Return to Transcripts main page


AirAsia Search to Resume Despite Weather; U.S. Search Teams Detect Possible Wreckage; Pentagon: ISIS Threat Remains, Momentum Halted; North Korea Closer to Nuke That Could Hit U.S.; Hideout of North Korea's Elite Cyber Attack Unit

Aired January 6, 2015 - 17:00   ET


WOLF BLITZER, CNN HOST: Happening now, search setbacks -- bad weather slows the effort to recover wreckage and bodies from AirAsia Flight 8501. But the teams make some new finds and are now ready to head out again.

Underwater danger -- zero visibility, powerful currents and razor sharp metal -- divers face extraordinary risks if they can get into the water at all.

ISIS stalled?

The terror group claims more success in a brand new video. And the Pentagon, though, gives a very different assessment of the situation on the ground.

And a CNN exclusive -- a visit to what may be the hideout of North Korea's elite cyber attack unit.

I'm Wolf Blitzer.


With a new day about to dawn in the Java Sea, the search is about to resume for the wreckage of AirAsia Flight 8501. Bad weather continues to hinder the search effort, although two more bodies have been recovered and sonar has located more objects which may -- repeat may be part of the airliner.

This is exclusive new video aboard the USS Sampson, one of the American warships taking part in the search right off the Indonesian coast. Even as the weather slows the recovery operation, there are new questions about the dangerous conditions that Flight 8501 encountered and whether the pilots were properly briefed.

Our correspondents, analysts and guests, they're standing by with full coverage.

But first, let's take a look at the latest developments.


BLITZER (voice-over): Search teams aboard the USS Fort Worth have detected two metal objects underwater and are now working to confirm if they're part of the plane. But dangerous weather conditions -- monsoon rains, muddy water and poor visibility -- are making the urgent search in the Java Sea extremely difficult.

Divers weren't deployed Tuesday because the underwater current is still strong and visibility remains limited. Almost 100 divers are in the search zone and 15 more are on standby to enter the water as weather permits. Twenty helicopters and more than 40 ships remain focused on the area where it's believed the commercial jet is located. Three seats from the flight were recovered on Tuesday. A flight safety card and emergency equipment were also found.

But the search continues for the downed plane's wreckage and the black boxes containing the flight date and voice recorders.

Indonesian officials believe icing may have contributed to the crash, but they won't have answers until the black boxes are recovered. Time is running out before the pinging noise from those boxes fade away.

So far, no pings have been detected. There has been progress finding bodies. Two more were found in the Java Sea, bringing the total to 39. The remains were airlifted and will be taken to Surabaya, where the difficult identification process will begin.

DR. ANTON CASTILANI, INDONESIA DISASTER VICTIMS IDENTIFICATION UNIT: Lately, you'll find the bodies more decomposed and after the next few days, you'll find maybe not an intact body.

BLITZER: Indonesia, which is leading the international search effort, is getting help from countries, including Malaysia, Singapore and the United States.

CNN was granted exclusive access aboard the USS Sampson, where those on board are working around the clock to try to find anything connected to the missing planes.

CMDR. STEVEN FOLEY, USS SAMPSON: Well, we've recovered a lot of debris and bodies. And quite tragic as it sounds, it just brings closure to the families.


BLITZER: All right, let's go behind the scenes to the AirAsia search headquarters right now.

CNN's Kyung Lah is joining us live from Jakarta.

What are you seeing, what are you hearing over there -- Kyung?

KYUNG LAH, CNN CORRESPONDENT: Well, Wolf, while the search, that difficult search, may be happening at sea, all the shots are being called here at a headquarters in Jakarta. We got our very first look at that headquarters with the man behind the operation.

(BEGIN VIDEOTAPE) LAH (voice-over): The nerve center and the intense search for AirAsia 8501, 18 aircraft, 38 ships in the Java Sea, in real time reporting into the command control center.


LAH: Moments after we walk in...

(on camera): What's happening?



LAH: The plane just spotted two bodies?



LAH (voice-over): Two more bodies, says Bambang Soelistyo. But he won't know for sure until a ship reaches the coordinates and picks them up.

Soelistyo is the head of Indonesia's search and rescue, the public face in the recovery, the man calling the shots, a lifelong military officer trained for restraint and completing the mission.

(on camera): You want to find these bodies for the families.

SOELISTYO: (INAUDIBLE) possible, yes?

As much as possible.

LAH (voice-over): What's possible becoming more challenging, as the search stretches into double digit days. Indonesia expanded the search zone further east. Officials at the command control center believe many passengers will likely be found on the sea floor still inside the plane. One clue for that theory, search teams already found three passengers, all from one row, still strapped to their seat belts. But others are drifting, a personal nightmare for the man charged with bringing them home.

(on camera): You're sleeping here?


LAH: You're eating here?


LAH: You have -- you have not left here.


SOELISTYO: Yes, because of the situation and the responsibility in the situation. Everything, I'm an officer and I'm a pilot.

LAH (voice-over): But the ship radios back. It has the bodies.

(on camera): Do you think you will find all the bodies?

SOELISTYO: Yes, I'm not sure, but I try.

LAH (voice-over): Two more returning, more than 100 still lost at sea.


LAH: Now, the headquarters says that the goals remain the same. The very first to find the bodies. The second, the more pressing one, to give us all the answers, is to find the black boxes for the investigators. Both, Wolf, becoming more challenging with these weather conditions -- Wolf.

BLITZER: It certainly is.

Kyung Lah in Jakarta for us.

Thank you.

Let's bring in CNN's Paula Hancocks.

She's right there on the Indonesian coast. She's watching what's going on.

What are you picking up over there -- Paula?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, Wolf, it's certainly interesting, some new information coming out that meteorological officials here in Indonesia say that the air official -- AirAsia officials didn't actually pick up the meteorological report ahead of the flight. They didn't pick them up in person ahead of Flight 8501.

Now, this doesn't actually violate any policies at this point. But it does mean, according to meteorologists, that they missed the opportunity to talk to them face-to-face, so they could potentially tell them about any dangers that may be ahead in the atmosphere and the weather for that flight.

Now, it doesn't appear as though AirAsia has changed its policy since the accident. In the logbook, it appears they still haven't actually gone in person to pick up that information.

But AirAsia officials say that it actually is more useful for them and easier for them to look at the electronic version of this weather report. So this is information coming into us, very interesting. And, of course, something else that will be looked at very closely by investigators to see if weather had any bearing on this flight crashing at all. Of course, we know that the pilot did ask to ascend to a higher altitude and certainly icing has been discussed so this is being looked at very closely -- Wolf. BLITZER: Is there a possibility that if they had actually seen the meteorological report reporting very, very extreme weather, that that flight could have been canceled?

What are they saying about that?

HANCOCKS: Well, this is what investigators are looking at, whether or not this flight would even have gone ahead. But there's no suggestion at this point that the weather report would have changed that in any way. It's not policy. It's not breaking any -- or violating any rules not to go in person to go and pick up this report. But, of course, when you're sitting next to a meteorologist, when you have a face-to-face discussion, then these things can be discussed in more detail. There can be questions and answers. This is what the meteorologists are saying. And certainly that's what investigators are going to be looking at -- Wolf.

BLITZER: Paula Hancocks on the scene for us.

We'll check back with you.

Thank you very much.

Let's assess what's going on right now.

Joining us, our aviation analyst, Miles O'Brien; our aviation analyst, the former NTSB managing director, Peter Goelz; and our law enforcement analyst, Tom Fuentes, a former FBI assistant director.

At a minimum, if the weather is really bad, a pilot can always delay take-off, right?

MILES O'BRIEN, CNN AVIATION ANALYST: It's always the pilot's discretion. That's an important thing to remember here. Even if you had this face-to-face meeting with the meteorologist, he doesn't make the decision on whether or not go. The captain does. And there was nothing in those reports -- I saw the reports they saw. There was nothing in those reports that would say don't go. There was a weather challenge ahead of them some 40 minutes of flight later, 300 miles away. But if every airline captain saw that and stayed on the ground, we would not get anywhere in the world.

BLITZER: The metal objects that they're finding, they seem to be getting a setback now with each -- more than a week.

Is the search getting more complicated, more questionable right now -- Peter?

What do you think?

PETER GOELZ, FORMER MANAGING DIRECTOR, NATIONAL TRANSPORTATION SAFETY BOARD: I don't get the sense that it's more questionable. I just think they're running into a very tough stretch of weather.

BLITZER: Because there have been...


BLITZER: -- so many false leads. We thought there was the tail, we thought there was major wreckage. It turned out to be junk...


BLITZER: -- from other ships or planes that went down in that same area. There seems to be all these false leads going on.

GOELZ: Well, it's tough. I mean there's a lot of stuff on the bottom of the ocean. And they are not able to get a good view of it. The ROVs, it's too strong a current to put them down. And that's really what you want down there, is a good size remote vehicle with high powered lamps that can cruise 24/7 looking for this wreckage. And they just haven't been able to do it yet.

BLITZER: You've been involved in these kinds of international investigations.


BLITZER: Is there a level of frustration that begins to seep in at a point like this, or are they motivated to just move and move and move, because it seems to be very frustrating?

FUENTES: Both. Both. They're frustrated, Wolf, and they're motivated. And I think the more frustration that comes up, the more motivation to keep at it and keep working hard to resolve the issue. It becomes even, you know, more of an obsession to solve this riddle.

BLITZER: Richard Quest is joining us, as well, our international business correspondent and expert on all things aviation -- Richard, this frustration level, I get a sense that people are frustrated because there have been these false alarms, if you will -- they thought they had the tail, that could have been the black boxes in the tail. That was 24 hours ago. It seemed to be so promising, but not so fast.

What's your sense of what's going on now?

RICHARD QUEST, CNN CORRESPONDENT: Oh, I think they're doing their business in a very methodical, a very orderly way. And as Peter says, quite rightly, the weather is against them. They know what they are fighting against here. They know how difficult it is. These are thoroughly professional people and they know how they've got to go about their business.

So, yes, I'm sure they're very frustrated because, Wolf, they know the plane is there. You don't get this much wreckage and this many bodies, God forbid, where -- without knowing you're in the right area.

So you've got the haystack. It's probably relatively not that big, at least not compared to 370s. And now you're just methodically going through it. They know what they're doing here, it's just going to take time. BLITZER: But the fact, Peter, that they still have not heard one little ping come from one of these flight recorders or cockpit voice recorders, they're listening very carefully. They've got the best sonar equipment down there. The U.S. has two ships on the scene with really high tech devices. They haven't heard a ping.

What does that say to you?

GOELZ: Well, it's disappointing. It's not surprising. It's not uncommon for the pinger to be broken off, for the black box itself -- it weighs 30 pounds -- to be embedded into the -- into a soft ocean bottom and the pinger to be covered with silt. Oftentimes, the pingers don't work. And that's something the aviation community needs to think about.

How do you strengthen the pinger?

How do you -- how do you strength batteries so that you can pick it up at a greater distance?

BLITZER: It's hard to believe, in this day and age -- we've talked -- spoken about this, Miles, that, you know, a little cell phone, they can always detect wherever you are. But on aircraft equipment like this, they can't detect where these -- they may never find these black boxes.

O'BRIEN: They may never. And there are ways to solve it. You could have deployable flight data recorders which can float. The military uses them all the time. Or some capability of real time streaming. When there's trouble on a plane, send some data up to the cloud. There's been tremendous resistance on this in the airline community. There's concern, frankly, that comes to the bottom line. Regulators have to step in here and say this is mandatory.

BLITZER: And that's that.

And you like get the sense that the international cooperation, all the countries who are involved in this search right now, Tom, whether in -- obviously, Indonesia, but the United States. We know Australia's involved. All these countries are working together.

Or is there a little competition going on?

Is there full cooperation?

FUENTES: No, I think there is full cooperation. But to go back to Miles' point about the -- you know, the auto industry had the same protest when people were saying you need to put seat belts in or you need to put airbags in. Oh, we can't, it's expensive. No one will pay the extra $30 for a car if we install these devices.

How many tens of thousands of lives have been saved as a result of putting in seat belts?

And this is kind of the same analogy to the aviation, that they don't want to do it, but if they do it, we're not going to go through this every couple of months.

BLITZER: Richard, you know, the frustration is the technology is there, but for some reason -- and you've studied this in depth over the years -- they've decided not to go with the best technology. And even though so many lives are -- 162 people were on that plane. There are about 3,300 of these Airbus aircraft -- commercial aircraft flying around right now. We have no idea why this plane went down. It seems so frustrating that they're not using the best technology.

QUEST: It's not only frustrating, it's ridiculous. It's a little bit offensive. And I spend an enormous amount of time talking to the top executives at the world's airlines. And they know what they have to do here. But they don't want to be mandated to do it, because they fear that this opens up, if you like, a chain of events. Suddenly it's this, then the next thing.

QUEST: ... the top executives at the world's airlines. They know what they have to do here. But they don't want to be mandated to do it. Because they fear that this opens up, if you like, a chain of events. Suddenly it's this, then the next thing.

And not all airlines are the same. Not every airline needs the same level of technology because of the routes they fly. But the reality is AirAsia 8501 is proving that this process is not moving fast enough. The answers are on the table, Wolf. And really, it now needs, within the industry, leadership for somebody to say, do it.

BLITZER: Just explain to our viewers who aren't familiar with ICAO and IATA, explain exactly what that means, these international aviation organizations.

QUEST: I beg your pardon, yes. ICAO is the U.N. body that sets all the regulation globally, the global regulator. It's pretty toothless. It works by consensus. And frankly, if we wait for them to do anything about it, we'll have all have retired.

IATA is much more efficient. It's the industry body of the airlines, and when the airlines perceive that something needs to be done, IATA gets its act together.

BLITZER: The working assumption, Miles, is weather was the cause of this crash, right?

O'BRIEN: Yes, I mean, we won't know for sure until we get these boxes, unfortunately. But that big blob of thunderstorm that you're seeing right there on the screen is exactly where that flight was headed on that day. We know that the pilot, the captain requested a diversion, requested...

BLITZER: He was flying at 36,000 feet, and he wanted to go up to 38,000 feet.

O'BRIEN: Correct.

BLITZER: And he never got a response?

O'BRIEN: He was able to make the turn, but he never got a response on the altitude change. So we don't know exactly what was going on there, but it might very well have been an embedded thunderstorm scenario. Giant storm enshrouded by other clouds. He wanted to get free of the clouds, so he could see the big storm to avoid it.

BLITZER: How high can a plane like that, that Airbus, fly?

O'BRIEN: Right around 40,000 feet.

BLITZER: So it was getting pretty close -- what happens if it flies at 40,000? What happens to that plane?

O'BRIEN: Well, you can squeak it out a little higher. But every foot of altitude you gain, you lose performance on both ends. You can easily go too slow and easily go too fast. And it's only a few knots, a few miles per hour between both speeds. It gets very difficult to control.

BLITZER: All right, guys. We're going to have more on this story coming up. So stand by, all of you.

Up next, they face strong currents, zero visibility, dangerously sharp wreckage, if they can even get into the water. We're taking a closer look at the risks confronting the dive teams. American divers, they are on the scene.

Plus, a CNN exclusive: a visit to what may be the hideout of North Korea's elite cyberattack unit. Stay with us.


BLITZER: To our top story, despite bad weather, the search is about to resume for wreckage and bodies from AirAsia Flight 8501. While the operation has managed to go ahead in the air and on the surface, the search conditions are extremely risky for divers, if they can manage to get into the water at all.

Brian Todd is looking into this part of the story for us. What are you seeing, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, tonight these divers are desperate to get in the water, frustrated that they can't. But according to a veteran Navy diver who we spoke with, who's worked these operations before, once they get in, virtually every moment under water is fraught with danger.


TODD (voice-over): Search-and-rescue divers aboard a ship in the Java Sea wait restlessly on deck, eager to get to the wreckage below but hamstrung by the weather.

FRANSISKUS BAMBANG SOELISTYO, INDONESIAN SEARCH AND RESCUE AGENCY (through translator): The current under water is so strong, at two to four knots, so we can't use ROVs or search with divers.

TODD: How dangerous are those waters for rescue divers?

CAPT. BOBBIE SCHOLEY (RET.), FORMER NAVY DIVER: In those sorts of currents, two to four knots, they're expending all of their energy and all of their concentration just trying to maneuver in those sorts of currents, let alone trying to search for the wreckage in zero visibility. It's almost impossible.

TODD: Bobbie Scholey is a former U.S. diver who pulled wreckage and victims from TWA Flight 800 and from the USS Cole. She says divers can't waste a second at the bottom, because they only have about 30 minutes, max, at this depth before they get seizures or decompression sickness. Some of the other dangers divers face when moving through wreckage are frightening. A diver's air hose is especially vulnerable.

SCHOLEY: You are working in an aircraft wreckage that is just full of twisted, razor-sharp metal. And then it is entwined in miles and miles and miles of all this electrical cable that you could get caught up in, tangled in and then you would be -- you would be trapped.

TODD: Then divers need to use knives like these to free themselves or their partner putting their own life at risk has to get them out. In the Java Sea, where visibility is extremely limited, Scholey says part of the AirAsia wreckage is likely buried in mud that divers will have to vacuum up using specialized tools. Divers can bump into wreckage or a body before they see it. The work is treacherous and traumatic.

SCHOLEY: They start to decompose and they -- you know, then we had to worry about sea life, as well, getting to them.

But you put that horror, that personal horror aside while you're doing the mission, and you don't think about that that is a person when you're doing the mission. All you're thinking about is, I've succeed in my mission to help this family recover their loved one.


TODD: Bobbie Scholey says even experienced salvage-and-recovery divers get nightmares and other forms of PTSD. She says counseling and other services are often available on-site, and they'll need all the support they can get for the long haul. Scholey says the TWA Flight 800 salvage operation took four months with better weather conditions than they're facing in the Java Sea right now, Wolf. They could be there for a while.

BLITZER: And the experts say that even bringing one body to the surface with a diver can be extremely dangerous.

TODD: Very dangerous, Wolf. Bobbie Scholey says dive teams have to often bring body bags down with them, place a body in the bag, then maybe get it into some kind of a salvage basket or a platform that's been lowered under water to raise it up. Sometimes, though, they have to bring the body up themselves, which is extremely difficult, because the bodies get very heavy. So that's dangerous, as well.

BLITZER: We wish these divers only the best. Good luck to them, Brian. Thanks very much.

Joining us now, CNN analyst David Gallo of the Woods Hole Oceanographic Institution; and retired U.S. Air Force Lieutenant Colonel Ken Christensen, a former NASA mission planner. He's an aviation consultant.

David, apparently, they've discovered two more pieces of metal, significant pieces of metal aboard the USS Fort Worth right now, one of the U.S. warships searching the area. How long will it take for them to determine whether these two pieces of metal are actually from the aircraft?

DAVID GALLO, CNN ANALYST: Well, again, Wolf, it's going to take getting eyes on that metal to decide if it's part of this, some shipwreck, or something else altogether. But until they get a robot or camera system or a diver in the water, that's not going to happen.

BLITZER: This is going to take some time. And Ken, the weather has gotten a little bit better, we're told. But the current under water is very, very strong, two to four knots, they say. How hard is this making this mission that's underway right now?

LT. COL. KEN CHRISTIANSEN (RET.), FORMER NASA MISSION PLANNER: I think, Wolf, because it's a concentrated effort now in a different area than you were looking initially. They're still searching from the air, and they're still searching the water.

So that coordination and all those assets are there expending time and monies. And that makes it difficult, because the divers underneath the water are struggling so hard.

So that coordinated effort can also be hindered by just minor, what you and I would think are minor weather deviations. But they're huge to people underwater and on the surface. And depending on how high the seas are, that can make it very problematic for wreckage to be brought up shipside so it can be photographed and identified by the aviation experts that are very familiar with that type of aircraft.

BLITZER: If it's so dangerous, David, for divers to go under that water, the visibility is sometimes negligible, what about these ROVs as they're called, these remotely operated underwater vehicles? Can they do the job?

GALLO: Right, Wolf. Well, again, you need some sort of visibility. But there may be some talent out there that they may have to be thinking -- it may be time for Plan "B." We're going to have day after day of this, because the visibility is not going to change overnight or the next day.

But I'm assuming that they've got all the resources at their disposal, and they're thinking about when the time is to bring in the ROVs. But they could do the job.

BLITZER: What does it say to you also, David, that they put in fresh batteries for the pingers for the cockpit voice recorder, the flight data recorder. There are fresh batteries that had just been put in, but we still have not even heard one ping. What does that say to you?

GALLO: That's a tough one. Well, again, you know, the pingers, you really have to be -- the conditions have to be right. You have to be in the right position. And I'm not surprised that they haven't heard them yet. You know, you have to be, in a way, fairly lucky to do that and fairly close, within a couple of miles, to three or four miles maybe at most.

BLITZER: If those black boxes are buried deep in mud at the bottom of the Java Sea, are we ever going to find those -- hear those pingers or find those black boxes?

GALLO: Yes, I'm confident, Wolf, they will find the black boxes. It's just going to take time and patience. But the frustration level must be through the roof. And on behalf of the family, what a horrible, horrible situation to be in.

BLITZER: It certainly is. Ken, what does it say to you that there were no mayday distress calls from the cockpit as this plane sort of was going down?

CHRISTIANSEN: What that means to me, Wolf, is that the crew initially -- the first priority is the safety of the aircraft and managing and flying the airplane. Then they get a mayday call off later.

Just given their altitude, I think they had a handful of airplane. So something happened very rapidly inside the -- inside the cockpit that prevented them from getting out that radio call as soon as possible.

What that could possibly be was they flew into a thunderstorm, flew downwind from a large hail, and the engines ingested hail or the hail impacted the wind speed of the aircraft, or of course, severe turbulence or in-flight break-up.

All these factors could have happened. One by itself or a synergistic effect of all of them happening at the same time could prevent a crew from getting that radio call off, that needed radio call off.

BLITZER: Because if you're going to do a mayday call, how long does that take. It just takes a second or two, doesn't it?

CHRISTIANSEN: That's correct, Wolf. And what that really helps is with the rescue -- the first responders to help get the people to where that aircraft is probably going to go into the water.

While you do that is you want to alert air traffic controllers and the air traffic controllers will give you a priority handling if you're going to return to another closer airport for an emergency landing. That's what it initially is there for. But in this case, I think they were overwhelmed and they were unable to -- or incapacitated to make that radio call. And they impacted the water. BLITZER: Is it a bad sign, David, that searchers aren't finding more

of the plane wreckage day by day? They found some stuff, but now it's been -- there's been a lull in discovery.

GALLO: Not if there's big pieces out on the ocean floor, Wolf. But boy, you know, I really am hoping that they'll bring the pieces they have, because we have had -- we found this, and it wasn't. We found that, and it wasn't. I'm hoping that those other big pieces are part of the aircraft. Because that would mean that they're not in the right spot altogether, and that would be horrific.

BLITZER: And finally to you, Ken, this notion that this was maybe an isolated incident, but there were more than 3,300 of these similar Airbus aircraft commercial airplanes flying around right now. And I've asked this question repeatedly. I want to get your thoughts. Is it safe? We obviously don't know what brought down this particular Airbus.

CHRISTIANSEN: Yes, it's safe to say we don't definitively know. Until we get eyes on the wreckage, and the post-crash forensic data analysis, there's no definitive -- there's nothing definitively causal on what took this aircraft down. And that's why it's so important to get that wreckage.

Because you do have such a large fleet flying worldwide, the manufacturer certainly wants to know. Airbus wants to know what went wrong with this airplane. And I know they're hoping that it's not aircraft related specifically, but if it is aircraft related specifically, they need to know that so they can get that out to the fleet and inspect the fleet that -- the current fleet that's flying and fix whatever could be wrong.

BLITZER: But you don't -- you wouldn't go so far as to say they should ground these planes for the time being until they figure out what happened?

CHRISTIANSEN: No. I wouldn't say they should ground at this point. And this is -- they have tried-and-true procedures for this. Our FAA is very, very diligent about doing that, as well.

And if you look back to the Malaysia Flight 370, again, Boeing, the manufacturer of that aircraft, they want to know why that aircraft went down and -- because they have 997 Boeing 777s out there flying that they would want to modify if they needed to.

BLITZER: That's why the search is so important, the investigation is so important to try to figure out what happened so we can all learn from that to make sure it doesn't happen again. David Gallo, Ken Christensen, guys, thanks very much.

Still ahead, we're going to take you to the city believed to be the hideout for North Korea's elite cyberattack unit.

But up next, the new ISIS propaganda video taunts the west just as the Pentagon has a surprising new assessment of the fight against ISIS in Iraq.


BLITZER: We're following reports that dozens of militants thought to be members of ISIS attacked several security posts and checkpoints in western Iraq today. A newly posted ISIS propaganda video taunts the west, claiming people actually like living in cities the militants have captured. But a very different story is coming from the Pentagon.

Let's go there. Our Pentagon correspondent, Barbara Starr, is standing by. Barbara, what are you learning?


You remember that "Mission Accomplished" banner from the Bush administration about Iraq several years ago? Well, the Pentagon isn't quite saying "mission accomplished," but it might be edging close to it.


STARR (voice-over): The U.S. Now believes ISIS' momentum in Iraq has stalled.

REAR ADMIRAL JOHN KIRBY, PENTAGON PRESS SECRETARY: Whatever momentum that they had been enjoying has been halted, has been blunted. That has stayed steady over the last couple of weeks.

STARR: Also possibly slowing down: the number of new foreign fighters traveling to Iraq and Syria, according to a senior U.S. official. The U.S. believes about 150 people from the U.S. have traveled or attempted to travel to the region to fight, part of the 3,000 westerners from 90 countries.

KIRBY: We know we've destroyed hundreds and hundreds of vehicles, artillery positions, checkpoints. We know that we've killed hundreds of their forces.

STARR: Exactly how many ISIS fighters killed?

KIRBY: We don't have the ability to count every nose that we schwack (ph).

STARR: ISIS, still a significant threat with hundreds of millions of dollars torturing and killing. Syria remains their safe haven. ISIS fighters in a new video in the Syrian border town of Kobani claiming gains. But Kurdish fighters say they control much of the city. The Pentagon is careful not to predict victory just yet.

For months, ISIS moved with lightning speed across northern and western Iraq, taking the town of Mosul, moving into Fallujah and Ramadi in al Anbar province. But for the last two to three weeks, ISIS has not taken significant new ground, the U.S. says. Instead, ISIS has had to go on defense, trying to hold onto what it has. LT. GEN. MARK HERTLING (RET.), CNN MILITARY ANALYST: They're having

trouble paying their fighters. They're having trouble governing. They don't have the leaders to actually govern the spaces they've attacked and taken over.

STARR: But with ISIS still able to launch attacks at places like al- Asad Air Base, where 320 Marines are located, an urgent effort is underway there and at other bases to train Iraqi units.

The U.S. now plans to sell Iraq 175 M1A1 battle tanks and 1,000 Humvees for nearly $3 billion. It's sending 250 MRAP mine-resistant vehicles and 10,000 M-16 rifles, all of this aimed at getting Iraqi forces not just trained but armed and willing to fight ISIS and take their country back.


STARR: Now, the Pentagon also revealed for the first time today that the military is investigating several allegations of potential civilian casualties from those coalition air strikes. Outside monitoring groups have long claimed hundreds of people have been killed in those strikes -- Wolf.

BLITZER: How worried are they at the Pentagon, Barbara, that all that military hardware the U.S. is now about to provide to Iraq could wind up in the hands of ISIS, if these Iraqi soldiers do what they have done over the past year, just take off their uniforms, run away, leave their weapons behind?

All of this U.S. hardware in Mosul, other parts of the Anbar province, which the U.S. left behind for the Iraqis, already they've wound up in the hands of is. How concerned are they that a similar situation will take place this time?

STARR: Well, Wolf, I think there's absolutely no guarantees about that. History is exactly what you said. It has happened before in Iraq. It has happened in Afghanistan. They are making every effort this time. They believe there is new Iraqi military leadership, new generals in charge that will be much more competent than who was in charge when ISIS began its sweep.

BLITZER: Yes, I've spoken to so many U.S. military personnel who are so angry, so frustrated when they see these ISIS terrorists driving around in U.S. Humvees or tanks, using U.S. weapons which Iraqi soldiers basically abandoned. Certainly don't want to see that happen anymore.

Barbara, thanks very much for that report.

Coming up, we're following signs of a dangerous new breakthrough in North Korea's military build-up. But could their long-range rockets soon be tipped with nuclear weapons. We have new information coming into THE SITUATION ROOM.

And right at the top of the hour, we'll have some live updates from Indonesia where a new day of searching for wreckage of the AirAsia jet is now about to get underway.


BLITZER: We're following dangerous conflicting signals coming from North Korea right now. Less than a week after Kim Jong-Un raised the possibility of talks with South Korea's president, we're now getting word that North Korea's actually getting closer than ever to developing a nuclear weapon capable of striking the United States.

Our chief national security correspondent Jim Sciutto is here in THE SITUATION ROOM. He's been working his sources. This is pretty alarming stuff.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: It is. This comes from the South Korean Defense Ministry. And you read it, it paints a fairly alarming picture of North Korea's growing military capabilities.

South Korea's Defense Ministry finding that Pyongyang has edged at least a step closer to arming an ICBM with a nuclear warhead, the North's ability to miniaturize a nuclear weapon. The report says, quote, "appears to have reached a significant level." South Korea assesses that North Korean missiles, such as the

Taepodong-2 already have the range to reach the U.S. mainland and that Pyongyang is now also developing submarines that could fire ballistic missiles.

Now I spoke with a U.S. official and I'm told that the U.S. assessment has not changed. The U.S. continues to believe that the North has not yet achieved the capability to strike the U.S. with a nuclear tip missile, though it has positioned missile defense systems closer to North Korea to mitigate any threat.

The North's greatest perceived threat today remains its neighbor to the south, South Korea, along the border with the South, in order to set up new military posts, artillery pieces, mechanized forces that the South says would allow for a quick invasion. And North Korea has a force of some 6,000 cyber warriors, South Korea

says, that it uses to launch cyber attacks on government and military entities in the South, a threat which of course the U.S. has experienced firsthand with the cyber attack on Sony which the administration blames on the North Korean government.

Now I am told that there is a broad gap, Wolf, between possessing the technology and perfecting that technology. In other words, it is believed they have the technology to miniaturize a warhead. What they haven't done is the years of test that are believed to be necessary to get it on top, launch it effectively, and target it effectively. But the difficulty here and the trouble here is that they are moving closer in that direction. That's of course an alarming prospect.

BLITZER: Certainly is. They've surprised a lot of people with what they have been able to achieve over these years to begin with.

SCIUTTO: Well, think of all those times they've launched missiles, for instance, when they launched a satellite successfully into orbit. BLITZER: Right.

SCIUTTO: The expectation was this one is going to blow up again. Of course it did not.

BLITZER: It did not.

All right, thanks very much, Jim Sciutto, reporting.

The United States believes a mysterious North Korean agency called Bureau 121 is at the heart of North Korea's cyber attacks, including the attack on Sony Pictures because the movie -- because of the movie "The Interview."

A CNN crew is just back from the city where this elite group of cyber attackers are believed to be operating. It isn't in North Korea. It's in China in a city just over 400 miles or so from Beijing.

Will Ripley is joining us from Beijing right now.

Will, you had an exclusive look at what's going on. What did you see?

WILL RIPLEY, CNN CORRESPONDENT: Well, Wolf, we know for a fact that nearly all of North Korea's Internet is routed through China. But we spoke with a North Korean defector who says the connection goes much deeper than that. He says that Bureau 121 began a large-scale operation in China a decade ago and hackers are still operating in this country right now.


RIPLEY (voice-over): Shenyang has the neon glow of a typical Chinese city. Beneath the bright lights, an unusual site -- the flag of one of the most isolated countries on earth.

This is the state-owned Pyongyang Restaurant.

(On camera): Kimchi?


RIPLEY (voice-over): The waitresses are here on what's considered a prestigious three-year assignment. They say they're all from the same university in Pyongyang.

Nearby, the Chilbosan hotel, a joint venture between North Korea and China. The art, like everything else, pure Pyongyang propaganda.

(On camera): This is North Korea state TV playing right now in our hotel room.

(Voice-over): Hallways are kept dark, just like in North Korea which struggles with electricity shortages.

Shenyang is the biggest Chinese city near North Korea, a place where many from Pyongyang come to work. This defector says they also come here to hack.

"It's easy for them to work secretly. It also has great Internet infrastructure", says Kim Haung-kwang. The former Pyongyang computer science professor claims North Korean hackers operated secretly in Shenyang for years. Kim says some of his own students became cyber warriors for the hacker network known today as Bureau 121.

"By day they worked regular jobs," he says. "But the rest time they were acting on orders from Pyongyang." Kim says hackers often work out of the basements of North Korean owned buildings. He's found no evidence any hacking activity was occurring at the places we visited but says locations were kept secret and constantly changing.

"When they enter China," he says, "they come under different titles. For example, an office worker, an official with a trade company or even as a diplomatic staffer."

North Korea has a consulate in Shenyang, just minutes from the hotel and restaurant. Representatives for that consulate, the embassy in Beijing, and government officials reached by e-mail in Pyongyang tell CNN they have no comment on the defectors' claims.

For its part China says it opposes any illegal cyber activity on its territory.

In the middle of a bustling Chinese city, a hub for North Koreans, and questions about what's really happening beneath the surface.


RIPLEY: The defector we spoke with says the hacking activity really peaked here in China between 2005 and 2011. And now that North Korea is expanding Internet access within its own country, they're moving some of their operations back to Pyongyang. But he also says they still have hackers operating all over the world because they can launch attacks that can't be directly traced back to North Korea.

And, Wolf, you've been to that country as have I. It was remarkable to be able to walk into a hotel, walk into a restaurant and feel like you're transported back inside North Korea.

BLITZER: Yes. That is pretty amazing. Very illuminating. Thanks very much, Will Ripley. Doing some great reporting for us from Beijing.

With us in THE SITUATION ROOM now, our guest, Steven Yates, he was the deputy assistant for national security to the Vice President Dick Cheney, Christian Whiton, who is a deputy special envoy for human rights in North Korea during the Bush administration, and Gordon Chang, a columnist for, author of the book, "Nuclear Showdown: North Korea Takes on the World."

Stephen, if this is so-called Bureau 121's location, its operation is so much public knowledge, why do the Chinese allow this to go on? Why have they intervened to shut it down? STEPHEN YATES, FORMER CHENEY DEPUTY ASSISTANT: Well, they must be OK

with its operations. And of course China itself is one of the leading sources of cyber attacks against the United States and the United States' interests around the world. So it wouldn't be too shocking for to us realize the Chinese government says that they don't condone or support anything like this happening on its territory. But they themselves do this.

BLITZER: What do we know, Gordon, about these hackers who make up this so-called Bureau 121? Are any names of active members out there? Are they all North Koreans? Or do they go out there outsourced? They hire Chinese or maybe hire Europeans, hire Middle Easterners, hire Americans for all -- for the possibility of getting the best kind of hackers out there?

GORDON CHANG, COLUMNIST, FORBES.COM: Yes, Unit 121 clearly has outsourced a lot of their work. For instance, the hack on Sony, which is generally considered to be a Unit 121 venture, you know, essentially worked Lizard Squad, Guardians of Peace and maybe even disgruntled Sony employees. But primarily its staff is North Korean. There's about 1800 of them. And most of Unit 121's people are actually in Shenyang. So clearly the Chinese are very much involved in what's going on with regard to this particular unit.

BLITZER: Christian, South Korea's Defense Ministry actually today says North Korea has increased the size of this so-called cyber army to about 6,000 troops. It doesn't seem like the U.S. imposed sanctions, at least over the past week or two, have done much to deter Kim Jong-Un, at least for now.

CHRISTIAN WHITON, FORMER STATE DEPARTMENT SENIOR ADVISER: No, I don't think so. The sanctions apply only to 10 -- 13 actually individuals and corporations that frankly have no exposure to the West anyway so they're not going to have an effect. You know, the administration appears not to have decided to put North Korea back on the list of state sponsors of terrorism. So we really haven't done anything to push back.

You know, it's fairly alarming also that the size of this army can double that quickly. It shows how little information we have about North Korea and of course, South Korea didn't just say they got a whole lot better and bigger recently in their cyber offense capabilities but also in their ability to strike the U.S. potentially directly with a nuclear weapon.

BLITZER: We know, Stephen, that the North Koreans apparently back in 2013, they did some hacking of South Korean banks, financial institutions. The U.S. says they did the same thing to Sony Pictures in recent weeks and months.

Do you have any sense of where this may be moving? Who may be the next target?

YATES: Well, we don't really get to know about where the next target is. But certainly they take signals on what works and where they run into resistance or obstacles and then try to work around them. Basically the most troubling thing about the Sony hack is how widespread that was. Or whether they did it directly or indirectly by way of collaborators, they really got a great deal of privileged information from private companies.

This is actually following a model the Chinese have taken to gain economic leverage and advantage in recent years. They took down an entire company out of Canada Nortel by way of cyber espionage. And North Korea could be looking to follow the same path.

BLITZER: Gordon, Kim Jong-Un, the leader of North Korea, will be celebrating his 32nd birthday on Thursday. Based on history, what can we expect?

CHANG: Well, there's going to probably be a lot of propaganda but also we know right now that the North Koreans are very interested in the South Korean activists who have announced that they're going to take DVDs of the movie, "The Interview," which was the subject of this hacking and actually put them into balloons and launch them over the Demilitarized Zone.

And if we have to figure out whether there's going to be the next target for North Korea, it's probably the South Korean groups operating on South Korean soil that will probably be the next object of North Korea's attack.

BLITZER: Gordon Chang, thanks very much.

Christian Whiton, thanks to you.

Stephen Yates, appreciate your expertise.

Coming up, bad weather slows the effort to recover wreckage of bodies from AirAsia Flight 8501. But the search teams make some new finds and now they're ready to head out again.