This is a partial transcript of The Big Story With John Gibson, July 5, 2004, that has been edited for clarity.

(BEGIN VIDEO CLIP)

COAST GUARD OFFICIAL IN BOSTON: We'll be boarding vessel traffic as it comes into the port of Boston. We will also, at a random basis, be placing Coast Guard officials on ferries, just to provide a presence in that area.

(END VIDEO CLIP)

DAVID ASMAN, GUEST HOST: That's just part of what they're doing.

About half of the budgets for this year's presidential conventions are going to be spent on security, for good reason. Intelligence suggests terrorists could be planning another attack.

I'm joined now by terrorism expert Walid Phares (search). And here is the big question, Walid: are the conventions a likely terrorist target?

WALID PHARES, TERRORISM EXPERT: Well, from the reading of Al Qaeda's strategic objectives, yes. Any major political gathering in the United States, let alone, those political conventions is a likely target because of their dimension.

ASMAN: Now, the element of surprise, of course, would be gone and they seem to like that element of surprise.

PHARES: They want to move to another area of how to integrate and infiltrate the United States. They're moving, to what I call the "Second Generation of Al Qaeda."

ASMAN: Which means?

PHARES: Opportunistic people born here, people with passports, people who have had links in the past, have not been very active and open politically.

ASMAN: So, people who are not on the FBI lists?

PHARES: That's exactly what they want to try to do.

ASMAN: So, you are saying, not only are they here now, but they probably are U.S. citizens?

PHARES: The recruitment process, basically, the first chapter of Al Qaeda recruitment process is to find U.S.-born citizens, U.S. with good accents, if possible, and not suspected of any action.

ASMAN: Where do they find them? We know they used to use mosques. Are they still going to the mosques?

PHARES: Well, originally the madrassas were in the mosques, according to their history, but now they're going to try to find them elsewhere as frustrated individuals. They will basically train them intellectually, then if they accept the mission, they would give them that mission.

ASMAN: But how do they, I mean, what, do they go around looking for bums on the street and ask them if they want to convert to Islam? I mean, what do they do?

PHARES: From my review of cases, basically they would identify a group of young people; they would give them that literature. It's a process that takes basically six to seven to eight months. But maybe two years at some point.

And at some point, when those people are ready for action they would train them, either outside the country, Afghanistan was the case, now not anymore; probably in other countries as well.

ASMAN: Now, who is directing — this is not a simple operation that you talk about: cultivating outcasts in the society, converting them to Islam and then eventually converting them to a murderous form of Islam is a long, complicated process. Who is directing them in this?

PHARES: Basically, from the cases that we've reviewed, they are sitting somewhere in the process of conversion of these individuals and monitoring who among these individuals is the most frustrated against the government or against the society. And then they would pull them into a secret cell and that cell could remain secret for as long as...

ASMAN: Here in the United States?

PHARES: In the United States.

ASMAN: So, they have these cells located, presumably somebody could look for them and find them, if we have infiltrated those areas in which they operate.

PHARES: David, the problem in countering and identifying these people is that they can form the cell 90 percent of all what they need is done under our laws. It's only when they decide to trigger that bomb...

ASMAN: It's only the last 10 percent?

PHARES: Yes.

ASMAN: Now, The Wall Street Journal had a great piece about how they uncovered this cell in Herndon, Virginia, that was associated with the American Muslim Council... who is now in jail. It seems, if you read the press, like we're gaining on them; like we are figuring out how their operations work and how to pin them down. What do you say?

PHARES: David, we are basically defeating the first generation of Al Qaeda, which was prepared before 9/11. Now, 9/11 abruptly ended their way of communications because we were not a society at war. What's happening right now is that they're trying to infiltrate institutions, agencies, armed forces and others by the fact that they are individuals, American citizens; nobody can identify their ideology until they trigger.

ASMAN: Is Usama bin Laden involved in this process?

PHARES: Long range. Of course, Usama bin Laden is a figurehead, but basically there is, what we call a North American command of Al Qaeda, which basically is formed of individuals who have not uncovered their identity after 9/11.

ASMAN: Now 9/11 itself was a huge operation that did demand a certain kind of central control. Are we likely to see if, we see anything — let's hope we don't — but if we do see some active terrorism here in the next couple of months, is it going to be independent of some kind of master control?

PHARES: When you put it that way, David, if 19 men were able to conduct an operation killing 3,000 people, what was the actual support system of these 19 men? Were they alone? I believe, and some people...

ASMAN: Of course, Usama bin Laden was bragging about the fact that he had not only designed the operation, but he had figured out the best way to knock down the towers.

So, he claimed to have some responsibility.

PHARES: He claimed to have actually, direct responsibility on the video aired on Al-Jazeera and other places. He said even that some of his colleagues didn't know about it.

My contention is that in the United States today there are at least 200 to 300 of the cadre that would have been able to conduct operations like 9/11.

ASMAN: What is the best thing that we could be doing that we're not doing now in fighting terrorism right here in the city?

PHARES: Further education of the public. The public is the most formidable weapon against the terrorists. Psychologically, if they are in a society which knows about them, they are deterred.

ASMAN: And what's the most important thing for the folks out there to keep aware of to spot in their own neighborhood?

PHARES: Well, first of all, read no more about jihad. Once they do have that knowledge, then systematically they would understand that any literature, any move, any word that indicates the existence of terror jihadism would be the beginning of the process.

ASMAN: All right. Walid Phares, great to see you. Thanks for coming in; good to see you in person.

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