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THE SITUATION ROOM

Car Bomb Rocks Beirut; Carter Calls Bush Admin 'The Worst in History'

Aired May 21, 2007 - 19:00   ET

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


WOLF BLITZER, CNN HOST: Thanks, Lou. Happening, exploding violence in Lebanon. A car bomb rocks Beirut while troops battle militants farther north. Is the Middle East unraveling right now?
Also this hour -- president against president. Did Jimmy Carter mean it when he called the Bush administration, and I'm quoting now, "the worst in history."

And Michael Moore's new film attracts raves overseas. And a federal investigation here at home. Tonight, the uproar over the new movie "Sicko." I'm Wolf Blitzer. You're in THE SITUATION ROOM.

We begin tonight with breaking news. An explosion rips through the heart of Lebanon's capital, Beirut, setting vehicles and buildings on fire as ambulances race to evacuate casualties.

To the north, Lebanese army tanks pound away at Palestinian refugee camps near Tripoli as Islamic radicals with ties to al Qaeda hit back with machine guns. Dozens of people are dead. Our senior international correspondent Nic Robertson is standing by live in Beirut. Let's begin with our state department correspondent Zain Verjee. There seems to be a new front unfolding right now, Zain, in this raging situation in the Middle East.

ZAIN VERJEE, CNN ANCHOR: Yes, Wolf, absolutely. There's also a very real fear that Lebanon could become a breeding ground for al Qaeda terrorists.

(BEGIN VIDEOTAPE)

VERJEE (on camera): What began as a hunt for bank robbers ended like this. A crowded Palestinian refugee camp turned into a war zone. Lebanese forces pounding well-armed militants holed up inside the camp.

They call himself Fatah al Islam and have links to al Qaeda. Their leader sentenced to death in absentia for the murder of a USAID worker in 2002. The group wants to wage war against the U.S. from Lebanon and now it's flexing its muscles, exploiting Lebanon's political tensions, taking advantage of the crowded and radicalized Palestinian camps to set up terror cells.

HISHAM MELHEM, AL-ARABIYA TELEVISION: These are ideal places for these radicals to recruit people and to preach their dark ideology.

VERJEE: Like northern Lebanon, Gaza also echoed the sound of warfare.

Israeli air strikes on Hamas targets in retaliation for rocket attacks fired into Israeli cities. At the same time, open conflict between Palestinians as Hamas and Fatah gun for each other. And bloody sectarian fighting continues to rage in Iraq. A region on fire as predicted months ago by Jordan's King Abdullah.

KING ABDULLAH, JORDAN: We can possibly imagine going in 2007 and having three civil wars on our hands.

VERJEE: While the White House is saying all sides should cool down, the administration is backing the Lebanese Army's tough response.

SEAN MCCORMACK, STATE DEPT. SPOKESMAN: Lebanese armed forces are reacting admirably.

VERJEE: As the violence rages on in Lebanon, Gaza and Iraq, terrorists are able to exploit the chaos, making it harder for the U.S. to influence events in the region.

(END VIDEOTAPE)

VERJEE: And President Bush is saying tonight that extremists that are trying to topple the fragile Lebanese government need to be reined in. Wolf?

BLITZER: What kind of support, Zain, is the U.S. government giving the government of Lebanon right now?

VERJEE: Well, the United States has always been supportive of the weak and as I said fragile, but democratically elected Lebanese government of Prime Minister Fouad Siniora. What we're learning from U.S. officials is they are looking into now giving military support. Wolf?

BLITZER: Military support from the U.S. to the Lebanese Army. Zain, thanks very much.

Let's get a closer look at the shattering situation in Beirut right now. For the second night in a row, there's been a bombing in the Lebanese capital. Let's go to our senior international correspondent Nic Robertson. He's on the scene for us. Nic, tell our viewers what has happened over the past couple of hours in Beirut.

NIC ROBERTSON, CNN CORRESPONDENT: A huge bomb, Wolf. It appeared to be a car bomb driven right up outside an apartment building in the center of Beirut. It seems to have been timed to go off when there weren't many people on the streets. But when we got there just after the bomb blast went off, the Lebanese Army soldiers were rushing in to secure the area. Ambulances were flooding the area. Injured people were being carried out of the apartments. At least three apartment blocks badly damaged. The face of the building ripped off, windows blown out. The apartments inside on fire.

At least six people were wounded in that huge blast. Again, it appears to have been timed when not many people were around but anyone in those apartment buildings, anyone sitting in a front room would have been injured. It's not clear yet how many casualties there had been in total so far, Wolf.

BLITZER: You know there's always a lot of conspiratorial theories in the Middle East. But some Lebanese are blaming Syria right now for this latest wave of violence that's unfolding in Beirut and in the northern part of the country. What are you hearing there, Nic?

ROBERTSON: Well, they are blaming Syria because they say Syria is responsible for sending Shaker al-Absi, who is the head of Fatah al Islam into Lebanon after he completed a three-year hard labor prison sentence for terrorism inside Syria. That's the allegation, that he was told by the Syrians to come and set up this cell inside this -- inside this Palestinian camp inside Lebanon. He denies it. The Syrians deny it. But the -- but there are elements within the western-backed government here in Lebanon that accuse and continue to accuse Absi of being supported by Syria saying that this is Syria again meddling in the internal affairs of Lebanon, Wolf.

BLITZER: Nic Robertson is on the scene for us. Nic, be careful over there. We'll stay in touch.

Deadly Israeli air strikes, meanwhile, have failed to stop the rockets fired by Islamic militants from Gaza into Israel. Israeli officials say 13 more rockets fell today, one of them killing an Israeli woman.

Both sides are threatening to escalate that conflict, which is now overshadowing a bloody Palestinian factional fight. CNN's Ben Wedeman has details.

(BEGIN VIDEO TAPE)

BEN WEDEMAN, CNN CORRESPONDENT (voice-over): Attack after attack after attack -- Israel's pursuit of its enemies in Gaza is unrelenting.

Monday, four militants from Islamic Jihad were killed in an Israeli air strike in northern Gaza. Overnight, Israel hit a house in Gaza City. Eight people were killed, including civilians. Israel said it was targeting militants in the street and did not intend to hit the house, which belongs to the extended family of a Hamas member of the Palestinian parliament.

Despite the pounding, Hamas insists it will not back down.

"Our commitment is to God, our people and the nation, say Hamas leader and Palestinian Prime Minister Ismail Haniya. "We will continue in this way until God gives us one of two wishes -- victory or martyrdom."

At this rate, it may be the latter. In the past week, the rockets have damaged homes and businesses, and wounded around a dozen Israelis, traumatizing many more. Such images put excruciating pressure on the government of Ehud Olmert to act. But there are good reasons for the Israeli Army not to rush in to Gaza. New weapons and tactics learned from Hezbollah in Lebanon could make an Israeli offensive a bloody proposition.

(on camera): Hamas is threatening to resume its campaign of suicide bombings against Israel, while Israeli Cabinet ministers warn if Hamas doesn't stop firing rockets, Israel may target the group's political leadership.

If either threat is carried out, the worst in this latest outbreak of violence may be yet to come.

Ben Wedeman, CNN, Jerusalem.

(END VIDEO TAPE)

BLITZER: The Middle East is exploding right now with new threats seemingly emerging every single day. President Bush was painting a very different picture of the region in the weeks before the war in Iraq.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, U.S. PRESIDENT: Success in Iraq could also begin a new stage for Middle Eastern peace. And set in motion progress towards a truly democratic Palestinian state. The passing of Saddam Hussein's regime will deprive terrorist networks of a wealthy patron that pays for terrorist training.

(END VIDEO CLIP)

BLITZER: That was then. Let's go to Jack Cafferty in New York. It didn't exactly turn out that way, Jack.

JACK CAFFERTY, CNN ANCHOR: Well, no. You could say that. It didn't quite turn out that way.

This weekend is Memorial Day. The unofficial start of summer. And the official start of yet another recess on Capitol Hill. But Congress has a lot on its plate before the break begins at the end of the week. Senators begin debating the so-called immigration reform bill today. That's likely to tie them up for a while.

But it's not the only thing that's cooking down there in the nation's capital. A possible vote of no confidence on Attorney General Alberto Gonzales could be on the agenda as well. Let's hope. In the House, the Democrats want to get a lobbying restrictions measure through. I wonder what that means.

And both houses are trying to resolve that impasse over the Iraq War funding bill. If experience is any teacher, I wouldn't hold my breath on any of it getting done, but one can always hope.

Here's the question. What should the top congressional to-do list this week ahead of the Memorial Day recess, what should be number one on that list? E-mail caffertyfile@cnn.com or go to cnn.com/caffertyfile. Wolf?

BLITZER: Jack, see you in a few moments. Thank you.

Coming up here in THE SITUATION ROOM, Jimmy Carter on attack.

(BEGIN AUDIO CLIP)

JIMMY CARTER, FORMER PRESIDENT: I think as far as the adverse impact on our nation around the world, this administration has been the worst in history.

(END VIDEO CLIP)

BLITZER: The former president breaks with tradition, pulls no punches for the sitting president.

Also, anger management. John McCain drops the "F" bomb on a fellow senator. Can he keep his temper in check for the campaign?

Also, Michael Moore's "Sicko." his controversial new documentary wins rave reviews and prompts an investigation. Find out why the filmmaker may be laughing all the way to the bank. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Tonight, some of Senator John McCain's critics suggest he might be in need of anger management. The Republican presidential candidate reportedly let loose on a colleague with some shouting profanity. Let's go to CNN's Tom Foreman. Tom?

TOM FOREMAN, CNN CORRESPONDENT: Wolf, before John McCain became known to the general American public, he was known around Washington for having a bit of a short fuse. And now with the campaign heating up, it appears he may be heating up also.

(BEGIN VIDEOTAPE)

SEN. JOHN MCCAIN, (R) AZ: We will track him down. We will capture -- we will bring him to justice and I'll follow him to the gates of hell.

FOREMAN (voice-over): A fired up John McCain at the first Republican presidential debate vowing to hunt down Osama bin Laden. And a heated John McCain late last week behind closed doors in Congress. According to first-hand accounts, the senator from Arizona got into a shouting match with fellow Republican John Cornyn over the new immigration bill.

The senator from Texas, who is against the bill, went after McCain, slamming him for missing negotiations while campaigning out on the trail. That's when McCain fired back with an F-U. Cornyn said McCain later apologized for the outburst.

This isn't the first time he's grown heated. A few months ago he got testy with reporters questioning him about an Iraq War funding bill he was writing. Again, McCain came back later to apologize. After the senator's joke about bombing Iran made headlines ...

MCCAIN: That old Beach Boys' song, "Bomb Iran." Bomb bomb bomb ...

FOREMAN: McCain once again fired back.

MCCAIN: Lighten up and get a life.

Insensitive to what? The Iranians? My response is, lighten up and get a life. I will continue to joke with my veteran friends.

FOREMAN: And a recent appearance on "The Daily Show" got loud.

JON STEWART, "THE DAILY SHOW": Let me explain it this way. What I am saying is ...

MCCAIN: It's a very unfair way to treat us ...

STEWART: Less supportive of them.

MCCAIN: ... when these people are being told they're fighting a war ...

STEWART: Settle down for a second.

MCCAIN: No, you settle down. That they are fighting in a war that they lost.

FOREMAN: McCain became famous for his straight talk during his first run for the White House.

MCCAIN: Five United States senators Vietnam veterans, heroes. Some of them really incredible heroes, wrote George a letter and said apologize. You should be ashamed. You should be ashamed.

FOREMAN: But years later, an admission that maybe that kind of language doesn't always work.

MCCAIN: My anger did not help my campaign. It didn't help. People don't like angry candidates very much.

FOREMAN: And how is he doing now?

MCCAIN: I am fine. Cindy says I'm more ill-tempered than I used to be, but other than that, I'm fine.

(END VIDEOTAPE)

FOREMAN (on camera): And take note of the issues that McCain is getting hot on. Immigration, funding for the war. These are issues in which his stance may put him at odds with some voters. So the pressures of the campaign, even early on, may be taking a bit of a toll.

Wolf?

BLITZER: Tom Foreman reporting.

John McCain, by the way, certainly not the first politician to drop the F bomb. Dick Cheney said it to Senator Patrick Leahy during a heated exchange over Halliburton. John Kerry was quoted saying it during his presidential campaign to describe White House policy in Iraq. Even President Bush used some colorful language, shall we call it, to describe a "New York Times" reporter.

(BEGIN VIDEO CLIP)

BUSH: There's Adam Clymer, major league (EXPLETIVE DELETED).

RICHARD CHENEY, VICE PRESIDENT: Oh, yeah, big time.

(END VIDEO CLIP)

BLITZER: Afterwards, the president said, and I'm quoting now, "I didn't, obviously, realize that the mikes were going to pick it up."

More blunt talk today from John McCain as well on a conference call with conservative bloggers. McCain slammed a rival Republican candidate. Let's go to our Internet reporter Jacki Schechner. What exactly happened, Jacki?

JACKI SCHECHNER, CNN CORRESPONDENT: Well, Wolf, Mitt Romney has been pretty vocal about his opposition to the Senate immigration agreement. And today, Senator John McCain was vocal about Mitt Romney. Take a listen.

(BEGIN AUDIO CLIP)

MCCAIN: Governor Romney, maybe I should wait a couple of weeks and see if it changed because it's changed in less than a year from his position before and maybe his solution will be to get out his small varmint gun and drive those Guatemalans off his lawn. I don't know.

(END AUDIO CLIP)

SCHECHNER: Now, Ryan Sager recorded the audio on his blog. And it's been bumping around the blogosphere this afternoon. The reference to Guatemalans had to do with a "Boston Globe" report last year that Romney hired a landscaping farm that had employed some illegal immigrants. And the varmints reference was to Romney's clarification of his hunting record that he had actually hunted small varmints over his past and not big game.

As for his reaction online today, some conservatives are saying that this is a McCain meltdown. Others called the comments hysterical, thought that they were very funny.

Romney's camp was quick to fire back in saying this was obviously McCain having trouble dealing with the terms of a failed plan. The fallout of what they are calling a failed plan. Wolf?

BLITZER: Getting testy out there on the Republican front. Thanks very much, Jacki for that.

Still ahead here in THE SITUATION ROOM, gas prices soaring to record levels. Are we being gouged by the oil companies? I'll ask California's Attorney General Jerry Brown. His state has the highest gas prices in the nation.

Plus, primary chaos. Find out what Florida is now doing that could change the entire political landscape.

(COMMERCIAL BREAK)

BLITZER: Our Carol Costello is monitoring stories incoming to THE SITUATION ROOM. Let's go to Carol. What do you have for us?

CAROL COSTELLO, CNN ANCHOR: A couple of things to tell you about, Wolf.

The Supreme Court today ruled that parents do not need to hire a lawyer to sue public school districts over their child's special educational needs. The case involves an autistic Ohio boy. His parents want the state to pay for him to attend a private school specializing in autism. They say they cannot afford a lawyer.

A mother whale and her calf appear to be heading back to the Pacific Ocean after venturing inland all the way to Sacramento. They reach the state capital last week after swimming about 90 miles up the Sacramento River. Now they are more than halfway back to the coast. Marine biologists say they still have to avoid a number of obstacles, including the pylons of the Golden Gate Bridge.

Federal health officials are warning that a widely prescribed drug for diabetes may increase the risk of having a heart attack. But in a statement issued late today the Food and Drug Administration says more analysis of data on the drug Avandia is need. The agency is urging patients using the drug to talk to their doctor about treatment options.

And a short time ago, a court in Sydney fined Sylvester Stallone $2,500 for illegally importing human growth hormone into Australia. Stallone pleaded guilty to the charges earlier this month. He reportedly told customs agents he was using the drug in order to give his body a boost and look good during the filming of his latest "Rambo" movie in Asia.

That's a look at what's happening right now, Wolf.

BLITZER: Thank you Carol, for that.

Still ahead, we're going to have some details of disturbing new reports that Osama bin Laden and al Qaeda are actually thriving in Pakistan right now despite billions of our tax dollars flowing into the country for the war on terror.

And former President Jimmy carter offers an explanation for the comments that started a war of words with the White House. Stay with us. You're in THE SITUATION ROOM. (COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM. Happening now, an Iranian American woman reportedly now officially charged in Tehran of trying to topple the country's government. Haleh Esfandiari is an American citizen. She's got dual citizenship, though, with Iran.

She went to visit her mother in December, was prevented from leaving Iran and was arrested this month. We're watching this story.

Also, a new vote of confidence from President Bush for the embattled Attorney General Alberto Gonzales. He's facing a possible no-confidence vote in the Senate. Mr. Bush is now calling it, and I'm quoting him, "pure political theater."

And Britain's Prince Harry reportedly now considering leaving the British Army. The Associated Press saying the prince is so frustrated after being denied a deployment to Iraq. He's now considering doing charity work instead. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Let's get back to our top story tonight. Lebanon exploding. Lebanese troops are battling Islamic militants near Tripoli in the northerner part of the country for a second day. President Bush also weighing in on the conflict tonight. Our White House correspondent Ed Henry is standing by. Ed, what is the president saying?

(BEGIN VIDEOTAPE)

ED HENRY, CNN CORRESPONDENT (voice-over): Well, Wolf, the president is expressing deep frustration with extremists in Lebanon trying to topple that fledgling democracy. Mr. Bush lashing out in an interview with Reuters that was conducted aboard air force one on the president's way back here to the White House. He's back now after a weekend in Texas at his ranch.

The president declared, quote, "extremists that are trying to topple that young democracy need to be reined in. Certainly we abhor the violence where innocents die and it's a sad state of affairs when you have this young democracy in Lebanon being pressured by outside forces."

Now it goes without saying that given all the setbacks with the war in Iraq, as well as Iran maneuvering with their nuclear ambitions, the last thing the president wants right now is more instability in the Middle East, Wolf.

BLITZER: And the president in the same Reuters interview is also speaking out about whom he'd like to see replace Paul Wolfowitz as president of the World Bank.

HENRY: And who he would not like to see. The president shooting down speculation that maybe he'd tap his friend British Prime Minister Tony Blair as the new World Bank chief. There is one big political reason for that. And that is that various European officials are trying to maneuver right now and take away the U.S. prerogative, the normal precedent to pick the World Bank chief.

They are trying to capitalize on the misfortune, the debacle of Paul Wolfowitz having to step down. So as much as the president likes Tony Blair, he's obviously not an American and that's why the president is saying he won't pick Tony Blair. Instead, he's going to pick an American, Wolf.

BLITZER: Ed Henry reporting from the White House.

Military officials say U.S. troops are focusing their search for three missing American soldiers on an area about nine miles across. This in the so-called Triangle of Death. CNN's Arwa Damon is embedded with one of the units following leads. She filed this report earlier.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT (voice-over): With roads too dangerous to travel, Charlie Company air assaults in.

CAPTAIN SHANE FINN, U.S. ARMY: I need them to -- I want them to clear forward of us on Janabi Run (ph). I want them to search for any IED triggermen.

UNIDENTIFIED MALE: Right.

FINN: And then see if they can observe anything suspicious in the canal itself.

DAMON: The mission, to search Janabi Run (ph) canal, the second canal the U.S. military has drained in the hunt for three kidnapped soldiers.

UNIDENTIFIED MALE: We need to make sure that we're looking for any signs of human remains or any type of equipment that could be collected on the side, a break, looking for anything that appears to be uneven on the sides of the banks of the canal.

DAMON: A tip came about three days ago from these local farmers, Shias in this predominantly unfriendly Sunni area.

"We were standing on the bridge there, and we saw two heads float by," this farmer says. "So, we went to the Iraqi and American base and notified them."

FINN: Certainly, looking in the canal, you're looking for something horrific.

DAMON (on camera): This area is about seven, eight miles from where the attack took place, but it is significant. This very same company found the body armor belonging to one of the 101st soldiers who was kidnapped and then murdered last year in the reed line running alongside this canal.

(voice-over): A soldier spots what looks like the sole of an American boot.

UNIDENTIFIED MALE: Try your best to limit the fingerprints.

UNIDENTIFIED MALE: Damn.

UNIDENTIFIED MALE: Just bring that up here anyway, just in case.

FINN: This is definitely not an American soldier's boot. So, this is a shoe. The search continues.

You want to find the clues, because you want so badly to return these soldiers to their families. But, by the same token, you don't want it to be that boot, because, then, it could mean other things. So, I'm not sure if I'm relieved or happy right now, or sad. I don't know.

DAMON: At the end of the mission, Finn's final call to headquarters: NSTR, nothing significant to report. The mixed emotions and physical fatigue, they will put aside, until their soldiers are found.

Arwa Damon, CNN, near Yusufiyah, Iraq.

(END VIDEOTAPE)

BLITZER: Is the United States throwing good money after bad in the hunt for al Qaeda's leaders? There are new questions about a key U.S. ally's role in a massive anti-terror effort.

CNN's Brian Todd is standing by.

Brian, what are you learning?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we're learning of growing frustration tonight on Capitol Hill and elsewhere over the $80 million a month the U.S. gives to Pakistan, and what America has gotten for its money.

(BEGIN VIDEOTAPE)

TODD (voice over): The world's most wanted terrorist still eludes capture, despite stepped-up U.S. intelligence efforts over more than a year to find him. And a U.S. official now tells CNN al Qaeda has been operating with a greater level of comfort in Pakistan over the past year, finding more space to train and plot.

Current and former U.S. officials say the terror network's leaders in that region have been asking their affiliates in Iraq for money. This comes amid new questions of what Pakistan is doing with $1 billion a year in U.S. aid.

DEREK CHOLLET, CENTER FOR A NEW AMERICAN SECURITY: we have seen many instances in which Pakistan's military has not done what we -- what we want it to do. And there's a question of, then, why are we continuing to pay them money? American taxpayers deserve that answer.

TODD: Democratic senator Jack Reed is leading an effort to tie the money given to Pakistan with its performance on the ground against terrorists. When we asked Pakistan's ambassador about that:

MAHMUD ALI DURRANI, PAKISTANI AMBASSADOR TO UNITED STATES: I will tell you one thing, that, if that language comes in, it will become more difficult for Pakistan to support you.

TODD: Pakistani officials say the money from the United States is actually a reimbursement for what Pakistan spends to fight terrorists.

But Pakistan's effort is again under fire. Current and former U.S. intelligence officials tell CNN, Pakistan's non-aggression deal signed last year with tribal elders along its border with Afghanistan has hurt the hunt for Osama bin Laden and the fight against terrorists -- Pakistani officials on the defensive about charges that their troops don't do enough to stop Taliban raids into Afghanistan.

DURRANI: We arrest them, check them, and we kill them whenever we find the Taliban or al Qaeda. We have no sympathy for them.

(END VIDEOTAPE)

TODD: Pakistani officials also deny the charge that they have pulled back their troops in a key border region where the Taliban and al Qaeda are known to operate. They say they have actually added troops in that region to about 90,000. That's compared with about 43,000 U.S. and NATO troops combined in Afghanistan -- Wolf.

BLITZER: Brian, how are U.S. officials, Bush administration officials, responding to this notion of tying aid to Pakistan to performance in fighting the Taliban and al Qaeda?

TODD: What they say is that the -- the -- the money has been -- the -- excuse me -- the investment in Pakistan has been well spent, essentially.

They aren't really thinking of -- of that plan to tie the money to the performance on the ground. A National Security Council spokesman tells us there is more work to be done; Pakistan realizes that; and they are working with the Pakistani government to ramp up the fight against terror, but, at the moment, no thought to tying that money to performance on the ground.

BLITZER: Brian Todd, reporting for us, he will watch this story for us as well.

And still ahead tonight: Michael Moore takes a scathing look at U.S. health care. We're going to find out why the State Department is investigating his new documentary.

Plus, we will also find out why California's attorney general, Jerry Brown, is calling some of President Bush's actions -- and I'm quoting now -- "criminal," when it comes to gas and gas prices.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: Michael Moore's latest documentary, "Sicko," is getting rousing reviews at the Cannes Film Festival in France. But he faces some serious trouble here at home.

Let's go back to Carol Costello. She's joining us.

What is this trouble all about, Carol?

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, we have been following this.

Moore's documentary, "Sicko," premieres in France, but will it play in the United States? The U.S. government is investigating Moore's documentary. And he fears, if he brings his film back to the United States, it will be confiscated. But, for now, Moore is basking in the spotlight.

(BEGIN VIDEOTAPE)

(BEGIN VIDEOTAPE)

COSTELLO (voice over): A triumphant Michael Moore at Cannes. "Sicko," his blistering look at America's health care system, was a hit, and vintage Moore.

(BEGIN VIDEO CLIP, "SICKO")

MICHAEL MOORE, DOCUMENTARY FILMMAKER: He sawed off the tops of two of his fingers. His first thought...

UNIDENTIFIED MALE: I don't have insurance. How much is this going to cost?

MOORE: The hospital gave him a choice: Reattach the middle finger for $60,000, or do the ring finger for $12,000. Being the hopeless romantic, Rick chose the ring finger for the bargain price of $12,000.

(END VIDEO CLIP)

COSTELLO: The controversial film is getting rave reviews. "Screen Daily" calls it "great, heart-on-sleeve cinema." Even FOX calls it a "brilliant and uplifting new documentary," despite Moore's critical assertion that other countries do health care better than the USA.

(BEGIN VIDEO CLIP, "SICKO")

MOORE: What did they charge you for that baby?

UNIDENTIFIED MALE: No, no, no. Everything is on NHS.

UNIDENTIFIED FEMALE: This is NHS.

UNIDENTIFIED MALE: No, it's not...

(CROSSTALK)

UNIDENTIFIED MALE: It's not America.

(LAUGHTER)

(END VIDEO CLIP)

COSTELLO: But all is not rosy for Moore. Part of the documentary was filmed in Cuba. Moore took three ailing 9/11 emergency responders for medical treatment there. The U.S. Treasury Department is investigating whether Moore violated the U.S. trade embargo by traveling to communist Cuba.

MOORE: The point was not to go to Cuba, but was to go to America, was to go American soil, to Guantanamo Bay, and to take the 9/11 rescue workers there to receive the same health care that they're giving the al Qaeda detainees.

COSTELLO: Moore says politics is behind the investigation, and says the message in "Sicko" is not partisan.

MOORE: And I think that, when people see this film, they're going respond to it, no matter what -- if they're Republican or Democrat, liberal or conservative, and -- and even rich or poor.

(END VIDEOTAPE)

COSTELLO: We will see.

Now, there are many politicians who are eviscerated in "Sicko," but Hillary Clinton, the Democrat, bears the brunt of Moore's wrath, accused of taking money from HMOs and pharmaceutical companies, while touting universal health care -- Wolf.

BLITZER: Carol Costello reporting.

And Michael Moore, of course, is absolutely no stranger to controversy. When his film "Bowling For Columbine" won the Academy Award for best documentary back in 2003, Moore slammed President Bush during his acceptance speech, saying -- and I'm quoting now -- "We are against this war. Mr. Bush, shame on you."

Bowling for Columbine, by the way, was the highest grossing documentary of all time, until Moore broke his own record with "Fahrenheit 9/11," which earned almost $200 million worldwide.

That film generated controversy at the 2004 Republican Presidential Convention, where Senator John McCain called Moore a disingenuous filmmaker. Moore was at the convention in the news media area. And, when the crowd chanted "Four more years" for President Bush, Moore flashed an L-sign for loser and chanted "Two more months."

For a second week in a row, gas prices are at a record high here in the United States. The average price of regular self-serve now is at $3.18 a gallon. That's up 11 cents over the past two weeks alone.

I talked about the soaring prices with California's attorney general, Jerry Brown.

(BEGIN VIDEO CLIP)

BLITZER: Is there evidence the oil companies or other elements out there -- out there right now are gouging American consumers?

JERRY BROWN (D), CALIFORNIA ATTORNEY GENERAL: Well, there's no evidence that the attorney general has -- and not my predecessor, who looked into it repeatedly. It may be true. We know we got gouged in the electricity crisis. People gamed the system and...

(CROSSTALK)

BLITZER: Enron and all of that.

BROWN: Enron, and even regular gas and electric companies, utilities, they did gouge us, no question. And we're involved in multibillion-dollar lawsuits, trying to recover.

But the problem with this gas is, it depends on oil. And oil -- if you measure by carbon content, which is what you should do, we're importing 68 percent. Nigeria, Venezuela, Iraq, Iran, that whole Middle East is a threat to our continued supply of gasoline.

So, look, we will keep looking. But I think people can expect, if isn't next month or the month after, over the next several years, gasoline prices are going up. And that's why it's so criminal for President Bush to do nothing about fuel efficiency and for the automobile...

BLITZER: Well...

BROWN: ... companies to keep fighting it.

(END VIDEO CLIP)

BLITZER: And still ahead tonight: Jimmy Carter's scathing critique of the Bush administration, we're going to show you how it launched a war of words, and how the former president is now explaining himself.

And will he or won't he? Newt Gingrich drops a hint about a possible announcement concerning the race for the White House.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Former President Jimmy Carter is now backing off some very controversial remarks he made about President Bush, calling the Bush administration -- and I'm quoting now -- "the worst in history."

And the White House had a few choice words for President Carter in response. Now the former president is offering an explanation. He spoke out today.

Let's bring in CNN's Mary Snow. She's watching all of this unfold.

All right, Mary, tell our viewers what happened.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, President Carter is retreating from his remarks, saying he should have been more careful. And he says his words were misinterpreted.

(BEGIN VIDEOTAPE)

SNOW (voice over): Jimmy Carter is clarifying what he meant when he said this to "The Arkansas Democrat-Gazette" about the Bush administration...

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: I think, as far as the adverse impact on our nation around the world, this administration has been the worst in history.

SNOW: The former president says he was comparing this administration to the Nixon years.

CARTER: I did comment on the fact that the Iraqi war and lack of progress in the Middle East caused me to put this administration as below that of Richard Nixon.

QUESTION: You didn't say it's the worst in history?

CARTER: Not intentionally.

SNOW: President Bush was asked what he thought of Carter's criticism.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I get criticized a lot from different quarters, and that's just part of what happens when you're president.

THOMAS MANN, SENIOR FELLOW IN GOVERNANCE STUDIES, BROOKINGS INSTITUTION: Actually, it's uncharacteristic of ex-presidents to be as critical of a sitting president.

SNOW: Historians say Jimmy Carter has changed the unwritten rules of ex-presidents restraining criticism of sitting presidents.

But Carter says:

CARTER: But I have always been very careful not to criticize any president, you know, in a personal way.

SNOW: Yet, when it comes to policy, Carter hasn't held back. Here what he said about the invasion of Iraq six months ago in THE SITUATION ROOM.

(BEGIN VIDEO CLIP, THE SITUATION ROOM)

CARTER: It's going to prove, I believe, to be one of the greatest blunders that American presidents have ever made.

(END VIDEO CLIP)

SNOW: On calling forth Guantanamo bay to be closed two years ago:

CARTER: The United States continues to suffer terrible embarrassment and a blow to our reputation as a champion of human rights.

SNOW: While he received low approval ratings while he was in the White House, Carter is considered a more popular ex-president in his role as diplomat. Historians point out that none of his presidential predecessors have been immune from his criticism.

DOUGLAS BRINKLEY, PRESIDENTIAL HISTORIAN: Every sitting president has to deal with the Carter factor, which is that he has an agenda of his own, that he's really speaking to a global audience.

SNOW: And, in an interview with the BBC over the weekend, he had harsh words for outgoing British prime minister Tony Blair's support of President Bush.

(BEGIN AUDIO CLIP)

CARTER: Abominable, loyal, blind, apparently subservient.

(END AUDIO CLIP)

(END VIDEOTAPE)

SNOW: And, over the weekend, a White House spokesman dismissed Carter, saying that he was losing his relevancy. Today, Carter said he doesn't claim to have any political relevancy -- Wolf.

BLITZER: Mary, Jimmy Carter has always been outspoken. So, why are these latest remarks generating this much excitement?

SNOW: Well, some historians say, these -- these are the harshest words he's ever used against a sitting president. And they say that he's usually more cautious. So, that's why they weren't surprised that he dialed back on -- on what he had said over the weekend.

BLITZER: Mary Snow in New York, reporting on this story, thanks.

The race to replace President Bush got a whole lot more complicated today. That's because Florida Governor Charlie Crist signed a bill moving his state's presidential primary up to January 29. As the calendar now stands, that -- that puts Florida behind only three states, Iowa, Nevada and New Hampshire.

Our chief national correspondent, John King, is on the story.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT (voice-over): A 2008 primary season that had an unprecedented early calendar to begin with now has a remote chance of seeing the first votes actually cast this year.

KATON DAWSON, SOUTH CAROLINA REPUBLICAN PARTY CHAIRMAN: It's -- it's possible. You know, I can't control what New Hampshire or Iowa do. I mean, certainly, they are good partners with South Carolina in this process.

KING: Those three early states are fiercely protective of their nominating roles. And, as a result, an election calendar already front-loaded with early contests is in flux again.

Until this week, it was penciled in this way: the Iowa caucuses January 14, followed by Nevada five days later, and the New Hampshire presidential primary January 22. South Carolina planned its Democratic primary January 29, and its Republican primary February 2.

But Florida's move rips that version up. Florida set its primary for January 29. And the domino effect is already in the works, because South Carolina insists on being first in the South.

DAWSON: We are a very proud, maverick-type state. And we will do whatever it takes to retain our position in presidential politics.

KING: Assuming South Carolina moves up, New Hampshire will be required by state law to move. January 8 is a strong possibility, which will impact Nevada and perhaps land the Iowa caucuses at about 10 shopping days left until Christmas, Christmas 2007.

KATHLEEN SULLIVAN, FORMER NEW HAMPSHIRE DEMOCRATIC PARTY CHAIRWOMAN: There is still so much uncertainty with this calendar, that it's not good for the candidates either. They don't know where to focus.

KING: The irony is that the biggest day on the 2008 calendar could have little impact. February 5 will feature nominating contests in at least 10 and as many as 25 states, including California, New Jersey, Missouri, and New Mexico. But history shows early wins and momentum matter most. And activists in both parties predict most of the candidates will be broke by South Carolina.

SULLIVAN: So, it's going to be over. And, so, you're going to have people in 46 other states, plus the District of Columbia, who are going to be sitting there, saying, what happened? Why does our vote not matter?

(END VIDEOTAPE)

BLITZER: That report from our own John King.

It could be very exciting. They move up all of these elections, even before Christmas, that first caucus in Iowa.

And, don't forget, we're gearing up for our own big debates in New Hampshire. CNN, WMUR and "The New Hampshire Union Leader" are sponsoring back-to-back debates early next month. The Democratic candidates square off Sunday night, June 3. The Republicans go head to head Tuesday night June 5th. You are going to want to see both of those debates.

Let's find out what's coming up at the top of the hour. That means Paula is standing by.

Hi, Paula.

PAULA ZAHN, HOST, "PAULA ZAHN NOW": Hi, Wolf. Thanks so much. Appreciate it.

Senator John McCain's temper, is it too fiery for someone who wants to be in the White House? And will it cost him the White House, if he gets the nomination

And is America's foreign policy really to blame for 9/11? It is one of the most inflammatory things that's been said in the Republican presidential debate so far. And we will debate that right here coming up at the top of the hour, among other things -- Wolf.

BLITZER: We will be watching.

Paula, thank you.

Still ahead here in THE SITUATION ROOM: a Beirut bomb, a surveillance drone, and a chimp -- "Hot Shots" coming up next.

Also: Congress about to go on vacation. So, what should they actually get done before they take off? Jack Cafferty with your e- mail.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here's a quick look at some of the "Hot Shots" coming in from our friends over at the Associated Press, pictures likely to be in your hometown papers tomorrow.

In Beirut, Lebanese police secure the scene around a car melted after an explosion rocked a Muslim area of the capital.

In England, a girl chooses a ribbon to show support for Madeleine McCann. She's the 4-year-old who has been missing for 18 days.

In Liverpool, England, a police officer works the controls of a new aerial surveillance drone.

And, in Australia -- check it out -- a young chimp scampers across a log in Sydney Zoo carrying fruit at a birthday party for a fellow chimp -- some of this hour's "Hot Shots," pictures often worth 1,000 words.

I know Jack Cafferty always likes those "Hot Shots, right, Jack?

JACK CAFFERTY, CNN ANCHOR: That last one looked remarkably like a television news executive in training, Wolf.

(LAUGHTER)

BLITZER: You want to name names?

(CROSSTALK)

CAFFERTY: No. No. I'm not that stupid.

(LAUGHTER)

CAFFERTY: I'm not as dumb as I look.

You can -- you could probably figure it out.

(LAUGHTER)

CAFFERTY: Our question this hour: What should top the congressional to-do list this week, ahead of the Memorial Day recess?

Bob in Naperville, Illinois: "The most important thing now is to do anything possible to force the removal of the attorney general, who fails to represent the interests of the American people, and, rather, represents the interests of the president. With a Justice Department that's totally controlled by the politics of the White House, all the laws Congress can pass are pretty much irrelevant."

Lewis in Torrance, California: "The top of the list should be to tear up that asinine immigration reform bill. Then listen, for once, to the will of the people, and not the special interests. I thought we lived in a democracy here."

Larry writes from Denver: "Kill this new attack on American workers by the senators, who are trying to give 12 to 20 million illegal aliens amnesty through the new immigration reform bill. If they would just fund law enforcement enough to uphold the current laws, that would be reform enough."

Pat in Fayetteville, North Carolina: "Have you bought gas lately? Rein in the gasoline industry, get the minimum wage out of the Senate, and pass it."

Michael in Ohio: "Why are paying our lawmakers full-time salaries and rewarding them with top-notch benefits to work the same schedule as high school students? The top priority of lawmakers before the recess should be to cancel the recess."

Dorothy in Mexico: "Jack, you're at the top of my list. I will meet you behind the gym at recess if you put this on the air, whatever it takes to get my e-mail read. I have been trying to get your attention for weeks, and I feel I might as well be talking to my congressman, for all the good it does."

Justin San Marcos, California: "A decision on whether it's OK to wear white after Labor Day, because, as you know, there's going to be another recess to plan for in September."

If you didn't see your e-mail here, you can go to CNN.com/CaffertyFile, where we post more of them online, along with video clips of "The Cafferty File" -- Wolf.

BLITZER: And, very briefly, tell us about New Orleans. You were just there over the weekend. Your daughter graduated from Tulane. What is it like?

CAFFERTY: New Orleans is a great city. And there are parts of it that are still in -- in bad, bad disrepair. But much of it is back. The music is back. Bourbon Street is back. The -- the atmosphere that is New Orleans is back.

You know the biggest disappointment I had? The "Times-Picayune" newspaper on Sunday didn't mention the Tulane University commencement, after all that that university represents to that city. Disgraceful.

BLITZER: That's bad.

Jack, congratulations on the graduation. We will see you tomorrow.

Let's go to Paula in New York -- Paula.

ZAHN: Thanks, Wolf. Appreciate it.

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