[Wolf Blitzer, Cnn Anchor:] Happening now, a new round of attacks between Hillary Clinton and Barack Obama camps. Disputes over race, code words, political tactics, they're dominating the Democratic presidential race right now. This hour, can either candidate come out of this ugly war of words a winner? Plus, the Republicans' final drive to win Michigan. On the eve of the primary, three candidates in the state's troubled economy right now in the spotlight. And President Bush gives the Saudis the royal treatment in the form of a huge weapons deal. Officials in Tehran are accusing Mr. Bush of trying to stir up Iranophobia, as they're calling it. I'm Wolf Blitzer. You're in THE SITUATION ROOM. The top Democratic presidential candidates are adding more fuel today to their nasty fight over race and politics. And voters are left reading between the lines of what's been said by Hillary and Bill Clinton, Barack and Michelle Obama, and their respective surrogates. Let's go out to our senior political correspondent, Candy Crowley. She's watching all of this unfold in Nevada, which holds its caucuses on Saturday. This dispute between these two camps, it's getting very, very nasty out there. What's going on, Candy?
[Candy Crowley, Cnn Sr. Political Correspondent:] Well, it absolutely is getting nasty, Wolf, particularly between the surrogates and behind the scenes. But this is not just about race and politics. It's about who to blame for bringing it up.
[Crowley:] The latest eyebrow-raising comment came from the head of Black Entertainment Television. Bob Johnson was introducing Hillary Clinton and attacked Barack Obama for allegedly questioning the civil rights credentials of the Clintons.
[Bob Johnson, Founder, Black Entertainment Tv:] I am frankly insulted that the Obama campaign would imply that we are so stupid that we would think Hillary and Bill Clinton, who have been deeply and emotionally involved in black issues when Barack Obama was doing something in the neighborhood that I won't say what he was doing, but he said it in the book.
[Crowley:] Johnson denies he was talking about Obama's admitted drug use while a teen. Bill Clinton, once referred to as the first black president, was under fire late last week for seeming to suggest that Obama's experience was a "fairy tale". Clinton denied it but felt the need for damage control on black talk radio most recently with Roland Martin.
[William Jefferson Clinton, Fmr. President Of The United States:] I have got a list of 80 attacks on her going back six months. When his campaign referred to her as the senator from Punjab, on the very same day they put out a three-page printed release attacking me for my business relationships and work with teamsters and others to try to get investment back in poor communities in America. It was a hard hit, man. I didn't say a word about it. And nothing happened to anybody who called Hillary the senator from Punjab. Then his top...
[Roland Martin, Radio Talk Show:] Well, actually that did generate some controversy in terms of the media.
[Clinton:] It generated controversy, but the point is, it was dismissed. And what he did was nothing compared to...
[Crowley:] So, Wolf, it went on like this all day long. Although, I will say that Hillary Clinton was up in New York today speaking at a Martin Luther King birthday celebration where she said in the end we may differ about minor things but we're all one family Wolf.
[Blitzer:] And John Edwards is sort of weighing on this as well, sort of watching it from the sidelines, this feud that's going on between the Clinton and Obama camps.
[Crowley:] Absolutely. And at this point, he is siding with Barack Obama. As you know, the two of them in some ways are going after the same vote, but they have both gone after Hillary Clinton as sort of the same old-same old. So the two of them have been at her about it. However, I will say that Barack Obama has tried very hard to kind of stay out of the direct conversation. Edwards, as you say, sort of injecting himself into this. But right now this is between the Obama camps and the Clinton camps.
[Blitzer:] Candy Crowley reporting from Las Vegas for us. Thank you. Let's get to President Bush right now. He's delivering a major arms deal to Saudi Arabia. It's a sign of how important the Bush administration views its alliance with the Saudis and how worried it is about the threat from neighboring Iran. Our White House correspondent, Ed Henry, is traveling with the president in Saudi Arabia right now. This is the first time the president has visited the Saudi kingdom. What's his bottom-line message there, Ed?
[Ed Henry, Cnn White House Correspondent:] He wants to show the U.S. is serious about defending an Arab ally against Iran.
[Henry:] Lots of red carpet for President Bush in the oil-rich kingdom of Saudi Arabia. But King Abdullah got the royal treatment as well. The U.S. giving the green light to a $20 billion arms deal to boost the Saudi military. All meant to show the U.S. is committed to helping protect Arab allies against a threat from Iran.
[George W. Bush, President Of The United States:] So the United States is strengthening our longstanding security commitments with our friends in the Gulf and rallying friends around the world to confront this danger before it is too late.
[Henry:] The president's tough talk came Sunday at this Abu Dhabi hotel, just 200 miles across the Persian Gulf from Iranian soil. The arms deal will give the Saudis precision-guided bombs so effective that some members of Congress are concerned the weapons could be used to target Israel. But Israeli Prime Minister Ehud Olmert has not raised objections after the U.S. agreed last year to give them $30 billion in military assistance. Not to mention the president asserting Iran is still a threat, despite a U.S. intelligence report that found Tehran has halted its nuclear weapons program.
[Bush:] A country which once had a secret program can easily restart a secret program.
[Henry:] Another key message of the president on this trip is pushing his freedom agenda, spreading democracy in the region as an alternative to extremism.
[Bush:] We cannot expect people to believe in the promise of a better future when they are jailed for peacefully petitioning their government. And you cannot stand up a modern and confident nation when you do not allow people to voice their legitimate criticisms.
[Henry:] That message is not easy to sell here in Saudi Arabia, where women are still not allowed to vote and a blogger has been in prison for other a month without facing any charges. But this is a close relationship. After dinner tonight, the president and the king had some late-night meetings. Now the president is staying at his guest palace. Tomorrow, he's going to the king's personal farm for more meetings, though there is a forecast right now for the first Saudi snowfall in decades Wolf.
[Blitzer:] I've met with top Israelis and top Saudi leaders, and I can tell you, the Saudis are almost as concerned about Iran as the Israelis are. And you know, Ed, how concerned the Israelis are. You were just there as well. Let's turn to politics for a second. The American race for the presidency, it's having a resonance out there in the Middle East where you are. What are you hearing?
[Henry:] Absolutely. Ed Gillespie, the White House counselor, told us today that in almost all the meetings the president has been having, whether in Israel, or here in Saudi Arabia, he's been getting quizzed what's going on in the election? Who's going to win on the Republican side? Who's going to win on the Democratic side? And it's funny. The president keeps deferring to Gillespie, saying he used to be the Republican Party chairman, ask him. Gillespie is not giving who he thinks is going to one, but he said at one of the stops he was asked directly, "Who is going to win the Michigan primary?" That specific. It tells you that even here in the Mideast, they're watching that U.S. election very closely Wolf.
[Blitzer:] The stakes are enormous for the United States, but they're also pretty good for the rest of the world as well, what happens here.
[Henry:] Absolutely.
[Blitzer:] All right. Ed on the scene for us in Riyadh, Saudi Arabia. Let's go to Jack Cafferty. He's got "The Cafferty File" for us in New York. Hi, Jack.
[Jack Cafferty, Cnn Anchor:] Hi, Wolf. For one brief moment after Barack Obama won the Iowa caucuses, it looked like we might actually have outgrown or petty racial bickering in this country. It didn't matter that Obama had run a dignified, intelligent campaign without so much as the mention of race. The people who have an interest of keeping this country divided along racial lines couldn't wait to get started. Do you realize how many morons would go through the rest of their lives ignored and completely irrelevant if we could ever get over the racial garbage? There's a lot of them. Now the racial fires are burning brightly once again. It's not like we don't have enough issues confronting all of us as Americans. We've got to get sidetracked by this crap. The last two days we've seen the Obama and Clinton camps embroiled in accusations that are steeped in race. Hillary Clinton defending her recent remarks on civil rights. She's suggesting Obama's campaign distorted what she said in an effort to inject race into the contest. For his part, Obama is dismissing Clinton's suggestion, saying the notion that somehow this is our doing is ludicrous. Obama is also describing Clinton's earlier comments about the legacy of Martin Luther King, Jr. as unfortunate and ill-advised. The Clintons find themselves in some unusual territory here when you consider Bill Clinton was once dubbed America's first black president. Meanwhile, all of this comes as large numbers of African- Americans are getting ready to vote in the primary in South Carolina. Ultimately, it looks like the big loser in all of this could be the Democratic Party. If the winner of the primary, whoever it turns out to be, wants to beat the Republicans' candidate, he or she will need the full support of a unified party, all of the Democrats, not one ripped apart by racial politics. So here's the question. Why can't the Democrats conduct a primary campaign without it degenerating into racial politics? Go to cnn.comcaffertyfile, where you can post a comment on my blog Wolf.
[Blitzer:] Good question, Jack. And I'm anxious to hear what our viewers think. Jack Cafferty standing by with that. Barack Obama right now getting ready to speak at a rally in Reno, Nevada. We're going to go there live and hear what he has to say. Will he discuss this whole issue of race? Later, by the way, we're also going to get more on what Bill Clinton is saying. He spoke to our Roland Martin earlier. The ObamaClinton battle over race, that's coming up as well in our "Strategy Session." Stand by for all of that. Also coming up, Republicans try to close the sale in Michigan. Tomorrow is the primary. It's seen as critical, a critical test in that wide open GOP race. And are Michigan Democrats being robbed? I'll speak live with the governor, Jennifer Granholm. We'll talk about the party dispute that's made the Democratic primary in Michigan a non-event. What happened? Stay with us. You're in THE SITUATION ROOM.