did see Israeli

military tanks on the border. Residents in the area told us that they were seeing more and more personnel and materiel moving in towards that border

as well.

The looming question now whether Israel will deepen its control of just a thin strip of land in southern Lebanon and go for a broader ground

offensive once again -- Max.

FOSTER: And what sort of sirens have you been hearing in Tel Aviv tonight, Jeremy?

DIAMOND: Well, just moments ago, we had once again an air raid, sirens sounding indicating that Iranian ballistic missiles were being fired. We

have, of course seen those barrages diminish in size and scale, as Iran is sometimes firing as much as just a single missile at a time, which makes it

a lot easier for Israels air defenses to be able to intercept that.

That's all the result of the U.S. and Israeli strikes on those ballistic missile capabilities. They've destroyed some 60 percent of those missile

launchers that can be used to fire at Israel. And the result of that is that while we've seen shrapnel falling, we've seen a direct impact

yesterday that didn't result in any casualties. We haven't seen any casualties in Israel any fatalities, I should say, since Sunday, since the

second day of this war. And so, we will see whether or not that holds up, of course. But certainly, there's been a major diminishment in Iran's

ability to fire these missiles.

But now, as we've been talking about, there is this renewed threat of Hezbollah. And at times Iran and Hezbollah coordinating their missile

attacks at the same time.

[15:10:01]

FOSTER: Jeremy, appreciate it. Live in Tel Aviv for us tonight.

The Iranian strikes against Gulf states continue, but not at the rate they had been, as Jeremy was describing there for Israel as well, over the last

24 hours, Iran's ballistic missile attacks have decreased by 90 percent. U.S. Central Command adds that drone attacks are down by 83 percent. This,

as Qatar's air defense says it successfully intercepted a drone attack targeting the U.S. air base earlier on Friday.

Air defenses are also being put to the test in Kuwait where falling debris has caused some damage. The war is pushing up the price of oil up to some

of the highest levels. In the past few years. The energy minister of Qatar tells the financial times that oil prices could hit $150 a barrel within

weeks. Oil prices are hitting their highest level since late 2023 and Brent crude prices have gained 9 percent, hitting $93 per barrel.

It's Saudi Arabia, though, that is the big supplier, and Nic Robertson is there for us today to give us a picture of that, you know, that critical

oil market.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yeah, it really is. One of the tests that oil producing countries like Saudi Arabia, like Kuwait,

like the others all face, is that their normal production levels, they ship it out, but when they can't ship it out, they have to put it in storage and

there comes a sort of a saturation point for their storage fairly quickly.

So they're looking at the situation right now, if there isn't a resolution to the war, and the Trump administration is talking about this may be

taking as long as a couple of months, that really means for them, they've got to address their output capacity. This has long-term knock on effects

all the Straits of Hormuz get open.

But they're also part of the calculation is are they going to get drawn into the fight. And although Iran's output of drones and ballistic missiles

may be down a little today in Saudi, it's been very focused on one area in particular, Prince Sultan Air Base, just outside of the capital, Riyadh,

here, three ballistic missiles intercepted in the early hours of today. And that was the first time, by the way, that Saudi Arabia had actually

admitted that it had intercepted ballistic missiles.

About an hour or so later, there was a drone fired in pretty much the same area. After that a cruise missile fired in the same area. After that, three

drones fired in the same area. All of these intercepted. Then another hour later, after those three, another drone, and then a few hours ago this

evening, after a break of a number of hours in those barrages, a cruise missile was fired in.

So, Iran really trying to go after that particular airbase. And so, you know, for Saudi Arabia, it's looking at the threat that still exists. And

this hard dynamic of what to do about its oil production over the longer term. And, of course, as we heard from the energy minister in Kuwait as you

were mentioning, this can and will have long term knock on economic implications across the globe. And that -- that's a worry.

FOSTER: Absolutely. Nick, thank you for that.

On top of surging oil prices and market volatility, the U.S. labor market is struggling a February Labor Department report shows the U.S. lost 92,000

jobs last month. The losses cut across nearly every major sector as well, including health care. The U.S. labor secretary blames strikes and bad

weather for dragging down employment.

Let's bring in Matt Egan, because this sort of environment is you know, very sensitive if we're going to get an oil shock on top.

MATT EGAN, CNN SENIOR REPORTER: Yeah, absolutely, Max, and let's keep in mind that this disappointing jobs report came before the oil shock that

we're now experiencing. And look, this was disappointing. The U.S. economy, as you mentioned, lost 92,000 jobs in February. That is much worse than the

gain of 60,000 that was expected. This is a significant drop off from the 126,000 jobs that were added in January. In December was revised down as

well it went from a small increase to a small decrease.

When you look at the trend over the last year or so for the job market, you can see that there -- this idea of a month of job loss is not an anomaly,

right? This is not a fluke. There's now been one, two, three, four, five months out of the last nine where the U.S. economy lost jobs after going a

long stretch of years without any months of job loss.

And the unemployment rate also went up to 4.4 percent. That's unexpected unemployment rate. It's not high but it is moving in the wrong direction.

As far as why this happened, as you mentioned, there were some one-offs here. Healthcare notably lost 28,000 jobs. This has been really the engine

of job growth in the economy.

[15:15:01]

But there were about 30,000, 31,000 workers, nurses who were on strike. And that is maybe the major reason why healthcare lost jobs. Now the strike is

over. So those jobs should come back.

Another factor here was likely the snow and extremely cold temperatures in the United States, some weather-related sectors including construction and

leisure and hospitality, lost jobs. But this was not all about weather and strikes because other sectors not exposed to those issues, including

manufacturing and information, also lost jobs. When we just look at how the market is taking all of this, you can see U.S. stocks are solidly down

today, one 1 percent across the board. The Dow is off by almost 500 points although much of this was being is being driven by the energy price shock

that's also going on.

So, look, bottom line, we were hoping that today's report was going to show some evidence of stabilization in the job market. We did not get that. We

got more signs of weakness -- Max.

FOSTER: Okay, Matt. Appreciate it.

EGAN: Thanks.

FOSTER: Now in Chicago right now, some of the biggest names in American politics and culture are paying tribute to the civil rights icon, Jesse

Jackson. There have been hours of speeches, songs and remembrances from the congregation at the House of Hope Arena, which holds 10,000 people. We've

already heard from former President Obama, with President Biden speaking right now and President Clinton due to speak afterwards.

A few moments ago, Barack Obama said without Jackson's example in the 1980s, he may never have become the country's first Black president,

decades later.

(BEGIN VIDEO CLIP)

BARACK OBAMA, FORMER U.S. PRESIDENT: It was because of that path that he had laid, because of his courage, his audacity that two decades later, a

young black senator from Chicago's South Side would even be taken seriously as a candidate for the presidential nomination.

(END VIDEO CLIP)

FOSTER: President Biden currently speaking. Let's take a listen to that.

JOE BIDEN, FORMER U.S. PRESIDENT: My kids can't get another father but because of a couple people starting with Teddy Kennedy and a guy named

Fritz Hollings from South Carolina where Jesse was from, and a few others after Hubert Humphrey and others. They put their arm around me and they

said, look, just stay. Just stay for 10 months. And then go -- because they knew I was going to be leaving, as Hillary can tell you, and all three of

us can tell you is that when you're a freshman, you don't get on the good committees. Everybody wants to get on are Appropriations, Finance,

Judiciary and Foreign Relations.

So, they keep me down there. They put me on two really important committees, the Judiciary Committee which allowed me to appoint the first

Black justice to the Supreme Court. But and the Foreign Relations Committee, the real benefit of that was, I've been around so damn long, I

literally and I don't want to -- I'm not being critical of my colleagues, I know more heads of state personally than any other president in history of

the United States of America.

FOSTER: It really has been quite a tribute. And it continues. We'll keep dipping in and out for you.

Ryan Young has been watching it all unfold.

I mean, what stood out to you, Ryan? I mean, Obama's speech was quite something.

RYAN YOUNG, CNN SENIOR U.S. NATIONAL CORRESPONDENT: Yeah, it really was. And, Max, every now and then, I watch you from across the pond and we you

talk about things that are happening over there, and we have to listen to you about culture, right? And this really stands out for the culture that

we're getting a chance to witness. When you think about this homegoing service, yes, it's happening in Chicago but many people describe it like a

southern homegoing service, Southern Baptist.

So especially for those of us who live in the South and grew up the South like myself, those church services, they said this one was going to last

about three hours. There was no way that was going to happen. This was going to extend for five or six hours and there was an international

basketball star who stood up there, Isaih Thomas. I talked about this earlier in the day because I knew he was going to have a message that was

going to strike across the room there, which was, he remembers, before becoming an NBA basketball star, standing in the soup line at the Rainbow

Push Coalition and getting food from Reverend Jackson's organization when his family was down on their luck.

So, you can understand his love and appreciation for the work that Reverend Jackson did. When you think about this man and the 50 years that he stood

in the gap after Dr. King was killed, he was really the man who carried the mantle for civil rights for quite some time in this country and extended

beyond color. He also ran for President Barack Obama giving him credit for being able to pave the way for Barack to win.

[15:20:05]

And people remember the images of Jesse Jackson crying that night in Chicago as Barack Obama became the president. But it's actually the

groundwork that he did for so long, the man died at 84. And when you think about the fact that he was born to a single teenage mother, that he was

able to rise to prominence, he actually tried to go to a library when he was in college to check out a book and became a part of the Greenville

Eight when they denied him the access to that book so they did a read in.

And the idea that this man went from struggling to check out a book in a whites only library to running for president, to then running the Rainbow

Push Coalition, which extended its reach across the world getting soldiers back from other countries, being able to negotiate terms.

When it comes to business, you really see the reflection of his life and as somebody who met him when the first time when I was about ten years old,

the thing that stands out to so many people is he was so athletic. He had a football scholarship at one point, 6'2, 6'3, 240 pounds. Big man, gloves

like hands, he would wrap you in his hands and he would look at you in the eye and he would be very direct with his commentary when he would tell you

something like, hey, you can be somebody, keep hope alive.

His voice was so powerful, and it's one of the things that stood out to me the most, the more sick he got, the more his voice seemed to diminish. But

that did not stop him from continuing to have a word where he was very strong about what he wanted to see in this country, and he really did

believe in the media and the outreach that could happen from a pulpit like this one, in terms of making sure people understood the struggle that so

many faced across this country and around the world.

FOSTER: Well, that's you know, another speaks to this wonderful tribute that you've got such a clear memory of him when you were 10. It's, you

know, it's not often we have these truly unifying figures, and, you know, it feels like a hopeful event amongst all the darkness we've got at the

moment.

Thank you so much, Ryan.

YOUNG: Thank you.

FOSTER: Coming up, what we know about the investigation into the horrific strike on an Iranian elementary school, on that topic and what the White

House is saying about it

(COMMERCIAL BREAK)

[15:25:14]

FOSTER: Now to that strike on an elementary school in southern Iran last week that killed dozens of students and teachers. The U.N.'s human rights

chief is demanding a prompt, impartial and thorough investigation. Now there's new details about who may have been responsible.

Here's CNN's Isobel Yeung.

(BEGIN VIDEOTAPE)

ISOBEL YEUNG, CNN CORRESPONDENT (voice-over): Nearly a week after a strike killed scores of students in Iran's Minab, it seems more and more likely

that the U.S. was responsible. A new satellite image shows an Iranian Revolutionary Guards base and an elementary school in southern Iran. Here

you see craters in several of the buildings, including the school. They were hit in. Their exact centers, suggesting precision strike, experts say.

A wall separates the school and the base.

Satellite images from December show dozens of people in what appears to be a handball court at the school. "Reuters" now reports that U.S. military

investigators believe U.S. forces were responsible, though they haven't yet reached a final conclusion.

N.R. JENZEN-JONES, DIRECTOR, ARMAMENT RESEARCH SERVICES: We paint a picture of multiple simultaneous or near-simultaneous strikes, and it looks like

these were delivered with explosive munitions, probably air delivered. I think the most likely scenario in this case is that it's a U.S. or Israeli

airstrike gone awry. It's probably a targeting failure somewhere in the targeting cycle, an intelligence failure

YEUNG (voice-over): The Israeli military say they weren't operating in the area.

DAN CAINE, CHAIRMAN, JOINT CHIEFS OF STAFF: To date, we've had over 2,000 targets.

YEUNG (voice-over): American military officials say they carried out extensive strikes in this area and released this map showing strikes in

southern Iran. The base and the school in Minab are located here.

PETE HEGSETH, U.S. DEFENSE SECRETARY: We, of course, never target civilian targets, but we're taking a look and investigating that.

JENZEN-JONES: The damage we've seen is quite significant. It's unlikely it was something like an air defense missile fired by the Iranians, for

example.

YEUNG: When we tried to assess who is responsible for airstrikes, we typically try to examine the weaponry fragments left behind. But in this

instance, there's an internet blackout in Iran. And it's been really difficult to obtain that. And so, this investigation is still not

conclusive.

Isobel Yeung, CNN, London.

(END VIDEOTAPE)

FOSTER: So, we want to know is what will the fallout be from the Iran school strike?

Joining me now is CNN military analyst, friend of the program, Colonel Cedric Leighton.

Thank you for joining us, Colonel. It does point to the U.S. doesn't it? If Israel says they weren't operating there?

COL. CEDRIC LEIGHTON (RET.), CNN MILITARY ANALYST: Yeah, that's true, Max. Absolutely. So we're the only other force that would be operating over

Minab at that time would have been the United States. And so, then that, of course, then speaks to the idea of, you know who is responsible and why did

they -- why did this targeting situation occur? And it's not the first time this type of thing has happened, but it's certainly a tragedy, no doubt.

FOSTER: I don't think anyone's accusing the Americans of targeting the school, but these were meant to be precision strikes. Can you just explain

how they could have got it so horribly wrong?

LEIGHTON: Yeah. So, this targeting depends a lot on precise intelligence. And one of the key things is to figure out exactly what's in which building

that you're planning to strike. And in a case like this where the base that the Iranian Revolutionary Guard base is so close to a school, it represents

some real difficulties for people who are working not only the intelligence side of the equation but also the targeting and weaponeering side of this

and by weaponeering, that's basically the science of putting weapons on target.

And in this particular situation, there's a distinct possibility that there may have been a failure along that chain of custody, either on the

intelligence side or on the weaponeering side.

FOSTER: Do you think it's right that they're not addressing it? You know, they're not, you know, the administration isn't addressing it in speeches

is when they're asked questions about it they just refer to the investigation. Do you think that's the right course of action?

LEIGHTON: Yeah, that's kind of a typical way of answering these kinds of things but it would be better, I think, if the administration or the

Pentagon would be very specific, that not only are they investigating it but that the investigating -- the investigation itself will be a thorough

investigation. So that's the kind of thing that I think not only the international community, but also the American people would really need to

know, and of course, the Iranian people as well.

FOSTER: Yeah. You mentioned the Iranian people. I mean they are trying to keep the Iranian people onside, aren't they, talking about, you know an

uprising. But this is the sort of event which really undermines local trust, isn't it?

LEIGHTON: It absolutely is. And you see these kinds of events occurring in several different conflicts of the past and every time that an event like

this occurs where civilians are targeted it only increases the resentment against a force like this and against the possibility of using the civilian

population to foment an uprising against the existing regime.

[15:30:01]

So, it's not only a failure of weaponeering, but it's also a failure of -- potential failure, at least in terms of political influence and you know,

military objectives in this particular case.

FOSTER: So, when we talk about fallout, I guess it depends on whether it happens again, something similar, maybe they can manage this situation if

they can speed up that investigation and explain -- explain it. But if this sort of event keeps happening, it's going to be very damaging, isn't it,

for the operation?

LEIGHTON: Absolutely and one of the things that the American military takes a lot of pride in is the precision of its -- of its weapon systems. And,

you know, it's pretty clear that there was precision in the strikes on the military side of that wall that that you showed in Isobel's report earlier.

But the key thing here is that if this happens again, then it really calls into question the entire targeting process as well as the intelligence

process that is used both in the pre-strike phase as well as in the post- strike phase.

So, this is a very serious issue, and it really needs to be addressed very quickly, and it needs to be done in a way in which this first of all

doesn't happen again. But whatever is at fault for making it happen is rectified.

FOSTER: Yeah. Okay. Colonel Cedric Leighton, thank you so much for your thoughts around that, apparently very tragic event.

Still to come, nearly every industry in the world depends on oil and gas. So, when war upends the energy sector, we all feel it. We'll look at when

we can see any relief coming up.

(COMMERCIAL BREAK)

FOSTER: Returning now to our top story, the war in the Middle East.

[15:35:01]

The U.N. Secretary General Antonio Guterres says the war could spiral beyond anyone's control. It's been a day of renewed attacks on Iran by the

U.S. and Israel with Israel claiming it has hit 400 targets across Iran. It's also been a day of strong words from Donald Trump as he is demanding

Iran's unconditional surrender and insisting that he play a role in picking the country's next supreme leader.

CNN's Christiane Amanpour spoke with the leading Iranian dissident today to find out his hopes for what happens next in Iran.

(BEGIN VIDEO CLIP)

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL ANCHOR: Do you think, Mehdi Mahmoudian, that there is a possibility to change your regime, and how do

you think it should happen? Who should be leading the change?

MEHDI MAHMOUDIAN, IRANIAN HUMAN RIGHTS ACTIVIST: In these struggles of the last 20 years, I was in prison for at least nine years, and I hoped that I

and all my friends and comrades in Iran who are fighting to confront tyranny and replace it with a democratic system, we hoped that we could

establish the system with the help of civil society and the Iranian people. Today, I also hope that America and its allies will allow the fate of Iran

to be determined by the Iranian people themselves and allow us to determine our own fate by stopping the war of attrition.

(END VIDEO CLIP)

FOSTER: The economic fallout from this war is threatening to spill over. Oil prices have surged above $90, and Qatar's energy minister says that

number could soon hit $150, dragging down economies across the world with it. Oil tanker traffic through the Strait of Hormuz appears to have

completely stopped. The U.S. Navy will soon begin escorting ships through the region according to the energy secretary. All of this comes at a time

when the U.S. economy suddenly looks shaky.

With today's jobs report showing the United States losing jobs. The jobs number has now been negative. Now for five of the last ten months.

What we don't know is could this war trigger an economic crisis?

Joining me now is Paul Krugman, the Nobel Prize-winning economist.

Paul, thank you so much for joining us.

I mean, these are complex matters. And for everyday viewers, quite difficult to grasp because they're so big. But what we're talking about

here as a starting point is oil not getting out of the Middle East, right, and the price of oil affects pretty much everything.

PAUL KRUGMAN, NOBEL PRIZE-WINNING ECONOMIST: Yeah. I mean, this is -- oil isn't everything. It's a -- you know, we had two of the most severe

economic slumps since World War Two occurred after Middle Eastern conflict led to oil price shocks in 1973 and 1979.

And in terms of the sheer magnitude of the shock right now, if anything, in terms of its effect on the supply of oil, it's bigger because 20 percent of

the world's oil goes through the Strait of Hormuz. And now, that traffic has completely stopped and it's very hard to see. I don't know how

escorting ships are supposed to work. I mean, there's almost nothing as vulnerable to a drone strike or a missile strike as an oil tanker. So, this

is something that is very worrisome.

The only positive thing to say is that the world is a lot less dependent on oil than it used to be, even though oil is in everything we use a lot less

oil per dollar of GDP than we did in the 1970s. Gas mileage is much higher. We have a lot of alternative energy sources. So it's, you know, the

macroeconomics is relatively benign, but the scale of the potential hit to global oil supplies is actually terrifying.

FOSTER: And even before we get a sense of that as the numbers come through, it's the psychology, isn't it? Because the idea of an oil shock might not

be as harmful now as it was 20 or 30 years ago, I guess, but people have that in their memories, and that's what is creating the worry

KRUGMAN: Oh, and the abruptness of it, you know, it's only 17 days since Donald Trump gave his State of the Union Address in which he was boasting

about low gas prices. He, you know, he what he said about gas prices wasn't exactly true, but the average price of gas in the United States was about

$2.98 a gallon.

As of the last I checked today, it's $3.37 a gallon. So that's almost a 40 cent increase in just a few days. That has to come as a real shock to

ordinary people. You know, I'm getting mail from people saying, I just went out to the gas station, and I can't believe what just happened to the

price. So the psychology, psychology of that blow to the economy has to be really serious

FOSTER: And what about the stock markets? Because even before this, we were talking about overvalued stocks, everyone piling their money into A.I. and

tech stocks. And you know, people were already nervous or investors were already nervous about that. Are you worried that this shock could trigger a

wave of selling?

KRUGMAN: Well, stock market does what the stock markets going to do and has never been a very reliable guide to where the economy is going, or has it

been very tied to what's actually happening in the real economy.

I'm more concerned about we're seeing interest rates tick up. We're seeing a lot of concerns. You know, think about the Federal Reserve, which is

always trying to weigh employment against risks of inflation. Well, they've just gotten a serious inflationary shock to the economy. And that has got

to -- that means that the chance of them cutting interest rates has receded.

Now, we also just got a lousy job report, which was probably mostly statistical noise, but still means that they're caught between a rock and a

hard place. But you know, the elements of what led to those terrible oil generated crises in the 1970s are all in place now. It's just, you know,

quantitatively, they may not be quite as bad, but I wouldn't want to bet too much on this being benign.

FOSTER: Presumably, you were as concerned about the jobs report as other economists today. At what point do we start worrying about, an economic

crisis?

KRUGMAN: Well, what we're seeing right now doesn't look like a full on crisis. I mean, the -- you know, I don't believe that the economy added

126,000 jobs in January and then lost 92,000 in February. That's got to be -- that's got to be statistical noise.

But if you take a step back a bit it looks as if job creation has essentially stalled, that the U.S. economy is not adding jobs, at least not

at a significant rate. Which in turn starts to feed over into bankruptcies, loan delinquencies, just a lot of bad stuff. It's not -- we're not seeing

anything that looks like a 2008 financial crisis, at least not yet. But this is a -- not an economy that you want to hit with this sudden blow from

oil prices

FOSTER: There has been some political voices coming through talking about just the expense of wars. And this one is going to be enormous, isn't it?

They're spending, you know, the countries between them are spending billions of dollars a day. When does that feed through to the domestic

economy?

KRUGMAN: Well, you know, the United States is a very which is, you know, we're most of the money is going were spending most of the money. We're a

very rich country. We have a gigantic federal budget. Almost anything you do is kind of rounding error in those numbers. Although a billion a day,

you know, a billion here, a billion there and soon you're talking about real money. And if you're going to be spending a billion a day for many

weeks, which is starting to look like it might happen, that does start to raise some questions about federal government finances and just in general.

The appearance -- I think a lot of this is psychological. Again, it's the appearance that things are out of control and that the people at the top

don't know what they're doing. And I think the expense just feeds into that.

FOSTER: Yeah. Paul Krugman, thank you so much. Honored to have you on the show. Thank you for joining us.

KRUGMAN: Thank you.

FOSTER: Still to come, could Cuba's fate follow that of Venezuela and Iran? We'll look at the next item on Donald Trump's international to-do list.

(COMMERCIAL BREAK)

[15:46:21]

FOSTER: Now, as the war in Iran intensifies, President Trump also now clearly has his sights on Cuba as well. Earlier on Friday, he told my

colleague Dana Bash, Cuba is going to fall pretty soon, adding, they want to make a deal so badly and Cuba's ready after 50 years.

Patrick Oppmann joins us from Havana with the story.

There's no doubt that for the country there is under huge amounts of pressure. It's being starved, isn't it, basic resources. But I mean, how

was it received this comment from Trump that he's going to go to focus on Cuba after he's dealt with Iran.

PATRICK OPPMANN, CNN CORRESPONDENT: You know, I think for many people coming from the outside, they would look around and say, this country does

look like it's ready to fall. But, of course, as you know, Max, this is an island that has been under U.S. sanctions, has suffered under its own

leaders, often misguided economic policies for more than 60 years.

So, there is a tremendous ability to withstand, to get by, to invent, to be creative. Although that ability is now being put perhaps to its greatest

test. You know, you go out on the streets here and there are just so few cars. As this oil embargo continues to take a bigger and bigger bite into

the already failing Cuban economy.

So, it is very worrying on some level to hear President Trump Cubans have told me, you know, say that Cuba is in his sights or others here that

frankly, would like a change in government officials that I've talked to say that they're willing to resist, willing to fight if need be. But of

course, the fact is oil is not coming in since the attack on Venezuela, since the pressure campaign on Cuba's ally Mexico began several weeks ago.

So, as the few reserves of oil that Cuba has run lower and lower as the temperature gets hotter, we are seeing blackouts that are lasting hours, if

not days, the situation here just continues to deteriorate. So, it would seem impossible that beforehand, the Cuba would buckle to U.S. pressure.

You know, it is just so part of the governments ideology that they will resist but at this point without significant help coming from somewhere,

and there are no indications that help is coming from Russia or China or any other major ally of this country.

It appears that the government here is going to have to make some kind of deal. And it's really hard to imagine a deal that they will agree to that

Donald Trump will agree to that the government you know, here will find acceptable. But at this point, it really does appear to be checkmate and

the economy here is just going to get worse and worse until that deal is reached.

FOSTER: Okay. Patrick, thank you.

Still to come tonight under pressure, the U.S. Justice Department has released additional documents that were missing from the Epstein files.

What they say about President Donald Trump, just ahead.

(COMMERCIAL BREAK)

[15:52:01]

FOSTER: Iran's internet and communication blackout is making it difficult to hear from people inside the republic, of course, but some messages are

getting through, expressing deeply mixed emotions. Along with fear and grief, there is hope.

Leila Gharagozlou has more on the voices in Iran.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: My friends, family and people around me were all stuck between not knowing whether to be happy or sad.

LEILA GHARAGOZLOU, CNN REPORTER: With U.S. and Israeli airstrikes reshaping Iran by the day, it's nearly impossible to hear from voices inside the

country. Some Iranians have sent CNN voice memos, despite a partial Internet and communications blackout. To protect their privacy, we've

distorted their voices.

UNIDENTIFIED MALE: The hardship here is if we want to talk about the impact on the people, is that there is no Internet, we cannot get any news they

have no idea when an attack is going to take place. What I've heard is people say, we just know that something is coming at us in the sky. We

don't know if it's ours or theirs.

GHARAGOZLOU: Many Iranians say they have conflicting feelings about the war coming just two months after a bloody and brutal crackdown on anti-regime

protesters.

UNIDENTIFIED FEMALE: Right now, you can hear what's going on in the background this is life right now. They come out every night. These are

really strange and unknown days. An enemy is attacking us, is carpet bombing us, and yet we aren't upset.

The thing is that continuing with what we had before was much harder. I really prefer this situation. I think it should continue and end so we can

see these changes.

GHARAGOZLOU: Meanwhile, for older Iranians, this is just another moment of upheaval in a country with a history of change and uncertainty.

UNIDENTIFIED FEMALE: But don't worry, I'm fine. This isn't the first war I've seen. I even remember Reza Shah leaving. I've seen a lot of these

types of events. I'm not scared.

GHARAGOZLOU: As Iranians inside the country live through the ongoing conflict, they offer reassurances to their loved ones abroad.

UNIDENTIFIED FEMALE: Don't worry about me. I'm here inshallah. We're here. You don't need to be worried about us here. Just watch out for yourself.

Inshallah. We see each other soon.

(END VIDEOTAPE)

FOSTER: Now newly released documents that were missing from the Epstein files contained serious, unverified allegations against U.S. President

Donald Trump. The justice department posted three FBI memos describing interviews with a woman who accuses both Jeffrey Epstein and Mr. Trump of

sexually assaulting her when she was a teenager. The White House calls the accusations completely baseless.

CNN's Paula Reid is in Washington.

You've been having a look and it's a pretty stark reading.

PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: That's right, and this individual was interviewed by the FBI four times, and initially, only one

memo was released and that initial batch of documents released by the Justice Department, and that was an interview where she made allegations

against Jeffrey Epstein, but not against President Trump.

Now yesterday, these additional summaries were released, and they detail the types of allegations that she made against President Trump, where she

describes being introduced to him.

[15:55:08]

She alleges that he asked everyone to leave the room and, quote, mentioned something to the effect of, quote, let's teach you how little girls are

supposed to be, and then describes an encounter where he pushes her head down to his penis and then told agents she bit Trump, who then allegedly

struck her and said something like, get this little expletive the hell out of here now.

In her third interview, she allegedly said that she was receiving threatening calls and in her fourth interview, it's interesting. She told -

- she told investigators that she was concerned about why she was even coming forward, because the statute of limitations had passed.

Now, I do want to make sure we get in here the fact that President Trump has consistently denied any wrongdoing. In a statement yesterday, the White

House described these allegations as, quote, completely baseless, backed by zero credible evidence.

FOSTER: Okay. Paula Reid, thank you so much for bringing us that update.

I'm Max Foster. That's WHAT WE KNOW. Do stay with CNN. We'll have more after the break.

END

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