the israelis and the palestinians to make peace. a new lead on a famous cold case, the deadly tainting of tylenol capsules back in 1982. the fbi wants dna samples from one of the nation's most notorious killers. i'm wolf blitzer, your senate situation room. breaking news this hour, a new york supreme court judge's decision to grant bail to dominique strauss-kahn. the former head of the international monetary fund has to pay $1 million in cash and post as 5 million bond to get out of rikers island jail where he has been held since his arrest over the weekend. defense lawyers disputed prosecutors' claims that strauss-kahn is a flight risk. >> a great relief for the family to be able to have him [ inaudible ] >> the complainant in this case has offered a compelling and unwavering story about what occurred in the defendant's room.she made immediate outcries to multiple witnesses, both to hotel staff and police. the quick response to the hotel staff and law enforcement did help apprehend the defendant before his flight to france took off. >> let's get to analysis from jeffrey toobin. fact that the indictment came so to quickly after this woman's grand jury testimony what does that say to you? >> it says that the new york district attorney does not have any doubt about whether this case should proceed. they feel they have a case they can win in front of a jury. they feel like dominique strauss-kahn is looking at many, many years in prison and certainly looks like this case will go to trial. >> the seven counts in the indictment, i will put them up on the screen for you and viewers, criminal sexual act, another criminal sexual act, attempt to commit rape, sexual abuse, unlawful imprisonment, sexual abuse, forcible touching, seven counts, some mismean but also felonies, obviously, potentially if convicted on all of those counts, he spend a long time in jail. >> the top count here the same facts are behind all of these charges, which is a sexual assault. in new york state, like every state in the united states that is a very serious crime. people go away for many years in new york state prison if they are convicted. >> yesterday when you broke the news here "the situation room," jeff, that he could be released as early as today on bail, i got tweets from followers on twitter no way should this guy be allowed on the street. explain why the judge decided, yes it would be appropriate to let him await trial free on bail. >> well what he said was dominique strauss-kahn is presumed innocent at the moment. so this isn't about the strength of the case against him. this is about whether he is a risk of flight. and his attorneys put forward frankly what i thought was a compelling package of guarantees that strauss-kahn will show up, $1 million in cash, a $5 million bond. that is a promise to pay $5 million more if he disappears, most importantly 24-hour house arrest with electronic monitoring. i think the district attorney was very hard-pressed to argue that given all of those guarantees, that strauss-kahn was a genuine risk of flight and i think the jim made a genuine understanding to release him on those conditions. >> more on the breaking news later this hour and next, but jeffrey, thanks very much. another huge story we are following today, president obama's big speech on the middle east. he says that in the midst of an historic outcry for freedom and after the death of the world's most wanted terrorist, america must seize this moment of opportunity. >> those shouts of human dignity are being heard across the region. and through the moral force of nonviolence, the people of the region have achieved more change in six months than terrorists have accomplished in decades. >> in his speech today over at the state department, the president promised u.s. support for reform across the middle east and north africa and that includes a $2 billion financial aid package to help egypt, struggling after fall of president mubarak as well as tunisia. mr. obama had strong words on the crackdown of anti-government protestors in syria. he said president bashar al assad can lead the transition or, and i'm quoting the president right now, "get out of the way." . >> the syrian government must stop shooting demonstrators and allow peaceful protests. it must release political prisoners and stop unjust arrests. it must allow human rights monitors to have access to cities like dara. and start a serious dialogue to advance a democratic transition. otherwise, president assad and had his regime will continue to be challenged from within and will continue to be isolated abroad. so far, syria has followed its iranian ally, seeking assistance from tehran in the tactics of suppression. and this speaks to the hypocrisy of the iranian regime, which says it stands for the rights of protesters abroad, yet represses its own people at home. >> the president says the uprisings in the middle east make peace talk between the israelis and palestinians more urgent than ever. let's bring in our foreign affairs correspondent jill dougherty, over at the state department for us. this part of the speech causing a bit of a stir already, jill? >> reporter: it is, wolf, a little history lesson here. you know, with the previous president, george w. bush, israel had a friend in the white house because mr. bush rejected that idea of going back to the 1967 borders. in fact, in a letter to former israeli prime minister ariel sharon, he said that settlements create a reality on the ground. the obama administration says that was never official u.s. policy and today, president obama took that a step further. it's an idea the u.s. has support unofficially for years, but no president has ever before stated it as policy. >> the borders of israel and palestine should be based on the 1967 lines, with mutually agreed swaps, so that secure and recognized borders are established for both states. >> reporter: in return, obama called on the palestinians to guarantee israel's security and recognize its identity as a jewish state. those 1967 borders were in place before the six-day war in which israel captured the golan heights, the sinai peninsula, the west bank and the gaza strip from its neighbors. since then, nearly half a million israeli jews have settled in those areas and giving that land took create a palestinian state is an idea that israel rejects. mr. obama's statement puts pressure on israeli prime minister benjamin netanyahu on the eve of a high-profile visit to the united states. immediately after speech, netanyahu called the idea indefensible. but mr. obama had plenty to anger the palestinians, too, calling for a nonmilitarized palestinian state, criticizing the palestinian ownity agreement between fatah and extremist group, hamas, and trying to head off their plans to seek recognition at the u.n. general assembly. >> symbolic actions to isolate israel at the united nations in september won't create an independent state. >> reporter: the reaction was positive but they had a key question. >> what would be the american role in getting mr. netanyahu to accept this? >> reporter: the president's balancing act gave a little to each side but one observer says mr. obama may have been too careful not to stick his neck out. >> i think he didn't want to displease any particular constituency but what that meant was he wasn't going to take a lot of risks and when you're not following take risks on the middle east, you are probably not going to make a lot of news. >> reporter: and mr. obama will have two more chances this week, wolf to define his policy on the middle east. he will be meeting with prime minister netanyahu tomorrow at the white house and then he also has a big speech before the jewish lobbying group apec. and wolf, the only problem is even as the president was deliver they can major speech here at the state department, israel announced approval of more construction settlements, another sign that the peace process is in real trouble. >> see how those talks go tomorrow between the president and the prime minister. thank you, jill, for that. jack cafferty was listening closely to what the president said. jack is here with the cafferty file. jack? >> president obama had a message for middle east nations in his much-behind speech today at the state department. if you promote reform and choose democracy, we will help you financially. well, that's great, we can borrow some more money from china and give it away to the middle east. just brilliant n a sweeping speech that applauded reforms and condemned the use of force by middle east dictators against protesters, the president said this is not just about handouts but encouraging democracy, this in a part of the world where most people can't even spell democracy. he also said, "it's important to focus on trade, not just aid and investment not just assistance." the president announced the united states will give economic aid to middle eastern and north african countries that transition to democracy. he also said the u.s. will encourage investment in those regions. president obama said the united states is prepared to forgive egypt of $1 billion in debt and that we will help that country regain access to markets, as a democracy, by guaranteeing $1 billion additional in borrowing. egypt has an unemployment rate of about 30%. the majority of egypt's population sudden earth age of 30. it's a noble gesture, to be sure, but we've got a few problems, economically speaking, right here at home. high unemployment, mounting debt, the inability of congress to agree on anything there are people here in the united states who could use some help. and we're broke. flat broke. here's the question. is now the time to increase aid to the middle east? go to cnn.com/caffertyfile, post a comment on my blog. >> i think a lot of people would like to see some of the oil-rich arab states, whether the saudis, uae,calitier, kuwait, come in and help with aid for egypt and tunisia, other countries as well. >> how much money do you think mubarak got out of town with? >> he is some place under house arrest some place. >> billions and billions of u.s. taxpayer dollars. >> oh, yeah. >> in his pocket. >> over the years, a lot of money. >> yes, ma'am yes. >> fair point. >> so i mean, come on. >> thank you. we heard president obama's new warning to syria's president but how long is the u.s. willing to wait for bashar al assad to get out of the way? i will ask the united states ambassador to the united nations, susan rice. and harsh new comments about the president by an african-american scholar and former supporter who is now questioning whether the president of the united states is black enough. ♪ ♪ one, two, three, four ♪ you say ♪ flip it over and replay ♪ we'll make everything okay ♪ walk together the right way ♪ do, do, do, do you can do this... get the ball, girl. hmmm, you can't do that. but you can do this. bengay pain relief + massage with penetrating nubs plus the powerful pain relief of bengay. love the nubs! there's another way to minimize litter box odor: purina tidy cats. tidy cats premium line of litters now works harder to help neutralize odors in multiple-cat homes. and our improved formula also helps eliminate dust. so it's easier than ever to keep your house smelling just the way you want it. purina tidy cats. keep your home smelling like home. leaders around the world listened very, very closely to president obama's speech about the middle east today, including top diplomats over at the united nations. and joining us now from the state department, the united states ambassador to the united nations, susan rice. ambassador, thanks very much for coming in. >> good to be with you, wolf. >> a big day the president delivering major, major speech, let's get through some of the specifics, referring to your job in particular. he said symbolic actions to isolate israel at the united nations in september wouldn't create an independent palestinian state. dog that mean, that, you're trying to avoid any general assembly resolution on a palestinian state? >> wolf, obviously, as the president said, you can't vote a state simply by passing a resolution in the general assembly a palestinian state to which the president reity it ter rated his commitment living side by side with the state of israel can only be accomplished through director in,s which is why the president took the historic step of framing, from a u.s. point of view, two of the core principles that ought to guide those negotiations and encouraging the parties to return to the negotiating table as soon as possible to begin negotiating on the principle of security for israel and a palestinian state based on much ly agreed swaps on the '67 lines n new york, wolf, as you know at the u.n., there is a bit of a head of steam building for a resolution that would be designed to declare a palestinian state. but you cannot create a state through a piece of paper, we will not be supportive of efforts that seek to bypass the very crucial and critical step of great negotiations. >> the united states will vote against any such united nations general assembly resolution? >> we have been very clear, wolf, that you -- we are not going to support efforts in new york or geneva or elsewhere to bypass the absolute necessity of the two parties negotiating between himself to establish this two-state outcome which is so crucial for israel, for the palestinian people and our interests and the region. >> remind me back in february when you raised your hand to veto a united nations security council resolution that base called on the israelis to freeze settlement activity which the united states wants them to do. why did you veto that resolution? >> well, we have been clear for decades, wolf that on the part of the united states government that we don't accept the legitimacy of continued settlement activity, but we oppose that resolution for the very same reason that i just described. we cannot resolve crucial final status issues that can only be dealt with through direct negotiations bypassing those direct negotiations and coming to the security council and the general assembly. it doesn't work. as a practical matter, these are core, tough issues that have been thought for decades and they can only be resolved through direct negotiations, that's why i was instructed to cast that veto and did so. >> let's talk about the syrian leader, bashar al assad, how much time does he have to be involved in a transition to democracy before the obama administration says to him what it said to mubarak in egypt what it says to gadhafi in libya that it's over, time to go? >> the president was very, very clear today on syria and said that bash shar assad has to leave this transition right away to a credible democracy or get out of the way. we have been very, very clear in condemning the violence that has been perpetrated by the syrian government against its own people and laying out very specifically the steps that the syrian government must take if it is to show that it's ready and willing to lead to a genuine transition. yesterday, we added to the already very substantial sanctions that we have in place on syria by designating president assad himself and those closest to him violators of human rights and freezing their assets. so, these are very significant steps and they show that the patience of the syrian people is running out, the patience of the international community is running out and assad has to act and act swiftly and do the right things or, as the president said, he will find himself only increasingly isolated. >> define swiftly, how much time does he have? >> i can't give you a timeframe, wolf what you can see with the violence intensifying, the people becoming much more rested, the international community, led by the united states, making very clear this is not the behavior befitting a credible government, and imposing additional sanctions, time is short and assad needs to prove that he will either lead a credible transition or as the president said, get out of the way. >> tell us why it's in america's interests, even at these tough economic times, to be providing billions of dollars in economic assistance to egypt. and tunisia while cutting so much spending here at home? >> well, wolf, we are obviously deeply and responsibly committed to reducing spending in this country and trimming our deficit, but that doesn't mean that we have the ability to simply walk away from the world and not invest in crucial opportunities like the president outlined today that are transsnirgt vital region of the middle east and north africa t matters enormously to american national security and our national interests that the democratic transitions under way in egypt and tunisia are still young and still fragile succeed. and our ability to invest through debt relief in the case of egypt, trade agreements in the case of egypt. and tunisia and additional forms of effort to spur private sector investment are crucial to shoring up and helping to give foundation to those democratic transitions. that's in our national interest. and as the president said, we will make those investments, make them wisely, frugally but do so because it matters to our national security. >> ambassador rice, good luck. >> thank you very much. good to be with you. >> later in the situation room, we will speak with tony blair you can the former british prime minister, who is a special envoy to the region. stand by for that meanwhile, congresswoman gabrielle giffords gets a good report from doctors after surgery to replace part of her skull. she is getting well -- getting well wishes from outer space as well. and cnn in depth, where the jobs are. a field where some ph.d.s are applying for factory jobs. curtis: welcome back to geico radio, it's savings, on the radio. gecko: and the next caller is doug from chico. doug: oh...hey thereey...! gecko: you sound like a happy n. i wrote a song about it. gecko: alright, let's hear it! curtis: yeah jam session! doug: one, two... ♪ (singing) i got my motorcycle ♪ ♪ and my rv now i gotmore money. ♪ vo: geico. 15 minutes could save you 15% or more on car insurance. with listerine® whitening plus restoring rinse. it's the only listerine® that gets teeth two shades whiter and makes tooth enamel two times stronger. get dual-action listerine® whitening rinse. building whiter, stronger teeth. development along the mississippi river as it continues to overflow. lisa sylvester is monitoring that and other top stories in "the situation room." what is going on right now? >> first, the swollen mississippi river claimed the first reported life in the state bearing its name. a 69-year-old man died after being pulled from floodwaters near vicksburg, mississippi. the river crested there at historic height, thousands of homes destroyed, including the governor's lake house. meanwhile, there are new concerns the massive flooding, coupled with dry weather in other parts of the country, well that could hit you hard at the grocery store this summer. planting conditions for wheat and corn are currently suffering and prices for both crops are on the rise. doctors have nicknamed congresswoman giffords gorgeous gaby following a nearly four-hour surgery to replace a part of her skull shattered when she was shot in the head. the procedure is expected to improve her recovery. giffords' husband, nasa astronaut mark kelly is comma commanding the "endeavour's" final mission in space and described her condition in an interview with pbs. >> i had the chance at the end of the day to call her mom and her chief of staff and my brother periodically through the -- as the surgery was going on and she is doing really well. everything went as planned. her neurosurgeons are very happy. she is recuperating and she is actually getting back