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THE SITUATION ROOM

London on Alert After Close Calls with Car Bombs. Bush Monitoring the Activity in London While on Vacation in Maine. Presidential Candidates Mad Dash for Cash. Interview with Elizabeth Edwards.

Aired June 29, 2007 - 1900   ET

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


WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou.
Happening now, breaking news -- London on alert after close calls with two car bombs. British police say hundreds could have been killed if the explosives hadn't been found and diffused -- tonight, the investigation and the search for suspects.

Also this hour, Elizabeth Edwards offers a passionate defense of her husband's views on the war on terror. The would-be first lady also picks up John Edwards' fight with a controversial conservative pundit.

And children transformed into killers. A powerful film cast a harsh light on innocents recruited to become martyrs.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Be on alert. Tonight that's the warning from police in London, even from some officials right here in the United States. There's a massive manhunt underway in London and elsewhere. This after bomb squads in London diffused two, repeat two car bombs packed with fuel, propane and lots of nails.

(BEGIN VIDEO CLIP)

PETER CLARKE, COUNTERTERROR CHIEF: The vehicle was found to contain very similar materials to those that had been found in the first car in Haymarket earlier today. There was a considerable amount of fuel and gas canisters. As in the first vehicle, there was also a substantial quantity of nails. This, like the first device, was potentially viable and was made safe by the explosives officers. These vehicles are clearly linked.

(END VIDEO CLIP)

BLITZER: Officials say if they had gone off, they would have caused certain disaster, possibly killing hundreds, hundreds of people. Let's go straight to our CNN international security correspondent, Paula Newton. She's standing at Scotland Yard in London.

Paula, this must be getting a lot of people in London very nervous right now, especially since they found two car bombs but they are presumably looking to see if there were anymore that could remain at large.

PAULA NEWTON, CNN INTERNATIONAL SECURITY CORRESPONDET: Absolutely rattled are people here today and been told to be vigilant about looking for parked cars. People are very, very nervous at this point. One thing police point to though is that when you're looking for these kinds of cars, in terms of examining these kinds of plots, they try and find out all in one evening. The fact there were two found, we haven't heard anything else so far, that is in a sense good news.

Also police sources telling us, Wolf that in fact they're very happy with the intelligence and the evidence that they've gathered so far. One tell-tale sign here, Wolf, is the fact that they have not put out any of that CCTV footage or any kind of a composite sketch or anything. Usually if they are desperate in these situations, that public plea will go out much quicker than it has. Again, police sources saying right now they're very happy with the evidence they've been gathering -- Wolf.

BLITZER: They have an enormous amount of evidence since those two vehicles remain in tact. They were not exploded, all that forensic evidence, DNA, fingerprints, whatever, that's all available for police investigators to start working on, which is a bonanza, if you will.

NEWTON: Absolutely, but that's the easy part. You have to think about all the CCTV footage linking around that. You know in other plots that we've had, Lou, if a car has been involved, keep in mind they can track back in some cases figure out where that vehicle was, not just in London but on the outskirts of London.

Did it come from another city or town in the UK? It is incredible the kind of evidence that they have to piece together right now. They will take their time to do it. Of course, one line of inquiry always has to be al Qaeda. They are not ruling it in or out at this point. Their best clues come from past plots. Right now they are going through the information they have, that with a fine toothed comb -- Wolf.

BLITZER: And there are a lot of those closed circuit TVs in England right now, millions of them and thousands of them in London. I'm sure they're looking at all those videotapes. Paula thanks very much. Stand by. We'll get back to you as we collect more information.

Meanwhile, President Bush is keeping close tabs on the situation in London from the family vacation home in Kennebunkport, Maine. Let's go to our White House correspondent Ed Henry. He's covering the president's stay up there.

How is the Bush administration, Ed, responding to these developments, dramatic developments I should say, in London?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Wolf, they're obviously very sensitive to the image of these very serious developments happening in Britain while Mr. Bush is on vacation, taking a little bit of R&R here. They're obviously taken P.R. hits before, for example, after Hurricane Katrina, the president allegedly not responding quick enough.

So they moved quickly this afternoon about 5:00 Eastern Time. There was a meeting, a cabinet level meeting. Not a full cabinet meeting, but basically cabinet level officials like Homeland Security Secretary Michael Chertoff there with Fran Townsend, the president's homeland security adviser, getting a day wrap, sort of a bottom line on what the U.S. knows at this point, very similar to two briefings the president got today.

He got one this afternoon from Fran Townsend. This morning he woke up and got a briefing from Stephen Hadley, his national security adviser with developments from overnight. What the White House is trying to stress is that in all of this intelligence, the U.S. has no sign, no sign at all that there's a serious threat within the homeland of the United States. And that's why the White House is not raising the threat level.

The Department of Homeland Security not raising the threat level within the United States. The White House, though, also pointing out that they have been in constant contact with their counterparts overseas, that the FBI, the State Department, the Department of Homeland Security as well, dealing with their British counterparts, making sure they have all the resources they need, if there's anything the U.S. can do.

Now Mr. Bush has not thus far reached out to Gordon Brown, the new prime minister of Britain. The White House saying that bottom line they don't really feel the need to confer right now. People at lower levels are doing that. But obviously the White House very sensitive to the fact that a new prime minister has taken office and this is happening just a couple days after Tony Blair left office -- Wolf.

BLITZER: Ed Henry up in Kennebunkport with the president. Thanks Ed very much.

The fears in London are reigniting fears of terror right here in the United States. With enemies bent on attacking, the government is doing whatever it can to try to prepare. Let's go to our homeland security correspondent Jeanne Meserve -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, U.S. officials say there is no known imminent threat to the U.S. homeland but they are keenly aware of the danger posed by car and truck bombs.

(BEGIN VIDEOTAPE)

(SOUNDS)

MESERVE (voice-over): U.S. law enforcement has been training for what it sees as inevitable. The use of vehicle bombs in the United States.

(SOUNDS)

KEVIN MILES, FBI BOMB TECHNICIAN: It's just a matter of time before we start having these incidents in our nation.

MESERVE: Vehicle bomb tactics and technology are being upgraded almost daily in Iraq with lethal effect. U.S. officials have been particularly concerned with the recent innovation, their combination with deadly chlorine gas. When enemies of the United States honing their skills in Iraq and sharing them over the Internet, experts expected vehicle bombs here long before now.

THOMAS SANDERSON, TERRORISM EXPERT: But I am completely surprised that we have not seen this in the U.S.

MESERVE: This FBI course teaches law enforcement how to extract forensic clues from the scene of a vehicle bomb. But preventing such explosions may be impossible. In response to the London bombs, New York City has taken some additional precautions.

COMMISSIONER RAY KELLY, NEW YORK POLICE: We have checkpoints that we've instituted, vehicle checkpoints on bridges, and some located in Manhattan. We're checking parking garages, ask the owners, and we're doing it ourselves to look for suspicious vehicles.

MESERVE: There are some technologies that can scan vehicles, but they are expensive and not widely deployed. And although some efforts are made to keep vehicles away from key buildings and large crowds, the simple fact is trucks and cars are almost everywhere and inspecting them all is impossible. The most effective defense experts say is low tech, old-fashioned observation.

SANDERSON: What you have to rely on is the vigilance of the population, the good work of the police and intelligence to prevent this from happening.

(END VIDEOTAPE)

MESERVE: But intelligence is imperfect. The perfect illustration, London where authorities had no inkling of the bomb plot -- Wolf.

BLITZER: Jeanne Meserve reporting for us -- thank you, Jeanne.

Jack Cafferty is off today.

Coming up here in THE SITUATION ROOM, Elizabeth Edwards joins me. I'll ask her if it was a mistake for her husband, the presidential candidate John Edwards, to call the war on terror a bumper sticker. And how might John Edwards, indeed all the presidential candidates do in this current round of fund-raising? They're all in a mad dash for cash before a critical deadline tomorrow.

And what kind of a person recruits a 6-year-old child to put an explosive vest on and then commit suicide and murder? Carol Costello has some insights. Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're continuing to watch the breaking news out of London. Two car bombs found just in the nick of time earlier today. Both car bombs containing lots of gas, propane, nails. We're staying on top of this story. Much more on what's going on in London in just a few moments.

But there's other important news we're following, including some important political news. It's a mad dash for campaign cash. Tomorrow, the last day of the month, it's also the end of the second quarter of the year. The presidential candidates are trying to raise as much money as possible before the clock runs out.

Our Tom Foreman is watching all the action -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: Wolf, we're getting some early estimates from the campaigns, but are these actual numbers or just an attempt to lower expectations?

(BEGIN VIDEOTAPE)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I would expect this quarter you'll see Mayor Giuliani is the largest fundraiser.

FOREMAN (voice-over): Mitt Romney was the big winner in the battle for campaign cash in the first quarter, but the former Massachusetts governor is sounding less optimistic this time around.

MARK PRESTON, CNN POLITICAL EDITOR: Campaigns are trying to lower their own projections, at the same time elevating the expectations of their opponents. It's a classic campaign tactic.

FOREMAN: John McCain finished a disappointing third in the money raised earlier this year. And the senator from Arizona is warning that his second quarter numbers may not be much better, saying it's always been difficult for me to raise money. But McCain shot down rumors that he would drop out if his fund-raising numbers were low, telling us why in the world would I want to do that? I mean, that's just crazy.

HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I am so grateful that we would have the opportunity to be here with my husband and my daughter to thank all of you for investing in the future.

FOREMAN: Among Democrats, it's a battle between Senators Hillary Clinton and Barack Obama for the big bucks. In round one, Obama raked in almost as much cash as Clinton, and that boosted his campaign. The Clinton camp says they'll bring in an eye-popping $27 million this time around.

But the campaign says they expect Obama to out raise them. Obama's group isn't showing their cards when it comes to the money, but they do say that more than a quarter of a million people have contributed to the senator from Illinois so far this year.

PRESTON: That is a huge number. Right now Clinton is leading in most polls but Obama deserves a lot of credit for amassing such a huge donor list.

(END VIDEOTAPE)

FOREMAN: And here is a CNN exclusive. We've just learned that New Mexico Governor Bill Richardson will raise $7 million this quarter. That tops his first quarter catch. Meanwhile, John Edwards hopes to rake in about $9 million. That's a lot less than his first quarter total, but the former North Carolina senator is continuing to fund raise now off of his wife Elizabeth's on-air clash earlier this week with conservative commentator Ann Coulter, who made a lot of his followers angry, hoping to cash in on that now -- Wolf.

BLITZER: All right. Tom, thanks very much.

Let's get back to our top story. A massive manhunt underway right now after police in London find two vehicles loaded with crude and potentially very deadly explosives. Coping with the terrorism threat is a major issue in the '08 presidential race right here in the U.S.

Just a short while ago I spoke with Elizabeth Edwards, the wife of the Democratic candidate John Edwards. Her husband caused a stir recently when he suggested that the war on terror is really nothing more than a bumper sticker. I asked Elizabeth Edwards what he meant.

(BEGIN VIDEOTAPE)

ELIZABETH EDWARDS, WIFE OF JOHN EDWARDS: I think that it's easy to misconstrue what John said. His -- he believes that there are terrorists out there and that we need a concerted effort and we're certainly everyone applauds the work of London police and London law enforcement officials who discovered these bombs and the work that was done obviously as a predicate to finding them. But when we use words like a war on terror, we create an awfully big frame and what it's done is whenever somebody objects to torture or objects to spying on American citizens or objects to the ignoring of the Geneva Conventions, they get hit over the head with this language, but there's a war on terror.

There are terrorists but when we have this slogan, it stops us from behaving the way we ought to and it's used as a weapon against those who would like to complain about some of the methods. And it's not just people on the left who are complaining. People across the country are very unhappy with the things that are being done in our names. Even as we applaud the legitimate law enforcement efforts and intelligence efforts that are made to locate terrorists where they are.

BLITZER: But I just want to make it clear...

(CROSSTALK)

BLITZER: ... Mrs. Edwards, if he were president of the United States, he would vigorously go out after those terrorists?

E. EDWARDS: Absolutely. He said that at every turn. And one of the terrorists he would go after I have to say is Osama bin Laden. You know somehow we've -- we seem to have lost track -- when we made this great big frame, we lost track of the fellow that we should have been going after with a laser.

BLITZER: Let's talk a little bit about to controversy that has erupted in recent days, Ann Coulter and you, the conservative pundit. She was on FOX last night and the -- she was told that your campaign, the Edwards' campaign is raising a lot of money as a result of this exchange, heated exchange you had with her the other day and she responded by saying not as much as I have off his attacks on me.

And I mean as is evident even today, there are going to be a lot more Americans who like Ann Coulter than hate Ann Coulter. Good luck with your fundraising, John. I wonder if you want to respond, that she sees herself as benefiting from this exchange that you had with her.

E. EDWARDS: Well you know it was -- I have to say in the first place, it wasn't heated from my perspective. I hope I was very calm in asking on behalf of myself and mothers across the country who are trying to introduce their children to the political process that we not have a process filled with hate language and vicious personal attacks. And this is not about the money anybody raises from it.

It's about our political dialogue and the tenor of that dialogue. The things that she has said, not just about me, she said about the 9/11 widows that they're enjoying their husband's deaths too much. What an outrageous thing to have said. She talks about Senator Clinton's physical appearance. There is no conceivable reason in legitimate political dialogue for that kind of language to occur.

And somebody finally has to say, I'm not happy with this. I want you to stop and I want other people to ask you to stop, too. To vote instead, to express their outrage in whatever way they find appropriate so that maybe we can put an end to this like we did to racist language as a part of civil dialogue in the south. It no longer is because decent people objected.

BLITZER: But what about the criticism that you face that you're using this exchange as a fundraising tool for your husband?

E. EDWARDS: Well, you know, I didn't put Ann Coulter on the air on MSNBC at the end of the quarter. We were going to be doing fundraising at the end of this quarter no matter what, as your piece pointed out earlier. All campaigns are doing that. We would have had a push at the end of this quarter no matter what. What she did was provide yet another opportunity for us to point out that we have a choice between the theater of politics, which distracts us from the real issues and actual substance.

BLITZER: Was he really surprised when you announced that you favor gay marriage and that your daughter does? How could he have been surprised? I know how close the two of you are.

E. EDWARDS: No, he was surprised that it was -- that I said it. You know I had actually said it before in previous interviews. Nobody paid much attention, because honestly it's his opinions not mine that should matter in this election. People are not voting for me, they're voting for John and primarily John is a messenger, but primarily for his message.

And so I think he was surprised that he read it -- when he read it in the papers. But it's not something that came as a surprise to him, my position about it. We don't -- but we don't sit around and talk about gay marriage at home. Honestly I don't think very many American couples do because it doesn't honestly affect our lives. It certainly doesn't threaten our marriage.

BLITZER: How are you feeling, Mrs. Edwards?

E. EDWARDS: I feel great. I feel a lot of energy. It's great to go into a crowd of enthusiastic people who are interested in hearing about John's policies and plans. And that buoys (ph) me, every place I go feeling that energy. The traveling stinks I have to say, but in between, but the events energize me. And then after this, I actually have a few days off.

BLITZER: Well good for you, Elizabeth Edwards, campaigning today in Lexington, Kentucky for her husband. Thanks for coming into THE SITUATION ROOM.

E. EDWARDS: It's always great to spend time with you, Wolf.

BLITZER: Thank you very much.

(END VIDEOTAPE)

BLITZER: The next presidential debate will be on July 23rd in Charleston, South Carolina. CNN is teaming up with YouTube. It will be the first debate where all of you can submit your questions to the candidates online.

Still ahead tonight here in THE SITUATION ROOM, a day after President Bush said quote, "the good Lord will one day take away Fidel Castro," Castro is responding. You're going to want to hear what he has to stay.

And the terror threat. As Londoners were reminded very vividly today, it could happen any time, anywhere. The former inspector general of the Department of Homeland Security will look at America's most open targets. What's going on right here?

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

(COMMERCIAL BREAK)

BLITZER: Our Carol Costello is monitoring stories incoming into THE SITUATION ROOM right now. Carol, what do you have?

CAROL COSTELLO, CNN ANCHOR: A sad story, Wolf. Film critic Joel Siegel has died. He died in New York today after a long battle with colon cancer, which he discussed with CNN's Larry King back in March. Siegel reviewed movies for ABC's "Good Morning America" for 25 years. He received five New York Emmy Awards. He was just 63 years old.

Cuban leader Fidel Castro says thanks to President Bush he now knows how he escaped so many assassination attempts. Yesterday President Bush spoke of the 80-year-old communist leader's eventual demise. Listen.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: One day, the good Lord will take Fidel Castro away.

(END VIDEO CLIP)

COSTELLO: Yep, Castro heard that. In a short essay distributed today to international media, Castro joked about escaping death saying sarcastically, quote, "The good Lord protected me."

On Florida's Jupiter Island, fire has damaged a guest home on a 12-acre compound owned by golfer Tiger Woods. The fire broke out this morning. Investigators say there is no evidence of anything suspicious about the fire, which actually gutted the house. They say lightning is a possible cause. No one was living in the house and there was no sign of a break-in.

And tonight presidential candidate Mitt Romney is in the doghouse with animal rights activists and wait until you hear why. Way back in 1983, the Romney's dog went along on a family vacation and he rode in a carrier on the car roof. People for the Ethical Treatment of Animals or PETA say the Romneys would not treat a child that way. But Romney says the Irish setter loved the rooftop ride, which included a windshield to make the dog more comfortable. And besides Romney says the folks at PETA don't like it much anyway.

Back to you, Wolf.

BLITZER: Carol, thank you very much.

Just ahead, disaster averted in London by a member of the public who saw something suspicious. Are Americans vigilant enough?

And recruited to die. A young filmmaker goes to Middle East to expose how children are being lured to becoming suicide bombers. Carol will be back with that powerful story.

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

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, a massive manhunt underway. Scotland Yard scrutinizing a wealth of surveillance TV footage and other evidence, hoping to find who's behind a plot to set off a pair of car bombs in the west end. Both of those car bombs foiled.

A change of heart by the U.S. Supreme Court and a blow to the White House's war on terror tactics. The nation's high court says it will now hear an appeal by Guantanamo Bay detainees fighting to take their cases to federal court.

An isolated incident or widespread abuses. The presidential panel gives a peek at what its report on Iraqi veteran health care might uncover over at the Walter Reed Army Hospital here in Washington. The panels says its report should be out around mid July.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Back to our top story, amid the terror scare in London, one city that suffered on 9/11 is now taking some extra precautions. That would be New York City. It's beefing up its already tight security. The mayor, Michael Bloomberg, saying more officers will be on the streets tonight. But that -- he's insisting it's nothing dramatic. Meanwhile, officials say you can stop a terror plot. We're looking at ways the public can help.

CNN's Mary Snow is in New York -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, here in New York and cities like Washington, D.C., people are encouraged to speak up if they see something suspicious, especially in the subway. But some security experts are becoming concerned that people may be becoming more complacent because there hasn't been a terrorist attack here in nearly six years.

(BEGIN VIDEOTAPE)

(voice over): Disaster was skirted in London when an ambulance crew noticed a smoking car and alerted explosive experts.

JAQUI SMITH, BRITISH HOME SECURITY: This latest incident reinforces the need for the public to remain vigilant and alert to the threat we face at all times.

SNOW: Here in the United States, it was a store clerk who told authorities about a suspicious tape that law enforcement said led them to foil a plot to kill soldiers at Fort Dix in New Jersey.

BRIAN MORGENSERN, FORT DIX TIPSTER: All I did was pick up the phone and make a call.

SNOW: In 2001, the so-called shoe bomber was stopped from blowing up a U.S. airliner after a flight attendant noticed something suspicious.

Security experts say public vigilance is crucial. In New York, for example, people are encouraged if you see something, say something. But those same experts say it's not just the public's eye that can make a difference, surveillance cameras can play a key role.

CLARK KENT ERVIN, FMR. DHS INSPECTOR GENERAL: London is the most heavily blanketed city in the world with surveillance cameras. We in the United States have only spotty coverage, at best. SNOW: An estimated four million cameras are watching over Britain. Those cameras helped in the investigation of the 2005 London subway bombing and are now being used to look for clues in this latest foiled plot.

Compare that to New York City, the country's top terror target, which currently has less than 300 police surveillance cameras installed. The city's police commissioner is pushing for more.

COMMISSIONER RAY KELLY, NY POLICE: Certainly cameras have been very helpful in investigations in the U.K. I'm certainly a supporter of cameras.

SNOW: One road block in the United States, civil liberties groups fighting against installation of too many cameras for fear of a complete loss of privacy.

But some security experts point to car bombs like the kind found in London, as reason why it's crucial to strike a balance between civil libertarians and law enforcement.

(END VIDEOTAPE)

(on camera): Police surveillance cameras used here in New York are used to fight crime. But the NYPD plans to install about another 1,000 cameras and license plate readers, but they're still about 18 months from finishing the job.

Wolf?

BLITZER: Mary Snow on the streets of New York for us. Thank you.

Let's turn now to a former inspector general over at the Department of Homeland Security. Clark Kent Ervin, is the author of "Open Target: Where America is Vulnerable to Attack."

Clark is a good friend. He's here in the SITUATION ROOM.

So what lessons should we be paying attention to what happened in London today, draw some lessons for us here in the United States.

ERVIN: I think there are at least two, Wolf. One is that soft targets, I think, are going to become increasingly appealing to terrorists world wide. One of the ...

BLITZER: Describe what you mean by soft targets as opposed to hard targets.

ERVIN: By soft targets, I mean things like nightclubs, like restaurants, like shopping malls, movie theaters, sports complexes, this first car bomb was found very near a popular nightclub.

They are called soft targets because they are not as protected as much as airports and sea ports and nuclear power plants that everybody knows is likely to be a target. And that if attacked in the right way would kill lots of people. The importance of soft targets is that everybody frequents them at one time or another.

I would argue that the psychic impact of an attack on a soft target could dwarf 9/11, even if the number of people killed would be smaller, because the psychic impact would be big. Suggesting that wherever you are, you are subject to a terror attack.

BLITZER: Because if, God forbid, a movie theater or something like that were attacked, it would discourage a lot of people from going to a movie theater.

ERVIN: Precisely. I mean, the point of terrorism is not just to kill people, it's also to terrorize, to scare everybody else.

BLITZER: As you know, a lot of places in Europe, certainly in Israel, you go into a shopping mall, you go through metal detectors before you get into that mall. You go to a movie theater, you go through metal detectors. That has not happened here, but that would be a huge fear.

ERVIN: No question about it. I think the second lesson would be what Mary was talking about and that is, this plot can be investigated, will be investigated, is being investigated, because of surveillance cameras.

There's one for every 15 residents of London. You heard only 300 or so in New York City. Certainly there needs to be a balance between security and civil liberties, but we've got to have these surveillance cameras because really, that's the only thing that can be done against something like car bombs.

BLITZER: Because a lot of Americans, as you know, don't like the idea that big brother is watching. If they had video cameras, these closed-circuit TV cameras, on every city block all over the country, a lot of people would be upset about that.

ERVIN: There's no question about that, but we have to do everything we can to minimize, to as close to zero, a terror attack. And really, the only thing you can do about a car bomb is to have surveillance cameras as a deterrent and an investigative tool after the fact.

BLITZER: Now you heard Jeanne Meserve report that at the White House right now, Fran Townsend, the president's homeland security adviser, is convening a meeting, an interagency meeting, to take the information they have from London and draw some lessons here.

If you were still at the Department of Homeland Security, you were participating in a meeting of this nature, what would you be looking at? What would you want to know, because the ramifications for us, on this part of the Atlantic, could be enormous.

ERVIN: One of the things I would want to know is, whether this was conducted by foreign-born terrorists who somehow got into Britain or whether this is another one of those home grown plots. I've been very concerned about the threat of home grown terrorism in the United States. BLITZER: Sympathizers to al Qaeda but not necessarily formal members, if you will, operated by al Qaeda international.

ERVIN: Exactly. It's marginally harder for foreign terrorists to get into the United States today than it was six years ago. It's not as hard as it should be, but it is harder.

Therefore, a premium would surely be placed on terrorists who are already here. People who are American citizens or residents. And we're not doing enough, it seems to me, to root out potential terrorists right here on our own soil.

BLITZER: Final question. Are we safer now than before 9/11?

ERVIN: You know, I think Senator Clinton put it well the other night in the debate when she said we are safer but not yet safe. We are marginally safer, but marginally safe is not safe enough.

There's a lot more that we need to do and soft targets increasingly, I think, will be as I say, a terror target and we haven't done enough in that regard.

BLITZER: Clark Kent Ervin. Always good to have you here in the SITUATION ROOM.

ERVIN: Thank you, Wolf.

BLITZER: And still ahead tonight, terrorism moves back to the front burner as a campaign issue, after the discovery of a pair of car bombs in London. What would the presidential candidates do to make us all safer? We are going to examine this life and death campaign issue.

And the wait is over. Apple's iPhone flying off the store shelves. Will it live up to its hype? Stick around, you're in the SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Top U.S. military commander in Iraq says an attack that killed five U.S. soldiers was relatively sophisticated and particularly violent. It happened in a volatile area in southern Baghdad yesterday. Where a very strong al Qaeda cell is said to be located.

That brings the total U.S. troop death toll in June up to 99. A very deadly stretch for American forces extending from spring into summer, 3,576 U.S. troops have been killed in Iraq since the war began.

We've been following the story of a foiled terrorist plot in London all day. Two car bombs were discovered, neither went off.

Terrorism, as you know, has no age limit. CNN's Carol Costello joining us once again to tell us about a film that uncovered efforts to recruit children as suicide bombers. Carol, how young, how young are these people we're talking about?

CAROL COSTELLO, CNN CORRESPONDENT: Some kids are as young as six years old, you know, Brook Goldstein is on a mission. As a young law student she travelled to the West Bank to make a documentary about child abuse. Not the kind we think about here, but the kind that turns children into killers.

(BEGIN VIDEOTAPE)

(voice over): It's a small film, but powerful.

UNIDENTIFIED CHILD: They showed me how to use the belt. They showed me out and said their were soldiers in a location. And that I should jump among them.

COSTELLO: "The Making of a Martyr," is a story about children transformed into killers.

Hussam, just 15, was offered paradise, rides on a ferris wheel and 20 bucks. In the end he couldn't do it. Arrested by Israeli soldiers, he's now doing time. Brook Goldstein, who produced "Martyr," talked with him.

UNIDENTIFIED MALE: Why did you disconnect the battery?

HUSSAM, CHILD TERRORIST (through translator): I was concerned about my life, my sisters, my father, my mother, and the house. Why should I die if there's peace tomorrow?

COSTELLO: Goldstein said she's on a crusade to bring attention to a growing problem. Just a few days ago, a six-year-old boy in Afghanistan turned himself in to Afghan soldiers. He had been lured by the Taliban for a suicide bombing he managed to foil.

BROOKE GOLDSTEIN, "MARTYR" PRODUCER: These children are not criminals, they don't deserve to be punished. They are victims of the most abhorrent human rights abuse, which is the intentional murder of innocent children.

COSTELLO: Hussam is serving an eight year prison term. Goldstein describes him as fiscally handicapped and unpopular in school. Children like him are easily manipulated by terrorist recruiters who expose them to cartoons depicting violence.

And pictures depicting armed children as heroes. Goldstein says she talked with terrorist leaders about it.

UNIDENTIFIED TERRORIST LEADER: We refuse child martyrs the first, second, third, even the fourth and fifth time. Until the child reaches a point where he will use a knife if no one gives him a bomb belt.

COSTELLO: Goldstein initially interviewed Hussam four years ago, when he regretted listening to those terrorists. But after a year in prison with hardened militants, Hussam explains what he did differently today.

HUSSAM (through translator): By the way, when I went on that day, I wasn't scared. My heart was not beating hard. When they drove me to the checkpoint in the car, I was giggling and jumping with joy. I couldn't stay still.

(END VIDEOTAPE)

COSTELLO: Did you notice the change in body language? And that's the thing, the longer these kids stay in prison, the more hardened they become.

Goldstein thinks Hussam will likely become a successful suicide bomber once he leaves prison.

Wolf?

BLITZER: So, is there a solution to any of this, Carol?

COSTELLO: Such a tough question. But Goldstein says international outrage is a start, and she says attorneys should band together to prosecute states that allow terror propaganda aimed at children. But most importantly, families within these communities should step up and loudly say this is wrong.

BLITZER: Carol, thank you very much. A powerful piece. Carol Costello reporting.

Several weeks ago, we told you about the character of Farfor on a Hamas TV children's show. The Mickey Mouse look-a-like got global attention and condemnation for preaching violence and Islamic domination.

The final episode featuring Farfor aired today. In the story, he was beaten to death by an actor portraying an Israeli trying to buy his land. The teenage presenter on the show called Farfor a martyr.

Still ahead, tonight, here in the SITUATION ROOM, the discovery of those car bombs in London, sounding a campaign wakeup call here in the United States. What do the presidential candidates in this country saying about the threat there? And about the war on terror here?

And the Apple iPhone finally goes on sale. After all the hype, is the new gadget measuring up? We'll hear some early reviews. Stick around, you're in the SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Tonight, as British authorities try to figure out who's behind those two car bombs found and diffused in London, presidential candidates in this country are trying to find a new opening to talk about the war on terror. At least several of them are doing that. Our Brian Todd is joining us now. One White House official -- presidential candidate in particular is trying to seize on this moment, Brian. BRIAN TODD, CNN CORRESPONDENT: He sure is, Wolf. Nearly six years after 9/11, the fight against terror is still a Republican strength and the GOP front-runner is in a unique position to capitalize.

(BEGIN VIDEOTAPE)

(voice over): Half a world away from London's cordoned streets, the Republican presidential front runner plays the terrorism card.

RUDY GIULIANI, (R) PRESIDENTIAL CANDIDATE: When I hear about a thing like this in London today, it brings me back to many, incidents in New York. How to react to it. How to deal with it. How to prepare for it.

TODD: What many believe is a proven track record on terror has catapulted Rudy Giuliani. And he often brandishes that on the campaign trail, intending to draw sharp distinctions between himself and the Democrats.

GIULIANI: I think they're in denial. I think they can't face this threat.

TODD: Analysts say with Iraq their albatross, and a fresh defeat on immigration reform, terrorism is one of the few issues where Republicans play from a position of strength.

A.B. STODDARD, "THE HILL": They have governed us in the time of terror. The Democrats have not governed since September 11th and have not yet proven that they are the party that can keep us safe.

TODD: That often leaves Democrats playing from the sidelines, trying to win credibility on terror by finding any Republican weakness, real or perceived.

JOHN EDWARDS, (D) PRESIDENTIAL CANDIDATE: What this global war on terror bumper sticker, political slogan that's all it is, all it's ever been, was intended to do, was for George Bush to use it to justify everything he does.

TODD: That got John Edwards skewered by Republicans. Even Hillary Clinton said she disagreed with Edwards. Said she's seen first hand what a small band of terrorists can do. On the current threat in the U.S.:

SEN. HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: I believe we are safer than we were. We are not yet safe enough.

TODD: But is that the right message to make voters believe they'll be safer under Democratic leadership?

MIKE ALLEN, POLITICO.COM: This is a very tough terrain for Democrats, because they have not convinced people as far down in the cellar, as Republicans are, that Democrats are not just the anti-war party.

(END VIDEOTAPE)

TODD (on camera): How are Democrats going to turn that around? One analyst says they'll have to do a careful balancing act. What he calls, security plus.

Democrats will have to hit home that they'll be tough on terrorism while not getting embroiled in controversies like torture and wiretapping that have hounded the Republicans.

Wolf?

BLITZER: Is there a sense that Giuliani also has a leg up on other Republican candidates?

TODD: Yes. Analysts says John McCain comes the closest to him. But this is the issue that Giuliani is most identified with. He's not squeaky clean on this, though. There's been lots of criticism over his handling of security before 9/11, like placing an emergency communication system inside the World Trade Center, so he does have vulnerabilities.

But still, overall, he has the most traction on terrorism.

BLITZER: Here to talk about the politics of terror and in our strategy session, Democratic Strategist, James Carville and Republican Strategist, John Feehery.

The conventional wisdom, is that this is an issue tailor made for Republicans, that if Americans start to worry once again about terrorism, it's going to benefit politically for the Republicans.

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Well, you know, our competitors over at Fox News network took a poll and asked people, if there's an all-out war between the United States and various radical Muslim groups, who would you rather have in charge, Democrats or Republicans?

Forty-one Democratic, 38 Republican. They lost that. There's nothing the Republicans have left. The last thing they've got is now gone. And I have no reason in the world why any rational person would want the Republicans in charge and not the Democrats.

The Democrats are staying in session to implement the 9/11 commission. The Democrats would have gone after Osama bin Laden. The Democrats would not have got us bogged down in Iraq. So that's fine. If people want to have terrorism as the number one issue, obviously an important issue. I can't understand why any sane person would not want the Democrats in charge.

BLITZER: It's not as powerful an issue for the Republicans now as it was in 2004.

JOHN FEEHERY, REPUBLICAN STRATEGIST: It's not but it's going to be if the nominee is Rudy Giuliani, I think. I think he's the best one to talk about this for the Republicans if he gets the nomination, versus Hillary Clinton. He will wipe up the floor with Hillary Clinton, I think, on this issue. And I think that he has that cue factor, he's got that, kind of credibility on this issue more than any other.

BLITZER: And he's certainly using that issue. You served for the speaker of the House during those critical years.

FEEHERY: I did. And the fact of the matter is, he was a great mayor, he showed the competence and the desire to get the job done.

BLITZER: If terrorism becomes a huge issue, and it's Hillary Clinton versus Rudy Guliani, what do you think happens?

CARVILLE: I think she'll beat him. Why did he put the command center in the World Trade Center? Why did he not have the police able to talk to each other? If you look at Senator Clinton's record on this, in terms of implement and the 9/11 commission, she was -- you go and ask the people, the widows of these people that died and I guarantee you, they'll all say the Senator Clinton has stood with them. Senator Clinton has been on the Armed Forces Committee and Rudy Giuliani has never had anything to do with the U.S. military.

BLITZER: John, is it a forgone conclusion that among registered Republicans, and those voters likely to vote Republican, this issue clearly helps Rudy Giuliani. As opposed to John McCain or Mitt Romeny or some of the other Republicans?

FEEHERY: I think McCain has a lot of credibility because he's been a war veteran and is someone who has built-up credibility and he's been strong on the war. I think that Romney, to a lesser extent. I think Rudy Giuliani because he has been most identified with the war on terror. This is his winning issue.

BLITZER: What about Fred Thompson?

FEEHERY: Well, you know, he was not really around during all this stuff and I don't think he has that built-in credibility that Rudy has.

BLITZER: John Feehery and James Carville. It's going to be a busy weekend for the presidential candidates out on the campaign trail.

Besides cramming in some last minute fund-raising before tomorrow night's second quarter financial filing deadline, seven of the eight Democratic presidential hopefuls will be in Florida tomorrow. They're showing up at a forum hosted by top elected and appointed Latino officials.

The pilgrimage by the candidates underlines just how important the Latino vote is for the Democrats. The long shot candidate Mike Revel is the only Democrat who won't be attending.

Six of the ten Republicans White House hopefuls will be at a conservative forum in Iowa. That's focusing in on tax relief. Texas Congressman Ron Paul wasn't invited to the forum, so he's going to show up and hold his own campaign event around the same time over at the same hotel.

The First Lady Laura Bush is on a marathon tour of Africa right now. One of her stops this week, Zambia, and one of her main issues, the battle against aids. On her trip, Mrs. Bush is promoting faith- based aids prevention and abstinence.

She's also acknowledging the importance of condoms distributed through a U.S. aid program to help African children with education and health care. Mrs. Bush spoke to our White House Correspondent, Suzanne Malveaux.

(BEGIN VIDEO CLIP)

LAURA BUSH, FIRST LADY: Because men wear condoms and not every girl or woman can get their partner to do that. Now I'm not saying that condoms are absolutely essential. They are.

(END VIDEO CLIP)

BLITZER: We are going to have a lot more of the interview that Mrs. Bush gave Suzanne Malveaux. That will air right here, next week, in the SITUATION ROOM.

Still ahead, it's here after months of anticipation, Apple's iPhone went on sale just a little while ago. We'll check out the reaction online.

And the lawyer for the astronaut at the center of a love triangle trying to set the record straight on this issue, whether she wore a diaper. Stick around. You're in the SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's check back with Carol. She's monitoring some other incoming stories coming into the SITUATION ROOM. Carol?

COSTELLO: That I am, Wolf. OK. Was she wearing a diaper or wasn't she? We are talking about Lisa Nowak, the former astronaut police say wore a diaper on a cross country drive to confront a romantic rival. Nowak's attorney now says the police got it wrong. She wasn't wearing a diaper, they merely old toddler diapers that were simply in the car with her. Nowak is still charged with attempted kidnapping and assault and battery.

And a bizarre twist in the death of pro-wrestler, Chris Benoit, his wife and son. Online encyclopedia, Wikapedia, reported on Benoit's wife's death, 14 hours before the family's bodies were found in their Georgia home.

A person reportedly confessed to changing Benoit Wikipedia profile to mention his wife's death. The person said the changes were based on rumors, not hard evidence. Authorities think Benoit strangled his wife and son before killing himself.

The Centers for Diseases Control and Prevention says visits to the hospital and to doctors have surged 20 percent over the past five years. The CDC reports estimates that more than a billion visits were made to hospitals, emergency rooms and physician's offices in 2005 alone. It says two of the most prescribed medications were antidepressants.

Those are the headlines right now, Wolf.

BLITZER: Thank you very much, Carol, for that.

After hours and in some cases, days of waiting in line, many excited individuals finally have their hands on the much-anticipated Apple iPhone, which was just released moments ago.

Our Internet Reporter Abby Tatton is here. Abby, what is the immediate reaction that you're seeing online?

ABBY TATTON, INTERNET REPORTER: Wolf, bloggers from tech sites have also been standing in line and they are recording the euphoria of people emerging from the Apple stores with their new prize. Now, these are tech blogs so it actually gets a lot more geeky than that.

In the last hour or so, we've been watching live unboxings of the new product from Apple like this one on Gizmoto. While people all the while are posting things from all over the world, like hurry up, I can't wait any longer. It's 4:00 a.m. here in India. It's a little bit early for reviews, but a couple who have posted on this tech site, who are unpacking the iPhone live had so many people call in to their iPhone that they said they managed to crash it. That site is now so popular that you can't even get on it.

But not everybody shares the hype. The bloggers at Engadget who were standing in line said passerby were shaking their head and saying, all this for a phone? Wolf?

BLITZER: Abby, thank you.

The telephone has gone through quite a revolution since it's inception. The coin operated pay phone was actually introduced in Connecticut back in 1889. The first rotary dial telephone was developed in 1891, but not widely available until the turn of the century. The first touch tone system was installed in Baltimore in 1941 but was not commercially available for another 20 years. The cell phone was invented in 1973, but it took decades before it was widely used by the general public.

And now we can't live without it.

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