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THE SITUATION ROOM

Future of Afghan/Pakistan Region; 'Strategy Session'; North Korea Photo Album

Aired December 23, 2010 - 17:00   ET

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


SUNNY HOSTIN, CNN LEGAL ANALYST: And, last but not -- last but not -- if you plan a face-to-face meeting, always tell a friend or relative your plans. Don't meet up at your home.

T.J. HOLMES, CNN ANCHOR: All right.

HOSTIN: Go to a busy, public place and provide some transportation for yourself.

HOLMES: Sunny, thank you.

Sorry to rush you.

I've got to hand it over to Wolf right now.

WOLF BLITZER, CNN ANCHOR: Thanks very much, T.J.

Happening now, new shots of fear that the Korean War games could explode into the real thing. The North unleashing very angry threats against the South once again. This hour the Obama administration's take on the global danger and more of what I saw inside the secretive communist regime.

Plus, a package bomb attack overseas -- the world on alert for holiday season terror. But there's growing concern that Homeland Security officials in this country still -- still are not necessarily fully prepared for the worst.

And gas prices climb to a level never seen at Christmastime, until now.

What if -- what if do what if we all have to keep paying a lot more at the pump well into the new year?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

This is the reason North Korea is threatening what they call a sacred war right now. South Korea held a massive military drill involving hundreds of troops, fighter jets, dozens of tanks and more than 100 types of weapons -- all just 15 miles from the North Korean border. Take a good look and a good listen.

(VIDEO CLIP) BLITZER: This exercise comes after tensions between North and South Korea seemed to cool off, at least a little bit, in recent days.

I got a firsthand look at the North's apparent effort to pull back from the brink of war when I traveled there had with New Mexico governor Bill Richardson just days ago.

Let's bring in our Pentagon correspondent, Barbara Starr -- Barbara, what's the U.S. assessment of the situation on the Korean Peninsula right now?

BARBARA STARR, PENTAGON CORRESPONDENT: Well, you know, Wolf, what U.S. military commanders don't like at all is uncertainty and that is what they are feeling right now about what is going on in Korea. As you have said, with Richardson came back to the United States, things looked pretty good, agreements for nucleins -- nuclear inspectors to go back in, war averted. The right words were being said. But now, new additional South Korean war games, drills, if you will. The North responding with another round of rhetoric. And that is the problem for the Obama administration and the U.S. military -- uncertainty.

Are the North Koreans really upset again about this?

Is it just rhetic -- rhetoric?

Will they start moving their war machine around?

That's what the Pentagon is watching for. And right now, they simply are not sure what the North Koreans may be up to -- Wolf.

BLITZER: There was a major, you know, exchange the OTHER day, this South Korean live fire military exercise on this island in what they regard, the North Koreans, as disputed water. They stay it's their water. They threatened to retaliate. They didn't. They backed down. They said the exercise was not worthy of a response, despite their earlier statements.

Is this incident, is this current crisis different, these -- these exercises today and what may or may not a North Korean military response?

STARR: Well, you know, there is a sense that this exercise that we're talking about in the last several hours is a bit different. It was preplanned. It had been announced. It was further deep inside South Korea. It was on an established military range -- all the sorts of things that the Pentagon is trying to paint as being normal and routine, nothing out of the ordinary, nothing to look at here, you know, move along. That's the kind of thing that the Pentagon is trying to portray this as.

But whether the South Koreans and the North Koreans, which is where it really counts, are seeing it the same way as the U.S. military, remains to be seen -- Wolf.

BLITZER: All right, Barbara, lots of nervousness over at the Pentagon, I'm sure, right now.

Most Americans believe North Korea does pose a threat to the United States. Our most recent poll shows 26 percent say it's an immediate threat. Fifty-six percent see North Korea as a long-term threat to this country. That helps explain why over half of those polled, 57 percent, say the U.S. should use troops to help defend South Korea if it's attacked by the North. Forty percent do not think U.S. troops should get involved.

As you know, I just returned from North Korea a few days ago.

Just ahead, we'll have more on my exclusive pictures from my trip there with Bill Richardson, the governor of New Mexico. Stand by for that.

North Korea's aggression and defiance are sure to come up when the Chinese president comes to Washington next month. The White House says President Hu Jintao will be here on January 19th. It's the third state visit of the Obama presidency.

Our senior White House correspondent, Ed Henry, is in Hawaii, where the president is beginning his holiday vacation -- Ed, what can we expect from the -- from the president during President Hu's visit to the United States?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Wolf, White House aides say there will be a lot of pomp and circumstance on the big state dinner, of course, in President Hu's honor. But that's going to -- they're going to get down to business. They believe they've forged a pretty good working relationship with the Chinese over the last two years. They're going to be talking a lot about the economy and trade. But they also say, obviously, North Korea is going to be front and center here.

White House officials believe that China is key to trying to stabilize the whole situation, calm it down there on the Korean Peninsula, in large part, because of China's own ties with North Korea. It's a -- it's a critical link for the U.S. They have the kind of relationship we don't, in terms of the conversations they can have.

I would also note, it's interesting that this morning here in Hawaii, the president had a phone call with the Russian president, Medvedev. Now, they obviously called -- talked about the new START Treaty and how happy they are that that moved through the U.S. Senate. But let's not forget that Russia was part of the six-party talks, trying to diffuse the situation with North Korea for so long. Those six-party talks have been stalled. But you can bet President Obama, when he says in this -- this White House statement that he wants close cooperation with Russia in the new year, it's not just about the START treaty, it's not just about Iran, it's about North Korea, as well.

And I can tell you, here in Hawaii, the president does have some National Security Council staff here. He's getting daily security briefings to stay on top of all of these big stories.

But North Korea is front and center for this White House, even here in Hawaii -- Wolf.

BLITZER: Yes, I'm not surprised.

What about the president?

What is he up to now that he -- he's there?

And I assume -- and I hope he's going to be able to relax and enjoy his family a little bit.

HENRY: Yes, absolutely, Wolf. He is playing a little golf, actually, as we speak. He's not played golf in about two months. It's a little cold in Washington, obviously. But he was also pretty busy with that lame duck session of Congress, which kept him in Washington a little longer than he wanted and that's why CNN just learned a short time ago the president is now going to extend this vacation by a day. He was going to come home to D.C. on January 1st. But we're now told by sources, he's going to stay until January 2nd -- not a huge difference, but it just means he gets a little bit more time with the family here and gets to rest up. It's going to be a big 2011. He's got the State of the Union Address pretty early in the new year. They've got to have these big national security issues, like North Korea, but also the economy and jobs, as well, front and center -- Wolf.

BLITZER: Ed Henry out in Honolulu for us covering the story. Ed, thanks very, very much.

The new evidence that the president has given his family an early Christmas trip -- gift. We have an update on his attempts to kick his smoking habit. The White House press secretary, Robert Gibbs, was asked about that during a new interview with our chief political correspondent, Candy Crowley.

(BEGIN VIDEO CLIP FROM "STATE OF THE UNION")

CANDY CROWLEY, HOST, STATE OF THE UNION: So the Tweet today, something to announce about the president and his maybe past smoking habit?

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I was asked -- I was doing some questions on -- on Twitter this morning and was asked whether the president was still smoking. And I can report that it's been probably about nine months since he last smoked a cigarette. He has done enormously well in quitting. It was a commitment that I think he made to himself at the end of health care and with his two daughters in mind.

(END VIDEO CLIP)

BLITZER: You can see all of the interview with Robert Gibbs this weekend on "STATE OF THE UNION" with Candy Crowley. That airs Sunday at 9:00 a.m. Eastern and at noon Eastern. It's replayed right here on CNN.

President Obama is ending the year on a high note politically after a self-proclaimed shellacking in the election. But can he keep the momentum going into 2011?

Plus, package bombs exploding overseas -- we're going to have the latest on who may be responsible.

And two years after the violent siege in India, we'll tell you what's behind a new terror alert there.

(COMMERCIAL BREAK)

BLITZER: The Capitol tree is glowing, but the lights are out for the 111th Congress. Members adjourned after a last minute flurry of critical votes yesterday.

Check out this list of accomplishments, including the repeal of "Don't Ask/Don't Tell." That's the cop -- the controversial extension of the Bush era tax cuts. It's too long reading the whole thing, but let's get a read on what it all means from our senior Congressional correspondent, Dana Bash -- Dana, this Congress is being credited with being one of the most productive in history, these two years.

What say you?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Oh, there's no question about it. The Democrats used their big majorities in the House and the Senate to get a lot done. Absolutely. I think that there's nobody who can argue with that.

The question is going to be what happens next, because some of the biggest accomplishments, from the perspective of Democrats, are some of the most controversial. Those were the -- the biggest flashpoints, Wolf, on the campaign trail the -- and in the election that allowed Republicans to sweep in in just two weeks, issues like health care and the stimulus bill. And those are the kinds of things that Republicans are going to come in in January and say that they're going to try to dismantle.

BLITZER: And those are going to be the first things on their agenda once the Republican majority in the House and the reduced Democratic majority in the Senate -- once we see all of that unfold in January?

BASH: Yes, it is. And specifically with the House, of course, the House is where Republicans will have control and a pretty big majority. They are going to start, at least in January -- on their agenda is going to be cutting spending by $100 billion. That is bringing the levels back to 2008, and, also, repealing the health care law.

Now, you know, Wolf, that the Republicans in the House may be able to pass that, but it's not going to get past the Senate because the numbers are still higher for Democrats.

So, but Republicans do say, Wolf, that they are going to -- even if they can't get that done, they are going to try to sort of chip away at it piece by piece, by trying to choke the funding that is going to be needed to implement that health care law. BLITZER: Listen to what the president said yesterday on his great disappointment that the Congress failed to pass the DREAM Act, which would have allowed young people who were brought here illegally, but who grew up in the United States to have a gateway to citizenship, serving in the military, going to university. Listen to -- listen to the president's frustration.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Maybe my biggest disappointment was this DREAM Act vote. You know, I get letters from kids all across the country who came here when they were five, came here when they were eight. The parents were undocumented. The kids didn't know. I hope people have seen, during this lame duck, I am persistent. I am persistent. I -- you know, if I believe in something strongly, I stay on it. And I believe strongly in this.

(END VIDEO CLIP)

BLITZER: Is the president going to be able to get this accomplished in the new Congress, which will have a Republican majority in the House and a smaller Democratic majority in the Senate?

BASH: You know, Wolf, I think the DREAM Act and "Don't Ask, Don't Tell," which obviously was successful, those are two examples of why Democrats pushed so hard to get things done in these last few weeks, because they had more numbers.

When you have Republicans who are going to run the House, more numbers in the Senate, it is going to be so much harder to do things like the DREAM Act and immigration more broadly. And, remember, when Republican President George W. Bush was in the White House, he had a Republican Congress and they couldn't even do it.

So that's why those sort of controversial issues are going to be very questionable going forward. Obviously, the big, big, big focus that Republicans said they are going to deal with when they come in is spending cuts -- slashing federal spending. Democrats say that they want to tackle it, too. The question that we're all going to be looking for is what are they going to cut and by how much -- Wolf.

BLITZER: All right. We'll watch it together with you, Dana.

Thanks very, very much.

Let's talk a little bit more about what lies ahead for President Obama and Vice President Biden in the new year and a new Republican- run House.

We're joined by our senior political analyst, David Gergen -- David, what must the president do now to keep the momentum of the lame duck session -- to keep it going?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: Well, for starters, Wolf, he could send you and Bill Richardson back to North Korea to make sure the world doesn't blow up there.

(LAUGHTER)

GERGEN: But beyond that, look, I think the most important thing for the president to do now is get off television and -- and -- and go below the radar screen, give the country a break. We've had two tumultuous years.

But then be quietly gearing up for a major campaign about America's future. And I say that because the president, after this lame duck session, is back on his feet, but the country is not back on its feet. This -- people are in a funk. And they worry not only about their jobs, but they're very worried about the country slipping. They're very worried about China coming up. You know, Joe Klein made that car trip across the country for "Time".

And what he found is that for every one person that raised Afghanistan or Iraq, 20 people wanted to talk about China.

I think what the country -- what the president has to do is rally the country to remain a great nation, a competitive nation, an innovative nation. He started talking about that before he made his international trip a few weeks ago. He talked about it in Greensboro.

I think to seize on that theme because I -- there's -- there's some sense in the country, especially among working white people, that he's -- that he's not strongly for America being a great nation. I think he has to convince us that we're all going to rally in that direction and try to bring Republicans with him to deal with the other -- all the issues, like deficits and education -- that will determine our future.

BLITZER: Like a lot of reporters here in Washington, David, I -- I've been intrigued by the -- the comeback, if you will, of Joe Biden, as perhaps the most key individual, after the president, in trying to get this agenda going forward.

Listen to what Biden said on "Meet the Press" on Sunday.

Listen to this.

(BEGIN VIDEO CLIP FROM "MEET THE PRESS," COURTESY NBC)

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: But I'm the guy that's gone up on the important issues to the House. And I'm the guy that goes, I'm vice president of the United States. They know when I speak, I speak for the president. So last year, everybody said God, you -- you know, if Rahm Emanuel were here, he would be the one going up to the House and the House Caucus. It's not true. It would have been me, whether he was here or not, just like it was last year. On three important occasions, I was the guy who went to the House to try to sell them, and in two cases sold them, on what to do.

(END VIDEO CLIP)

BLITZER: All right, look, I think he makes a fair point, the vice president. A lot of people try to sell him short, but he -- he's really been significant.

GERGEN: I -- I think, in the last few weeks, Wolf, he's come very much into his own and -- and a lot of the things he's done in the past, for which he didn't get recognition, are finally coming to light.

But these last few weeks have been pivotal for the vice president and the president. You know, the -- the tax cut deal, you know, was negotiated around his table hour after hour after hour in his house. And then he made numerous visits, on the Hill, to -- to bring reluctant Democrats along.

And on START, as we're learning, he helped to turn around people in the administration who thought it was -- all was over when Jon Kyl pulled out, the Republican pulled -- pulled the plug on it and everybody thought, we'll never get this done. He rallied inside the White House and then -- then he was a pivotal figure in trying -- in getting the Senate to come around.

So I -- I -- I do believe that, you know, when -- when people say that the president needs a heavy-hitter around him, I do believe he needs more heavy-hitters like Joe Biden around. But I think Joe Biden provides that.

People say he needs -- the president needs an adult in the White House, Joe Biden is an adult. He's irrepressible. And he could have somebody else, you know, toot his horn for him, I think. But the fact is, he's had a terrific fall. And I think the pres -- he's going to be an absolutely essential player, one of the most important vice presidents we've had, as a partner with the president, over the next two years.

BLITZER: He'd had a terrific autumn. I don't want you two say a terrific fall, because he's not falling.

GERGEN: Yes. Yes, I'm sorry.

BLITZER: He's had a terrific autumn right now.

GERGEN: Yes. Thank you.

I told that that's why you need to go be a diplomat in North Korea now -- Wolf.

(LAUGHTER)

BLITZER: And I think he underscores and what -- what became clear these past few weeks is why the president picked him as his running mate, at a time when a lot of people wanted him to pick someone else. But Biden has come through for the vice -- for the president right now.

Thanks very much, David, for that.

GERGEN: Take care, Wolf.

BLITZER: Merry Christmas. Happy New Year to the family.

GERGEN: Thank you.

The same...

BLITZER: I'll see you...

GERGEN: Have good holidays.

BLITZER: -- obviously, soon.

We're monitoring other important top stories here in THE SITUATION ROOM, including some warnings of a serious threat after package bombs exploded at two embassies in Italy. We're learning new details right now about the blast.

Plus, it might be one of the most famous purses around -- just ahead, we'll tell you what happened to that bag used in an attempt to nab a gunman.

(COMMERCIAL BREAK)

BLITZER: Two bombings in Italy today.

CNN's Samantha Hayes is here in THE SITUATION ROOM here monitoring that and some of the other top stories going on.

Pretty worrying, what's going on over there. What do we know?

SAMANTHA HAYES, CNN CORRESPONDENT: Very concerning, Wolf. Italy's foreign minister is warning of a serious threat in the wake of embassy bombings in Rome which left two people injured. One package bomb exploded at the Swiss embassy. A second blast later occurred at the Chilean embassy. Police say the bombs came from Greece. And all embassies in Rome are being inspected as a precaution. There has been no claim of responsibility for the attacks.

Meanwhile, in India, police have issued an alert saying four members of a terrorist group have entered the city of Mumbai and are believed to be plotting violence during the Christmas and New Year's holidays. An official tells CNN the suspected militants belong to the Pakistan-based group blamed for the violent siege on the city in 2008.

Authorities in Texas briefly detained a man who lost control of his car while driving past the Dallas home of former president, George W. Bush. A Secret Service spokesman says the man was on his way to visit friends at the time of the incident and was authorized to be on the street. Police say there was no perceived threat to the former president.

Performances of the troubled "Spider Man" Broadway musical are scheduled to resume tonight, just three days after an actor's shocking fall mid-show. Thirty-one-year-old Christopher Tierney plunged at least 20 feet during Monday's performance and was initially listed in serious condition at a New York hospital. An actor's union has determined that the fall was caused by human error. BLITZER: There's a lot controversy in New York on Broadway over that. We'll see how it all unfolds.

Thanks very much, Samantha, for that.

HAYES: You've got it.

BLITZER: Captured members of the Taliban are freed.

Are they reformed, though?

Will they return to their radical ways?

Our own Chris Lawrence was son the scene for their release. His eyewitness account, coming up.

Plus, we're going to take a look at the end of the Kennedy political dynasty in Congress and whether -- whether we can expect a comeback any time soon.

(COMMERCIAL BREAK)

BLITZER: A new milestone for the most famous political family in this country. As of right now, the Kennedy dynasty isn't what it used to be, at least not in Congress.

Samantha Hayes is back to tell us about that and who may follow in the Kennedys' footsteps.

What's going on here, Sam?

HAYES: You know, it's quite a moment in time. As the 111th Congress came to a close, it also marked the end of the reign of America's royal family of politics.

(BEGIN VIDEOTAPE)

HAYES (voice-over): Packed away among the many bins and boxes lined up outside the offices of departing members of Congress is the final chapter in a long-running Washington tradition -- a Kennedy in Congress. Come January, when lawmakers reconvene, for the first time in 64 years, you won't find a member of the Kennedy clan on Capitol Hill. The last one standing, Rhode Island Congressman Patrick Kennedy, son of the late Senator Ted Kennedy, who announced in February he won't seek reelection.

(BEGIN VIDEO CLIP FROM COMMERCIAL)

REP. PATRICK KENNEDY (D), RHODE ISLAND: Now, having spent two decades in politics, my life is taking a new direction. And I will not be a candidate for reelection this year.

(END VIDEO CLIP)

HAYES: The Kennedy era started back in 1947, when John F. Kennedy was elected to the House. JFK's two younger brothers followed in his footsteps; Robert Kennedy, as a New York senator; and from Massachusetts, the man who would become the lion of the Senate, Ted Kennedy, who died of brain cancer last year.

It was his father's death, according to close friends, that influenced Patrick Kennedy's decision to leave office.

KENNEDY: While a nation has lost a great senator, my brothers and sisters and I have lost a loving father.

HAYES: Patrick Kennedy's tenure in the House was largely defined by personal struggles, including bipolar disorder and an addiction to painkillers, which he admitted to after crashing his car into a barricade outside the Capitol Building in 2006. As for policy issues, he became a strong critic of the Afghan war, delivering an angry tirade in March to on the House floor.

KENNEDY: You want to know why with the American public is fit?

They're fit because they're not seeing their Congress do the work that they're sent to do.

HAYES: If the Kennedy dynasty is resurrected, some say a likely bet is Patrick Kennedy's stepmother, Victoria Kennedy.

(END VIDEOTAPE)

HAYES: Patrick and Ted Kennedy were also a unique father/son duo in Congress.

In January, there will be another one, but from the opposite side of the political aisle. Senator-elect Rand Paul of Kentucky joins his father, Congressman Ron Paul of Texas. There they are -- Wolf.

BLITZER: Thanks very much, Sam, for that.

And you're in THE SITUATION ROOM.

Happening now, President Obama's former chief of staff could be one step closer to becoming the next mayor of Chicago. Just ahead, the dramatic legal hurdle that almost booted Rahm Emanuel from the race.

Also, new concerns about the intelligence operations of the United States.

Just as holiday travel reaches its peak, could your security be at risk?

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

Heading into the new year, Americans are looking forward to the beginning of the end of the U.S. war in Afghanistan. The future of the region, though, still very much uncertain, as the Taliban continue to try to exert influence in Afghanistan and neighboring Pakistan.

Our Pentagon correspondent, Chris Lawrence, is reporting from the region. He witnessed the release of Taliban members captured by the Pakistani military.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT (voice-over): Rashid Ali used to take orders only from the Taliban, but tells me those days are over.

RASHID ALI, FORMER TALIBAN MEMBER: (INAUDIBLE) are terrorists. Only my friend is (INAUDIBLE) Taliban. Therefore, I come here.

LAWRENCE: Ali was 16 when a classmate introduced him to the Taliban. At the time, they controlled this area of Swat Valley. Now, Ali is 18 and regrets he gave them food, supplies and information.

ALI: (INAUDIBLE) I did not like it.

LAWRENCE: He is one of 46 graduates of the De-radicalization and Emancipation Program. The Pakistani military captured them over the past year and is now setting them free.

(on camera): When these men walk out of this program, what's to guarantee they don't go back to the Taliban?

UNIDENTIFIED MALE: We screen every individual by a psychiatrist, a psychologist, and an intelligence expert, so they categorize these people.

LAWRENCE (voice-over): The hard-core killers were jailed and sent to court for punishment.

UNIDENTIFIED MALE: Then there are sort of foot soldiers who are working under pressure, who are sort of facilitators. This is that lot, who are the facilitators who are not -- none of them is involved in any killing.

LAWRENCE: Some sheltered the Taliban, gave them weapons or intelligence.

(on camera): When we asked these men how they came to be involved in the Taliban, most of them said it had something to do with a family member, a close friend, a brother, a cousin that initially got them involved in the group.

(voice-over): So the program loops their families into the rehabilitation. Imams reteach a more moderate form of Islam, and trainers teach them how to be electricians, welders, carpenters.

Ali is excited about his new life.

ALI: I want to become a doctor.

LAWRENCE: But even he admits this program would only work for about half the Taliban he knows.

ALI: Fifty to sixty percent.

LAWRENCE (on camera): Could be changed?

ALI: Yes, could change.

LAWRENCE: But the other 50 will never change?

ALI: Could be possible.

LAWRENCE (voice-over): But not likely. Just look at the program's success rate. Ali is one of 46 graduates out of nearly 100 who started here.

(on camera): That's why the Pakistani military is going to trust, but verify. Each of these men comes from a village, and the village elders there had to sign off on them before they were let go. Those village elders will be responsible for what happens to them from here on out.

Also, the men have to report to a military station about once every 15 days. As they prove their conduct, that will stretch to once a month, once every six months, once a year, and so on.

Chris Lawrence, CNN, Islamabad.

(END VIDEOTAPE)

BLITZER: It looks as though WikiLeaks may have another outlet to expose America's diplomatic secrets. Stand by for more of one of our top stories.

And it's the season to pay big at the pump. We'll take a closer look at gas prices soaring to an all-time high at this Christmastime.

(COMMERCIAL BREAK)

BLITZER: A new publication gets access to those controversial WikiLeaks documents.

Sam Hayes is back. She's monitoring that and some other stories in THE SITUATION ROOM.

Samantha, what's going on?

SAMANTHA HAYES, CNN CORRESPONDENT: Well, this time, it's one of Norway's largest daily newspapers. It says it has obtained hundreds of thousands of the leaked diplomatic cables.

The paper's managing editor wouldn't say how it got the material or whether there had been contact with WikiLeaks. The whistle-blowing Web site began releasing a cache of more than 250,000 diplomatic cables from around the world in November.

The free Internet voice and video calling service Skype is working to get back to normal following a major outage. The disruption began yesterday, and technical problems are keeping people from logging on to the service. The company says it is seeing an estimated increase of 10 million people online. Customers are being directed to the address at Skype on Twitter for updates.

The famous purse used in that attempt to slug a gunman holding Florida school board members hostage has sold on eBay for a whopping $13,100. During last week's incident, Ginger Sullivan snuck into the room where the suspect was and then took the failed swing. Proceeds from the sale will go to a children's charity started by the security officer who police say eventually shot the suspect.

That was quite a scene, when she did that, because --

BLITZER: Yes. It took guts.

HAYES: -- she is a petite woman, and she came and really tried to knock that gun out of his hand.

BLITZER: It took guts for her to do that.

HAYES: Yes.

BLITZER: Good for her. Thank you very much.

President Obama admits his feelings about gay marriage are "constantly evolving." But will he win in 2012 if he ends up fully supporting it? Stand by.

And new hints that GOP heavyweight Mitt Romney might be considering a presidential run of his own. The details are in his holiday card.

(COMMERCIAL BREAK)

BLITZER: Let's get to our "Strategy Session."

Joining us, Democratic strategist Maria Cardona. She's a principal at the Dewey Square Group here in Washington. Also joining us, our CNN political contributor, the Republican strategist Ed Rollins.

Guys, thanks very much for coming in.

ED ROLLINS, CNN POLITICAL CONTRIBUTOR: Thank you.

MARIA CARDONA, DEMOCRATIC STRATEGIST: Thank you, Wolf.

BLITZER: I want to play this little clip just hours after the "Don't Ask, Don't Tell" repeal was approved by Congress, signed into law by the president. He had this exchange, the president, with ABC's Jake Tapper. Listen to this.

(BEGIN VIDEO CLIP)

JAKE TAPPER, ABC: Is it intellectually consistent to say that gay and lesbians should be able to fight and die for this country, but they should not be able to marry the people they love?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My feelings about this are constantly evolving. I struggle with this.

I have friends, I have people who work for me who are in powerful, strong, long-lasting gay or lesbian unions. And they are extraordinary people.

And this is something that means a lot to them and they care deeply about. At this point, what I've said is that my baseline is a strong civil union that provides them the protections and the legal rights that married couples have.

(END VIDEO CLIP)

BLITZER: All right.

Maria, if his position on gay marriage continues to evolve between now and 2012, and he comes out and says, you know what, I believe gay Americans should have the right to get married, how will that play in his re-election bid?

MARIA CARDONA, DEMOCRATIC STRATEGIST: Well, that's a great question. And I think if he does decide to that, I think that he will be able to communicate to the American people why he arrived there.

But importantly, Wolf, I don't think he needs to finish that evolution, and then up there before 2012, especially after the monumental repeal of "Don't Ask, Don't Tell." He enjoys incredibly strong standing among the gay and lesbian community, and they understand that they have no better ally in the White House than this president, and what he has done to fight for the repeal of "Don't Ask, Don't Tell."

And in addition to that, his stance where things are right now in terms of his beliefs, that he believes in strong civil unions that give the real legal protections that all married couples have, that, at the end of the day, is what most gay and lesbian couples want. And that is the bottom line for them.

BLITZER: How would it play, Ed, if he does evolve and come out flatly in favor of gay marriage?

ED ROLLINS, REPUBLICAN STRATEGIST: Well, first of all, marriages have always been about state issues. You don't go to the federal government and get a marriage license, you go to a state entity, or city, or what have you.

I think if he crosses that baseline -- and I agree with what Maria said -- I think he will basically energize an opposite base from the gay and lesbian community. I think the Christian right, other entities that have been in the battlefield many times when they've tried to change these at the state level, I think it will work to his detriment. And I think to a certain extent, it will -- I speak as a conservative and a Republican -- it will energize our political base like it has never been energized before. BLITZER: I want show you this, switching gears to Mitt Romney and the race for the White House in 2012, the Republican nomination. Take a look at Mitt Romney's holiday card that he sent out.

It shows him, his 14 grandchildren, an inscription at the bottom that says, "Guess which grandchild heard that pop-pop (ph) might run again?"

Very cute.

Ed, you worked for Mike Huckabee during the last presidential campaign, against Mitt Romney, but he's making it pretty clear he is serious about this once again.

ROLLINS: Oh, I think he's been serious. I don't think he ever stopped.

I would assume it's all 12 of those gorgeous grandchildren that he has. It's a great-looking family.

The more fundamental question is, what's the backdrop? He has got five, six houses now. Is that California, is that New Hampshire, is that Iowa? Where is he living these days? And I think that will have a lot to do with where he runs.

I expect him to be in the mix. He'll probably be the first one with out of the box. He will be a very credible candidate, and Mike Huckabee or anybody else has to go out and beat him, and beat him again, as they did last time.

BLITZER: At this very, very early point, Maria, as Democrat, who scares you the most?

CARDONA: Well, it's interesting, because right now, in most of the polls, especially after this overwhelmingly historic lame-duck session, I think that Obama is the one that scares most of all of the GOP contenders more than they have --

BLITZER: But which Republican scares you the most?

CARDONA: I don't think that really one stands out, Wolf. And I think it's because right now, they are all flawed candidates against President Obama.

You can point to any one of them, and whether it's Mitt Romney, who has problems with the conservative base, has problems with flip- flopping, has problems with having the one to have approved and pushed for Romneycare in Massachusetts, and the conservative base does not like that, or Sarah Palin, who clearly doesn't have the heft intellectually, many people believe, even among the GOP base, to be president, all of them have specific flaws. Really, there's not one that stands out to me, Wolf, in saying, oh, my goodness, that is the one I would not want President Obama to run against right now.

BLITZER: Any of them stand out for you as the strongest right now? And don't say Mike Huckabee because you worked for him. ROLLINS: No. I won't. He's a Fox commentator, doing very well.

You know, my sense is three weeks does not make a presidency. I can't tell you who is going to emerge.

We have got some very strong governors that are going to be running, and I think, to a certain extent, one of them with lots more experience than anybody who had last time will be the challenger. You can't tell what is going to happen in a year or two years. A year from now, we will basically be on that verge of the Iowa and New Hampshire primaries, and we'll have a much better idea who is emerging.

But I promise you this thing -- President Obama will have a real battle on his hand.

BLITZER: All right. I'm going to leave you guys with this little clip from Conan O'Brien on our sister network, TBS. He took this little shot at Sarah Palin, who maybe running for president next year as well.

Watch this.

(BEGIN VIDEO CLIP)

CONAN O'BRIEN, TALK SHOW HOST: You know, Rudolph the Red-Nosed Reindeer was just on TV. And did you know this? They updated it to make the Rudolph story a little more contemporary. And I don't know if they should have, but take a look.

CLARICE, REINDEER: Something wrong with your nose?

My name is Clarice. Hi. I think you're cute.

SARAH PALIN (R), FORMER ALASKA GOVERNOR: It's a great feeling of accomplishment.

(END VIDEO CLIP)

BLITZER: Wow. I'm not going to make you guys comment on that.

ROLLINS: Thank you.

CARDONA: Oh, what? Come on.

BLITZER: We'll leave it alone. You guys can think about it though.

Thanks very much, Ed and Maria.

CARDONA: Thank you, Wolf.

BLITZER: Appreciate it.

Stand by for more of my photos from North Korea. We're going to talk about the scary moments, the personal moments I had from my extraordinary visit there with Governor Bill Richardson.

Plus, the White House spokesman Robert Gibbs' dream job. We're going to tell you what it is. It's not necessarily the one he has right now.

(COMMERCIAL BREAK)

BLITZER: I've been back from my six-day visit to North Korea for a few days now, but I'm still digesting everything I saw and heard and felt during that remarkable trip.

Brian Todd here to help us go through some more of the photographs from my journey there.

Let's show our viewers some of these pictures.

BRIAN TODD, CNN CORRESPONDENT: Wolf, we're loving these pictures from you. This is our only window, for millions of us, the only window into North Korea.

Let me ask you first, was there ever any moment, as we look at this picture of Bill Richardson meeting with the North Koreans, ever any moment when you were genuinely fearful because of the situation on the peninsula, your own personal situation? Any time when you were really scared?

BLITZER: I really got scared at one point when I was watching Korean TV and they went from some opera to some martial music. And I said, "Uh-oh, they're going to martial music. That may be designed to get the country ready for war."

And I was really nervous. Fortunately, about an hour later, they went back to the opera, so I calmed down. But that was a point when the South Koreans had their exercises, the North Koreans were threatening to retaliate. Then I got worried.

TODD: And then, did they ever explain that?

BLITZER: No.

TODD: No. OK.

Well, this is one of our favorite pictures, you with a little North Korean boy. Your impressions of the children were very telling.

BLITZER: The kids were amazing. All the North Korean kids, they were walking around, and I took some pictures with them. And they sort of underscored the issue here.

These children in North and South Korea, they would be so vulnerable, God forbid, if there were another war. It just ripped me apart at times when I saw the kids wondering what would happen.

TODD: What did you observe about the behavior of the North Korean children? Were they regimented? BLITZER: No, they seemed like normal kids. They were walking down the streets of Pyongyang. There is no crime there, so they were walking around, holding hands with each other. It seemed relatively normal.

TODD: Here is the North Korean -- I assume the politburo. Maybe not enough free-flowing debate in this room?

BLITZER: This was actually at the University -- a lecture at Kim Il-sung University. And they let us come in, and they're listening to -- that's the professor up at the top.

TODD: OK.

BLITZER: And you see the photos that are always there, virtually in every single room that I went.

TODD: But, again, on the dialogue, are they allowed to kind of interject and have that free-flowing dialogue, or is just lecture and take notes?

BLITZER: This was a lecture. This was a lecture. They were taking notes. The professor was speaking.

TODD: OK.

This is fascinating, that you are at this shrine to Kim Il-sung, the founder of North Korea. What was it like there? Was it surreal?

BLITZER: I'm here with the Richardson delegation, basically, and it reminded me of the Lincoln Memorial here in Washington. We sort of -- this is not outside, this is inside a huge government building. But you walk in and you see this major statue up there. And it just reminded me of the Lincoln Memorial in Washington.

TODD: It looks like it may have been modeled after it to some degree.

BLITZER: Yes.

TODD: All right. Traffic on the streets of Pyongyang, I guess it's not like Rome. There's not a lot of weaving in and out.

BLITZER: They had these traffic cops, and almost all of them were women with these lovely fur collars, on almost every corner in Pyongyang. There's not a lot of traffic lights because electricity is a big deal.

TODD: Right. Of course.

BLITZER: So they've got a lot of these traffic cops. And it was very nice to see all these young policewomen out there.

TODD: You don't dare cross them at any point.

Women in uniform here. What -- (CROSSTALK)

BLITZER: They were marching all over the place, and they have a million-person military in North Korea facing a South Korean military almost as big, so they are very evident and they're very present.

TODD: OK.

A top-level dinner involving Governor Richardson and the North Koreans?

BLITZER: This was a banquet that they had. This is Kim Gye Gwan, the chief nuclear negotiator for North Korea. They were drinking a lot of beer, having a good time.

TODD: How's the food?

BLITZER: The food was delicious. It was good Korean food. I was at this dinner and actually sat right across from him, next to Governor Richardson. We had a good conversation.

TODD: Now, at these events, when you are kind of after the meetings and relaxing, do they kind of let loose at all?

BLITZER: Yes, they do. It's much less formal than those formal meetings around the big conference table. Everyone had a good time.

TODD: I imagine they still have to watch what they do.

But oh, my goodness, a karaoke bar in Pyongyang.

BLITZER: This was great. That last night, we were stuck in North Korea because heavy fog prevented us from leaving. And we went back to the hotel, and they had great karaoke, a karaoke bar there.

And they were doing some karaoke. We did some karaoke as well. We're not necessarily going to show me up there, but it was a lot of fun.

TODD: Freedom of expression.

Interesting, a Christmas decoration here.

BLITZER: This was the hotel lobby where I stayed, and they had a Christmas tree in there, which I thought was interesting. They allowed us to see that as well.

TODD: OK. Well, these are excellent photos.

We've got one last one, kind of this two-shot. Again, the children with the old people. This might have been a grandmother.

BLITZER: We're going to show more about the trip outside Pyongyang in the next hour. We went to this farm, and this woman was there. She spoke to us. Both generations, the older generation, the very young generation. We'll see a different sliver, a different slice of life in North Korea in the next hour.

Brian, thanks very, very much.

TODD: Looking forward to it.

BLITZER: New concerns, meanwhile, about U.S. intelligence operations just as holiday travel reaches its peak. Could your security be at risk?

Plus, gas prices reach a new two-year high, but will they go higher?

(COMMERCIAL BREAK)

BLITZER: Traveling home for the holidays this year could end up costing all of us a whole lot more. Gas prices in the United States have never topped $3 per gallon on a Christmas Eve or a Christmas Day. That is likely to change right now.

So, what if -- what if the price of gas just continues going up?

Let's turn to CNN's Martin Savidge. He's working to story for us.

It's a good "what if" Marty. What's going on?

MARTIN SAVIDGE, CNN CORRESPONDENT: Well, you're right. It's one of those questions, do you want the bad news or the good news first? Let me start with the bad news.

And that is, if you think that the gas prices are high now, well, wait until spring, because this is traditionally the low season for gas prices. The good news is investors say higher gas prices is actually an indication that finally, the economy is really turning around.

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP, "THE GRINCH WHO STOLE CHRISTMAS")

UNIDENTIFIED MALE (singing): You're a mean one, Mr. Grinch

(END VIDEO CLIP, "THE GRINCH WHO STOLE CHRISTMAS")

SAVIDGE (voice-over): If you're traveling this holiday season, you have likely noticed there is a new grinch in town -- the gas pump.

UNIDENTIFIED MALE: Painful this time of year. All the other demands people have on them --

SAVIDGE: For the first time in more than two years, AAA says the national average for a gallon of regular unleaded gasoline has risen above $3.

UNIDENTIFIED MALE: I was just up in San Francisco, and I spent more money on gas than I spent on food or lodging. SAVIDGE: From California to New York, drivers might get a bit misty-eyed recalling Christmases past, like 2008, when gas was just $1.62 a gallon.

UNIDENTIFIED MALE: I drive for a living, and these gas prices just keep going up, up, and up. Not a good thing.

SAVIDGE: Pump prices are up four percent in just the last 30 days, and up 16 percent from when you filled your sleigh last December.

Why?

UNIDENTIFIED MALE: It's Christmastime. Everybody's traveling. Why not raise it up?

SAVIDGE: A popular theory, but not the reason, according to experts. Gas prices are simply mirroring the rise in crude oil, which passed $90 a barrel Wednesday.

So why are oil prices up?

TROY GREEN, AAA: It's because of investor optimism. Investors are feeling pretty good about the domestic and the international economies. And as a result, they are pouring more money into oil, betting that people are going to be using more oil down the line.

SAVIDGE: But the higher pump prices aren't keeping people home for the holidays.

(on camera): The American Automobile Association says I'm sharing with road with 85.7 million people who are traveling by car this holiday. That's up 3.2 percent from last year.

UNIDENTIFIED FEMALE: I'll grin and bear it and worry about it later.

SAVIDGE (voice-over): And if you're stuck on a last-minute gift for someone this year, here is an idea --

UNIDENTIFIED MALE: Buy stock in the oil companies.

(END VIDEOTAPE)

SAVIDGE: That would be a wise choice, investors say.

By the way, if you're wondering who is paying the most for gas, well, it's the usual suspects, the people in Hawaii and the people in Alaska. Who's got the cheapest prices at the pump? It turns out, at least for today, Denver, Colorado, coming in at $2.71 a gallon for regular unleaded -- Wolf.

BLITZER: All right, Marty. Thank you.

And you're in THE SITUATION ROOM. Happening now, a major slip and now major concern about U.S. anti-terror intelligence as millions of people are traveling for the holidays --