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America's New War: Has the United States Been Aggressive Enough in Search for bin Laden?

Aired December 30, 2001 - 22:00   ET

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


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JONATHAN KARL, CNN ANCHOR: Good evening. I'm Jonathan Karl in Washington. Welcome to a CNN SPECIAL REPORT: AMERICA'S NEW WAR.

First an update on a breaking news story we are tracking tonight. Argentina's interim president, Adolfo Rodriguez Saa, has resigned just one week after taking office. Rodriguez Saa has said his Peronist Party has not supported his efforts to handle the country's economic crisis.

His cabinet members resigned Friday after more violent protests over government corruption and a lengthy recession. Rodriguez Saa called for new elections to be held in March. We will go live to Buenos Aries for a full report in just a few minutes.

The investigation of the al Qaeda terrorist network reportedly includes dozens of groups and individuals in the United States. U.S. officials tell "The Washington Post" the FBI is conducting more than 150 investigations. Officials say the large number suggests a far broader al Qaeda presence in the United States than previously known.

Some targets are reportedly under electronic surveillance, while others are being watched by undercover agents.

Pakistan has frozen the assets of two groups accused by India of backing a suicide attack on parliament earlier this month. The two Islamic militant groups deny taking part in the gun assault, which left 14 people dead.

Earlier this week, Secretary of State Colin Powell designated both as terrorist organizations.

And the leader of one of those groups was arrested today. Pakistan government sources say he was taken into custody for making inflammatory speeches and inciting people to violence. The action follows the arrest of the leader of the other group earlier this week.

Afghanistan took a significant step today toward peace and stability after the Taliban. The country's interim foreign minister says the deal has been struck on the role of an international peacekeeping force. At the same time, the Afghan official made some conflicting comments about the whereabouts of Osama bin Laden. CNN's John Vause reports. (BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT: Afghanistan's new interim government says it has reached agreement on the final details of a multi-national peacekeeping force. At a press conference today, the foreign minister, Abdullah Abdullah, refused to give many details only saying that multinational troops would be here in Afghanistan very soon.

ABDULLAH ABDULLAH, AFGHAN FOREIGN MINISTER: It will be disclosed. It will not and secret but I'm not in a position to talk about it now. And the numbers as well, I think, this will not be a secret. The location, the number, the mission, of course, it is of course obvious it is international security assistance force.

VAUSE: A small number of British Royal Marines have been on the ground in the capital since before the swearing in of the new interim administration on December 22. However, they were paving the way for much larger force, the number which has been quoted around 3,000. Now, there has been some questions about their responsibility.

Now, they will operate under chapter seven of the U.N. charter. Dr. Abdullah Abdullah reinforced that today at his press conference. Under chapter seven, that gives the international troops a right to use force in self-defense. They will also be able to operate in Kabul and ultimately move out to other areas around Afghanistan.

Now also, at his press conference today, Dr. Abdullah Abdullah said that in fact, Osama bin Laden may still be in Afghanistan. That puts him at odds with the a spokesman for the defense ministry, Mohammed Abil, who just two days ago said that Osama bin Laden may in fact be in Pakistan.

And on the issue of the continued U.S. bombing of parts of Afghanistan, Abdullah Abdullah said that as a policy the new interim administration supports the U.S. campaign until all terrorists have been hunted out. That also puts him it on odds with some tribal elders from the Patika (ph) province, who came to Kabul the last few days to meet with Hamid Karzai, the interim chairman, pleading for an end to the bombing campaign.

Those tribal elders said Hamad Karzai would push the U.S. to bring the bombing campaign to end. So once again, Abdullah Abdullah reinforcing the interim administration's policy that it does in fact support the U.S.-led bombing campaign. John Vause, CNN, Kabul.

(END VIDEOTAPE)

KARL: As more prisoners of war arrive at the detention center at the Kandahar Airport, the Pentagon said a U.S. Marine helicopter was involved in an accident while on a mission in the area. CNN's Bill Hemmer is in Kandahar and filed this report.

(BEGIN VIDEOTAPE)

BILL HEMMER, CNN CORRESPONDENT: Under a full moon in Kandahar, word of a rare mishap for the U.S. Marines. Apparently late Saturday afternoon, a Super Stallion helicopter, a CH-53 apparently suffered a hard landing somewhere in the region. This helicopters has been a workhorse for the Marines throughout their operations here in Afghanistan.

We are told the crew of four is safe and fine. No serious injuries and no casualties on board. As for the helicopter, the Marines say sometime overnight Sunday and into Monday they will recover the helicopter and bring it back to the airport.

As for the detainees, the number now here in Kandahar, 139 after 14 more were brought in late Saturday night. We are told through sources on the ground, the process can be slow at times due to the translation and the difficulty working through translations of several languages here on the ground.

Ultimately they say the big question still has not been answered: Where is Osama bin Laden?

On another front we are told same number, 139, is now being detained and processed somewhere in Pakistan. Eventually, sources say, they too will come here to Kandahar.

With the U.S. Marines, Bill Hemmer, CNN, Kandahar, Afghanistan.

(END VIDEOTAPE)

KARL: As U.S. special forces continue their search for Osama bin Laden in Afghanistan's Tora Bora region, frustration is growing among eastern alliance fighters also on the hunt for the al Qaeda leader. Some agree with reports bin Laden may have escaped to Pakistan. CNN's Nic Robertson has more from the region.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN CORRESPONDENT (voice over): For these Afghan fighters of the Eastern Alliance, there is little to do these days except wait. They came to the mountains to catch Osama bin Laden. Now more than a month later, they're beginning to think their al Qaeda quarry has eluded them.

"I think Osama is in northeast Pakistan" says tank commander Zabed Walajan.

"We have searched the mountains many times," says commander Gula Lin. "We have arrested some Arabic people, and found a lot of dead Arabs, but the other Arabs and Osama have gone to Pakistan."

Indeed, among the more senior commanders in the mountains, there is surprise U.S. Special Forces continue their hunt.

"According to my information" says Commander Mohammed Tahir Sarjan, "work here is finished and there's nothing in this area and no need for American commandos, but if they have a plan, they can stay." Despite rumors, some fighters here may have helped Osama bin Laden escape, none show sympathy for him, and expect others to finish what they couldn't.

"The international community will find Osama and kill him" says fighter Wachan Gul. Time has passed and familiar battle front routines, servicing the machines of war, friendly contact with foreign forces in this search, even if much of the help has been from high- tech planes far above, has reaffirmed for these rugged warrior, they need updating.

"We have this old tank" says Saddam Mohammed. "Everyone wants good equipment and good tanks." Almost as neglected as their aging hardware, are the men themselves. No uniforms, often just sandals on their feet, and according to commanders, no pay. Only three meals a day, although some suspect top commanders may be getting cash from the Americans they all help.

Surprisingly though, no animosity towards their better equipped comrades in arms, the U.S. Special Forces. Indeed most here say they just want help ending the mess the country has slipped into.

"We have been fighting for 25 years" says Azi Zulla. "We are happy for an international force to come and bring peace."

In the meantime, until peace of bin Laden is found, they gather round the fire for another night, to ward off the only enemies they say they have left in these mountains now, the dust and the cold. Nic Robertson, CNN, near Tora Bora, Afghanistan.

(END VIDEOTAPE)

KARL: The uncertainty over bin Laden's whereabouts is prompting some criticism of the way the United States is waging the war on Afghanistan. At issue: Is the Pentagon is relying too heavily on local fighters who may have allowed bin Laden and other top al Qaeda leaders to flee? CNN's Kathleen Koch reports.

(BEGIN VIDEOTAPE)

KATHLEEN KOCH, CNN CORRESPONDENT (voice-over): It has been a new way to wage war deploying small numbers of U.S. forces to coordinate ground fighting, cave searches, and aerial support for anti-Taliban troops. As incentives the Pentagon has given Afghans weapons, ammunition, food, clothing, blankets and money. Still, control and motivation have been difficult.

DONALD RUMSFELD, SECRETARY OF DEFENSE: This is a relationship and it's multiple relationships. It isn't something where someone says do this or don't do that or I will do this or I won't do that. It is a discussion. They are not our forces.

KOCH: But lawmakers and others are wondering whether the use of proxy forces may have let Osama bin Laden and as Qaeda fighters slip out of Afghanistan. SEN. RICHARD LUGAR (R), INDIANA: We are attempting, through money, through clothing and what have you to get Afghans to do this work. Now that makes sense in terms of our potential casualties, and I have no quarrel with that, but it means that if Afghans are less and less motivated to do that, the trail may get colder.

MIKE O'HANLON, BROOKINGS INSTITUTION: Just as the Clinton Administration is criticized for not having used commandos against bin Laden back in '98, and using cruise missiles instead, the Bush Administration may ultimately be second guessed force not having used American forces in a greater way.

KOCH: The Pentagon admitted earlier this month, that it suspected some Afghan forces were selling freedom to Taliban fighters.

REAR ADM. JOHN STUFFLEBEEM, PENTAGON SPOKESMAN: I think that we have seen anecdotally, the instances where there were a lot of Taliban forces in Kandahar, and when they actually capitulated control of Kandahar there weren't that many forces to be found. And so you can make a pretty good assumption there that there was some coordination done with individuals who would pay for their escape.

KOCH: Others say even if top al Qaeda fighters got away, the overall U.S. strategy has worked, limiting combat fatalities to three.

JEFFREY SMITH, FMR. CIA GENERAL COUNSEL: Even if we had put in substantial U.S. ground forces, it's not clear to me that we could have successfully prevented the escape. So I don't think we should necessarily conclude that just because they have escaped, that it is a failure of our activity on the ground.

KOCH (on camera): And as long as public support for the campaign is high, and loss of U.S. military lives low, it is unlikely the Pentagon will rewrite its play book.

Kathleen Koch, CNN, the Pentagon.

(END VIDEOTAPE)

KARL: Now, with an update on the U.S. military strategy: Former NATO supreme commander and CNN analyst, General Wesley Clark. He joins us from Little Rock, Arkansas.

General Clark, thanks for joining this Sunday night.

GENERAL WESLEY CLARK (RET.), FMR NATO SUPREME MILITARY COMMANDER: Good to be with you, Jon.

KARL: Getting right to it, the point of the Kathleen Koch story you just heard, has the U.S. relied too much on these local fighters in Afghanistan, fighters who certainly didn't do a good job in terms of capturing Taliban leadership leaving Kandahar, virtually the entire Taliban leadership escaped. Are we relying on them too much now to get al Qaeda leadership? CLARK: I think that any time you adopt any method of warfare there are always pluses and minuses. One of the things that this helped us to --relying on the proxies here on the ground is that it got the fight under way quickly.

It brought down the Taliban quickly. It avoided the mistakes of the Soviet Union in putting in a large ground force. If we tried to go in there with several hundred thousand ground troops we have waited until next summer to have gotten all those troops assembled, moved through Pakistan. Who knows what the impact would have been on Pakistan when we went through?

So, this was by far the more expedient way to take the fight to the enemy. Is it possible that they weren't as aggressive at the end? Yes, it's possible, but as the president has told us all along, this fight is far from over. There is a long way ahead. And we have got the enemy off balance. We have the initiative, not he. I think the fact that there has been no successful attacks on the United States or elsewhere in the world since we started this campaign is a good indication of that.

KARL: Reading between the lines of what's you are hearing coming out of the Pentagon, do you get the sense that Pentagon officials no longer think that Osama bin Laden is still in the Tora Bora region?

CLARK: They have been pretty straightforward from the beginning in saying they really weren't sure where he was. I was surprised that there was a discussion of his voice being heard on the radio a couple of days before Tora Bora fell. But we -- we still haven't heard really an explanation for that. And maybe he was there, and maybe it was just a recording. We don't know that.

But I think they are now under the impression that he is probably not there, but he is probably elsewhere in Afghanistan.

KARL: And what do you make of the conflicting reports from those on the ground in Afghanistan, and obviously everybody has got a horse in this race? You have go Northern Alliance, Abdullah Abdullah saying he believes that in fact bin Laden is still there in Afghanistan, but you have eastern alliance officials saying they believe he is in Pakistan. How reliable is this information?

CLARK: Well on the surface, none of it is reliable. You have to go to the sources of it and of course we are not altogether privy to those sources. But a good guess would be that he made his way out through Afghanistan. He is probably still in Afghanistan simply based on all the confusion and the misinformation that is coming out.

But clearly the longer we stay there the more deeply entrench we help the northern alliance and Hamad Karzai, the more difficult it is going to be for Osama bin Laden. And so if he is in Afghanistan today he is certainly going to be looking for other places to go and eastern Pakistan is likely to be a weigh station in that route.

KARL: And ultimately can this operation be considered a success if the senior leadership of the Taliban still has not been caught and Osama bin Laden has not been caught?

CLARK: It is a success. It is already a success, because it has taken the fight to the enemy. It has removed the ability of al Qaeda to use Afghanistan as a secure base. It's punished the Taliban regime for having supported al Qaeda. So in that respect it's a success. How complete, how lasting, how decisive it will be remains to be determined.

It's still necessary to get the Taliban leadership and especially to break up al Qaeda and as we have heard many times, al Qaeda is in many different countries including the United States. There is a lot of work to be done and probably the bulk of the campaign work is not going to be done by the military. It is going to be done by the intelligence activities and the police and law enforcement in many, many countries.

KARL: OK, now in terms of what is next, the Pentagon is saying that the Marines in southern Afghanistan will be replaced by the Army's 101st Airborne division. I have been told that that could take up to 30 days or more to get the 101st in position. Does this mean that as we go to this next phase in Afghanistan, the rebuilding phase, that we are really in it for the long haul?

CLARK: We are in it for a longer haul. We don't know how long that would be, but to me, the indication is that the Marines get pulled out over time. A task force or multiple task forces from the 101st come in. They occupy Kandahar. They help rebuild a facility, they continue to guard purchasers. They provide assistance and humanitarian relief and eventually the airport is opened there.

As the president said, we are going to have to help stabilize Afghanistan. So we are in it for a longer haul -- a year, two years, don't know, but more than another few weeks.

KARL: General Clark, thank you very much for joining us.

CLARK: Thank you.

KARL: It is a place where political squabbling is expected. Coming up, a closer look at one of the biggest challenges facing Afghanistan's interim government.

And later, the dawning of a new age in Afghanistan. Girls are grabbing their books and going to school.

(COMMERCIAL BREAK)

KARL: People in Afghanistan are beginning the monumental task of rebuilding their country. That includes major political jockeying to determine who will control the country's villages and other settlements. CNN's Walter Rodgers looks at the power struggle in one place near Tora Bora.

(BEGIN VIDEOTAPE)

WALTER RODGERS, CNN CORRESPONDENT (voice-over): Mohammed Moree (ph) leads a village delegation to a tribal meeting of Afghan elders. He's been mayor of Sabra Soffla (ph) since Harry Truman was president of the United States. Moree (ph) survived a long, bloody war with the Soviet Union, Civil War with the Taliban, and more recently, the U.S. bombing of Tora Bora.

"Let's forget the past and now let's sit like brothers," he says. It's his campaign speech. Mohammed Moree (ph) wants another term as mayor.

Those who want to be selected village mayors sit with the tribal elders in a kind of nominating caucus. They pray Allah will solve their problems and unite Afghanistan. Outside, Omar Gul (ph) says not likely.

"Nobody trusts anybody here," he complains, sporting a belt he took off a dead Russian soldier. Inside, a tribal leader rejects a mayoral candidate, saying "he's deceived the people, not a good man."

Pajee Abdullah (ph) agrees and reminds the tribal council of how the Taliban abused power. "Barbaric" was his word.

Dhat Mohammed (ph) wants to be mayor of another village. He denounces corruption under the Taliban, but says he sees nothing wrong with growing opium poppies as a cash crop.

(on camera): Twenty years of war here does not make political reconstruction any easier. Many of those Afghans who should be participating are still refugees, but cross the border in Pakistan. Still, the tribal leaders say if the dissatisfaction factor gets too high again, they'll just call another election.

Judging by arguments heard outside the tribal elders meeting, nobody's happy. And Afghan unity is but the latest oxymoron.

Dhat Mohammed (ph) again promises if elected, nobody will have to pay him any bribes, but he's a rich man anyway. Still, this villager warns, "If Dhat Mohammed (ph) is elected mayor, I will personally kill him."

Unfazed, Dhat Mohammed (ph) claimed he's won by default, but there was never any vote, just a lot of shouting. Underlying the seeming chaos is the strong hand of the warlord, Hajee Abdullah (ph). I asked him what happens if a new mayor turns out to be a disappointment.

"When a new mayor doesn't obey us, we will dismiss him, punish him, put him in jail." The gun pretty much still decides everything in this country. And the abject poverty suffered by the Afghan people may have to be endured even longer, at least until after the next election.

Walter Rodgers, CNN, Gorekil (ph), Afghanistan.

(END VIDEOTAPE)

KARL: Now that's a campaign. Meanwhile, Italian troops have landed in Afghanistan. An advanced team of peace keepers arrived in Kabul today to prepare the way for about 300 more Italians who will eventually become part of the British peacekeeping force on duty in the capital city. Several diplomats also arrived today, to start the reopening of the Italian embassy in Kabul.

There is new evidence in Kabul that Afghan women are beginning to emerge from the oppression thy experienced under the Taliban. CNN's John Vause now on some lessons being learned in Kabul.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice-over): At Kabul's main school for girls, something which hasn't happened for five years, mothers dropping off their daughters for class. This was more than the start of a new school year, but the end of an era, where women everywhere across Afghanistan were denied basic human rights like education.

UNIDENTIFIED FEMALE: I feel so happy. I'm glad because I come school. Yes.

VAUSE (on camera): What would you like to study? What do you want to be?

UNIDENTIFIED FEMALE: I want to be a doctor for my future.

VAUSE: Do many girls here like Seda (ph) want to be doctors, teachers, educated working professionals, but they are starting with nothing. Classrooms have no desks or chairs. There are no books or pens or pencils. There's not even chalk for the blackboard. Many windows don't have glass.

UNIDENTIFIED FEMALE: Can you help us? The world? We don't have anything. We want the world -- we hope the world, all the world, they can help -- if they can help.

VAUSE: Compared to other schools around Afghanistan, the facilities here aren't too bad. That's because when the Taliban were in power, it was a madrassa, used to teach only boys and only Islamic law.

(voice-over): Many girls did receive some education over the past five years, illegally at home. Their teachers risked going to jail.

UNIDENTIFIED FEMALE: It was very difficult for us to be in Taliban situation. It was very hard situation. And we can't go at schools and we was at home with sadness.

VAUSE: Despite the almost overwhelming job ahead, there was much joy here today, for both teachers and students, simply to start a new school year. But as the school's principal told me, the world was so critical of the Taliban. Now she says, the time has come to show that it is serious about helping the women of Afghanistan. John Vause, CNN, Kabul.

(END VIDEOTAPE)

KARL: Turning now to the conflict between Pakistan and India. Pakistani authorities have arrested the leader of a group India blames for a deadly attack on its parliament building earlier this month. That attack cause tensions between the two nations to escalate as CNN's Tom Mintier reports, the nuclear rivals say they are hoping for peace, but are ready for war.

(BEGIN VIDEOTAPE)

TOM MINTIER, CNN CORRESPONDENT (voice-over): Along the border between Pakistan and India, the tensions are high. Here in Pakistan, these soldiers are on patrol, lightly armed but deadly serious. Far from the front-lines, political leaders of both India and Pakistan ponder what to do next. In Islamabad, Pakistani President Pervez Musharraf meets with religious and political leaders, a meeting that lasted more than seven hours, and covered not only the situation along Pakistan's border with Afghanistan, but more pressing the current tension with India.

(on camera): The meeting between the president and the political leadership was described by one Pakistani official as not an emergency meeting but an unusual meeting.

(voice-over): Unusual because it was scheduled just two days ago, in apparent effort by the military government to ensure political as well as public support if a war breaks out.

As everyone was leaving the president's house, General Musharraf himself appeared before reporters, to deliver what he called "a message he wanted to send to the people of India."

PRES. PERVEZ MUSHARRAF, PAKISTAN: Pakistan stands for peace. Pakistan wants peace. Pakistan wants to reduce tension. Pakistan wants to deescalate. Let the relationship between Pakistan and India move toward peace and amity and harmony in the future. If any war is thrust on Pakistan, Pakistan armed forces and 140 million people of Pakistan are fully prepared to face all consequences with all their might.

MINTIER: The harsh words come just hours after a similar meeting in New Delhi between Prime Minister Atal Bahari Vajpayee and India's political parties. Next week, both Mr. Vajpayee and President Musharraf will travel to Nepal for a South Asian summit meeting.

I asked the Pakistani president if he would attempt to talk to the Indian prime minister sitting across the table from him.

MUSHARRAF: I certainly will be sitting across the table. I don't know which direction I'll be looking.

MINTIER: One thing its certain. Everyone will be looking at both leaders very closely. Unlike a previous summit last July that didn't go very well, these time the stakes are much higher now, and so are the tensions between two armies who have already been on the battle field three times.

If there is a next time, it will come with both India and Pakistan having weapons not available before. Both are now on the list that worries many. They both have nuclear weapons.

Tom Mintier, CNN, Islamabad, Pakistan.

(END VIDEOTAPE)

KARL: As we reported earlier, there is breaking news in Argentina tonight, where that country's economic crisis has forced the resignation of the second president in just over a week. CNN's Carolina Cayazzo is standing by live in Buenos Aries with the latest -- Carolina.

CAROLINA CAYAZZO, CNN CORRESPONDENT: Thank you, Johnathan. Argentinians learned today shortly before beginning a new year and facing the worst economic and financial crisis of its history, Argentinians have learned that interim president Adolfo Rodriguez Saa had resigned ten days after former president, elected by the people, Fernando de la Rua, also had to resign, forced by the people, who came out to the streets and complained and asked for his resignation.

In his message to the people, Rodriguez Saa said tonight said that he did not have the support of the governors of the provinces of the nation in order to be able to develop a program that would take the country out of the crisis.

He blamed, more than anything else, the governor of Cordova, Jose Manuel de la Sota, and he said that his personal ambition had trumped the support of this governor and some others that we think, according to Rodriguez Saa, in the (UNINTELLIGIBLE) of the country but instead their own political ambitions.

Although he said that, there are people here in Argentina who don't agree or won't agree with the president because they have criticized him over the ten days that he has been in charge of the country that he himself has been making more presidential candidate, behaving like a presidential candidate, instead of somebody that is taking charge and making sure that the measures that the country so desperately need are taken.

Basically, the social crisis that has many people hungry, there were not programs to give out food, which the people were asking for. Also, there was not a measure to allow the people to take their money out of the banks, some decision that was left for -- from the government that came before. So, the country is in a political crisis right now -- Jonathan.

KARL: Caronlia, thank you for that report. We will certainly be talking to you more as you track Argentina's struggle not only with an economic crisis but also with a political one. Thank you.

And now we will take a quick break. We will be back with more in just a minute.

(COMMERCIAL BREAK)

KARL: Here are some of the latest developments we are following: A deal has been reached on peacekeepers in Afghanistan. The country's foreign minister says the United Nations and Afghanistan's interim government have agreed on an international force that would be deployed to initially only in the Afghan capital, Kabul.

The chairman of the Senate Intelligence Committee tells CNN that accused terrorist mastermind Osama bin Laden is probably still alive. Florida Senator Bob Graham says that's what the latest intelligence reports indicate. But he adds bin Laden's whereabouts are unknown, and that the trail has, quote, "gone cold."

And Pakistani authorities have arrested an accused terrorist leader. Hafiz Mohammed Saeed heads the group India says took part in a deadly attack on the Indian Parliament December 13. That attack has fueled escalating tension between India and Pakistan, including a military buildup on both sides of that border.

And there's word of two new major airport security breaches in the United States. One happened Christmas Eve when a man boarded a flight at Atlanta's Hartsfield Airport with six rounds of ammunition. It was discovered as he boarded his return flight in Jamaica on Friday. The other incident was at Florida, at Tampa Airport, where a man got through security with a loaded pistol. It was found when he tried to board his return flight in Memphis.

Meanwhile, a British newspaper is reporting a new link between shoe bomb suspect Richard Reid and Zacarias Moussaoui, the only person charged in the September 11 attack. The report in "The Observer" says British security forces -- services intercepted phone calls last year between Reid and Moussaoui, but didn't realize the implication. This follows last week's revelation that Reid and Moussaoui attended the same London mosque.

2001 is a year the nation's airlines won't be sorry to slip into the history books. CNN's Allan Chernoff has more on the industry's turbulent year.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): Airlines were already heading for a bad year. Then September 11 happened. For the bulk of three days, the nation's air traffic system was shut down.

GORDON BETHUNE, CEO, CONTINENTAL AIRLINES: The three-day shutdown, we estimate, caused a loss of more than a billion dollars. It's a staggering amount. That's $15 million an hour.

CHERNOFF: When airports reopened, much of the public was afraid to fly. Airlines responded by canceling one out of every five flights, laying off about 100,000 workers and delaying orders for new aircraft. Executives went to Washington to get help.

LEO MULLIN, CEO, DELTA AIR LINES: We have had an excellent response from the White House on all elements of the package.

CHERNOFF: A $15 billion package; $5 billion in cash grants, $10 billion for loan guarantees. On November 12, more tragedy: a deadly crash in Rockaway, New York. Though investigators believe it was an accident, the disaster made it even harder for airlines to get passengers back into the sky. Bargain fares are helping, proven to be an attractive lure. Traffic is gradually improving. Still, the financial cost is huge.

BRADFORD RICH, CFO, SKYWEST: In spite what has been, you know, some economic slowdown throughout the country, our passenger volumes have stayed relatively constant.

CHERNOFF: At year's end, the only profitable airlines are Southwest, Alaska Air and some regional carriers that are taking over short-haul routes. The trio of tragedy, terrorism and recession is causing the industry to report record losses likely to top $8 billion for the year.

Washington has already handed most of its grant money. Soon, only the federal loan guarantees will remain as a safety net for struggling airlines. The widespread fear in the industry is that the events of 2001 will force some airlines into bankruptcy in 2002. Allan Chernoff, CNN Financial News, New York.

(END VIDEOTAPE)

KARL: Raging brush fires south and west of Sydney, Australia are shrouding the city in thick smoke. A change in wind and lower temperatures gave Sydney a little relief today from the dense smog that rolled in yesterday, but visibility is still very low, and pollution levels are off the scales. The area's fire outbreaks are the worst since 1994.

And Peru is grieving the deaths of at least 287 people in a fire that roared through a section of downtown Lima last night. Another 180 Peruvians are suffering injuries from the disaster. CNN's Claudia Cisneros reports from Lima.

(BEGIN VIDEOTAPE)

CLAUDIA CISNEROS, CNN CORRESPONDENT (voice-over): After the fire, the ashes, (UNINTELLIGIBLE) reveled the magnitude of the tragedy. Four blocks of burned building and stores at a downtown Lima historical district.

A firecracker blast started a massive blaze which killed hundreds of Peruvians that minutes before packed the streets of this busy commercial area, shopping for fireworks for the holidays.

At the aftermath scene, firefighters, putting out the last smoldering flames, fireworks and all kind of debris all over the streets. Firefighters pick up new bodies of men, women and children, charred beyond recognition. They search inside the buildings for the bodies of those who were trapped behind security bars or vendors that locked themselves in to prevent looting. Relatives of the victims waiting outside the main morgue to identify the bodies of their loved ones, or what was left of them.

President Alejandro Toledo supervised the dozens of injured survivors, treated at government's expense at different local hospitals. He promised to relocate their businesses at no cost. He also announced a ban of fireworks, imports and production.

ALEJANDRO TOLEDO, PRESIDENT OF PERU (through translator): We cannot keep witnesses the deaths of our brothers and sisters. From now on, it's completely prohibited to import or produce any fireworks whatsoever. My government from now is assuming complete responsibility to recover the costs for all victims and those affected by the tragedy.

CISNEROS (on camera): Some firecrackers blast have been heard throughout the city even after the tragedy. In a country where the uses of fireworks have been a tradition and generations, the ban on fireworks will be a challenge for the government to enforce. The legislative package is in the works. President Alejandro Toledo has warned transgressors will be severely punished.

Claudia Cisneros, for CNN, Lima, Peru.

(END VIDEOTAPE)

KARL: Coming up, a closer look at one of the busiest and most important members of the Bush administration.

And later, Afghanistan is alive with the sound of music. We will tell you what the Afghans are listening to, and which artist is bigger than the king of pop.

(COMMERCIAL BREAK)

KARL: A Recent Gallup poll shows up that one of the most respected men in America is Secretary of State Colin Powell. CNN State Department correspondent Andrea Koppel looked at what might be in tonight -- looks at what he did -- looks at Colin Powell in tonight's installment of our series, "Profiles in Leadership."

(BEGIN VIDEOTAPE)

ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT (voice-over): In the weeks following the September 11 attacks, the State Department became a revolving door.

COLIN POWELL, SECRETARY OF STATE: It's a pleasure to once again meet with my colleagues.

KOPPEL: Secretary of State Colin Powell lobbying ministers from around the world to join an international coalition against terrorism. The pitch: You're either with the U.S. or you're against it. Among the most important players in the campaign, Pakistan's President Pervez Musharraf, one of the first to sign on.

RICHARD ARMITAGE, DEPUTY SECRETARY OF STATE: Black or white, no shades of gray, with us or against us, and President Musharraf made the decision he made, and we have been pressing on since then.

KOPPEL: Another critical component to the campaign's success, convincing Russia, in the words of one senior State Department official, to "jump in with both feet." President Vladimir Putin quickly offered the U.S. unconditional support for targeting Afghanistan and courting former Soviet republics in Central Asia.

Powell's aides credit his success in building this broad-based coalition to the many relationships he cultivated in the early days of the Bush administration. By September 11, Powell had already met with more than 100 foreign ministers, what one aide called "putting capital in the bank."

Only weeks before September 11, some called Powell the odd man out in the Bush administration, questioning his clout in making U.S. foreign policy. Beginning with a misstep on North Korea, Powell suffered a series of embarrassing setbacks, culminating in an August magazine cover wondering where he had gone.

But after September 11, Powell's presence was front and center at the White House. In the president's post-9/11 address to Congress, he put the Taliban on notice.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: And tonight, the United States of America makes the following demands on the Taliban.

KOPPEL: That ultimatum to the Taliban, and another key element to the president's speech, warning nations against harboring or supporting terrorism, were, Powell's aides say, his suggestions. Another push by Powell was to keep the war focused on Afghanistan.

LEE HAMILTON, WOODROW WILSON CENTER: This is one of the victories for Colin Powell this year. He has succeeded in restraining some of the more hawkish voices within the administration that wanted to go after Iraq, even though there is not a direct, clear linkage between Iraq and the events of September 11.

KOPPEL: Instead, since September 11 Powell has toured Central and South Asia, as he worked on the next stage of the war in Afghanistan, winning the peace.

(BEGIN VIDEO CLIP, OCTOBER 16)

PRES. PERVEZ MUSHARRAF, PAKISTAN: We agree that durable peace in Afghanistan would only be possible through the establishment of a broad-based, multi-ethnic government

(END VIDEO CLIP)

KOPPEL: But this new spirit of international cooperation on Afghanistan has not changed certain realities in the U.S. relationship with some of its new partners. Just this month, President Bush notified Russia the U.S. planned to withdraw from the 1972 ABM Treaty in order to build a missile defense shield, that despite Secretary Powell's attempts to accommodate Russia's preference for modifying the treaty. HAMILTON: That's what many in the Bush administration wanted, that's what Secretary Powell did not want. So he lost that battle.

KOPPEL (on camera): And as the war against terrorism moves beyond Afghanistan to other fronts, the ideological battles within the Bush administration are likely to continue, pitting Powell against other more conservative members of the president's cabinet.

Now, however, in the wake of September 11, Powell's position as chief coalition builder may carry more weight, helping him to win more battles than he loses.

Andrea Koppel, CNN, at the State Department.

(END VIDEOTAPE)

KARL: Coming up on our special report, the pop music Afghans are listening to, now that they are finally free to listen.

And reflections on September 11. CNN's Bruce Morton looks at where the U.S. has been, where it's going, and what we collectively will take with us.

(COMMERCIAL BREAK)

KARL: One of the ways the Taliban made life miserable in Afghanistan was to outlaw music. With the Taliban out of power, Afghans can once again listen. CNN's Patricia Sabga wanted to know what tunes they're listening to. Here's what she found out.

(BEGIN VIDEOTAPE)

PATRICIA SABGA, CNN CORRESPONDENT (voice-over): It's no mega- store, but it's definitely virgin territory. With music banned by the Taliban, these kiosk owners in Kabul's Kum Haria (ph) market sold an average of 40 cassettes a week.

(on camera): What did you sell before you could sell music?

(voice-over): "Cassettes without music, Taliban cassettes, Koranic verses." It took less than a month to kick the Taliban out of the top 40, which has definitely proven good for business.

"I sell more than 5,000 to 10,000 a week now," he says. "Whenever I get them, we sell out."

With that kind of volume, we wondered who's in the top 10?

(on camera): They don't have Billboard charts here in Kabul, but according to the shopkeeper, what all the kids are asking for, Farhad Dariah (ph).

(voice-over): The Afghan artist certainly proved popular in our random poll. We wondered how Western artists were faring against the local favorites.

(on camera): Have you ever heard of Britney Spears?

UNIDENTIFIED MALE: Britney Spears.

SABGA: If you saw a picture of Britney Spears, I bet you would love her.

(on camera): But even Britney's album covers may have a tough time standing out on these shelves.

(on camera): Is this a big seller here in Afghanistan?

UNIDENTIFIED MALE: (SPEAKING UNIDENTIFIED LANGUAGE).

UNIDENTIFIED MALE: He says that a lot.

SABGA: I think this sells a lot because of the picture.

(voice-over): We continued our cross-cultural quest.

(on camera): Now you can find some Western music here. For example, this gentleman just bought a Supertramp cassette from 1985. But my favorite, the 1986 disco mix.

UNIDENTIFIED MALE: Yes, (UNINTELLIGIBLE).

SABGA (voice-over): In fact, when it comes to Western artists, the '80s reign supreme.

UNIDENTIFIED MALE: Modern Talking, Michael Jackson.

SABGA (on camera): Michael Jackson?

UNIDENTIFIED MALE: Michael Jackson.

SABGA (voice-over): We asked him to hum a few bars.

He sold 100 Michael Jackson tapes this week, but it's not the best seller.

(on camera): How many Farhad Dariah (ph) cassettes have you sold this week?

UNIDENTIFIED MALE: Five hundred.

SABGA (voice-over): But there's another Afghan burning up the charts. There's a new artist, Nasib John (ph), has sold more than 1,000 cassettes in a day. At that rate, it won't be long before they're dancing in the streets.

Patricia Sabga, CNN, Kabul.

(END VIDEOTAPE)

KARL: From pop music in Afghanistan to weather in the United States. Just ahead, will the weather cooperate with your new year's plans. The forecast. (COMMERCIAL BREAK)

KARL: In Buffalo, New York, frosty the snowman is playing the Grinch this holiday season. Buffalo is digging out from a record snowfall of nearly seven feet that paralyzed the city this week. The snow finally headed south over the weekend. Crews as far away as Toronto are in the city working around the clock to plow, dig, and truck away the stuff. The city's mayor expects Buffalo to be open for business tomorrow, but the clean-up will go on for several days.

So who needs to be on the lookout for more rough weather in the coming week? Let's check in with Orelon Sidney in the CNN weather center.

(WEATHER REPORT)

KARL: New York City officials expect to entertain about 500,000 of their closest friends tomorrow night at the world's most famous New Year's Eve party. Organizers tested the dropping of Times Square's Waterford crystal ball nine times today to make sure it's ready for the countdown to 2002. If you can't be among the half-million revelers actually in Times Square, we invite you to join us from your living room. CNN's live coverage begins at 11:45 p.m. Eastern time.

And when we come back, a poignant look at ground zero.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

BRIAN PALMER, CNN CORRESPONDENT (voice-over): Over the past four months, the landscape of that now legendary patch of earth in lower Manhattan has changed dramatically -- from an apocalyptic sight of charred, scarred and shattered buildings to an almost level plain of rubble and dust. Now with a viewing platform at its edge for the public.

PATRICK VERSAGE, PORT AUTHORITY: There is no structure anymore. There is no Tower one or two. The Vista Hotel. Our police building in 5, the commodities exchange in Building 4. U.S. Customs building in Building 6, or across the street there, Building 7. And part of Battery Park, you know, the World Financial Center, 1, 2 and 3, you know, is gone.

PALMER: Patrick Versage, a member of the Port Authority police department emergency services unit, has been there almost every day. First as a rescuer, then as a searcher.

VERSAGE: In the beginning when there was some structures, we were doing void searches.

PALMER: Now as a sort of sentinel, or perhaps a witness.

VERSAGE: I have seen two beautiful pieces of architecture basically come down to -- down to earth, down six levels. Basically, everything is just now concrete dust and steel. And day in and day out, we are coming in, trying to, you know, make some closures for the rest of the families here.

PALMER: It's a difficult routine that keeps the eight-year veteran of the force from his wife and two sons in New Jersey.

VERSAGE: My 5-year-old is pretty sharp. He says, "daddy, I saw the two towers fall down." I'm like, "Yeah." And you know, "everybody OK?" And he was -- and I told him no.

PALMER: The Port Authority of New York and New Jersey runs the tunnels and bridges that link the two states, as well as the area ports and airports. It used to manage the Twin Towers.

Thirty-eight of the Port Authority civilian employees and 37 of its police officers and commanders died in the attack, Officer Versage's colleagues and friends.

Versage was inspired by a discovery made by ground zero iron workers, the remnants of giant I beams in the shape of a cross.

VERSAGE: 9-11. The North and the South Tower.

PALMER: This cross Versage cut and shaped, and his vigilance at ground zero are his tribute to those who died on September 11.

Brian Palmer, CNN, New York.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): At the end of other years, we've remembered people we lost that year -- a poet, a statesman, an artist. 2001 was different. The loss came all at once, September 11. It was massive, it was shocking, it still hurts.

Thousands died in New York, in Washington, in the Pennsylvania countryside. Most were innocents who were just there by chance. Others moved forward, died doing the work they had chosen to do. They worked, some of them, for hours and days on end, slept when and where they could.

They work still. The fires are out now, but wreckage still stands twisted where the towers stood.

So let us remember them, the dead, the survivors, the living who mourn. Let us remember them.

(MUSIC)

The dead, the heroes have taught us things: taught us again that the cost of war is very high because it is measured in lives, not dollars.

They have united us, reminded us that for all our differences of race and religion, we are on people united because we stand for freedom. They have united us first in grief, then in anger, then in war.

We will always remember them and the day that changed so many lives.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

KARL: I'm Jonathan Karl in Washington. "CNN PRESENTS" "Unholy War" is up next.

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