The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, coverage of four major news stories: Excerpts and analysis of the Osama bin Laden tape that shows him taking credit for the September 11 attacks; the latest on getting bin Laden's fighters to surrender in Afghanistan; reaction from Senators Biden and Hagel to the President's decision to withdraw from the ABM Treaty; and an update on the violence and rhetoric between Israel and the Palestinians. We'll have the other news of this Thursday at the end of the program tonight.

FOCUS - IN HIS OWN WORDS

JIM LEHRER: A most chilling videotape was made public today. The pentagon released a tape of Osama bin Laden discussing the successful attacks of September 11. Administration officials said it makes clear that bin Laden was the mastermind behind the operation. Ray Suarez begins our report.

RAY SUAREZ: The tape bore a label indicating it was made on November 9. Administration officials wouldn't reveal exactly how or when they got it, except to say it was found in a house in Jalalabad after anti-Taliban forces moved in. The US Government translated the Arabic conversation and provided subtitles. The tape, which has a home video quality, shows bin Laden sitting on the floor in a bare room in a house in Kandahar. With him are several other men, including two aides and an unidentified cleric, or Sheikh. Bin Laden, identified on screen as UBL, made it clear he planned the September 11 attacks.

Bin Laden says, "We calculated in advance the number of casualties from the enemy who would be killed based on the position of the tower. We calculated that the floors that would be hit would be three or four floors. I was the most optimistic of them all. Due to my experience in this field I was thinking that the fire from the gas in the plane would melt the iron structure of the building and collapse the area where the plane hit and all the floors above it only." (Translated) "This is all that we had hoped for." The Sheikh replies, "Allah be praised." Osama bin Laden continues: "We were at - (inaudible...) -- when the event took place, we had notification since the previous Thursday that the event would take place that day. We had finished our work that day and had the radio on." (Translated) "It was 5:30 PM our time. I was sitting with Dr. Ahmed Abu-al-Khair. Immediately, we heard the news that a plane had hit the World Trade Center. We turned the radio station to the news from Washington. The news continued and no mention of the attack until the end. At the end of the newscast, they reported that a plane just hit the World Trade Center." Again, the Sheikh replies: "Allah be praised." Bin Laden continues: "After a little while they announced that another plane had hit the World Trade Center." "The brothers who heard the news were overjoyed by it." Now the Sheikh continues: "I listened to the news and I was sitting. We didn't - we were not thinking about anything, and all of a sudden, Allah willing, we were talking about how come we didn't have anything, and all of a sudden the news came and everyone was overjoyed, and everyone, until the next day in the morning was talking about what was happening. And we stayed until 4 o'clock listening to the news, every time a little bit different. Everyone was very joyous and saying, 'Allah is great. Allah is great. We are thankful to Allah. Praise Allah.'" "And I was happy for the happiness of my brothers. That day the congratulations were coming on the phone non-stop." (Translated) "The mother was receiving phone calls continuously, 'Thank Allah. Allah is great.'"

RAY SUAREZ: An aide to bin Laden, identified as Sulayman or Abu Guaith, expressed joy at learning of the attacks. "I was sitting with the Sheikh in a room. Then I left to go to another room where there was a TV set. The TV broadcasted the big event. The scene was showing an Egyptian family sitting in a living room. They exploded with joy. You know when there's a soccer game and your team wins; it was the same expression of joy. There was a subtitle that read 'In revenge for the children of Al Aqsa: Osama bin Laden executes an operation against America,' so when I went back to the Sheikh," meaning Osama bin Laden, "who was sitting in a room with fifty to sixty people, I tried to tell him about what I saw, but he made a gesture with his hands, meaning, I know, I know." Bin Laden responds: "He did not know about the operation. Not everybody knew. Muhammad," that is, Attah, "from the Egyptian family" meaning the Al-Qaida Egyptian group - "was in charge of the group." The Sheikh replies: "A plane crashing into a tall building is out of anyone's imagination. This was a great job. He was one of the pious men in the organization. He became a martyr. Allah bless his soul." Bin Laden speaks: "The brothers who conducted the operation, all they knew was that they have a martyrdom operation, and we asked each of them to go to America. But they didn't know anything about the operation - not even one letter." (Translated) "But they were trained and we did not reveal the operation tothem until they are there, just before they boarded the planes." Then he said, "Those who were trained to fly didn't know the others. One group of people did not know the other group. We were at a camp of one of the brother's guards in Kandahar. They were overjoyed when the first plane hit the building, so I said to them, 'Be patient. The difference between the first and the second plane hitting the towers was 20 minutes.'" (Translated) "And the difference between the first plane and the plane that hit the Pentagon was one hour." The Sheikh responds: "They" - that is the Americans - "were terrified, thinking there was a coup."

RAY SUAREZ: At the beginning of the meeting, the cleric thanked bin Laden for the operation and said it was a great success. And bin Laden said the attacks helped recruit followers. "In Holland, at one of the centers, the number of people who accepted Islam during the days that followed the operations were more than the people who accepted Islam in the last eleven years. I heard someone on Islamic radio who owns a school in America say, 'We don't have time to keep up with the demands of those who are asking about Islamic books to learn about Islam.'" (Translated) "This event made people think about true Islam, which benefited Islam greatly."

RAY SUAREZ: The tape, which was about an hour long, included other footage besides the meeting. Bin Laden's forces are seen at the site where a US helicopter crashed in southern Afghanistan in October. They displayed various parts of the aircraft for the camera. At the Pentagon today, Defense Secretary Donald Rumsfeld said the tape provided insights into bin Laden and his actions.

DONALD RUMSFELD: I suppose one can come away from looking at not just this tape, but his general behavior over time, he clearly has a large network. He clearly has a well-financed network. It covers many, many countries across the globe. He's a careful planner. They also are clearly able to put things in compartments and let only certain people know certain things. He's also perfectly willing to do almost anything anyone can imagine to kill people. Do I expect that he has other plans? Sure. Do I expect that he has places he thinks he might be able to go, someplace other than where he is if that becomes uncomfortable? Sure, I suspect that.

RAY SUAREZ: Administration officials said they were convinced the tape was authentic. Now, some analysis of the tape. For that, we turn to Ahmed Rashid, a Pakistani journalist and correspondent for the "Far Eastern Economic Review." He is the author of "Taliban: Militant Islam, Oil, and Fundamentalism in Central Asia." And Jessica Stern, a public policy lecturer at Harvard University and the author of "The Ultimate Terrorists." She served on the National Security Council staff in the Clinton administration. Well, guests, we saw Osama bin Laden showing no remorse, no regret, exalting at the extent of his success. Jessica Stern, what was your reaction to what you saw?

JESSICA STERN: Well, of course it's completely horrifying to see him rejoicing about what happened in a group of people who are also rejoicing and talking about how people feel in the mosques in Saudi Arabia and gloating and rejoicing at the idea that some of the young men involved in this operation weren't really aware of what they were doing. It's really a terrible display.

RAY SUAREZ: Ahmed Rashid, when you looked at that tape, what did you see?

AHMED RASHID: Well, you know, I was quite horrified at the way that bin Laden and the associates used the name of Allah in association with such a horrendous act. And I mean as a Muslim, I really you know, feel a lot of anger at that and I just hope that this will impress people around the Muslim world that, to associate a God with such an act of murder and carnage and repeatedly to be doing so, you know, every second sentence, is really frightening.

RAY SUAREZ: What about those who, at various times and places in the last three months, have expressed doubt about the connection between Osama bin Laden and the September 11 attacks?

AHMED RASHID: Well, I think, you know, again, I think it will... This tape will certainly have an impact on a lot of skeptics, but it will not have any impact on the hard core, who still believe in al-Qaida and bin Laden. But I think a major role now has to be played by leaders in the Arab world who have not openly, so far, after three months, even really condemned bin Laden or al-Qaida. They may be supporting the western alliance, but they have been very careful not to condemn al-Qaida and bin Laden's role. So I think, you know, this tape is going to be appointed to them that I think it really offers irrefutable proof that he was behind it.

RAY SUAREZ: Jessica Stern, on the doubters?

JESSICA STERN: Well, I completely agree with Ahmed, and I also think that it's critical for leaders in the Arab world to now make clear that this was a horrific act of terrorism. They need to condemn it. I have a Muslim student who said to me today, "Now is the time for Muslims to declare jihad against al-Qaida." I think he feels some of the same feelings that Ahmed was just voicing.

RAY SUAREZ: And for someone who's been watching terrorism over the years, as you have, did any interesting operational details pop out? He was talking about the groups, the training, his notification, sending people to the United States.

JESSICA STERN: Well, I think the thing that really jumps out is how this group functions very much like a government or intelligence agency, trying to protect classified information. This came out in the Africa embassy bombing trial in New York in the spring where it was clear that, not only intelligence, but counterintelligence is a very important part of this group's modus operandi, not allowing individuals to know more than they need to know to get the job done, as a way to prevent intelligence leaks.

RAY SUAREZ: Ahmed Rashid, does this also mean that, even if Osama bin Laden had been killed or injured or incommunicado, that the operations of al-Qaida could continue?

AHMED RASHID: Well, certainly. I mean I've long believed that al-Qaida is really divided into two separate areas: One is the kind of foot soldiers who have been fighting in Afghanistan for the Taliban and who are now still resisting. Now, these - you know -- many of these will clearly be killed or captured by the after began forces under American bombing. But then there's a whole grid of perhaps thirty to forty thousand people who, since 1996, have been through these training camps. These are mostly middle class militants, educated people who've come to these camps for a certain period of time, who perhaps have fought for one or two months with the Taliban as battle experience but then have gone home to their own countries you know, where they have been kind of lying low as sleepers or taking part in actions. And that grid of course still does exist in many countries of the world.

RAY SUAREZ: Well, the visitor who was with Osama bin Laden in that room in Afghanistan had just talked about coming from outside the country. What does that tell you?

AHMED RASHID: Well, I think that is really frightening. Here you have this tape being made in the middle of the war. There's a US blockade of Afghanistan. The neighbors, all Afghanistan's neighbors are supposed to also be part of the alliance and blockading off the country to not allow people coming in, and there's clearly traffic going on. I mean militants are coming in and leaving the country. So it shows that, you know, the blockade was not successful. People have been able to leave Afghanistan and arrive in Afghanistan throughout the period of the war. Secondly, I think it really shows that, even today, there's the same grid that has allowed that is going to allow people to escape the American bombing, for example, of Tora Bora at the moment. Many of these militants will be able to escape and go through perhaps Pakistan, Central Asia, Iran, and get out.

RAY SUAREZ: Jessica Stern, at one point the Sheikh, who's still unidentified, says that he had expected to find Osama bin Laden in a cave. This is about a month into the bombing of Afghanistan by the United States and coalition members, but instead, he's being welcomed into a home that's clean and looks pretty intact. What does that tell you?

JESSICA STERN: Not only that, it's not only that they're not living in horrific discomfort, but they seem to be feeling psychologically quite comfortable. They don't seem to be acting hounded or afraid, and this is a bit surprising. It certainly is quite common to see leaders, when they are meeting people they are trying to give a certain impression to, have them meet them in filthy ugly offices and poverty-stricken areas. But then when they are speaking with the already converted, sometimes those already converted get to see the real side of these Jihadees. Jihady leaders often live very with well, even though don't want us to know that. They'd like us to think that they are Ascetics, but they're not.

RAY SUAREZ: Ahmed Rashid, does this intact, comfortable environment for Osama bin Laden a month into the war tell us anything about the ease with which he moves inside Afghanistan and the extent to which he was protected by the government there?

AHMED RASHID: Certainly. I mean, you know, he had the run of the country, the complete freedom of the country. He had safe houses in every city where his guests could be entertained. He took his forces in Kabul, which I saw myself, took over the best houses in Kabul, the most lavish houses in Kabul, redid them. And I mean there was no question of anyone protesting or you know that the house could have belonged to somebody else or anything like that. There was complete freedom of action, freedom of movement. And you know, they were able to do exactly what they liked.

RAY SUAREZ: Jessica Stern, at one point the Sheikh refers to the holy month of Ramadan and refers to the September 11 attack as the first hit and says that the next hit will come from the hand of the believers, leaving open the possibility of more attacks from the United States. How seriously should this be taken in Washington?

JESSICA STERN: I think it should be taken very seriously. Obviously, this is not the first indication that the group is planning additional attacks, but it is one more, and I think it must be taken very seriously.

RAY SUAREZ: And who's on notice, Ahmed Rashid? When they're referring to links to Saudi, to Egypt, does this sort of throw the ball into those American-aligned governments' court to an extent?

AHMED RASHID: Well, I think, you know, this is the clearest indication we've had how seriously bin Laden, you know, wants to overthrow the Saudi regime. And he is most keen to know about what is a reaction in Saudi Arabia. He's not asking about reaction kind of elsewhere in the world. You know, he's not particularly interested even in the reaction in America. I mean that's taken as a given. He's very keen to know, you know how many recruits and how many people have been praising him in Saudi Arabia. And I think, you know, if there hasn't been a wake-up call already for the Saudi regime, I think this is a very important wake-up call for them. We have not had a categorical denunciation of bin Laden, you know, and what has been going on by many of the royal families in the Gulf States. And I think this tape surely should be a wake-up call for that.

RAY SUAREZ: Ahmed Rashid, Jessica Stern, thank you both.

UPDATE - MILITARY CAMPAIGN

JIM LEHRER: Fighters loyal to Osama bin Laden ignored a surrender deadline today in eastern Afghanistan. It set the stage for new attacks on their positions in the mountainous area known as Tora Bora. Kwame Holman has our report.

KWAME HOLMAN: American planes bombed and strafed al-Qaida hideouts all day and into the evening. Eastern Alliance tribal fighters trooped into the mountains for a new assault on the al-Qaida positions in caves and tunnels. The action followed two failed attempts at getting the al-Qaida and Taliban to surrender. A local alliance commander blamed the United States for the failure to convince foreign-born Arab fighters of al-Qaida to come out of their hiding places. He said: "The Americans broke the link with us and the Arabs. They were ready to surrender, but because of us bombing, they do not trust anymore. America has made a mistake." The claim by the anti-Taliban commander and a report in this morning's "Washington Post" brought a sharp reaction at today's Pentagon briefing, conducted by Joint Chiefs Chairman Richard Myers and Defense Secretary Donald Rumsfeld. The Post quoted a source who said the US was pursuing "a war of extermination."

DONALD RUMSFELD: Wow. That is inflammatory language, isn't it? Who said it?

REPORTER: They quoted another military official as saying that.

DONALD RUMSFELD: In what country?

REPORTER: The USA. And, General, they also mentioned...

DONALD RUMSFELD: Say it again? (Laughter)

REPORTER: -- a war of extermination.

DONALD RUMSFELD: Make a full sentence for me. (Laughter)

REPORTER: You were asked about earlier reports that the United States was not interested in having a surrender, that would have... This report was suggesting that the United States was more interested in killing al-Qaida fighters than in seeing them surrender. And buried inside...

DONALD RUMSFELD: But where does the word "extermination" come in?

REPORTER: Buried inside the story, it talks about US Military officials seem more intent on waging a war of extermination. And they quoted another retired military official as saying that.

DONALD RUMSFELD: I'll bet he is. (Laughter)

GEN. RICHARD MYERS: -- likely to be more so in the future.

REPORTER: But he also pointed to US military people as using words such as, "eliminate," which General Myers said earlier, "Eliminate the al-Qaida." And I just wanted to get his...

GEN. RICHARD MYERS: "Network," I said, you know, and that's somewhat different than extermination. Extermination seems to apply to termites, but this is not what we're talking about here. So this is not a war of extermination. I think that's very loose use of the English language and imprecise.

DONALD RUMSFELD: Yeah, that's an unfortunate characterization. And I must say, I don't think that that type of phraseology is useful or accurate. The first choice clearly is surrender. It ends it faster, it's less expensive, and we can encourage people to surrender. Now, there's a lot of misinformation floating around about somebody says this to somebody, that, "Gee, they'll surrender if we'll let them turn themselves in to the United Nations, or if you'll let us keep our weapons, or if you'll let us go back and become governor of Kandahar or something." I mean, this is not a drill where we're making deals. This is a...the purpose of this activity, the reason we're doing this is to defend the United States of America and our friends and allies.

KWAME HOLMAN: Back in the Tora Bora Mountains, some Alliance warriors stopped trudging long enough for prayers. Trucks loaded with ammunition struggled up the dirt roads. Their radios blurted exhortations from their chieftains to advance and not turn back. Another leader said the besieged al-Qaida would only be allowed to surrender now if they brought out Osama bin Laden and his close cadre with them. bin Laden's whereabouts remain unknown. There have been reports he escaped days ago through rugged mountain passes into neighboring Pakistan, another topic Rumsfeld was pressed about.

REPORTER: Are you confident that Osama bin Laden is still in Afghanistan?

DONALD RUMSFELD: Charlie. How can one be confident until they have him? We think he's in Afghanistan. We are chasing him. He is hiding. He does not want us to know where he is. We think he's there. We don't know if he's there. We're trying to find him, and when we find him, we will announce it.

REPORTER: Mr. Secretary, you said that, and you have said that you see different reports about his whereabouts all the time. Have you seen a specific report that you consider to be credible that he's still in the Tora Bora region?

DONALD RUMSFELD: I have seen reports that people believe are from reasonably reliable sources that, in one case, suggest he's still in Afghanistan, in another case suggest he's out of Afghanistan.

REPORTER: Did the United States in any way veto or nix some sort of surrender arrangement that was in progress yesterday?

DONALD RUMSFELD: To my knowledge, the United States did not nix or stop or put the kibosh on anything. I do not even know if anything was really offered. I have read the same reports you have where somebody opined that if we had done this and if we had let them keep their weapons and if we had let them turn themselves in to the Red Cross or somebody, that then everything would be fine and it would all end. Now, that's nonsense. We're not there for that. We're there to stop those people. And if they want to surrender, they can do it in one second, and they know it.

KWAME HOLMAN: Meanwhile, Afghan prime minister-designate Karzai arrived in the capital, Kabul, to urge disparate tribal leaders to acknowledge and participate in a new government that assumes power December 22.

JIM LEHRER: Still to come on the NewsHour tonight: The ABM decision, a Middle East violence update, and the other news of the day.

FOCUS - END OF A TREATY

JIM LEHRER: The United States formally notified Russia today it intends to withdraw from the 1972 Anti-Ballistic Missile Treaty six months from now. The decision opens the way to develop a US missile defense system. Margaret Warner has the story.

MARGARET WARNER: The President has long argued that the old US- Soviet ABM Treaty is obsolete. But now, he said, the need to scrap it is more urgent than ever.

PRESIDENT GEORGE W. BUSH: Today, as the events of September the 11 made all too clear, the greatest threats to both our countries come not from each other or other big powers in the world, but from terrorists who strike without warning, or rogue states who seek weapons of mass destruction. We know that the terrorists and some of those who support them seek the ability to deliver death and destruction to our doorstep via missile, and we must have the freedom and the flexibility to develop effective defenses against those attacks. Defending the American people is my highest priority as commander in chief, and I cannot and will not allow the United States to remain in a treaty that prevents us from developing effective defenses.

MARGARET WARNER: The President wants to build a high-tech defense shield to protect America and its allies from missile attacks. But the ABM Treaty signed in 1972 stands in the way. The pact restricts missile defenses to one site per country, and more important for now, bans the sort of testing the Pentagon says it needs to develop an effective system. Russian President Putin, as recently as his visit to the US Last month, has opposed scrapping the treaty. Today in a national TV address, he faulted the US decision to unilaterally withdraw; though he conceded the US was within its rights under the treaty to do so.

PRESIDENT VLADIMIR PUTIN (Translated): The leadership of the US Announced this several times, and such a step wasn't a surprise for us. However, we believe the decision was a mistake. Russia, like the United States and unlike other nuclear powers, has long had an effective system capable of penetrating missile defense. That's why I can say without hesitating that the decision from the USA doesn't pose any threat to the national security of the Russian Federation.

MARGARET WARNER: President Bush noted that both countries have agreed to reduce their nuclear arsenals dramatically, and sounded confident the US-Russia relationship would remain positive.

PRESIDENT GEORGE W. BUSH: President Putin and I have also agreed that my decision to withdraw from the treaty will not in any way undermine our new relationship or Russian security. As President Putin said in Crawford, we are on the path to a fundamentally different relationship. The Cold War is long gone. Today we leave behind one of its last vestiges.

MARGARET WARNER: At the Pentagon today, Defense Secretary Donald Rumsfeld said he would continue meeting with Russian defense officials to find a framework to replace the treaty. He was asked about the Russians' reaction to today's decision.

DONALD RUMSFELD: We've said all along, "look, we're bumping up against this thing; we want to set it aside, we want to get on with a new framework, a new relationship that's looking forward, not back." I personally think that people ought to be relieved that this is behind us. It has been kind of a sticking point that's just been sitting there for this period of time-- "when are they going to withdraw?" The President said a year ago he was going to withdraw.

MARGARET WARNER: Rumsfeld made clear the testing program will move ahead as soon as possible.

DONALD RUMSFELD: It turned out that we do need to test, and we've waited now a year. And it's... Well, now we have to wait another six months before we can proceed with some of those tests. And it seemed that the thing to do was to get the clock ticking on the six months so that we're... Won't be constrained by the treaty after that. But we still have exactly the same attitude and approach that the President and President Putin announced, and that is that we are looking forward, that we're not looking back, that we do not consider them an enemy.

MARGARET WARNER: The United States plans to start building a missile defense command center at this army base in Alaska next spring.

For reaction to the President's announcement and what it means for US-Russia relations, we're joined by two Senators from the Foreign Relations Committee: Democrat Joseph Biden of Delaware, the committee chairman; and Republican chuck Hagel of Nebraska. Welcome, gentlemen. You've been quite critical, Senator Biden, of this impending announcement. What's wrong with it?

SEN. JOSEPH BIDEN: Wrong priorities set, the President in a citadel speech said that nonproliferation is the best strategy. Distracts our attention. I find it fascinating that the events of 9/11 mean we need a national missile defense. It seems to me it should have underscored the fact that we're more likely to have a bomb put in the rusty hull of a tanker coming up New York Harbor than anything else. We have cut -- the President has cut over $100 million out of programs that are designed to corral the nuclear material in Russia through our Department of Energy, cut Nunn-Lugar money. And according to Kadish, General Kadish, the guy who ran the program or runs the program, a couple of months ago he said there's no test envisioned in the next couple of years that would require to us pull out of the ABM Treaty. But quite frankly, I'm much more worried about starting an arms race in race than I am about the Russian reaction.

MARGARET WARNER: Ambassador Hagel... You may become an ambassador.

SEN. CHUCK HAGEL: I'm not worthy of that, Margaret.

SEN. JOSEPH BIDEN: We don't want to you leave, Chuck.

MARGARET WARNER: Respond to, that especially this argument that it's really misplaced priorities.

SEN. CHUCK HAGEL: Well, I understand Senator Biden's concerns and questions. But I view it a little differently. First, I think the response that we've seen from President Putin today and in fact Prime Minister Blair in saying that what's important here is stability and the nuclear stabilizing dynamic for the world and developing a framework for that is most important, not the specific document. And as you look across over the last few hours, the global and the kind of response we've had, I think it's been pretty good. But more to the point, why now and some of the tough questions that Senator Biden answered. First, you had Secretary Rumsfeld on a minute ago explaining why now, and I don't think I need to repeat what he said. But I think more fundamentally for me is that nonproliferation is not mutually exclusive with missile defense. I see this in a sense as part of a changing and dynamic world. Joe talked about the dirty bomb. Of course we have to be careful about that. The threats and challenges facing our world today are asymmetrical. They will come and do come in many forms, and I think one of those forms certainly in the long term could very well be someone launching a ballistic nuclear missile toward this country. Is that going to happen tomorrow? Probably not. But the testing and the technology takes time. It's probably five years away at best before we could put that in place. I don't want to risk the future generations of this country that we made a mistake here.

MARGARET WARNER: Senator Biden, on that point, I mean are you saying you really think it's a far-fetched danger, this idea that some rogue state could get ahold of ballistic missile technology and lob something our way?

SEN. JOSEPH BIDEN: Margaret, what's getting lost in all this -- the original rationale for the system is to defend against a rogue state getting a missile, is to defend against particularly North Korea, which is the most likely one to have the capacity that could have a missile to reach the United States, although it wouldn't be able to put a nuclear weapon on because it wouldn't have enough throw away to be a chemical weapon or a biological weapon. And my point is that deterrence works. We're going to spend tens of billions of dollars on this program; we're going to divert our attention from the needs that related to the 9/11 kind of things that can happen. So what are we doing?

MARGARET WARNER: But are you saying that you think deterrence would also work if an al-Qaida-like group ever got a hold of this technology?

SEN. JOSEPH BIDEN: No, I'm not saying that, but no one is saying an al-Qaida-like group is likely to get a hold of that, but that's what I'm worried about. An al-Qaida-like group is going to get a hold of some fissile material, put it around a hundred pounds of TNT, blow it up on a mall and render this city uninhabitable for the next thirty or forty years. That's what I'm worried about. That's a real threat. We're not doing anything. Look, Senator Baker filed a report saying that the single greatest urgency was to corral that nuclear material, it'll cost $30 billion, the Russians would cooperate with us. We've moved not a wit on that. We're going to be able to afford all these -- $30 billion for, that $8 billion for chemical weapons, the $30 billion we need for homeland defense -- and at the same time we're going to be out there spending tens of billions o dollars on a threat that is based upon the notion that one morning Kim Jung Il is going to wake up in North Korea, assuming he gets the capacity, and say, "You know, I'm taking out San Francisco today and not worry about retaliation? Name me one single nation state in the history of mankind, knowing that they would face absolute annihilation that has gone forward with an offensive action against a state that could annihilate them. I don't know one.

MARGARET WARNER: Senator Hagel?

SEN. CHUCK HAGEL: Well, like I said earlier, I don't believe it's an either/or scenario here. We're going to have to pay attention to all the pieces, all the dynamics that Senator Biden pointed out. And I happen to believe, and I think a good number of Americans believe that the potential is there for... is true and it's real and it is there for some group, some organization and, and not necessarily a rogue nation as we define rogue nations today, would not in the future have the capacity and the deliverability, capability, the delivering of that nuclear weapon, that it's not going to be there. I don't think we can sit here-tonight and predict what's going to happen or be the situation in the world in five years. I think that we have got to plan and prepare and protect for all these possibilities -- and including what Senator Biden is saying. Now, are we going to need to do more? Of course we will do more. It will require us doing more in areas that we haven't done much in, in the past. But I don't think that this is exclusive from what I think is a very real threat, and even Henry Kissinger, the architect of the ABM Treaty in 1972, has said it is now time, because of the world changing and the threats changing, the challenges changing, to move beyond and put together a new framework of nuclear deterrence and nuclear stability.

SEN. JOSEPH BIDEN: Margaret, I don't disagree with the bottom line that this is a threat. The question is that: Are we safer if, as a consequence of this, China goes from less than two dozen ICBM's to 250 ICBM's and then Pakistan responds to, that as well as India and Japan goes nuclear in ten years? Are we in a safer world? Is anybody talking about a nuclear...

MARGARET WARNER: Let me ask Senator Hagel that because Senator Hagel that is a scenario that a lot of critics raise - that Russia doesn't have reason to be concerned but China does because they don't have as many and they -- it may just start an arms race in Asia and in South Asia.

SEN. CHUCK HAGEL: Well, Margaret, we could sit here and go "if "and "may "and "but" and "and" and "if" and "maybe" all day long and defer the tough decisions. There are certain parts of foreign relations and national security that we can't control. The things we can control, then those are the things that we better pay attention to. Now, do we want to deliberately offend China or start China or force China or induce China into an arms race? Of course not. China will have to do what it believes is the best in their own self-interest. But we cannot hold our national security interests captive to what China will do, maybe will do, we think will do. We've got to make a very tough, difficult, hard decision here, and we've made it, to make our national security needs come into focus with a capability to deal with those challenges out there. And I think that is what's paramount here, not that we dismiss the threat here of India or Pakistan or China. Those are real. And we're dealing with those. The President and Powell have dealt with those. They'll continue to deal with those.

MARGARET WARNER: All right, Senator Biden, let me go back, though, to the US-Russia relationship because that is a new element post September 11, which is this new cooperative relationship against terrorism. Do you think that withdrawing from this treaty will affect that?

SEN. JOSEPH BIDEN: I think it will affect it in ways we don't know on the margins. Look, one of the things that's happened here, Margaret, is that Putin is going to get an awful lot of heat from his military, an awful lot of heat from the browns and the reds, the old Commis and the nationalists for not putting up more of a fuss here. Now, for example, Senator Lugar and I have and I think Senator Hagel supports it, we have this proposal, for example, to say we'll forgive you debt you owe us, Russia, in return for you engaging in nonproliferation activities with us, including not selling to Iran or letting us have access to your chemical weapons to help you store them, et cetera, et cetera. I think we're going to see nuance changes in the willingness to go forward. You're going to see a nuance change in their willingness to see the expansion of NATO, which shouldn't affect our decision but may affect our European friends' decisions. I can't calculate -- in fairness to Chuck, I can't say for certain what will or will not happen. We've got to make some strong judgments. What I find unnecessary here was this notion that everybody believed, at least we were led to believe that you could have worked out a deal here with Putin on how to allow the testing to go forward with an amendment to or an addendum to the ABM Treaty. I asked Secretary Powell this morning when they called me to tell about this, "have you spoken to China?" He said, "We haven't had a chance to yet." Now, you know, I'm not sure that that is... I don't mean for a veto right or veto power or anything. And by the way, we were on the verge of having an agreement with North Korea in return for food and launching satellitesfor them to oversimplify that, that they'd stop moving toward the third stage of constructing a missile, which could have obviated the urgency of all of this.

MARGARET WARNER: Let me get Senator Hagel to respond to the first point you made, which had to do with the pressure Putin is going to be under from his generals and from a lot of conservative forces in Russia.

SEN. CHUCK HAGEL: Well, I think Senator Biden's right but that's not new. He would have a certain amount of that pressure regardless. He understands that. And I think...

MARGARET WARNER: But you don't think it's going to undercut this new relationship? Are you as confident as the President is, that in fact it's on a new footing and that's going forward?

SEN. CHUCK HAGEL: It's more to this point. Not as confident as I am or President Bush is, but in President Putin's own words today, he said that this is not going to affect the bilateral relationship we have of many common self-interests parts of this relationship. I mean he, President Putin, said it himself. Will there be blips and bumps along the way? Of course. This is imperfect, this is imprecise. That's it is it is. But the bigger picture here will I think, stay in focus. I think President Putin's lens will be, and I think he's quite clear on this, is he going to have some problems? Of course he is. But the bigger picture is where he will go and focus on as he should.

MARGARET WARNER: So Senator Biden, what should we be looking at in terms of the Russian reaction here on various fronts in the anti-terrorism war, whether it's bio-terrorism or nuclear proliferation or chemical stockpiles, what do you think we should be looking at in the next year to know whether, as Senator Hagel put it, Putin's lens stays clear or that he is still on track in this relationship, versus the opposite?

SEN. JOSEPH BIDEN: I think he's going to stay on track. Again, I'm not most worried about the Russian relationship. I have said that for the last year and a half, as Chuck knows. That's not been my focus, the Russian relationship. But I think with regard to Russia, you could look at attitudes toward Iraq, attitudes toward Iran, whether or not there's more cooperation or less cooperation.

MARGARET WARNER: You mean at the UN or at selling the material, technology?

SEN. JOSEPH BIDEN: Their bilateral relationships as well as agreements with us at the UN to toughen sanctions and the like against Iraq. But again, that will be hard to - that will be hard to measure. The place where the rubber's going to hit the road with Russia will be down the road if they conclude that we're going to weaponize space. If they conclude, for example, we're putting lasers in space and we're having an overall system, we're going for the big enchilada. You'll see it all change then. But in the meantime, in the meantime, my greatest concern is that we are focusing on... And by the way, I have voted for probably over $70 billion in research on this program. I think we should continue the program. I'm not saying we should scrap national missile defense. But what I am saying to you is that it's the wrong focus at this moment. And thing to look at over the next year, keep your eye on Asia, keep your eye on Asia, and that's the place where I think we're going to find out whether there's any positive or negative drawback in this. And we haven't even spoken about the efficacy of such a system and the capability of achieving a system. I know you don't want to talk about, that but that's another tie.

MARGARET WARNER: We can't. But let me have Senator Hagel have abrief final word.

SEN. CHUCK HAGEL: I go back to a comment I made earlier, Margaret. All the points that Senator Biden has raised are legitimate. They are questions. But again, we have to focus on what we think we can do, as the President said today, to protect the national security interests of this country and at the same time reach out, as we have been, to our allies, bring them into this process, consult with the Russians, as we have been, and the Chinese and others. And then we have to come to a point where we make a decision. I think what the President did today was responsible. I support it. I think it was the right thing to do. I know there are different points of view on it, but we have to move on and deal with what's ahead, and there will be bumps, and which know that.

MARGARET WARNER: All right, and we have to move on, but thank you both very much.

SEN. JOSEPH BIDEN: Thank you for having us.

UPDATE - MIDEAST MAELSTROM

JIM LEHRER: Israel cut all contact today with Palestinian leader Yasser Arafat, and the Israelis launched new air strikes and sent ground forces into Palestinian towns. We get more from Terence Smith.

TERENCE SMITH: The Israeli attacks continued overnight in Gaza and today in the West Bank town of Jenin, where helicopter gun ships and F-16s fired missiles into Palestinian Authority buildings. Israeli troops also moved into Ramallah on the West Bank, coming within 100 yards of Palestinian Authority President Yasser Arafat's headquarters. Other units moved into the Gaza Strip, tightening already strict security procedures. Meanwhile, the death toll continues to rise. Four Palestinians were killed in the West Bank and Gaza today. Three, including two teenagers, were shot by Israeli troops, and one was killed in the air strikes. The Israeli actions followed yesterday's deadly ambush of an Israeli bus in the West Bank. Ten Israelis were killed and scores injured when Hamas militants detonated bombs beneath the bus and machine-gunned its passengers as they fled. Today, a spokesman for the Israeli cabinet said his government will do what Arafat has not.

ARI MEKEL, Israeli Government Spokesman: The Israeli cabinet has decided last night, following the recent terror attack in which ten more Israelis were killed, to consider Arafat irrelevant. What it means is that from now on we will do what it takes to fight terror in the West Bank and Gaza. We will arrest the terrorists. We will put them in jail. We will bring them to justice.

TERENCE SMITH: In Gaza, a defiant Palestinian Authority official said Israel's intent was clear.

TAYEB ABDUL-RAHIM, Secretary General, Palestinian Authority (Translated): There is no doubt that the latest Israeli escalation and attacks in Gaza and the West Bank are aimed at toppling Arafat's Palestinian Authority.

TERENCE SMITH: The Israeli decision to break off contact with Arafat comes after a particularly deadly period of violence in the now 15-month-old second Intifada. A series of Hamas suicide bombings on December 1 and 2 killed 25 Israelis and provoked retaliatory Israeli air strikes in Gaza city and elsewhere. Prime Minister Ariel Sharon demanded that Arafat stop the violence and curtail the operations of the militant groups, or face the prospect of a unilateral Israeli withdrawal from the stalled Middle East peace process begun eight years ago in Oslo. The attacks also have coincided with a renewed US effort to get that process moving again. The US envoy sent to negotiate a cease-fire, retired Marine Corps General Anthony Zinni, has seen little but violence in the region over the course of his two-week mission. Nearly 100 people have been killed, and hundreds wounded, since his arrival. At the State Department this afternoon, Secretary of State Colin Powell sounded a tough note.

COLIN POWELL, Secretary of State: The situation is getting worse, not better, and we really cannot give up hope. We can't walk away from this. The stakes are too high. And Prime Minister Sharon is desperate to bring peace and security. Chairman Arafat is desperate to get the process going that would lead to a Palestinian state. We must find a way to bring these two somewhat complementary positions together so that we can get into a cease-fire. And the way to do that is to get rid of these terrorist organizations, such as Hamas, which do not want to achieve any of the two objectives of the two sides that I just laid out, and they are more likely to destroy the Palestinian cause than to destroy the state of Israel. And that's why Mr. Arafat, it seems to me, has the burden upon him right now to act very aggressively.

TERENCE SMITH: But Powell stopped short of breaking US Ties with Arafat, noting that he remains the elected head of the Palestinian Authority.

COLIN POWELL: He still has that authority, that mantle of leadership given to him by the Palestinian people, and we will continue to work with him.

TERENCE SMITH: But the Israelis say they will not. While denying any intention of harming Arafat physically, an Israeli government spokesman said it will pursue what he described as a "sustained and prolonged military action" aimed at demolishing the Islamic militant groups.

NEWS SUMMARY

JIM LEHRER: In other news of this day, at least five gunmen stormed the Indian parliament in New Delhi. They killed seven people before being killed themselves. We have a report from Joyce Ohajah of Independent Television News.

JOYCE OHAJAH: For more than an hour, the attackers fought a running gun battle with soldiers and police. One assailant reportedly detonated explosives strapped to his waist. Others hurled grenades. At least 12 people, including the five attackers, were killed. Several ministers were in the building at the time, but none were hurt. No groups admitted to carrying out the attack in a country plagued by political unrest. India's arch foe, Pakistan, was quick to respond.

AZIZ AHMED KHAN: The government strongly and unequivocally condemns the attack.

JOYCE OHAJAH: Indian Prime Minister Atal Behari Vajpayee said India's battle against terrorism had reached its final stage, and his ministers vowed a tough response.

RENUKA CHOUDHARY: ...For a blow to parliament is trying to destabilize India, and our unity, and we will fight back. This is not going to be taken lightly.

JOYCE OHAJAH: The parliament areas have been sealed off as security forces remain on high alert.

JIM LEHRER: Last week, police in Bombay said a man arrested in October had confessed to training with Osama bin Laden's network. He said there were plots to attack parliaments in Australia, Britain, and India. In Washington today, the Food and Drug Administration asked a federal judge to hold the American Red Cross in contempt of court. The FDA cited repeated violations of blood safety regulations, including failure to quarantine possibly tainted blood or turn away high-risk donors. A 1993 court order had mandated improvements. The FDA said despite the problems, the nation's blood supply is safe. There was a mix of economic news today. The Commerce Department reported retail sales fell a record 3.7% in November, following a record gain in October. The labor department said wholesale prices dropped 0.6% in November. And new claims for jobless benefits were down 86,000 last week, the most in nine years. But the health insurance company AETNA announced it will cut 6,000 jobs, or 16% of its work force. The House today approved a compromise education reform bill. It's the biggest overhaul since 1965. Federal spending would rise nearly 20%, to more than $26 billion. States would test grades three to eight in reading and math. For the first time, the scores would determine how federal aid is spent. The bill now goes to the Senate. Congress gave final approval today to a defense authorization bill of more than $340 billion. It calls for another round of base closings, plus more money for missile defense and pay raises for the military. We'll see you online, and again here tomorrow evening with Shields and Brooks, among others. I'm Jim Lehrer. Thank you and good night.