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NEWS FROM CNN

Countdown to Handover: Custody of Saddam Hussein; Buyers Line up to Purchase 'My Life'; Interview With Wesley Clark; Interview With Benjamin Netanyahu

Aired June 22, 2004 - 12:00   ET

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


WOLF BLITZER, CNN ANCHOR: A week from tomorrow, Iraqis are set to gain their sovereignty. And soon after, they could have their hands on their former president. CNN has learned Iraqi leaders working doggedly to try to gain legal custody of Saddam Hussein.
Our chief international correspondent, Christiane Amanpour, joining us now live from Baghdad with new information -- Christiane.

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, Wolf, yes, indeed, that is exactly what is happening. The Iraqis are working to get custody of Saddam Hussein. Legal custody, in fact full custody, only they say that his protection will be guaranteed by the United States. They will hold on to him.

We spoke to Salim Chalabi, who is the executive director of the special tribunal for Iraq and for those who will be charged with war crimes and other crimes against humanity. He appeared in shadow because he says he's received death threats since this tribunal was set up. But here's a little of what we -- of our conversation with him.

(BEGIN VIDEO CLIP)

SALIM CHALABI, EXECUTIVE DIRECTOR, SPECIAL TRIBUNAL FOR IRAQ: That's one of the alternatives we're discussing.

AMANPOUR: Is that the likely alternative?

CHALABI: I mean, they've got a better ability to protect him now.

AMANPOUR: Does Iraq have the ability to take physical custody of Saddam Hussein now and his lieutenants and guarantee his security?

CHALABI: Frankly, I think we do not. However, we can in short, time. The other danger is not the life of the detainees so much as because we are in an insurgency kind of environment.

AMANPOUR: You mean people might want to spring him?

CHALABI: Yes, exactly.

(END VIDEO CLIP)

AMANPOUR: He also told us that he does plan to issue arrest warrants, we expect, against Saddam Hussein and several other people, and that to be done very close to the handover date. And thereafter, custody to be transferred to the Iraqi government, having become a sovereign government.

He also said that Saddam Hussein would not be the first on trial, that it does take a long time to compile the evidence and get a trial ready. And that would take many, many month, he said. But he did say that many of those who are also in jail and who would potentially be witnesses against him, those people are talking under interrogation, and perhaps indicating that they will testify in return for leniency or some kind of immunity from the special -- special tribunal -- Wolf.

BLITZER: Christiane, I'm intrigued why Salim Chalabi did want to be photographed on the air. He was on this program about two months ago speaking openly via satellite. What has happened since then?

AMANPOUR: Well, indeed. He says he's been receiving threats to himself over -- since that time. He has, obviously, appeared before. But he says that he does not want to anymore, and he's feeling uncomfortable at the moment because he says his job puts him in that precarious position, and that he has received threats, that he simply doesn't want to take the risk of appearing any more right now in the full spotlight.

BLITZER: Now, I believe he's the nephew of Ahmad Chalabi, who's gotten himself into quite a bit of trouble over these past few weeks. He's -- he's being suspected of passing U.S. intelligence information to Iran. Do you sense that Salim Chalabi, who's in charge of these war crimes tribunals, in effect, has been hurt because of what Ahmad Chalabi may or may not have been up to?

AMANPOUR: No, not at all. I mean, we spoke together. He's obviously got good relations with his own uncle, but he also has very good relations, apparently, according to him, and according to the discussions that are going on, with the U.S., the occupational authorities here.

He has meetings with Paul Bremer and others involved in this legal process because there is a U.S. office from the Department of Justice that is helping. It's called the -- the Regime Crimes Liaison Office. And they're helping the Iraqi tribunal.

In any event, he has good relations. And he's discussing on a daily basis the fine points of the date of the arrest warrants to be issued, how the transfer is going to happen. As I say, we've pretty much nailed it down that they will get legal custody. The U.S. will maintain physical guard over Saddam Hussein, but he says he also has good relations and he's discussing all these issues with the interim Iraqi prime minister and with other members of his cabinet. So it does not seem to have hurt him at all.

BLITZER: Christiane Amanpour with the latest from Baghdad. Christiane, thanks very much.

It's weighty, it's wordy and, according to some reviewers, more than a wee bit self-indulgent. People are, though, lining up by the hundreds to try to get a copy of Bill Clinton's presidential memoir. After months of buildup, it's finally on the shelves in bookstores coast to coast.

CNN's national correspondent, Kelly Wallace, among those standing by in New York.

I take it is raining, Kelly. Has that had any damper on the crowds?

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: Not at all. Certainly not dampening any spirits here, Wolf.

We're coming to you from the location where we expect Bill Clinton to arrive at this bookstore, if he is on time, about 30 minutes from now. We have been reporting all morning long about the hundreds and hundreds of people who have been camped out in line, some for as many as 12 hours, hoping to be a lucky person to get the former president to sign a copy of his autobiography.

We have also at CNN had a team of reporters looking through the 957 pages to see exactly what he had to say. And something we haven't really heard the former president comment on in a round of interviews he has been doing is comments about the former vice president, Al Gore. And here is the president in his own words about Al Gore and about the decision that led to a Democrat not taking Bill Clinton's place in the White House.

(BEGIN AUDIO CLIP)

WILLIAM JEFFERSON CLINTON, FMR. PRESIDENT OF THE UNITED STATES: "If Gore had been ahead in the vote count and Bush behind, there's not a doubt in my mind that the same Supreme Court would have voted 9-0 to count the votes. And I would have supported the decision. Bush v. Gore will go down in history as one of the worst decisions the Supreme Court ever made."

(END AUDIO CLIP)

WALLACE: And now we want to give you a live picture of the scene inside this bookstore where, as we said, Bill Clinton is expected about 30 minutes from now. Expected to be standing room only, tons of television cameras, and, again, people with the book hoping the president will sign it.

This is a full-scale PR effort. The president beginning a month- long book tour here in Manhattan and then later tonight up in Harlem.

Wolf, as you know, the initial reviews of this book, very, very harsh. "The New York Times" calling it "sloppy" and "self-indulgent." But clearly, that is not stopping people from buying it.

All expectations are this will break all kinds of records. More than two million advanced copies already expected to be sold. And it is expected to break all of the records for a work of nonfiction -- Wolf.

BLITZER: All right. Kelly Wallace in New York. Kelly, we'll be checking back with you. Thanks very much.

To our viewers, please stay tuned to CNN for former President Bill Clinton's first live primetime interview. The former president will be taking your phone calls as well. "LARRY KING LIVE" has the interview Thursday night, 9:00 p.m. Eastern, 6:00 p.m. Pacific. That will be live. You'll want to watch "LARRY KING LIVE" Thursday night.

Let's get to politics right now, a little bit of politics, foreign policy. We seem to know who's not running with John Kerry and the Democratic ticket this November. Republican Senator John McCain says he's supporting President Bush. He's backing it up with deeds, as well appearing with the president earlier.

So the speculation is continuing who's on Kerry's short list to become his running mate. We'll talk to -- talk to some of the possible candidates in the days ahead. Today, it's General Wesley Clark, the former NATO supreme allied commander. Earlier this year, he himself was a candidate for the Democratic presidential nomination. He's here in Washington.

We'll talk politics shortly, General, but let's get to some of the substantive issues that we're watching right now. First, the June 30 handover in Iraq. From the military perspective -- and you spent three decades-plus in the military working your way up to the top, the NATO supreme allied commander -- does this look workable?

WESLEY CLARK, FMR. PRESIDENTIAL CANDIDATE: Well, it's workable in the sense that what's going on today is -- is messy. The handover's going to be messy.

The real question is not what happens on the early weeks of July. It's what happens a year, two years down the road. As long as the American troops are there, we're strong enough to crush the outbreak of civil war. But we may be feeding the emergence of forces that will lead to civil war as we try to pull back, turn it over to the Iraqis, stay out of places like Fallujah and maintain our forces on the outside. So we may get through this period, but there's danger ahead.

BLITZER: Are there enough troops? Does the United States have enough troops on the ground?

CLARK: I don't think so. I've been very concerned about this. We don't have the border effectively controlled. We know that, we know people are still pouring in. We're working with people in the region, but we know that there are Syrians and Iranians that have entered and left and gone back and forth fairly freely across that border.

BLITZER: The news that Christiane reported at the top of the show, which potentially is significant, that, in effect, they've worked out some sort of arrangement that Saddam Hussein would be legally under the control of the new Iraqi regime, although the U.S., the coalition would continue to maintain his physical security, does that sound like a good idea?

CLARK: Well, I think we need to give the sovereignty to the Iraqi people completely, as soon as it's feasible to do so.

BLITZER: But if they can't guarantee Saddam Hussein's security...

CLARK: Well, we need to figure out why they can't guarantee Saddam Hussein's security, and we need to help them get the guarantees in place so we're comfortable that they can provide security. This is an important aspect of sovereignty, that they've got to bring a reconciliation in this country. And they've got to hold this man accountable for what he did to the Iraqi people. And it's got to be the Iraqi government itself.

BLITZER: But you know -- you've had a lot of experience with war crimes tribunals with Slobodan Milosevic in the Balkans, among others. You're not going to -- the U.S. is not going to hand over Saddam Hussein to an Iraqi authority that may or may not be able to guarantee that he's going to show up for a trial.

CLARK: That's right. No, they've got to -- got to lay the groundwork in there. And that has to be done.

BLITZER: That requires a lot of work?

CLARK: But I think the goal has to be firmly established. This is an Iraqi problem. They're going to try him, and they will eventually guard him.

BLITZER: Put on your military uniform for a second and talk about this whole issue of torture, getting information out of detainees. How far, in a worst case scenario, in a tiny number of cases, when you suspect there's, "a ticking time bomb" that a detainee might know information about a planned terror operation that could result in a lot of innocent people getting killed, how far do you go to try to get that...

CLARK: Well, it's against the law.

BLITZER: How far do you go to get the information?

CLARK: You don't. It's against the law. I mean, it's that simple.

And there's no cut-out for the law. The president's not above the law. He's not above the Constitution. He's not above the international obligations that the United States government has undertaken.

BLITZER: But you know the legal opinion of the White House counsel, Alberto Gonzalez, has put out that if these are not armed -- these are not uniformed soldiers or troops, that these are terrorists, in effect, that they don't necessarily get up to the standard of the Geneva Conventions.

CLARK: No, but they also have to be treated in a humanitarian way. And we also signed a law against torture. And, you know, I -- I've read this Department of Justice memo in some detail, and even though there is technically no international approved definition of torture, I think everyone understands what it is. It's causing pain, and it's causing pain in an effort to extract information.

BLITZER: We're going to take a break, but just follow up on this. When you were on the battlefield, whether in Vietnam or elsewhere, and you're fighting the enemy and you've got a troop out there, you mean to say in all those years of experience you never saw American soldiers get tough with these guys and try to get information?

CLARK: No, I never saw that. But I'll tell you this, when we had three U.S. soldiers captured by the Serbs in a cross-border raid at the start of the Kosovo operation, the Serbs took them and roughed them up and beat them up. And we were totally outraged by that treatment.

You remember they were on television, and how angry people were about the way they were treated? And normally, when people get captured, they do get roughed up a bit because there's a lot of tension. People are afraid on both sides.

But we've never condoned that treatment. I know it's happened, it's been wrong. And it's wrong today.

BLITZER: All right. We're going to take a break, but we have more to talk about. General Clark, stand by.

We're going to take a quick break. When we come back, we'll also talk about what Bill Clinton writes in his book, "My Life," about Wesley Clark.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're continuing our conversation with General Wesley Clark, the former NATO supreme allied commander and the former Democratic presidential candidate. We'll get to politics shortly.

Saudi Arabia, this is a subject you've studied at some length now. What is your bottom-line assessment? Have they turned the corner? Are they doing everything they should be doing to fight al Qaeda and terrorism, or is there still a problem there?

CLARK: Well, I don't think they've turned the corner. Whether they're doing everything they can be doing or not really has to be assessed by people who are on the inside and can see all of the intelligence work that's going on. But for years they've been in denial about this.

And given the way that insurgencies work and the way that people's attitudes all over the world take form and develop, it's unlikely that knocking off the top four people as they claimed to have done in this last shootout is going to dramatically change the situation. These organizations don't work that way. It's just like in the United States military. If you knocked off the top four people, the next four are going to get promoted.

BLITZER: There's plenty of others waiting in line?

CLARK: Exactly. And these people are impassioned. They may not be quite as competent or quite as experienced, they may be six months behind in -- on the learning curve. But they'll get that.

BLITZER: All right. Let's switch the corner -- turn the corner and talk a little about this new book, "My Life," Bill Clinton's new book. There it is. It's very, very thick.

I'm sure you haven't had a chance to go through it, but we went through it. And here's what he writes about you, a fellow Arkansan. He writes about a meeting he had in 1967, but he goes back to the first time he met you.

"I had participated in the conference two years earlier" -- that would be 1965 -- "where the most impressive student I met was a West Point cadet from Arkansas who was first in his class and a Rhodes scholar, Wes Clark."

You were a Rhodes scholar before Bill Clinton was a Rhodes scholar.

CLARK: That's right. Yes, I'm two years older. I finished ahead of him in school.

BLITZER: I suspect not a lot of young men from Arkansas turn out to be Rhodes scholars?

CLARK: Well, a surprising number.

BLITZER: Really?

CLARK: Yes.

BLITZER: All right. So it wasn't that unusual, is that what you're saying?

CLARK: Not that unusual.

BLITZER: All right. So he -- he...

CLARK: A lot of good people in Arkansas, Wolf.

BLITZER: ... he is full of praise for you...

CLARK: Well, that's nice.

BLITZER: ... as the NATO supreme allied commander and what you did in Kosovo in the Balkans. And I assume you have high praise for him as well. But here's the question that a lot of people are asking now, because he spends a good chunk of this book and in the interviews talking about how he was tormented during much of that period when you were dealing with life and death issues, national security issues in Kosovo, in the Balkans. You were the commander in Bosnia. On the one hand, he was trying to be president of the United States. On the other hand, he was fighting this whole Monica Lewinsky disaster that was unfolding in his mind. The question is this: how did that affect you? Did it filter down to you as the NATO supreme commander?

CLARK: Well, not in any direct sense. I mean, what we saw was a president who was a master of the facts, understood the analysis, smartest guy in the room, always on top of the issues. But we also knew that his freedom of maneuver was constrained. And we knew that this must be taking a terrible toll on him.

And my European friends would come up to me and they'd say, "What is wrong with your country? You have a brilliant man as president. Why are you ruining the reputation of the United States in trying to attack him personally for this? This has nothing to do with his leadership of America."

And it was part of this gulf of misunderstanding that opened up between the United States and Europe. Because what they wanted from an American president was a world leader. And frankly, the problems he had with his family weren't relevant to them.

And as a military commander, I can tell you that he gave -- he gave tough orders. He gave effective orders. He thought through the issues. He was on top of the situation in every circumstance that I had any knowledge of.

BLITZER: Now, some of his critics have alleged -- and you well know this -- that he often -- and this is the allegation -- would order certain military actions to divert attention from his own political problems. The strikes in Afghanistan and al Qaeda after the East Africa bomb -- East Africa...

CLARK: I don't believe that for a minute. I just don't believe that for a minute.

You have to understand that in -- in the context of the Democratic Party and Bill Clinton's background, and where we were, that to have to order military action is essentially a recognition that diplomacy, your first preference, has failed. Democrats believe that force should be used only as a last resort. And there may be people who believe that you get something by using force, that it makes you look tough and strong, but I never thought Bill Clinton wanted to do that.

The opposite was the case. What he wanted to do was succeed without ever having to use force. And that's why he was so very effective in combining the use of force and diplomacy.

BLITZER: Did you believe when you were at NATO, when you were the supreme allied commander, that al Qaeda and Osama bin Laden was the major threat to the United States?

CLARK: Yes, I did. I knew that was coming. In fact, I was targeted over there by Moroccans who were apparently affiliated with al Qaeda. We knew they had been doing surveillance on us. My car was stolen once. And so we knew that there was a threat from that group.

I was concerned, of course, for NATO's position and the American position in the Balkans. And I always viewed that as a more urgent problem than the problem of Saddam Hussein, who after we struck him in December of '98, if he had things, we struck everything we knew at that point. He was a simmering problem, but not an immediate threat. Osama was the threat.

BLITZER: Let me ask -- let me ask you the converse of the other question I asked you. Did you ever get the sense that Bill Clinton as commander in chief didn't order a military strike because he was afraid he would be accused of trying to divert attention from his impeachment problems?

CLARK: No. I never saw that. I saw -- and what I heard from my colleagues and others who were working with him in various regions was always...

BLITZER: Because...

CLARK: ... that he did the right thing. He thought it through, he separated...

BLITZER: ... would he have been -- would he have been more aggressive against Osama bin Laden if he didn't have this impeachment, Monica Lewinsky nightmare hanging over his head?

CLARK: No, I don't -- I don't think so. I think that that impacted him in other ways.

It impacted his ability to gain public support. It impacted his ability to go to the Congress and say, we've got a major threat. But when it came time to use force, which is that solitary moment a president has to confront, he, I think, put aside all other considerations, he focused on the moment.

BLITZER: Let's get to politics. A lot of speculation that you're being vetted right now, potentially, you're being interviewed as John Kerry's running mate. Are you?

CLARK: Well, he has a confidential process, and I'm not going to speak about that.

BLITZER: You don't want to tell our viewers if you're interested in being vice president?

CLARK: Well, as I've said, I'm not interested. And I've said that consistently from the day that I endorsed John Kerry. But I am very interested in helping John Kerry become president.

I think he's a good man. I think he'll be a great president. And I think he's the kind of leader that our country needs right now.

BLITZER: We'll see what he decides. Thanks very much, General.

CLARK: Thank you. BLITZER: General Wesley Clark, as usual.

As John Kerry ponders a running mate, we'll continue our look at possible vice presidential picks. Senator Bill Nelson of Florida will be among my guest tomorrow. That's at noon Eastern here on CNN.

Israel is keeping a close eye on developments in Iraq and elsewhere. What impact will the handover have on the overall situation in the Middle East? We've got many questions for the former Israel prime minister, Benjamin Netanyahu. He joins me live. That's coming up next.

(COMMERCIAL BREAK)

BLITZER: Welcome back. President Bush keeps saying a democratic Iraq will help bring peace to not only Iraq, of course, but to other countries in the region as well. Is that realistic? One nation keeping a very, very wary eye on the new Iraq with enormous ramifications, of course, is Israel. Joining us from New York, the former Israel prime minister, the current finance minister of Israel, Benjamin Netanyahu.

Mr. Minister, welcome back to CNN. Thanks very much for joining us.

BENJAMIN NETANYAHU, ISRAELI FINANCE MINISTER: Thank you.

BLITZER: There are so many questions we have. Let's get to one that's in the news right now. Seymour Hersh has an article in The New Yorker magazine saying Israel has now deployed individuals on the ground in northern Iraq and the Kurdish areas to work with Kurds with whom Israel has had a longstanding relationship going back many decades, with one eye being on Iran. Is that true?

NETANYAHU: Well, if it were, I couldn't confirm it. And if it isn't, it's irrelevant if I deny it. So I pass on it. I don't think that's the critical thing. Israel is not a factor in Iraq, period.

BLITZER: All right. Let's talk about Iran, though, which is the subject that so many Israelis are very worried about, the fear that Iran might be attempting to build some sort of nuclear bomb. What is Israel's assessment of that?

NETANYAHU: I don't think there's an assessment right now, which is what differentiates our common knowledge. I mean, the western government's knowledge of what is happening in Iran with our guesses, our estimates of what was happening in Iraq.

In Iraq we guessed and we all guessed wrong. In Iran we know. We know that there is a program that has launched -- has been launched and is very advanced to build nuclear weapons. There's no question about it.

BLITZER: The director general of the International Atomic Energy Agency, Dr. Mohamed ElBaradei, was on my program last Friday, and I asked him how concerned he was that either Israel or the United States might launch some sort of preemptive strike to try to blow up or destroy Iran's nuclear reactor. And you and many of our viewers, of course, will remember Israel did precisely that in 1981 when it destroyed the Iraqi nuclear reactor at (UNINTELLIGIBLE).

Listen to what Dr. ElBaradei told me on Friday. Listen to this.

(BEGIN VIDEO CLIP)

MOHAMED ELBARADEI, IAEA DIRECTOR GENERAL: I hope that's not going to be the course of action, Wolf. I sincerely believe that this would be the wrong course of action to take, definitely because it will not -- A, it will not solve the issue. It would simply lead to a country to go underground, as we have seen in the case of Saddam Hussein. I think the issue, in my view, could best be resolved through verification, through diplomacy.

(END VIDEO CLIP)

BLITZER: Well, what's the Israeli stance on a preemptive strike against Iran's nuclear reactor?

NETANYAHU: Well, we have no plans for such an action. But instructively, I must tell you two things.

First, it turns out that our action against (UNINTELLIGIBLE) Iraq, against Saddam Hussein's bound (ph) factory is one that he never, ever recovered from. He could never really put it back together. But on this one, I think this is not an Israeli problem.

By now, I think Iran is understood to be a nuclear-armed theocracy. Ayatollah Rujin (ph) in Iran with the atomic bombs is not Israel's problem. It's the world's problem. I think that President Bush and the United States understand that very well. I think many other countries understand that.

So I would very much welcome the suggestion that the international community take vigorous action through the Security Council to prevent this. I think this is the preferred outcome from any -- any point of view, including mine.

BLITZER: What is your assessment now of Saudi Arabia and its willingness to fight in the war on terror? Do you believe, as many top Bush administration officials have been saying in recent days, that the Saudi government now is doing everything they should be doing?

NETANYAHU: Well, I hope so. And I'd like to believe that. But they certainly took a long time coming, because they've been, in fact, playing a dual game on the one hand, proclaiming their friendship to the West, on the other hand, funding the worst kind of Islamic militancy, Wahhabism, funding it actually around the globe. And that is the ideological underpinnings of al Qaeda and so much of the Islamic terrorism that you see spanning the globe now.

BLITZER: In Israel...

NETANYAHU: So if they come around -- if they come around, I'll be delighted. Time will tell.

BLITZER: In Israel there -- and correct me if I'm wrong -- there seems to have been -- I guess it's -- it's a -- it's a word that's subjective -- a lull in terror attacks against Israeli civilians in recent week, if not months. Is that right, or am I getting the wrong impression?

NETANYAHU: No, you have the right impression. But it's not for lack of trying on the part of the Palestinian terrorists.

At any given time, we have dozens and dozens of attempts, including today, as we speak. That, as we know, we have intelligent warnings of attempts, attempted suicide bombings, attempted terrorist attacks.

The reason we've gone down from sometimes two suicide attacks a day, then to two a week, then to two a month, and now it's been several months, I think four or five months since we've had one, is not because they don't try. It's because they don't succeed. And the reason they don't succeed is, first, because we're building up a fence, just a physical barrier to prevent them from getting to our cities, to our towns and villages, to our children.

And the second is that fence is foolproof. No one has crossed it. And the second thing is we take offensive action with superb intelligence to intercept these terrorists.

So the combination of offensive and defensive means is -- has brought about a situation where Israel has brought down the terror rate precipitously. Israel is probably now more secure than many other countries. It's a paradox, but it's borne about the fact that we live in a very confined area. The terrorists come from a separable place, we're enforcing the separation, and we have superior intelligence and military prowess. So Israel is actually getting pretty safe.

BLITZER: Is there -- is there a lesson that Israel can -- can share with the United States? As you know, there's deep concern here that perhaps al Qaeda may be plot some sort of major terror strike against the U.S. homeland right now. Is Israel a totally different situation, or are there lessons that would be applicable here in the United States based on your experience?

NETANYAHU: I think the immediate requirements of what I've just said -- and they apply in any arena -- you have to combine offensive and defensive means. And I think the United States is ably doing that.

This is not foolproof. It never is. But I think you have to be on the offensive, keep them scrambling for their safety.

Remember that those who dispatch suicide bombers are themselves are not suiciders. They would like to live and kill another day. So keep them at all times scrambling for their lives, for their safety. And the second thing is, of course, enhance your defenses. But beyond that, I think that what is important -- and this is what President Bush has said time and again -- this is a larger battle. It's a long war. It's a war that includes the dismantling of terrorist regimes, but you also have to change the culture.

You want to democratize. It's a slow process, in my opinion. It doesn't happen overnight.

It's going to be more difficult than the case of other mad pathological ideologies that we've had, as in Germany or in imperial Japan. There, it was enough to replace the regime to end the fanaticism.

BLITZER: All right.

NETANYAHU: Here, you still have very large population that has to be won over culturally. That's hard and long.

BLITZER: In the new Bill Clinton memoir, "My Life" -- I was going through it this morning -- there are several references to you, his efforts to try to negotiate some sort of peace settlement between Israelis and Palestinians. Clearly, he blames Yasser Arafat for the collapse of his -- his effort near the end of his effort. But I want to read one passage to you.

He makes a reference to that very controversial visit by Ariel Sharon to the temple mount in Jerusalem that caused huge anger among Palestinians and Muslims. He writes this: "Arafat said he had asked Iraq to prevent Sharon's stroll, which was clearly intended to affirm Israel's sovereignty over the site and to strengthen his hand against a challenge to his leadership of the Likud Party from former Prime Minister Netanyahu, who was now sounding more hawkish than Sharon."

Looking back on that incident, was it a huge mistake for -- for Ariel Sharon at that point to go to the Jerusalem -- to go to the temple mount in Jerusalem and take what so many saw, including the U.S., as a provocative step?

NETANYAHU: Look, I think Arafat would use any excuse. He tried to do the same thing when I was prime minister. He claimed that a door that I'd opened in a 2,000-year-old Maccabean tunnel a quarter of a mile away from the same al Aqsa mosque, was undermining the foundations of the mosque.

He started riots. I got that over in about 48 hours by taking very, very strong action. But the pretext is also the same.

So it's a pretext. I think by now people understand that the real cause of this continual lack of peace and the violence is Arafat's absolute refusal to have any kind of peace, any kind of compromise with Israel.

He doesn't want a Palestinian state next to Israel. He want a -- he wants a Palestinian state instead of Israel. That's the lingering problem. It always was. BLITZER: You're the finance minister of Israel right now. The Israeli economy, by almost all accounts, seeming to make some significant improvement in recent months. Lots of speculation, Mr. Minister, you want to succeed Ariel Sharon and become the next prime minister of Israel. Do you?

NETANYAHU: I intend to come back to that office one day, but I'm in no hurry. Prime Minister Sharon and I have been working I think very ably together, and we've put back this economy. It was on the verge of collapse, shrinking at one percent a year for two years just over a year ago.

Last quarter, it grew 5.5 percent. The stock market has doubled in 12 months. It reached today an all-time high. Investments are flowing in.

Israel has now better security and tremendous free market reforms, coupled with technology. That's, I think, something that investors are looking at. And all you have to ask yourself is this, there was no peace on the Korean peninsula for many years, but there was a line of separation between north and south.

In the south, you had a robust free market economy. Would you not have invested in Samsung or in Daihatsu or in LG because there was no peace between North Korea or South Korea? So those who are listening to me and to us, now, don't forego this opportunity. Come in...

BLITZER: One final question. When will Israel be completely out of Gaza?

NETANYAHU: I think we have a program right now, first of all, to prepare the groundwork for a possible pullout. That could -- that pullout could be partial, in stages, it could be complete. I think we'll monitor the situation nine months from now and make a decision on that.

But mind you, it's not so simple just to walk out anymore than it is simple for the United States to walk just out of Baghdad and Iraq. If you want to leave -- I don't think many Israelis want to stay in the Gaza district. But they also want to make sure that the terror doesn't follow them, and that stability is left in the place that we vacate.

This is the primary concern of most Israelis. It's certainly my primary concern.

BLITZER: All right. Benjamin Netanyahu, the finance minister of Israel, thanks very much for joining us, spending a few minutes with us here on CNN.

NETANYAHU: Thank you, Wolf. Thank you for asking about the economy. I like those questions.

BLITZER: The Israeli economy, who would have thought in the face of what's going on apparently improving. Mr. Netanyahu, thanks very much.

Opening the book on the Clinton presidency: book buyers lining up right now. We're expecting the author to start signing copies this hour at a bookstore in New York City. You're looking at live pictures right there. Once he emerges and goes and sits down there, starts signing books, we'll go there live as well.

And they traveled to Iraq. What did they see? Is Iraq ready for the handover? Two U.S. congressmen, Steve King, Adam Smith, they're standing by to join me live.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're get something new information on interrogation techniques authorized by the Defense Department. Our senior Pentagon correspondent, Jamie McIntyre, is standing by with details -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Wolf, the Pentagon is now saying that when it releases documents later today it will show the Defense Secretary, Donald Rumsfeld, never authorized a controversial interrogation technique known as water boarding for use on detainees at Guantanamo Bay. That is contrary to what a senior defense official indicated to CNN yesterday.

What we are now told is that the documents will show a series of aggressive procedures were requested by interrogators at Guantanamo Bay, and they included convincing detainees that death or severe pain could be imminent, exposure to cold weather or water, using a wet towel to induce a perception of suffocating -- that's the water boarding technique -- and mild, non-injurious physical contact.

But we're told Secretary Rumsfeld only approved the last bullet item, the mild non-injurious physical contact that includes things like grabbing someone's arm, poking them in the chest, or some light shoving. Again, this is contrary to what a Defense Department official told CNN yesterday and resulted in our report yesterday, indicating that Rumsfeld had approved water boarding. This morning, on Capitol Hill, Deputy Defense Secretary Paul Wolfowitz said he was outraged by that report.

(BEGIN VIDEO CLIP)

PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: I'd like to at least clarify one thing that's been seriously misreported for almost the last 24 hours by CNN claiming that Secretary Rumsfeld authorized some kind of extreme interrogation method in Guantanamo that I think they describe as water torture. That is wrong.

CNN was told yesterday that it was wrong. They have continued running the story, until I'm told finally this morning at 8:30 they published a correction.

(END VIDEO CLIP)

MCINTYRE: While Secretary Wolfowitz's sentiments are certainly understandable, just a couple of points. One, CNN did receive a call from the Pentagon last night, but at that point it was still not clear whether the story was inaccurate. As soon as CNN was convinced that the story was inaccurate this morning, we issued a correction right away.

How could it happen, Wolf? Well, I can just tell you that I had a long discussion with a senior official who works closely with and for Defense Secretary Rumsfeld. And I came away with a completely different impression of what that official was telling me. Now, whether I misunderstood or whether I was misinformed is something that honest people can debate.

The bottom line, though, is the story was not accurate. And we are correcting it because that's what CNN does -- Wolf.

BLITZER: And just to be precise on this point -- it's very sensitive, I understand, Jamie -- this senior Pentagon official close to the defense secretary, Donald Rumsfeld, his suggestion was that you simply misunderstood, that he never said that the defense secretary had approved this water boarding, this form that some call torture?

MCINTYRE: Well, let's just say that we had another discussion today in which it was clear that the understanding that we had yesterday was not the same understanding we had today. As I said, you can put it down to an honest misunderstanding, it could have been some confusion.

I don't want to, you know, attribute motives to anybody, but let's just say that what we were told yesterday is not what we were told today. And we are told we'll see the very memos themselves today, and everyone will be able to read them for themselves and make their own judgments about what they show.

BLITZER: OK. Jamie McIntyre at Pentagon, clarifying that point. Thanks, Jamie, very much.

The president's national security adviser, Dr. Condoleezza Rice, went to Capitol Hill this morning to meet with Republican lawmakers on the conflict in Iraq, as well as the transition of power scheduled for June 30. Two members of Congress have, in fact, just returned from the war zone. We're going to get their impressions right now. Congressman Adam Smith is a Democrat from Washington State. Congressman Steve King is a Republican from Iowa.

Congressmen, welcome back. Thanks very much for joining us. I wonder if you'd both care to respond to this notion. How far -- how far should the U.S. go in trying to get information out of suspected terror detainees?

REP. ADAM SMITH (D), WASHINGTON: Well, I'm not an expert, obviously, in security and interrogation, but from what I've been told, I mean, there are no methods of doing this. And, in fact, torture is not a particularly effective method of getting accurate information.

There is a variety of different ways to make those inquiries. And we have a lot of people, both civilian and certainly in the military, who know how to do that. And I think they ought to use those methods. But, you know, taking it up to the torture level, everything that people have told me is it's not even very effective. And it certainly has an impact on public opinion.

BLITZER: Is there ever room for torture, Congressman King?

REP. STEVE KING (R), IOWA: I would say that we should use the methods that we can use and stay within international law, and that protecting and saving American lives and our mission in Iraq is of paramount importance. So that decision within -- within the boughs of international law would be where I would ask the Department of Defense to stay.

BLITZER: All right. You just -- both of you just back from Iraq right now. I want your bottom-line assessment. This June 30 handover, for example, do you see some light at the end of tunnel there?

KING: Well, we know that the violence has been escalating, building up to June 30. We anticipate there will be significant efforts on the part of al Qaeda and the insurgents until then. That is light at the end of tunnel, although I don't think it's the last tunnel.

It's one of the last tunnels maybe for our United States military. But the transition from June 30 on their elections, maybe the end of January, is the time also that we'll see, I think, violence increase before our November elections and then again before the elections, and maybe during the elections that the free Iraqis will have in January of 2005.

BLITZER: Congressman King?

(CROSSTALK)

SMITH: That's OK. First impression was that the troops are doing an incredible job over there. I mean, I was amazed. It's 115 degree heat, they're all dedicated to their job.

They believe in the mission. They believe in what they doing -- they're doing. I think they're making a difference. And you just can't help but be impressed by that.

The second thing is they've got two major challenges. One is the security situation, which is not under control enough in the country. And the second is the infrastructure, building, you know, the basic electricity, garbage, sewage, water, health care systems.

BLITZER: Is this mission impossible or mission doable?

SMITH: No. No. I mean, the mission is absolutely doable, but it's going to be difficult and it's going to be more difficult than the administration anticipated. And it's going to take longer.

But I think you can certainly see that the Iraqis, the new prime minister, the new group, it's going to make a difference to get Iraqis in charge of Iraq. That's what's really important.

They're not going to support our troops in an occupation. They want to support their own people. We've got to get them to the point where they can take over.

BLITZER: And a lot of Americans are wondering how many more lives, U.S. troops are going to be lost, how many more billions of dollars are going to be spent. Is it all worth it?

KING: We have really two choices. And one is to complete the task in Iraq and promote and establish a free government for a free people in Iraq. And that becomes then the loadstone Arab nation for a freedom to echo throughout the Arab world.

If that happens, we can see the end of the war on terror. If we don't do that, if we withdraw or recede from there and leave the Iraqis to themselves, then our other alternative in this war on terror is simply come back to the United States, turn the United States into one huge Israel, and guard every bus stop and every theater and every hospital, and still see our women and children blown to bits by terrorists who believe their path to salvation is in killing us.

BLITZER: Do you agree with that, Congressman Smith?

SMITH: Well, I don't disagree with it. I do think that along the way we've unnecessarily damaged our credibility and made the mission more difficult. I think in the way the war in Iraq was pitched, not just us here domestically, but to the outside world, a number of those things have turned out not to be true.

It's undermined our credibility and made it more difficult for us to get the international support we need. Because doing what Congressman King said is certainly important. That's a piece of it. But if the rest of the world is totally against us, we're still going to be in a disadvantageous position. We've got to figure out some way to get them on our side.

BLITZER: Congressman King, some disturbing numbers for the White House in The Washington Post-ABC poll that just came out this morning. "Who do you trust to do a better job on terrorism?" In May, May 20 to 23, 52 percent said Bush, 39 percent said Kerry. But now, only a month later, 47 percent say Bush, 48 percent say Kerry on an issue that so many Republicans thought was the president's strongest card in the -- card going into the election.

KING: Well, I can tell you what I heard from U.S. soldiers in Iraq consistently on that, and that is that they believe and I believe that there's been just a relentless effort to report only the bad news coming out of Iraq and the Middle East. And the good work that's being done over there and the progress that's being made is not -- is not soaking into the consciousness of the American people.

So it's understandable that the public would start to lose confidence if they didn't hear about five million Iraqi children being inoculated against communicable diseases and 2,500 schools being rebuilt. The list goes on, hospitals, roads, sewers and oil production and electricity production, not to mention the best ambassadors that we have over there are the American soldiers playing soccer with Iraqi kids.

BLITZER: All right. We're getting some very disturbing word -- word in right now, Congressman. Al Jazeera, the Arabic language television network, reporting that that South Korean hostage that we saw on videotape pleading desperately for his life apparently has been executed by his Iraqi captors.

Al Jazeera simply reporting the South Korean hostage, a businessman, a 31-year-old businessman -- we're showing viewers the picture, and all of us heard that appeal, the heart-wrenching appeal that he had to save his life -- apparently has been killed. Al Jazeera says he has been killed.

This is very disturbing what's going on, the beheading of the American, Paul Johnson, in Saudi Arabia, Nicholas Berg beheaded in Iraq. If this Al Jazeera report, Congressman Smith is true, the beheading -- I don't know if it's a beheading, but the killing of this South Korean businessman, it demoralizes a lot of people watching what's going on.

SMITH: Well, two points. First of all, on the poll numbers you mentioned, I also want to say that I think Senator Kerry has done a great job in recent months in talking about his plan for security, his plan to take on terrorism. And I think people are impressed with that plan. And I think that is making a difference.

And certainly, it's incredibly disturbing what's going on in Iraq. But it is -- it's not like the terrorists weren't doing this before Iraq or before Afghanistan. I mean, they have said repeatedly they have no respect for human life. It means nothing to them, and they will kill whoever they have to kill to advance their -- whatever those interests are.

So I don't think we can say just because of Iraq this is happening. We have got to stop these people from doing these things. But it's more complicated than just doing in it in Iraq.

BLITZER: Congressman King?

KING: (AUDIO GAP) law enforcement and intelligence problem. It is a worldwide war. And as tragic as this is, and as vivid as these images are likely to be, it does define the enemy that we have, this barbaric enemy that's got a nation -- a worldwide network.

And so if these lives of these people like Nicholas Berg and Paul Johnson and the South Korean are to count, we need to use them to identify our enemy, inform the American people, so we can come together with a resolve. We can't run away from this enemy. They will come and find us. And they are the worst barbaric enemy we've ever faced in the history of this country.

BLITZER: What is the most important military requirement right now to deal with this threat? KING: We need to be successful in establishing a peaceful and democratic government in Iraq. And we can do that, and we're not in any kind of tactical risk whatsoever. That will be done.

But to -- we've got to win the hearts and minds of the Arab world. I spoke with Benazir Bhutto over a year ago about this and I asked her, "How do we win? How do we declare victory?" And her answer was, "You've got to give people freedom. You've got to give them hope. You've got to give them democracy."

It's going to be a bloody road to there. And it will be a long, hard slog.

BLITZER: Very quickly, you want to button this up for us, Congressman?

SMITH: Well, the only thing I would say is I'd put that differently. If we say we have to give it to them we're going to be in trouble, we have to create the conditions where they can take it. They're not of the mind to trust the west to give them what they want. We have to figure out a way to work with them, not to be seen as the ones who are dictating everything. And that's a difficult task.

BLITZER: All right. Congressman Adam Smith, thanks very much for joining us.

Steve King, thanks to you as well.

We're going to take a quick break. More coverage when we come back, including more on this Al Jazeera report on the South Korean businessman.

(COMMERCIAL BREAK)

BLITZER: Updating the breaking news that we're just getting in, Al Jazeera, the Arabic language television station, reporting that the South Korean businessman, Kim Sun-Il, 33 years old, who's been held hostage by militant groups in Iraq, has been killed. The Associated Press quoting Al Jazeera, saying, "He has been beheaded."

No details. We do not yet have official confirmation. You will recall he was only pleading for his safety over the past few days.

The deadline had come and gone. We had been told earlier in the day the deadline was being extended. But now Al Jazeera saying it has seen evidence, seen video that the -- Kim Sun-Il, 33-year-old South Korean businessman, has been beheaded.

We'll continue to watch this story for our viewers. Stay with CNN throughout the day for more on this.

I'll be back later today, every weekday, 5:00 p.m. Eastern, for "WOLF BLITZER REPORTS." We'll have more on what has happened in Iraq.

We'll also have a debate on the new movie "Fahrenheit 9/11." Two hot topics, that's coming up. The former New York governor, Mario Cuomo, and Republican Congressman David Dreier will be my guests.

Until then, thanks so much for join us. I'm Wolf Blitzer in Washington. "LIVE FROM" with Kyra Phillips and Fredricka Whitfield is up next.

(COMMERCIAL BREAK)

KYRA PHILLIPS, CNN ANCHOR: Hostage killed. A South Korean man reportedly killed by his Iraqi captors. We're covering the breaking developments right now on this story.

FREDRICKA WHITFIELD, CNN ANCHOR: Pentagon papers: memos released this hour about Donald Rumsfeld and interrogation tactics he approved for detainees held at Guantanamo.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: I'm Kelly Wallace, here in Midtown Manhattan, where the hottest author in America right now, former President Bill Clinton, just arrived for his book signing. A live report coming up next.

PHILLIPS: From the CNN Center in Atlanta, hello, everyone. I'm Kyra Phillips. Miles is off today.

WHITFIELD: And I'm Fredricka Whitfield. It's Tuesday, June 22. And CNN's LIVE FROM begins right now.

We begin with the developing story out of Iraq. Iraqi militants have reportedly made good on their threat to kill a South Korean hostage. The Al Jazeera television network reports kidnappers have killed the man.

The 33-year-old businessman, Kim Sun-Il, was seen on video, pleading for his life. He was abducted last week, and the kidnapper had given South Korea until yesterday to pull its troops from Iraq. The government refused that demand.


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