updated 7/12/2005 10:33:43 AM ET 2005-07-12T14:33:43

Guest: Michael Isikoff, Dana Milbank, Robert Fluhr

ALISON STEWART, GUEST HOST:  Which of these stories will you be talking about tomorrow?

What a difference an e-mail makes.  Karl Rove and the Valerie Plame investigation.  What did Rove reveal and when?  A new e-trail blows the CIA probe wide open, and today the White House resorted to the old chestnut, No comment.

The London terror investigation.  Brits gamely return to the tube, while Scotland Yard turned to dozens of countries for any sort of clue about the 7/7 bombings.

The day after Dennis.  The damage, the clean-up, the frustration, and the anticipation of another storm already hanging out in the Atlantic.

And revenge of the bulls.  The fight pitting man against bovine in the streets of Pamplona.  Today the bulls ran, but so did the humans, in fear.

Goring galore, and more, now on COUNTDOWN.

And good evening.  I'm Alison Stewart, in for Keith Olbermann.

Even the nickname could be taken as either a compliment or perhaps an insult.  The man known as Bush's Brain, largely responsible, many would argue, for the election and reelection of President George Walker Bush.

But tonight, it seems, Bush's Brain is giving the White House a big old headache.

Our fifth story on the COUNTDOWN, what did Karl Rove tell Matt Cooper, and when did he tell it?

“Newsweek” magazine reporting that it has obtained an e-mail that shows White House adviser Karl Rove spoke to “TIME” magazine reporter Matt Cooper about the secret CIA operative at the heart of this leak investigation.

Now, he never mentioned the agent, Valerie Plame, by her name.  But he did try to discredit her husband, former ambassador Joseph Wilson, who traveled to Africa to investigate claims that Iraq was trying to buy uranium for a nuclear program, claims that Wilson dismissed in the pages of “The New York Times.”

Quoting Cooper's e-mail about his discussion with Rove, quote, “It was, K.R. said, Wilson's wife, who apparently works at the agency on WMD issues, who authorized the trip.  Not only the genesis of the trip is flawed and suspect, but so is the report.”

That Cooper's “double super-secret source” was in fact Karl Rove does not bode well for Rove's job security, based on what the president and his press secretary have said in the past about the leak investigation.

(BEGIN VIDEO CLIPS)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  And I've constantly expressed my displeasure with leaks, particularly leaks of classified information, and I want to know, I want to know the truth.  I want to see to it that the truth prevail.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY:  If someone in this administration leaked classified information, they will no longer be a part of this administration, because that's not the way this White House operates.  If anyone in this administration was responsible for the leaking of classified information, they would no longer work in this administration.

I made very clear that the president expects members of his administration to adhere to the highest ethical standards.

(END VIDEO CLIPS)

STEWART:  Well, that was then, this is now.  Scott McClellan trying to say as little as possible about the leak investigation this afternoon.  And the White House press corps, not buying it.

(BEGIN VIDEO CLIPS)

MCCLELLAN:  Our policy continues to be that we're not going to get into commenting on an ongoing criminal investigation from this podium.

JOHN ROBERTS, CBS NEWS:  When did you change your mind to say that it was OK to comment during the course of an investigation before, but now it's not?

MCCLELLAN:  Those overseeing the investigation asked that it would be their (INAUDIBLE), or said that it would be their preference.

DAVID GREGORY, NBC NEWS:  Did Karl Rove commit a crime?

MCCLELLAN:  Again, David, this is a question relating to an ongoing investigation.

GREGORY:  Scott, I mean, this, this is ridiculous.  You've got a public record out there.  Do you stand by your remarks from that podium or not?

MCCLELLAN:  And again, David, I'm well aware, like you, of what was previously said.

David, there will be a time to talk about this, but now is not the time to talk about it.

GREGORY:  Do you think people will accept that, what you're saying today?

MCCLELLAN:  Again, I've responded to the question.

TERRY MORAN, ABC NEWS:  Look, you're in a bad spot here, Scott, because now that Rove has essentially been caught red-handed peddling this information, all of a sudden you have respect for the sanctity of the criminal investigation?

MCCLELLAN:  I've responded to the questions.

And you have my response to these questions.

Do you have questions on another topic?

(END VIDEO CLIPS)

STEWART:  You got the response to his questions.

That one e-mail that's caused all the uproar, “Newsweek”'s story is the work of its investigative reporter, Michael Isikoff, who is kind enough to join us tonight.

Michael, thanks a lot for spending some time with us.

MICHAEL ISIKOFF, “NEWSWEEK” MAGAZINE:  Good evening.

STEWART:  Does this e-mail that I understand you've actually seen prove that Karl Rove has done anything illegal?

ISIKOFF:  (INAUDIBLE), more than seen it, we have it.  But, no, it doesn't, on its face, prove that any crime has been committed.  But it does raise questions, clearly, as your opening segment showed—indicates, about the credibility of past White House statements and past statements by Rove, and particularly Rove's lawyer, about these matters.

First, the e-mail clearly indicates that Rove spoke to Matt Cooper on a off-the-record, background basis, in which none of the comments could be attributed to him, or even anybody at the White House.  That's what the e-mail says.  The reference of opening line refers to the conversation with Rove being on a “double super-secret background” basis.

Number two, it clearly indicates that Rove did share information with Matt Cooper about Joe Wilson and his wife, and the role his wife played in arranging for the trip to Africa, and her place of employment, the working at the agency on WMD issues.

Now, that is far more than has ever been publicly acknowledged by the White House or Rove.  But it is still far less than what would be necessary to prosecute somebody for violating the Intelligence Identities Protection Act, which is the law that Pat Fitzgerald, the prosecutor, was appointed to investigate.

Number one, he doesn't, there's no indication Rove does use the name Valerie Plame or knew the name, although one could say Joe Wilson, he does refer to Joe Wilson's wife.  He only had one wife.  It might not have been that hard to figure it out...

STEWART:  Like Bill Clinton's wife, we all know who that is, right?

ISIKOFF:  Right...

STEWART:  Hey, let me ask you a quick question.

ISIKOFF:  (INAUDIBLE)...

STEWART:  We've talked about, and it's kind of obvious about the way this e-mail might hurt Karl Rove.  Are there any ways which it might help him?

ISIKOFF:  Well, it does, in fact, his, sources close to him have argued that it indicates that he is responding to questions by Cooper about Wilson, and he's pointing Cooper to facts, or at least, Rove's spin on the facts, that are different than what Wilson is saying.  In other words, as Rove clearly seems to be presenting it in the e-mail, he's trying to correct the record about what Joe Wilson has been saying about the origins of his trip, the genesis of his trip to Africa.

So in that sense, you know, it could be argued that he's trying to get the truth out, at least from the White House's point of view, rather than, as others see it, smear a political critic.

STEWART:  Let me ask you a nuts-and-bolts kind of question.  Has Karl Rove testified before the grand jury in this case?  And if so...

ISIKOFF:  Yes.

STEWART:  ... is it possible there are other worries for him?

ISIKOFF:  Yes.  In fact, that is, if there was a legal question that leaps out from this, it's precisely that.  Karl Rove has testified three times before the grand jury.  And he almost certainly would have been asked about this conversation with Matt Cooper.  Pat Fitzgerald had to know about it.  That's why he was subpoenaing Matt Cooper in the first place.

So Karl Rove's testimony under oath is fixed, it's frozen in.  He gave it without the benefit of knowing what Matt Cooper was going to say, without ever seeing this e-mail that we obtained and publish in “Newsweek.”

So the real question is, how does Rove's previous testimony under oath track with the contemporaneous account of the same conversation that Matt Cooper wrote in the e-mail, and what Matt Cooper is presumed likely to give when he testifies himself before the grand jury on Wednesday?

STEWART:  To be continued.  Michael Isikoff of “Newsweek” magazine, with the latest twist in this case.  We appreciate your time.

ISIKOFF:  Thank you.

STEWART:  And now for the political impact and that smackdown that went down in the White House press room, I'm join by “The Washington Post” national political reporter, Dana Milbank.

Dana, nice to see you.

DANA MILBANK, NATIONAL POLITICAL REPORTER, “THE WASHINGTON POST”: 

Good evening, Alison.

STEWART:  As we mentioned at the top of the show, the president and his press secretary both said repeatedly, anybody in this administration responsible for leaking classified info would no longer work in this administration.  So does Karl Rove have a job-security issue today?

MILBANK:  Well, if you were strictly basing it on that, those lines, of course he'd have a problem.  But in reality, we're talking about Karl Rove.  And in this business, in this administration, he is too big to fail.

The question came up repeatedly today, and Scott McClellan was so determined not to answer a question, he wouldn't say even whether the president has, still has confidence in Karl Rove.  But of course the president has confidence in Karl Rove, and very much needs him there at his side.

STEWART:  You just mentioned Scott McClellan.  What about his job security?  He took quite a beating in that press room today.  One reporter actually went so far to ask him, Have you consulted a personal attorney?  Tell us what it was like in there.

MILBANK:  Oh, it got even worse than that.  And Kent Herman from Cox News brought up the old Ron Ziegler phrase about his earlier remarks being “inoperative.”  So a very rough day for Scott.  He did a good job in terms of the administration.  He didn't give anything away.  But whenever you take that kind of abuse, it either looks like he was duped by his colleagues in the White House, or he deliberately misled people.

In either case, you got to wonder if he might be considering taking a job with his mother, who's running for office in Texas next year.

STEWART:  Yes, yes, neither one of those chalks up to a good day at the office, I would say.

Backlash against the president, or Mr. McClellan, what do you think?

MILBANK:  Well, backlash against Mr. McClellan is hardly of great concern to the administration.  He was pleading for reporters to remember their relationship with him.  And obviously, as you could see from those clips, people were not inclined to do so.

In contrast to what Mike Isikoff was talking about on the legal side, which is somewhat questionable here, on the political side, this is potentially very damaging, because it has inflamed this issue once again.  Remember, this is the issue two years ago that was dogging Scott McClellan and the administration at that time, when Scott first took his job.  This is not exactly what the administration wants to be returning to the headlines now, again with confirmation, that the president's top strategist is involved.

STEWART:  Now, as a writer, I'm sure you appreciate language.  And there's been an interesting wordplay going on through this entire investigation, the use of the phrase, “knowingly released classified information,” or Rove's defense that he never named Plame, yet he ID'd Wilson's wife.  From your reporting and working at the White House for “The Washington Post,” is this kind of parsing common with this White House, and is it calculated to protect the people?

MILBANK:  Parsing is common in any White House once they're in trouble.  It's no accident that you remember it was Dick Cheney just a few weeks ago talking about the insurgency in its last throes.  And then he said, Well, it depends on what the definition of throes is.  Of course, he didn't mention the definition of last throes.

Then we can go back to what, you know, depending on what the definition of the meaning of...

STEWART:  Is is.

MILBANK:  ... is is.  So you can see that whenever an administration is having some trouble, they're going to try to be legalistic, they're going to try to split hairs.  That may get you out of the legal jam, and very often does, but it's not going to get you out of the public relations jam.

STEWART:  Dana Milbank of “The Washington Post,” thanks for joining us tonight.

MILBANK:  Thanks.

STEWART:  OK, so Keith may be on vacation, but that is not stopping you from getting his take on today's Rove headlines.  You can read his latest blog by going to countdown@msnbc.com.

From political storms to literal ones, Hurricane Dennis proved to be a menace for an area still rebuilding from Ivan the Terrible.  We'll show you the damage, some physical, some emotional.

And the terror attacks in London, a rising death toll stymieing investigators, and an international effort to help them capture the bombers.

You're watching COUNTDOWN on MSNBC.

(COMMERCIAL BREAK)

STEWART:  Well, the sight of shingles flying off roofs, tree branches snapping, and power lines dangling has become an unwelcome summertime ritual for the millions who live on the already hurricane-battered hurricane battered Gulf Coast of Florida.

But despite 680,000 residents losing power, and structural damage estimated to be as high as $2.5 billion, many are slightly relieved tonight.

Our 4th story on the COUNTDOWN, as anyone there will tell you, it could have been much worse, but it still ain't no day at the beach, forecasters once predicting Dennis would roar ashore with a ferocity eclipsing that of Hurricane Ivan just 10 months ago.  Fortunately that was not the case.

The storm made landfall yesterday afternoon as a category three hurricane, but was quickly downgraded to a tropical storm by early evening.

Our correspondent Martin Savidge weathered the worst of it.  He is in Pensacola, Florida, where, just like after any visit from a bad guest, the focus now is on the cleanup.  Martin?

(BEGIN VIDEOTAPE)

MARTIN SAVIDGE, MSNBC CORRESPONDENT:  Good evening, Alison.

For the fifth time in less than a year, Floridians are heading home in the aftermath of a hurricane.  And surprisingly tonight, many are feeling lucky.

(voice-over):  It could have been worse.  Just two hours before landfall, Hurricane Dennis, with wind speeds of 145 miles per hour, was poised to make history as the strongest storm ever to strike the Florida panhandle.

But then suddenly the storm weakened as it sought its way ashore.  It packed, punch but was no knockout.

TED ROY, ESCAMBIA COUNTY SHERIFF'S OFFICE:  We really aren't out here looking for bodies like we were last time.  We're out here just assessing damage.

SAVIDGE:  Not surprisingly, beachfront communities bore the brunt of the blow, for the third time since 1995.  In Navarre Beach, the damage varied from minor to extreme.  To the west, in Pensacola Beach, scaffolding tore off a condominium under repair.  Boats ended up on shore.

UNIDENTIFIED FEMALE:  As bad as it is, we're actually relieved.

SAVIDGE:  In the popular vacation spot of Destin, the beach tourists love to walk now clogged the streets.

UNIDENTIFIED MALE:  Trying to get it off so people can get in.

SAVIDGE:  Florida Governor Jeb Bush toured the hardest-hit areas by air.

GOV. JEB BUSH ®, FLORIDA:  And I couldn't tell where the damage ended from Ivan and where it started from Dennis.

SAVIDGE:  The biggest problems here are power outages.  Dennis cut electricity to well over half a million homes and businesses.  And it could be weeks until it's fully restored.

If it wasn't wind, it was rain that brought misery.  Dennis triggered flooding in suburban Atlanta and south Georgia, forcing the evacuation of 400 homes.

UNIDENTIFIED FEMALE:  We've had a little flooding in the back before we had built up the yard, but nothing compared to this.

SAVIDGE:  Yes, Dennis could have been worse.  But for some, it was bad enough.

(on camera):  Also today, oil and gas producers began sending work crews back out into the Gulf of Mexico to restart rigs that had been silent since just prior to the storm.

Back to you, Alison.

(END VIDEOTAPE)

STEWART:  Martin Savidge in Navarre Beach, Florida.  Many thanks tonight.

Dennis was the first hurricane of the season, and I bet you a whole five bucks it won't be the last.

Look.  It's a girl.  Isn't she cute?  That pretty little swirl way out in the Atlantic is officially tropical depression number five but could soon be upgraded to tropical storm status and given the name Emily.  She could make her presence felt in the Caribbean as early as this Saturday.

More weather talk, and not just because it's small talk, it's because the elements will play a big role in NASA's scheduled return to space on Wednesday.  We'll have the latest from Cape Canaveral on the final preparations for liftoff.

But up next, payback, Pamplona style.  The bulls had a little score-settling to do.

Oddball, your place for the most comprehensive, exclusive coverage of the running of the bulls.

(COMMERCIAL BREAK)

STEWART:  I'm Alison Stewart, steering the good ship COUNTDOWN while Keith Olbermann is on vacation.

And now, playing on the verandah deck, crazy videos and strange news of wild animals and stupid people.

Let's play Oddball.

We begin at the festival of San Fermin with Oddball's special coverage of day five of the running of the bulls in Pamplona.  And it was a big day for the bulls.  After four days of jogging the two-mile course to meet their maker without so much as a decent trampling, the bulls today, much like that White House press corps, finally said, Enough is enough.

Four human participants were gored in the run, countless others trampled and tossed about as the normally two-and-a-half-minute run went into a brutal overtime.  And now before you accuse me of being a card- carrying PETA person, consider, all the bulls die a horrible death at the end of each day's run.  So if testosterone-fueled fellows who want to taunt the creatures during their last few moments on earth get injured along the way, well, I say, let the karmic boomerang do its thing.

Later, explaining the karma thing, we'll talk to someone that was actually gored in Pamplona and lived to speak of his buffoonery.

Now to Medford, Oregon, for the most dangerous wedding proposal of the week.  Todd Grenna (ph) says there was a stunt professional standing by to assist him as he set himself on fire, then dove into a pool, just to impress his girlfriend.  He then popped out of the water with a diamond ring and popped the question to the girl.

Now even though the correct answer was probably, Hey, creepy, get away from me, however, the lady was in love, so she said yes, but only if there are no candles at the wedding, just Glo-stix, like a Fish concert.

From third-degree burns to four decades of brain freeze, 7-Eleven stores today celebrating the 40th anniversary of the Slurpee.  Today, July 11, 7-Eleven.  Took me a minute too.

Across the U.S. and Canada today, more than 5,800 7-Eleven locations are giving out free samples of the slushy-sweet beverage.  Just don't think that gives you the right to flip through the magazines without buying one, pal.  Hospitals around the country have been bracing themselves for the onslaught of frozen fud headaches on this giveaway day.  But at last check, the death toll stands at zero.

NASA is hoping for a triumphant return to space.  Two days and counting for liftoff of the shuttle “Discovery.”  We'll have the very latest details from the Kennedy Space Center.

And new details out of London on the terror investigation there. 

Police might finally have a first break in the case.

Those stories are ahead.

But first, here are COUNTDOWN's top three newsmakers of the day.

Number three, Merab Morgan of Hendersonville, North Carolina.  She says she was offended by the movie “Supersize Me” and decided to go on an all-McDonald's diet to prove the movie wrong.  McDonald's for breakfast, lunch, and dinner.  In two and a half months, she claims to have dropped 33 pounds.  We want to know if she dropped them from her belly to her butt.  We're not sure.

Number two, the unnamed trucker in Zanesville, Ohio.  He was hauling a load of hay, which caught fire in the back of his truck.  His idea to put it out was to drive faster and swerve around a lot, hoping the wind would extinguish the flames.  Instead, he dropped flaming loads of hay all over Interstate 70, causing a six-mile-long brushfire, which ended at his parked truck.

At least he didn't try to stop, drop, and roll the truck.

And number one, Police Chief Angelo Machuca of east Chicago.  He said the crowds gathering every night on Drummond Street were getting out of control.  Hundreds of people from sunset to sunrise, walking to the area to see a vision of Jesus in the shadow caused by a streetlight.

After a week and numerous neighbor complaints, the chief finally decided to turn off the streetlight.  And Jesus went away.  And so did the people.  And thus ends another episode of Machuca, World's Smartest Police Chief.

(COMMERCIAL BREAK)

STEWART:  Just days after terrorists murdered at least 52 early-morning commuters, millions of Londoners defiantly got right back on the tube and buses and went to work this morning, this despite the fact that investigators are still pulling bodies from the wreckage and police seem to have little idea about exactly who's behind the attacks.

Our third story on the COUNTDOWN: four bombs and few leads.  In a moment, the latest on the investigation.  But first, the impact of the attacks on the broader war on terror.  President Bush today, addressing the FBI on counterterrorism measures, used the London bombings as a rallying point to pursue extremists across the globe.

(BEGIN VIDEO CLIP)

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES:  We don't know who committed the attacks in London, but we do know that terrorists celebrate the suffering of the innocent.  Our nation has no greater mission than stopping the terrorists from launching new and more deadly attacks.  Whether you're fighting the terrorism in Afghanistan or Iraq or rooting out terrorists here at home, America is counting on to you stop them.

(END VIDEO CLIP)

STEWART:  In an irony of timing, a scant 10 minutes before the president addressed the FBI, Prime Minister Tony Blair briefed his own government on the bombings, but there was not one single mention of Iraq, Afghanistan or al Qaeda, just a summary of the investigation and the impact on Britain.

(BEGIN VIDEO CLIP)

TONY BLAIR, BRITISH PRIME MINISTER:  Besides the obvious imperative of tracking down those who carried out these acts of terrorism, our principal concern is the bereaved, the families of the victims.  It is the most extraordinarily distressing time for them, and all of us feel profoundly for them.

(END VIDEO CLIP)

STEWART:  So far, 52 people have been killed by the bombs, only one of whom has been officially identified.  She was 53-year-old Susan Levy, who died in the King's Cross explosion.  At least 31 other people are still reported missing.  And as British officials pore through 2,500 surveillance tapes and over 2,000 telephone tips, there seem to be surprisingly few leads on just who was responsible for the attacks.

NBC's senior investigative correspondent, Lisa Myers, is in London, tracking the latest on the investigation—Lisa.

LISA MYERS, NBC CORRESPONDENT:  Alison, a former senior U.S. Official tells NBC News that British investigators have some possible leads.  He said British intelligence has told U.S. intelligence that investigators have picked up some fingerprints from the bomb materials.  We're told they can't be certain yet that the fingerprints are those of the bombers.

(BEGIN VIDEOTAPE)

(voice-over):  This new cell phone video shows the scene after Thursday's attacks, which authorities now believe involved at least four operatives.  Law enforcement officials tell NBC News that investigators suspect the bombers congregated here, at the King's Cross tube station, then set out to plant the devices.

DEPUTY CHIEF CONSTABLE ANDY TROTTER, BRITISH TRANSPORT POLICE:  King's Cross appears to be a significant factor in our investigation.

MYERS:  Why?  Because all three trains left that station and bombs on board exploded within seconds of each other.  The bomb on the bus also went off not far from King's Cross.  Londoners are jittery with the bombers still at large, and after five days, many families still have no answers.

MARIE FATAVI-WILLIAM, SON IS STILL MISSING:  I need to know what happened to my Anthony!  He's the love of my life!

MYERS:  Frustrated by their slow progress at finding the culprits, the British have reached out to intelligence officials from 30 countries for help.  Intelligence sources say European officials were asked to track down associates of this man, Mustafa Setmaryam Nasar, also known as Abu Musab al Suri, who allegedly was involved in the Madrid bombings.  Nasar, seen in this video obtained by NBC News, once lived in London and in the late '90s, allegedly trained Europeans in Afghanistan and sent them back to Europe.

UNIDENTIFIED MALE:  He's a master of teaching the use of explosives, and he has tremendous credentials in terms of a war fighter.  He's fought in several jihads.

(END VIDEOTAPE)

MYERS:  Tonight, Nasar's high on the list of suspects in an investigation which may finally have some leads—Alison.

STEWART:  That was Lisa Myers reporting from London tonight.

For more on the scope of the investigation, we turn to MSNBC terrorism expert and executive director of the national security program at Harvard University Kennedy School of Government Juliette Kayyem.

And Juliette, as Lisa mentioned, on Saturday, British intelligence officials convened a highly unusual and private summit in London with intelligence officials from the U.S., two other dozen other European countries.  They want to share information on the attacks.  Read between the lines for us.  What does this tell you, this meeting?

JULIETTE KAYYEM, MSNBC TERRORISM EXPERT:  I think it probably tells us that the British haven't gotten very far in their investigation.  Now, it is very likely stuff isn't leaking out, that maybe they are further along.  But my suspicion is that they have nowhere—they don't really know where to look right now, so they're reaching out to the Spanish, of course.  They're reaching out to the French, and of course, the United States, to figure out whether our intelligence told us anything, if there's particular individuals they should be looking out for.

So it's not a very optimistic meeting, in that sense.  On the other hand, it's unprecedented and probably good news, to the extent that you have now all these security agencies recognizing that Europe is now this sort of new home front in terms of terrorist attacks.  The French clearly worried, the Italians clearly worried they might be next, and Denmark, for example.  And so you have this getting together because all of them recognizing that they're at least one united home front in this regard.

STEWART:  Obviously, people are comparing the London attacks to what happened in Madrid.  It only took a few days for Madrid officials to piece together an idea of who might have been responsible for the attacks on those trains there on 3/11.  Why do you think this British investigation has taken so much longer?

KAYYEM:  Well, to be honest, the Spanish got very lucky.  There was an undetonated bomb that led to important forensic evidence, which then led to the cell.  And when you really look at terrorist incidences, they get solved a lot of times, or they even get stopped sometimes, through luck.  It's a Customs agent stopping a guy at the border in the western United States, or in the case of the Oklahoma City bomber in the United States, him getting pulled over by a cop for a speeding ticket.

These cases, you know, a lot of times rest on luck or the stupidity of the terrorists, them leaving something behind.  So if there are fingerprints, as Lisa reports—there are fingerprints on a bomb, that will be the first specific evidence, of forensic evidence leading us to maybe a criminal who can then lead to us a terrorist cell.  And that's probably how this—where this—how this investigation will unfold.

STEWART:  There's been a lot of reporting about these surveillance cameras...

KAYYEM:  Right.

STEWART:  ... 2,500 from the underground, all around London.  Now, in the past, how have terrorists dealt with maneuvering around these cameras, or did the British police actually have one up on them, perhaps, in this case?

KAYYEM:  They may.  I mean, basically, the videocameras in King's Crossing (SIC) are going to be the most important because that's clearly where either the terrorists congregated or at some stage, they met to figure out how they were going to sort of attack these—all these different hubs that were leaving King's Crossing.  So that's where I would be looking, if I were them, in terms of the video surveillance.  Then they can go backwards from that and figure out it leads them to anyone that they know or maybe some cell we don't know.

You know, I still use the term “cell.”  I think now it's probably misleading.  “Cells” implies a highly organized group of people, maybe hierarchical, getting orders from above to do something.  What we're starting to hear from European intelligence officials is that these groups are really spontaneous gangs who are really bad gangs.  In other words, that they're sort of group of friends who believe in a certain cause, figure stuff out.  This was  not a highly sophisticated attack, although very successful.  And so even the notion of cells, like the notion of al Qaeda, has started to change over the last three-and-a-half years.

STEWART:  And we need to be fluid, as well, in the way we think about those kind of things.

KAYYEM:  Yes.  Exactly.

STEWART:  Before I let you go, let's talk about how this relates to Iraq or doesn't relate to Iraq.

KAYYEM:  Right.

STEWART:  Prime Minister Tony Blair played down the connection between Iraq and the bombings.  But “Newsweek” magazine is reporting that CIA officials have been long concerned that terrorists recruited in Europe by Zarqawi, trained in Iraq, aren't going to necessarily stay in Iraq.

KAYYEM:  Right.

STEWART:  They may come home with their knowledge.  What are your thoughts on that?

KAYYEM:  I think that's absolutely true.  The CIA is suggesting it, and I think the British intelligence officials are suggesting it.  Zarqawi would certainly want it.  The borders are open enough.  It's easy for them to access.  And here's the thing about Iraq.  You know, for a long time, a lot of us have been saying, Well, it's become sort of the focus for al Qaeda in the sense that, you know, that's how they're able to get recruits.

The scary thing about Iraq is that—and what's becoming clear is that it's also the training ground, so that it's not just this place that people, you know, are sort of galvanizing around, they are learning urban warfare skills—how to maneuver in streets, how to work in subways, skills that they weren't learning in Afghanistan.  And so that's the difference.

STEWART:  Juliette Kayyem, the executive director of the national security program at Harvard University's Kennedy School of Government and MSNBC terrorism analyst, and a pretty cool chick, as well.

KAYYEM:  Thank you!

STEWART:  Thanks for your time tonight.

In Afghanistan, for the first time ever, suspected terrorists have managed to escape from the main U.S. military jail.  Four militants described as dangerous enemy combatants by the United States fled Bagram Air Force Base early this morning, sparking a massive manhunt by coalition forces.  The U.S. has refused to name the suspects, but Kaber Ahmad (ph), a government official in the neighboring town of Bagram, said they were foreign fighters from Syria, Kuwait, Saudi Arabia and Libya.  He also provided the press with pictures of all four, which is much more helpful than the description he initially gave to the BBC, quote, “They all have short hair, long beards, and are wearing yellow prison clothes.”

And while it may sound familiar, it doesn't lessen the horror of it all.  This weekend in Iraq, at least 48 people were killed by gunmen and suicide bombers across that country.  At an Iraqi army recruiting station in Baghdad, witnesses say a young man walked in, started complaining about the lack of jobs and alleged corruption in the new government.  Then, as people drew closer to listen to his complaints, he blew himself up, killing at least 22 bystanders and wounding 43 more.

In the northern town of Kirkuk, four people were killed at a local hospital when a suicide bomber detonated his car.  And in Mosul, a remote-controlled roadside bomb exploded as the police chief of the nearby town of Nimrud was driving by.  Four of his officers were killed, but the chief escaped unharmed.

And on the subject of Iraq, yet another leaked British memo is causing ripples of concern.  It details U.S. and British plans to cut their armed forces in Iraq by two thirds as early as next year.  The top secret memo, titled “Options for Future U.K. Force Posture in Iraq,” would reduce the British troop presence from 8,500 to 3,000.  And it noted that the U.S. was planning to scale back from its 176,000 troops to 66,000, handing over full control to Iraqi forces in 14 of the 18 Iraqi provinces in the year 2006.  Both the Pentagon and British military officials deny reaching any decisions about a timetable for withdrawing troops, the British defense secretary, John Reed, telling the press that, quote, “This is but one of a number of such papers produced over recent months covering various scenarios.  This is prudent planning,” end quote.

The next crew waiting to pilot the shuttle program back into space is anxious to blast off.  The final countdown is on.  We'll get the details on the final preps from MSNBC's Chris Jansing.  And an air show disaster in Canada, a World War II dogfight simulation goes horribly wrong.

Those stories ahead, but first, here are COUNTDOWN's top three sound bites of this day.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  You just keep on (INAUDIBLE) pedals, Lance!  I love you!  You've made this trip something more than I ever dreamed possible!  We're with you all the way, Lance!  Keep on dancing, boy!

JEFF BURNSIDE, WTVJ-TV (voice-over):  Wild sharks were fascinated with our camera because of the tiny electrical current coming from the batteries.

UNIDENTIFIED MALE:  (INAUDIBLE) man there with the (INAUDIBLE) jersey.  Let's not forget as he goes over the top of the climb here to give himself maximum points to be streaking by to give himself a few points in that competition.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

STEWART:  OK, think about your last hold-your-breath moment, a moment so exciting yet so scary—the first time you kissed someone you really liked or maybe it was the moment that you opened what you hoped was a college acceptance letter, maybe watching a space shuttle launch.

Our number two story on the COUNTDOWN: the return to flight for the nation's space shuttle program.  The first launch since the Columbia disaster two-and-a-half years ago is now only two days away.  NASA officials were heartened when Hurricane Dennis stayed far from their Cape Canaveral launch site.  But if the Discovery doesn't launch this week, officials may find themselves butting heads with another developing storm.  MSNBC's Chris Jansing is in Cape Canaveral with the latest—Chris.

CHRIS JANSING, MSNBC ANCHOR:  Hi, Alison.  It would be difficult to overstate the importance of this mission, STS 114, to both NASA and the future of manned space flight.  NASA, of course, feels its reputation on the line.  This is the first flight in two-and-a-half years since Columbia broke up on reentry in February of 2003, killing all seven astronauts on board.  But this is also the first step toward the end of building the international space station, and that would lead to landing man on Mars, something President Bush has called for.  So the stakes here, again, just couldn't be higher.

Let's talk about what happened today, two briefings by NASA officials.  They say it is all systems go.  We had already heard from the astronauts who have been here at Cape Canaveral for two days.  They have been raring to go.  This is a long time for them to be practicing, to be in simulators, so they want to get on board Discovery and they want to be shot into space.

One unknown here, of course, is the weather.  They think there's a 70 percent chance it will cooperate.  That's very high.  And the Discovery has had $1.4 billion in modifications, almost 50 changes to this shuttle.  So they think it is the safest shuttle that has ever flown.

Now, the countdown officially started yesterday.  Take a look at the countdown clock.  It is not ticking—no hours, no minutes, no seconds.  The reason is while they were working so hard on the shuttle, they forgot that this is an Apollo-era clock, so it didn't go as high as the 43 hours of the countdown.  It will actually start one day, 24 hours, before the official launch starts.

And it will have a series of holds.  This is not something that goes through for 24 hours.  There are a number of holds built into this system.  This is the most complicated mission that they've ever had, in terms of the lead-up to the actual launch.

Now, coming up tomorrow, I just want to let you know that we're going to have a special on this launch, the importance of the mission, the safety modifications that have been made.  We're going to be talking to seven former astronauts, including the last man to leave his footprint on the moon.  They'll have their impressions of this mission and the future of space.  We'll also be talking to the family of one of the astronauts who was killed on board the Columbia.  So all of that coming up tomorrow night, 8:00 Eastern, right here on MSNBC—Alison.

STEWART:  MSNBC's Chris Jansing.  Many thanks.

Another kind of flight that usually produces ooh's and ah's resulted in gasps when an air show ended in tragedy.  Two Americans pilots were killed Sunday as they recreated a World War I dogfight at an annual air show in Moose Jaw, Canada.  What should have been thrilling was instead horrifying as Bobby Younkin and Jimmy Franklin collided their biplanes before 20,000 spectators.  The civilian aerobatics team with the unfortunate name, called the Masters of Disaster, were performing the stunt, along with a third plane which landed safely.  No spectators were hurt.  Canada's transport safety board arrived today.  No indication yet on what exactly went wrong.

And from the morbid coincidence file, there was another mid-air collision on Sunday when two small planes were practicing for an air show in Delaware.  the experimental aircraft collided over the Delaware Bay, leaving one pilot dead and another missing.  Rescuers found the body of pilot Jay Blum, along with the wreckage of his plane.  Divers are still looking for the second pilot.  The two aircraft were part of a six-plane formation called the Vultures.  The team had been practicing regularly.  It appeared that one of the planes spun out of control, but the investigation has just begun.

Making a sharp turn now into our nightly round-up of celebrity entertainment news.  “Keeping Tabs” we call it.  And another sigh of relief for David Letterman.  Looks like the man accused of plotting to kidnap his son is going to jail.  Kelly Frank will plead guilty to lesser charges in exchange for prosecutors dropping the most serious kidnapping-related charge against him.

Frank was arrested in March for planning to kidnap Letterman's 16-month-old son, Harry, and the boy's nanny at the Lettermans' Montana ranch.  Frank will plead guilty to felony theft, misdemeanor obstruction and possessing illegally killing wildlife.  No big details on that last charge.  But all of it will bring Frank 10 to 15 years in jail at his sentencing on September 13.  No comment yet from the Letterman camp, but he might consider a top 10 people your nanny wouldn't touch with a 10-foot pole.

And a legend from the song-and-dance days of a generation ago has passed away.  Frances Langford, who performed with Bob Hope's USO tours during World War II, has died at the age of 91.  Langford is best known for her steamy rendition of “I'm in the Mood for Love,” which enthralled soldiers during those overseas shows at military bases and hospitals and was covered spectacularly by Alfalfa of “The Little Rascals.”  Langford was a singer, radio star and actress in the 1930s through the '50s, appearing in 30 Hollywood movies, including “Yankee Doodle Dandy.”  Langford was active later in life, boating and sport fishing near her home in Jensen Beach, Florida, even remarrying when she was 80 years old.  My kind of gal.  But she has said in interviews that entertaining the troops, quote, “was the greatest thing in my life.”

Tonight's number one story is ahead: humans, bulls, cobble streets, booze.  One man explains the desire to risk life and limb all in the effort to outrun a bull.  Stand by.

(COMMERCIAL BREAK)

STEWART:  Thousands, tens of thousands, actually, head to Spain every year for the San Fermin festival.  That'd be in Pamplona.  And those celebrants bask in the glory of both sunshine and, we suspect, sangria.  Hundreds eventually decide it'd be a super idea to put foot to cobblestone and take on the bulls.

Well, there are two things you should know.  The first: Since 1910, 15 of those runners have died at the horns of their foes.  The second: Since 1910, all of the bulls have died at the hands of theirs.

Our number one story on the COUNTDOWN tonight: The odds are pretty good for the bipeds in this particular contest.  So need we ask the obvious?  Why?  For an answer, we turn to Robert Fluhr, who found himself on the business end of the bulls' horns two years ago.

Robert, thanks for joining us.  And we want to have a caveat here, of course, is that the COUNTDOWN current staff openly root for the bulls and maintain the stance that the deck is stacked against the bulls.  So let me just start by asking you, what motivated you to make this run?

ROBERT FLUHR, RAN WITH THE BULLS IN 2003:  I mean, that's a question that, unfortunately, is difficult to articulate.  It's the same reason why people jump out of airplanes and ride motorcycles.  It was something adventurous to do, and I decided to do it, and we had a good time doing it.

STEWART:  You got injured pretty badly, I understand.  Where were you hurt?

FLUHR:  Yes, I was injured real badly.  I had a bunch of internal injuries, and I was the hospital for about three-and-a-half months.

STEWART:  Three-and-a-half months?

FLUHR:  Yes.  I was in the hospital in Pamplona about a month, was finally able to—healthy enough to travel, stable enough to travel, and I was medevaced back to the States and spent about two months—on and off, two months in the hospital back in the States.

STEWART:  All right.  Now, I understand insult to injury, you slipped and fell, and a bull tried to kind of sweet talk you there.

(LAUGHTER)

STEWART:  What happened?

FLUHR:  Yes.  Yes, a little bit.

STEWART:  What happened?  He got friendly?

FLUHR:  Yes, a little friendly.  I was on the wrong end of his horn.  And I didn't know to what extent or how badly I was injured until I got up and tried to run again.  And then I realized it pretty quickly after that.

STEWART:  So when you're running down the streets like this, is there any method of egress?  Is there any place to escape to?

FLUHR:  Yes, there are.  There's—about every, you know, 20 to 30 feet, there are little alleyways and walls that you can bail out and, you know, crawl under, if an emergency, you know, such as what I experienced happens.  And you can certainly do that, which I would have, but unfortunately, I fell and slipped, and I was in the middle of the street, not close to any of those bail-out points.  And the bull was quickly on top of me.

STEWART:  We've been making a lot of jokes about sangria and cerveza.  I understand, though, they actually do screen for people who are drunk, right?

FLUHR:  Yes.  It's not like an official screen, but there are plenty of authorities, whether it be, you know, EMT-type personnel or police officers, walking through the crowd and kind of, you know, looking at the different people, see what they're, you know, doing, how they're acting, what's going on.  Believe it or not, there are not, you know, as common belief would have it...

STEWART:  Robert...

FLUHR:  ... very many intoxicated people during that run.

STEWART:  For the record, Robert Fluhr, veteran of Pamplona.  Thanks a lot for joining us tonight.

That is COUNTDOWN.  Tucker Carlson drops in next.  You can see what kind of situation he's in.  I'm Alison Stewart, in for Keith Olbermann.

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

END   

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