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Twelve Years of Hard Labor; Doomed Plane's Tail Found; The Gloves Are Off in Iran; Iran's Next President; Capitol Visitors Center Evacuated; GOP: Palin A Go At Fundraiser

Aired June 8, 2009 - 17:00   ET



Happening now, it may be a valuable clue in the crash of Air France Flight 447. The plane's tail section found floating in the Atlantic. But right now, speculation on the cause of the disaster is focused on a much smaller part of the airliner.

The gloves are off in Iran -- President Mahmoud Ahmadinejad forced to defend himself in live televised debate. With only days to go before a high stakes election, CNN's Christiane Amanpour takes us inside Iran to check the pulse of the country.

And it may be the first stop on the road to 2012 -- a big GOP fundraiser here in Washington only a few hours away.

What exactly will the Alaska governor, Sarah Palin, do there when she shows up tonight?

I'm Wolf Blitzer.


A dozen years of hard labor -- that's the stunning sentence for two American journalists who were seized near North Korea's border with China. The North Korean court ruling comes three months after the two women were arrested. And it comes as tensions between the U.S. and the Communist North are already very high.

Let's go live to CNN's foreign affairs correspondent, Jill Dougherty.

She's working the story for us -- Jill, everyone is asking the same question -- what can the U.S. government do to get these two women out?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: You know, Wolf, this is one of the most sensitive diplomatic challenges this administration has faced so far. And that is why they're treading very carefully.


DOUGHERTY (voice-over): Laura Ling and Euna Lee, sentenced to 12 years in a North Korean prison camp for what the North calls: "grave crimes and their illegal border crossing."

But is the standoff with North Korea over its nuclear and missile tests complicating getting them released?

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: We view these as entirely separate matters. We think the imprisonment, trial and sentencing of Laura and Euna should be viewed as a humanitarian matter. We hope that the North Koreans will grant clemency and deport them.

DOUGHERTY: Senior administration officials tell CNN Secretary Clinton wrote to the North Korean leadership several weeks ago, appealing for the journalists' release on humanitarian grounds.

Now, will the U.S. send an emissary?

Former Vice President Al Gore, who founded the online network that employs the journalists, and New Mexico governor, former U.N. ambassador, Bill Richardson, both stand ready.

Richardson, who helped free an American held in Pyongyang 13 years ago, is encouraged that both the U.S. and North Korea so far have managed to keep the journalists' fate separate from their nuclear standoff.

GOV. BILL RICHARDSON (D), NEW MEXICO: I think eventually they'll be released. I'm an optimist here. But North Korea is unpredictable. They play a high stakes poker game.

DOUGHERTY: Victor Cha agrees. He traveled to North Korea with Bill Richardson in 2007 to bring back the bodies of U.S. servicemen killed in the Korean War.

VICTOR CHA, CENTER FOR STRATEGIC & INTERNATIONAL STUDIES: This individual, whether it's former Vice President Gore or someone else, needs to be able to deliver a message to the North Koreans about their willingness to negotiate the return of these individuals and, if necessary, provide an apology.


DOUGHERTY: And because these journalists have been treated relatively well so far -- kept in a hotel, for example -- and because previous Americans have never served any time in North Korean prison camps, U.S. officials are hopeful that these two journalists might avoid that fate, as well -- Wolf.

BLITZER: And I know they're trying to keep these issues separate -- the arrests and now the sentencing of these two women as far -- and the nuclear standoff, the missile tests, the nuclear tests the North Koreans have been doing.

What is the next step, though, as far as the nuclear standoff is concerned?

DOUGHERTY: Yes, Wolf, it's amazing having these things going on at the same time. But on the nuclear front, there is a major push by the United States to rally the other countries at the United Nations to have stronger sanctions. And, also, the U.S. is talking that its own unilateral sanctions, probably financial.

BLITZER: Jill Dougherty is over at the State Department for us.

Thank you.

Lisa Ling, a CNN special correspondent, recently spoke to her sister Laura in North Korea. And before the journalists' trial began last week, she spoke to CNN's Larry King about that phone call.


LISA LING, SISTER OF JAILED JOURNALIST: She sounds scared, Larry. I mean she sounds absolutely terrified. You know, it's been almost three months and communication with her has been so limited. We got that one phone call. That was the first time I had heard her voice in two-and-a-half months. And we've gotten one letter. Our family got one letter and her husband got one letter. And then that's it.


BLITZER: The families of the two Americans had initially kept quiet, but recently stepped up their efforts to appeal for the pair's released. We hope they are released soon.

New debris from Air France Flight 447 found and questions swirling right now around one critical piece of equipment.

Let's go to CNN's Paula Newton.

She's been investigating what's going on, speaking to a lot of authorities.

What are you finding out -- Paula?

PAULA NEWTON, CNN INTERNATIONAL SECURITY CORRESPONDENT: Wolf, you know, there was a measure of relief when that huge section of the tail was found in the waters of the Atlantic. And here's why.


NEWTON (voice-over): It's a telling snapshot -- the tail section of Air France Flight 447 floating in the Atlantic and now tethered to recovery teams -- now maybe a valuable lead in this difficult investigation. Precious pieces of the Airbus A330 can now be forensically examined. But more than a week after the crash, there are still few hard facts to go on. Without the flight data recorders, the cause of Air France 447's sudden crash may never be known.

PAUL LOUIS ARSLANIAN, CHIEF FRENCH CRASH INVESTIGATOR: This is the beginning. This is what we are looking for in the middle of the Atlantic Ocean. NEWTON: But as that search continues, French investigators are facing mounting questions about one piece of equipment that might have confused the pilots about their air speed and might have triggered a problem. More than three hours into its flight from Rio to Paris, the Airbus flies through turbulent weather. But computer error messages confirm the pilots are getting conflicting data about how fast the plane is actually going. The pitot tube designed to help measure speed could have iced over and malfunctioned.

Asked whether all A330s should temporarily be grounded as a precaution, French investigators told CNN it would not be prudent at this time because " definite link between speed sensors and the crash have been established."

Aviation experts agree.

DAVID LEARMOUNT, FLIGHTGLOBAL.COM: No. Unless they know or until they know what the problem is, the aircraft will not be grounded, because the vast majority of the information available to the authorities and to the airlines is that the A330 has a first class safety rating.


NEWTON: A first class safety record, of course, until now. And, Wolf, that is why so many people have their eyes on this investigation. A lot of nervous travelers out there right now -- Wolf.

BLITZER: My heart goes out to the families, Paula. I can only -- I can't even imagine how they're going through it. I know you're speaking with some of them.

NEWTON: Well, you know, it's kind of in two camps. Some of them do feel the amount of closure that you get with something like this and they feel ready to grieve. Others, remarkably, still holding out hope that somehow they've gotten all this wrong and that their loved ones will come back to them.

It's a really tough investigation -- Wolf.

BLITZER: What a painful, painful story it is.

All right, Paula.

Thanks very much.

Mexico grief-stricken at an unspeakable tragedy -- dozens of children killed in a fire at a daycare center. Now, mass funerals and new details of what happened.

And the Iranian president, Mahmoud Ahmadinejad, on the defensive in an extraordinary campaign marked by rhetoric unheard of in that country. Our chief international correspondent, Christiane Amanpour, she's there in Tehran. She's standing by to join us live.

Plus, the iPhone -- only $99. A great deal, but -- there's always a but -- there's a catch.


BLITZER: All right. The gloves are off in Iran, where President Mahmoud Ahmadinejad has been put on defensive in live, televised debates.

We asked CNN's Brian Todd to take a closer look.

It's pretty remarkable what's going on there.

BRIAN TODD, CNN CORRESPONDENT: It is. You don't see this televised in Iran very much and certainly not to the outside world. Tonight's debate, Wolf, just ended. This was not against Ahmadinejad's main rival. In this one, he took on the former head of the Revolutionary Guard.

Now, this is a candidate who could undermine Ahmadinejad's support among hard-line conservatives in Iran. And this exchange was freewheeling and contentious.


MOHSEN REZAEI, IRANIAN PRESIDENTIAL CANDIDATE (through translator): Well, you have forgotten history.

PRES. MAHMOUD AHMADINEJAD, IRAN (through translator): No, I haven't forgotten the history.


TODD (voice-over): Another spirited debate for President Mahmoud Ahmadinejad of Iran. This time, he is challenged on the state of the economy by candidate Mohsen Rezaei. Also at issue, inexperience versus overconfidence.


AHMADINEJAD (through translator): You haven't been involved in practical management of the country and therefore, you are not acquainted with the measures.

REZAEI (through translator): He considers himself as the expert of all experts in all spheres. Security wise, he thinks that he's the only person who understands. He's a know-all.


TODD: In his last debate, Ahmadinejad was accused of having an adventurist foreign policy. He replied that his rivals and the establishment are ganging up on him.

AFSHIN MOLAVI, NEW AMERICAN FOUNDATION: It is the first time Mahmoud Ahmadinejad is being challenged so publicly in front of a live television audience. And this could fundamentally alter the shape of this presidential election -- an election that Ahmadinejad still has a chance to win.

TODD: Even the wife of one candidate has become involved, after Ahmadinejad questioned her academic credentials.

Her response...


ZAHRA RAHNAVARD, WIFE OF CANDIDATE MOUSAVI (through translator): If he apologizes, I will not sue him. But if he does not, l will give him a 24-hour deadline and will file a lawsuit.


TODD: Iran's supreme leader has warned the candidates to tone down the rhetoric.


AYATOLLAH ALI KHAMENEI, IRAN'S SUPREME LEADER (through translator): This shouldn't cause hatred or enmity.

Candidates should conduct themselves in a brotherly way.



TODD: Now it is the Ayatollah Khamenei who makes the big decisions on foreign affairs, experts say, and he does not face re- election, of course. So the impact that Friday's results could have on U.S./Iranian relations is not clear. It's what everybody on this side of the world is looking out for, Wolf, but not clear at all which of these candidates would have the greater effect on that aspect.

BLITZER: I know there are polls being conducted over there.

TODD: Right.

BLITZER: I wonder if any of them are really reliable.

But what are you hearing?

TODD: Well, there is one poll that was conducted. It was uncensored, independent, taken from a neighboring country by telephone. This was done by three groups -- Terror-Free Tomorrow, the Center for Public Opinion and the New America Foundation. It was just released today.

It does show Ahmadinejad in the lead. But it also shows that none of these four candidates would pass that 50 percent threshold needed to win outright. There could be a runoff.

It's important to say this poll was taken May 11th to the 20th, before some of these presidential debates took place. Those debates could have had a huge impact since this poll was taken. BLITZER: Interesting stuff.

All right, Brian.

Thanks very much.

Let's go to Tehran right now.

CNN's Christiane Amanpour is in Tehran to cover these elections for us.

She's joining us on the phone -- are you getting a little flavor, Christiane, on who has the upper hand?

CHRISTIAN AMANPOUR, CNN INTERNATIONAL CORRESPONDENT: Well, I don't know about the upper hand, but certainly this is the most spirited public campaign that I've witnessed in all the elections that I've been covering.

The streets are jammed today -- and they have been earlier -- by supporters of both President Ahmadinejad and the leading candidate, who is Mohsen Rezaei, as you've been talking about.

There was a long human chain that was formed by Rezaei supporters from the top of Tehran down to the south. And there was a big rally held in a religious complex by President Ahmadinejad.

A lot of campaigners on the street. A lot of spirited give and take on the street. Sometimes the two sides meet and they're sort of confrontational -- not violent, but certainly very, very vocal.

BLITZER: Does it really make any difference, from the U.S. perspective, Christiane, who the next president of Iran is going to be?

AMANPOUR: Yes and no. It makes a difference because, as you've seen in the four years of Ahmadinejad, he has been the perfect face of Iran and has been a very belligerent, bellicose figure in terms of relations with the West. And relations have deteriorated significantly under his presidency.

On the other hand, the big decisions are made by the supreme leader. But it is not just a single center of power. He is the top power, but it is consensus when it comes to foreign affairs and the big decisions.

And that means it's a supreme leader who also has to get on board the presidency, the parliament, the people, the religious fundamentalists. It's a big group effort led by the religious leaders. But by no means can he just go out and do it on his own. He has to be able to sell it.

BLITZER: There was a considerable -- a nice chunk of President Obama's speech to the Muslim world in Cairo last Thursday that did directly involve Iran.

How is that playing there?

Is it likely to have any impact on the election?

AMANPOUR: It does have an impact. What the world thinks about Iran and the way the United States reacts to Iran is important and significant here. Already we've been talking to people -- both ordinary voters, as well as officials and, indeed, analysts and experts -- who say that, clearly, the tone is having an impact and makes a difference.

However, the universal line that we're hearing here is that while the tone has shifted and the words are different than under President Bush, Iran wants to see concrete action and not just words. And by that, they mean they want to know whether the United States will work with Iran as a regional power here; what the United States will do vis-a-vis Iran's nuclear program, about which there is no sense of compromise here on the ground.

They continue to say and they continue to point out that the supreme leader has issued another fatwa, another reminder that Iran is not seeking nuclear weapons, but that they want to continue their peaceful nuclear program.

And everywhere we go, we hear that Iranians want better relations with the United States.

BLITZER: Christiane Amanpour is in Tehran for us.

We'll be in constant touch with you, Christiane.

Thanks very much.

A sigh of relief from the Obama administration after the Iranian- backed Hezbollah came up short in yesterday's parliamentary elections in Lebanon. A pro-Western coalition will keep control of Lebanon's government despite a strong challenge from an alliance dominated by Hezbollah. The U.S. views Hezbollah as a terror organization and a White House statement says the election results shows the courage of the Lebanese people.

There were concerns that a Hezbollah victory would have raised tensions in the region. Hezbollah seized control of Beirut's streets last year and three summers ago, fought a bloody war with Israel.

An actor's mysterious death in Thailand -- now the FBI may join the investigation as to how David Carradine died. But Thai officials are setting some very specific conditions.

Plus, the landing none of us will ever forget -- now feathers yielding clues about what happened to U.S. Airways -- that U.S. Airways flight on the Hudson.


BLITZER: It looks like there's an incident going on up on Capitol Hill. Our Congressional correspondent, Brianna Keilar, is joining us -- set the scene, Brianna.

What do we know?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Wolf, I'm about 150 yards away from the Capitol, outside. I'm looking at a lot of police and fire vehicles, as well as at least two large HAZMAT vehicles.

We understand from a press release sent out by U.S. Capitol Police that there was a suspicious package found in the Congressional Visitors Center, which is off the east side of the Capitol. This is where all the tourists start their tours.

And it was initially evacuated -- just the tourist areas. And then staff started to evacuate. We started getting e-mails from staff members who have offices down in the CBC and they had to evacuate and come outside.

So, at this point, a number -- I would say at least 12, maybe as many as 15, even more emergency vehicles, including two HAZMAT crews. We've been told by U.S. Capitol Police that they're going to disrupt a suspicious package. They have told us that we may hear a loud bang or a pop.

But at this time, in terms of the entire Capitol, Wolf, it has not been evacuated.

BLITZER: When you say disrupt, that means they're going to -- they're going to explode that box or whatever it is, right?

KEILAR: Yes. That's -- that's what I would take it to mean, because they're telling us that we're going to be hearing a loud bang or pop. So, obviously, they're going -- yes, to be essentially detonating or exploding it to make sure that it isn't something to worry about. And, at this point, we've heard from -- some Capitol Police told one of our producers, Deirdre Walsh, inside, that they should be letting tourists back in here in about 15 minutes. So at least police on the scene are telling tourists that they'll be allowed back in the Visitors Center soon.

BLITZER: That's where they belong.

All right, let us know what goes on, Brianna.

We'll stay in touch with you.

Brianna Keilar watching the story on the Hill.

Deborah Feyerick is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Deb, what do you know?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, in Thailand, one of the deadliest single incidents in the ongoing Muslim separatist insurgency. Gunmen opened fire on a mosque in Southern Thailand during evening prayers, killing at least 10 people and wounding 19. Violence has plagued three predominantly Muslim provinces in the mostly Buddhist country since 2004, leaving more than 3,000 people dead.

Also in Thailand, the FBI may be joining the investigation into the death of actor David Carradine. His naked body was found in a hotel closet in Bangkok. And this is a little bit graphic, but a leading Thai pathologist now says the ropes around Carradine's wrists, neck and genitals suggest a dangerous sex game that went awry. Thai police say the FBI would be welcome to take part in the probe, but only as observers.

On Wall Street, stocks ended the day not far from where they began. The Dow Jones Industrial Average was just up over a point. The Nasdaq lost about seven points. And the S&P 500 was down less than a point.

And this feather -- take a look -- providing new details about the birds that brought down that U.S. Airways jet forced to land in New York's Hudson River. Scientists at the Smithsonian Institution now say it was at least three Canada geese that were sucked into the plane's two engines, knocking them out. Researchers made the determination by studying feathers that were found in the engine -- Wolf.

BLITZER: It's amazing that they can determine that based on that one little feather.

All right. Thanks very much for that, Deb.

Just hours away from now, a big Republican fundraiser right here in Washington. But only a few moments ago -- until a few moments ago, Alaska Governor Sarah Palin had been keeping the GOP guessing as to whether she'll show up. We're going to let you know what she has decided to do.

And the former first lady, Laura Bush, has some surprising comments about the president's pick for the U.S. Supreme Court.

Plus, an Illinois police chief says it's like something out of "The Da Vinci Code" -- a treasure trove of stolen antiquities found in the home of a dead man.



Happening now, the U.S. Supreme Court delays the sale of Chrysler to the Italian automaker Fiat. Three pension funds that hold Chrysler debt are challenging the deal.

A staggering trove of stolen antiquities worth billions of dollars found inside the home of a deceased rare books dealer -- how they got there and what they were going -- and where they were going next. And all eyes on news from a major Apple conference -- a new iPhone, a deal on the old iPhone and the questions tech observers want to know -- was Steve Jobs there?

I'm Wolf Blitzer.


All that coming up. But first, the on-again, off-again appearance by Governor Sarah Palin of Alaska at a major Republican fundraiser here in Washington.

Guess what?

It's apparently on again.

Let's go to our senior political correspondent, Candy Crowley -- Candy, governor has been keeping a lot of people guessing.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Absolutely, Wolf. And, you know, a Republican official now says Alaska Governor Palin is expected to attend this evening's dinner. She is expected to be recognized, but not expected to have any formal remarks.

But do not count on anything. This story, first reported by Politico, is full of some unexpected things.


CROWLEY (voice-over): Alaska Governor Sarah Palin is at the center of another Republican misfire.

NANCY PFOTENHAUER, REPUBLICAN STRATEGIST: It's a real shame that this has played out the way it has. I would have hoped that it could have played out the way normal people on the same team resolve differences. But it's clearly got -- you've got a lot of egos involved.

CROWLEY: It may or may not be a comedy of errors about the keynote speaking slot at this evening's Republican fundraiser. To raise a lot of money, organizers of these sorts of things want popular, interesting speakers -- big draws. At the hearts of party, few are bigger draws than Palin.

Earlier this year, she was invited to speak. Her staff said yes and the fundraiser's political committee, set up to raise money for House and Senate races, put out a press release. Except her staff says they forgot to check with Palin and she wasn't sure.

Enter the tried and true Newt Gingrich. Uncertain whether Palin could speak, the committee asked the former speaker in March to be the keynoter.

Rich Galen used to work for Gingrich.

RICH GALEN, REPUBLICAN STRATEGIST: He jumped into this dinner deal after the Palin people so badly screwed it up that the -- both committees needed somebody to headline the dinner.

CROWLEY: Gingrich is still a draw, even if he is a former. When he speaks, the GOP listens.

NEWT GINGRICH, FORMER HOUSE SPEAKER: And like Reagan, I'm for saying, my fellow Republicans and Independents and Democrats who want a better future, let's get together on the same team. So I'm an inclusionist. I just made that word up.

CROWLEY: Now, stick with us. Reenter Sarah Palin, who was in New York this weekend commemorating the purchase of Alaska for the U.S. by William Seward. He gave her a painting.

GOV. SARAH PALIN (R), ALASKA: I'll bet you anything what Seward was pointing out was lookie there, you can see Russia from Alaska.

CROWLEY: Last week, Republican officials decided to reissue the invitation to Palin, not as a keynoter but as a kind of speaking surprise for the crowd. But this weekend, according to a Palin aide, the invitation was withdrawn, citing concern that Palin would upstage Gingrich, all of which leaves party members a bit confused and way leery of jumping into the fray.

REP. ERIC CANTOR (R), VIRGINIA: I don't know what has transpired about the communications back and forth with those folks in Alaska and Washington, but at the end of the day, look, the Republican Party needs to be a party that is much more inclusive.

CROWLEY: The whole thing appears to be a series of minor mix- ups, or not, but in a party with major problems, everything is amplified.


CROWLEY: So, just to restate what we believe is going on now, there has been a meeting of the minds, as it were, and it now appears Sarah Palin will attend this evening's fundraiser. At least, Wolf, that's what we expect.

BLITZER: Until it happens, we're not sure what's going to happen. But I guess the sub-question, the subtext to all of this, Candy, is, is there a rivalry already developing between Newt Gingrich who's thinking about running for president in 2012, and Sarah Palin, who's probably thinking about running for president in 2012? And they don't want to share the platform, if you will, tonight?

CROWLEY: Not particularly. And this does seem to be -- have been a comity of errors, but I think it's absolutely correct there are some big egos in this party and there's a big opening in this party so there is bound to be a clash. But looking at what transpired, this did not seem to be a Sarah Palin versus Newt Gingrich thing so much as these two fundraising committees versus Sarah Palin.

BLITZER: OK. Good stuff to talk about.

Let's do that right now with Democratic strategist and CNN political contributor Donna Brazile and Republican strategist Ed Gillespie, a former counselor to President Bush, former chairman of the Republican National Committee.

All right. Ed, explain what's going on here because we're all confused.

ED GILLESPIE, REPUBLICAN STRATEGIST: Well, this is more attention than the House Senate dinner has ever gotten, I think. The fact is Governor Palin is someone who is a forceful personality in the party. She draws a lot of attention. Newt Gingrich is a forceful personality and draws a lot of attention. The bottom line is despite all the twists and turns in this lead-up to this dinner tonight, they're doing very well, by the way. Both the congressional campaign committees, senatorial and house, will raise a million dollars.

BLITZER: What would be so bad if both spoke at this large dinner?

GILLESPIE: Like Eric Cantor, I'm not sure about the ins and outs other than these dinners, one speaker is plenty, generally, two is -- you know, we shouldn't punish our donors. That's not a slap at --

BLITZER: You know what, though --

GILLESPIE: Two speakers are a lot.

BLITZER: You know these are true Republicans will be there that are ready to write checks. You would think they would be thrilled to hear from Newt Gingrich but especially thrilled to also hear from Sarah Palin.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Wolf, as you know, I was at the Republican Convention last year. It was like a four-car funeral until Sarah Palin got up and spoke. I thought that she energized the Republican Party, energized its base, and clearly I think there's room enough at the table to have someone of her stature. She is, after all, a governor. To give her -- excuse me -- her sense of what the Republican Party is going to do.

BLITZER: This whole tour she's been on over the weekend, Long Island and New York and upstate New York, I know the reason was she was honoring the American who made that brilliant decision to buy Alaska many, many years ago. But it seems whenever she comes down to the lower 48, as we like to call it, something exciting is going to happen.

GILLESPIE: Well, there's no doubt there's a lot of electricity that surrounds Governor Palin. Like I said, a lot of energy. Her supporters are very staunch supporters. I mean, they really, as Donna pointed out, at the Republican convention, you could feel it. She lit the place up.

So, I think it's going to be interesting to watch her over the next few years and see what she does. I think, you know, she obviously, as we look at the twists and turns, like I say, in this dinner, is going to have to adapt to a real national stage if she's going to continue to be making appearances outside of Alaska.

BLITZER: The former first lady, Laura Bush, was on ABC today and she had some nice things to say about Sonia Sotomayor, the Supreme Court justice nominee. Listen to this.


LAURA BUSH, FORMER FIRST LADY: I think that she sounds like a very interesting and good nominee. And as a woman, I'm proud that there might be another woman on the court and so we'll see what happens. But I wish her well.


BLITZER: A statement from Laura Bush for Sonia Sotomayor on this day when she fractured her ankle and we see her hobbling over there on crutches.

BRAZILE: Yes. Well, first of all, former first lady Laura Bush is a very gracious lady, and in that same interview she made some wonderful remarks about Michelle Obama, as well. But, you know, of course, I agree with Laura Bush that I think Judge Sotomayor is not just an incredible candidate but she will be confirmed. And I'm glad to see that Obama did appoint a woman to the court. There's nothing wrong with it.

BLITZER: She made no secret when she was first lady, Laura Bush, and you were right there in the White House, that she wanted to see another woman on the U.S. Supreme Court. And you tried with Harriet Miers. Didn't exactly work out.

GILLESPIE: That's correct. And she said something similar back at that time. She was obviously very supportive and glad that Judge Alito was confirmed as justice Alito, as well. And I think that the first lady captured the sentiments of a lot of women and men. This is a what a country moment. We just had the first African-American president nominate the first Latina to the Supreme Court. Whether you agree with her judicial philosophy or have concerns and believe that there ought to be a thorough scrutiny, that's a great moment for our country, and I think the first lady captured that.

BLITZER: Is it too early to predict whether or not the Republicans will try to use a filibuster to block her confirmation?

GILLESPIE: It is, Wolf. One of the points that President Obama rightly makes is that she has had more time on the bench than any of the current sitting justices before they were nominated. That's also a lot of cases to go through, and so I think it's awfully early for Republicans to rule in or out any option.

BLITZER: I've been monitoring the reaction from Democratic senators and Republican senators, and basically, almost all of them are saying very nice things about her as compared to other Republicans that are not necessarily in the U.S. senate.

BRAZILE: Well, she has an engaging personality, and clearly I've heard from some of those staffers that she's just a wonderful person to be around. I think once she's able to have her hearing and is confirmed, hopefully she will be able to get her seat on the court when it's convened in October to hear all of the cases.

BLITZER: And you don't know if the hearings are going to take place in July or in September. August they'll be in recess.

BRAZILE: Here again, what's wrong with being in D.C. in August? It's a little hot. That's about it.

BLITZER: They want to go on vacation. What do you think?

GILLESPIE: They've got air conditioning and we could have hearings in August if need be. But, look, people make plans. I think regardless of whether the confirmation is before the August recess or after, she will be on the bench by the time they convene for the first Monday of October. If confirmed.

BLITZER: If confirmed.

BRAZILE: Let's hope that's the gospel truth. I like that.

BLITZER: Donna, Ed, guys, thanks very much.

President Obama wants health care reform, but it's not clear how he's going to pay for it. We want to know what you think. Are you willing to pay higher taxes for universal health care? Submit your video comments to Watch the program tomorrow to see if your video makes it on the air.

Fidel Castro weighing in on a spy scandal rocking the State Department. His take on a longtime U.S. diplomat and his wife now accused of spying for Cuba.

Plus, 44 children killed in a fire at a daycare center leaving a country grief stricken and searching for answers.


BLITZER: There was certainly a bombshell the other day when the news broke here in Washington, a former State Department employee and his wife charged with spying for Cuba over the course of three decades. That same news was treated almost with amusement by Cuba's former leader. CNN's Shasta Darlington has the story for us from Havana -- Shasta?

SHASTA DARLINGTON, CNN CORRESPONDENT: Wolf, Cuba found out about the arrest of these two Americans who are now being accused of spying for Cuba from Fidel Castro himself. That's because he wrote in a new essay published in state newspapers that the timing was suspicious. He pointed out that it came shortly after the organization of American states voted to lift a ban on Cuba's membership. What he said is, "It's curious that this news comes to light 24 hours after the United States suffered a diplomatic defeat in the General Assembly of the OAS." Now, Castro never confirms or denies that this couple was working or spying for Cuba. Instead, he takes kind of a mocking tone. What he wrote is, "Doesn't this little story about Cuban spying seem ridiculous to everyone?" And despite the publicity given by Castro to this case, most of the Cubans we talked to had never heard of it. They didn't know who this former State Department retiree was or his wife. And those who had heard of it supported them. This is what they had to say.

UNIDENTIFIED FEMALE: (through translator): If this couple was there working for Cuba in the revolution, I applaud them. I wish I could do that.

UNIDENTIFIED MALE: (through translator): It was spontaneous solidarity with Cuba and the revolution.

DARLINGTON: According to court documents, this couple once had a lengthy meeting with Fidel Castro in 1995. But Castro wrote in his essay that he doesn't recall. In fact, Wolf, he said he met with thousands of Americans in that same period.

BLITZER: Shasta Darlington reporting for us from Havana.

The most notorious husband and wife espionage case involved Julius and Ethel Rosenberg who were executed in 1953 for passing America's atomic bomb secrets to the then Soviet Union. In 1987, navy intelligence analyst Jonathan Pollard pleaded guilty to conspiracy to commit espionage and was sentenced to wife in prison. His then wife, Ann Pollard, received a five-year sentence after pleading guilty to one count of conspiracy to receive embezzled government property. She was paroled after three years. And in 1994, veteran CIA Officer Aldrich Ames pleaded guilty to spying for the Soviet Union. He was sentenced to life without parole. His wife, Rosario Ames, was sentenced to five years in a plea deal and was released after four years in prison.

Mexico's mourning dozens and dozens of children killed in a fire at a daycare center. CNN's Thelma Gutierrez reports.


THELMA GUTIERREZ, CNN CORRESPONDENT (voice-over): It was a day the city wept for its little children. Burials were going on throughout the day. This mother cried out, "My child, my little boy. What will I do without you?" His tiny coffin was carried to the grave. Complete strangers mourned in silence. The mother cried, "How will I go on?" No one could console her.

Mexico's president ordered the attorney general to investigate Friday's deadly fire. Witnesses say the fire started in the nearby building then quickly spread to the daycare. Officials now say 142 children were trapped inside as fire rained on them. The smallest, only a year old, napping in their cribs, unable to get out.

Twenty three year-old Francisco Lopez watched in desperation as the daycare center burned. With no accessible windows and only one door open, he jumped into his pickup truck and rammed the building several times. When he finally punched through, dozens of children were able to escape, but not 2-year-old Paulette. The toddler died in the fire. Her mother, Maria Jesus, played her youngest daughter's favorite music. She said when she kissed Paulette good-bye Friday morning she never imagined it would be the last time she saw her.


GUTIERREZ: The state attorney general says the fire began in the cooling system of a building that's attached to this daycare center. Now, this daycare center is actually a converted warehouse that had just passed a safety inspection less than two weeks ago. But they say the flames then raged up the walls, up into that corrugated ceiling you can see behind me, and then it traveled right into a room, into the area where the children were napping -- Wolf?

BLITZER: What a heartbreaking story, indeed. Thelma Gutierrez on the scene for us, thank you.

The probe in that Air France crash now focusing on one specific piece of equipment. Could it be the clue to solving the mystery of Flight 447?

Plus, a faster new iPhone and a cheaper old iPhone but where's Apple's boss, Steve Jobs?


BLITZER: Big announcement from Apple today. The company revealed its worldwide developers' conference the details of the highly anticipated new and improved iPhone. Our Internet reporter Abbi Tatton is standing by. She's got some details.

What do they say about this new phone?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, there were two hours' worth of announcements at this developers' conference today but this is the one that everyone had been waiting for, cheaper and more powerful iPhones, the new generation model that will be out June 19th. That's going to be $199 and the current model is now going to be on sale for $99. Bear in mind that a couple years ago when they first come out, they were six times that price so it's really, really dropped.

Apple's also announced software improvements that iPhone users have been asking for and the online hype today has been huge. If you go to Twitter and look for the word iPhone you're seeing the tweets are coming in at about 500 per minute.

One thing you were asking me about before, Wolf, was Apple's CEO Steve Jobs. Lots of hype about was he going to be there, was he showing to show up. There was no sighting of the Apple CEO there today. It was this time last year when his health had been in question at the conference, lots of people were buzzing about that online. He has been on medical leave since January but he is expected to return at the end of this month. BLITZER: Did they give us some specifics on what the new iPhone can do that the old iPhone that's only going to be $99 can't do?

TATTON: The one thing that everyone's really, really talking about is the video capability. There is now a video recorder that you are going to be able to tape video on it. Something the old one couldn't do.

BLITZER: At some point, they will give those phones away.

TATTON: They're really trying.

BLITZER: Thanks very much for that.

Let's go to the White House. Suzanne Malveaux is getting news about a phone call that the president has just had. What happened, Suzanne?

SUZANNE MALVEAUX, CNN CORRESPONDENT: With the Israeli Prime Minister Benjamin Netanyahu. It lasted for 20 minutes so you can imagine the significance of this call. I'm going to read the brief statement here. It says that the president and prime minister had a constructive 20-minute conversation. The president reiterated the principal elements of his Cairo speech, including his commitment to Israel's security. He indicated that he looked forward to hearing the prime minister's upcoming speech outlining his views on peace and security. The president also noted that Senator Mitchell would be in Israel again tomorrow as he starts his fourth trip to the region as the special envoy for Middle East peace.

Now, the significance of this, as you know Wolf, it was just last Thursday when he gave that major speech in Cairo to the Muslim world but also a clear signal to Israel as well that they do not want those settlements to expand. That's something that was included in the speech. This is President Obama, who is trying to bring Israelis and Palestinians together to move the peace process forward, a lot of sticking points. That is one of the major ones. We expect that that is something that came up in this conversation. There's a lot to work through but it is significant that these two leaders talked for about 20 minutes regarding some of those key elements in that speech.

BLITZER: I was struck by the statement that the White House released, Suzanne, that the president reiterated what he said in his Cairo speech. As far as Israel is concerned, that means a freeze, no more settlements on the West Bank, because that was a key part of his Cairo speech. The other key part as far as Israel is concerned, that Israel should accept what's called a two-state solution, Israel alongside a new state of Palestine. This comes only days before Prime Minister Netanyahu says he will be delivering his own major Middle East Arab Israeli peace process speech. No doubt the president was trying to influence, in part reassure but also suggest take prime minister Netanyahu you know what, we hope you say certain things in your big speech next week.

MALVEAUX: It's very significant, Wolf, absolutely right, because we have not heard Netanyahu say and endorse the two-state solution. We didn't hear that when Netanyahu was side by side with President Obama when he visited the White House. It is not something we have heard. The administration realizes it's a tough call because it's a coalition that has to come together on that, but obviously, the president exerting whatever kind of behind the scenes arm twisting, if you will, the influence that he has to make sure that that's the direction, at least the direction that Netanyahu is moving.

BLITZER: A phone call between the president and the prime minister. We will stay on top of this story. Lots at stake here, Suzanne. Thanks very much.

That doomed Air France jet may have been flying too fast or perhaps too slow. Why a small sensor may have played a critical role in the disaster over the Atlantic.

Plus a big auto deal delayed. The U.S. Supreme Court throws a wrench into the works holding up Chrysler's sale to fiat. What's behind the 11th hour order?

Stick around. You're in THE SITUATION ROOM.


BLITZER: The Italian government is seeking the return of more than 1600 artifacts found in a dead man's home in Chicago. Susan Roesgen is there with the story.

SUSAN ROESGEN, CNN CORRESPONDENT: Wolf, the man at the center of this is a scholar who lived in this house. When he died, his family called a funeral home. Then they called the police.


ROESGEN: When he walked into this house, the Berwyn, Illinois police chief says it was like walking into the Da Vinci Code. These are some of the Italian manuscripts and artwork found in the home of John Cisto, a rare books dealer who died at the age of 78. The police chief told the officers to look but not touch.

CHIEF WILLIAM KUSHNER, BERWYN, ILLINOIS POLICE: We had everyone walk around with their hands in their pockets, seriously. It's hard to screw up a crime scene if you don't touch anything.

ROESGEN: The FBI inventoried 3,000 items and it's taken two years just to prove that at least half of them were stolen. The police were led to the home by one of Cisto's sons who told them he believed the family was cursed because his father had stolen things from the Vatican. In fact, the art crimes unit of the FBI found medieval documents, some so old they were written on sheepskin bearing the papal seal.

BONNIE GARDNER, FBI ART THEFT PROGRAM: By their very nature, they are in the public realm. The fact that they were stolen and came to the United States in some way illicitly deprives those historians and archivists in Italy from their chance to study these documents and reconstruct history from them. ROESGEN: The FBI doesn't know how the artifacts were smuggled out of Italy but they say Cisto seemed to value the antiquities for their historic value more than what they were worth for sale. If he had sold them, their estimated value is between $5 million and $10 million.


ROESGEN: The FBI says Italian authorities will take the loot back to Italy later this week --Wolf?

BLITZER: Susie Roesgen in Chicago for us, thank you.

Happening now, breaking news. Chrysler's very survival, hundreds of thousands of American jobs, perhaps your car could be at risk. There's a new level of alarm out there after a surprise U.S. Supreme Court decision. The best political team on television is standing by to weigh in on what is going on.

And two American journalists sentenced to hard labor in North Korea. Might they avoid doing time in prison that some compare to concentration camps, some prisoners allegedly endure torture there. We're investigating.