Updated

The investigation into the leak of a CIA undercover officer's identity is being run by a team of career Justice Department counterespionage lawyers and FBI agents that President Bush says makes appointment of a special counsel unnecessary.

In answer Tuesday to intensified Democratic demands for a special counsel, Bush told reporters he was "absolutely confident" the Justice Department could handle it impartially.

"I have told our administration, people in my administration to be fully cooperative," Bush said during a fund-raising stop Tuesday in Chicago. "Leaks of classified information are a bad thing. ... I want to know who the leakers are."

That did not satisfy Democratic leaders, who argued that Attorney General John Ashcroft was too close to the White House to run an independent investigation.

"If there ever was a case for the appointment of a special counsel, this is it," said California Rep. Nancy Pelosi (search), the House Democratic leader.

Ashcroft has not ruled out the possibility of appointing a special counsel, said a senior law enforcement official speaking on condition of anonymity.

The investigation is aimed at finding who leaked the name of the CIA employee, possibly in an attempt to punish the officer's husband, former Ambassador Joseph C. Wilson (search), who had accused the administration of manipulating intelligence to exaggerate the threat from Iraq.

The probe for now is in the hands of 11 Justice Department lawyers led by John Dion (search), chief of the counterespionage section of criminal division. Dion's team handles all of the roughly 50 referrals a year from the CIA and other intelligence agencies about leaks of classified information.

The decision to begin the investigation was made Friday by Dion. A senior Justice Department official, speaking on condition of anonymity, said Ashcroft and acting Deputy Attorney General Robert McCallum were not notified until Monday afternoon. The official said the delay was not unusual.

As the investigation progresses, FBI counterintelligence agents from the Washington field office will be conducting the interviews and examining documents and e-mails, officials said.

The Justice Department told the White House and CIA to preserve any documents that might be related to the probe, including telephone logs, e-mails, notes and other documents.

Republicans said Democrats were playing politics.

"The Democrats haven't lost a nanosecond in jumping on this as a political matter," Sen. Arlen Specter, R-Pa., said.

Democrats tried to attach a resolution calling for a special counsel to a spending bill for the District of Columbia but Republicans ruled it not relevant and it was defeated without a vote.

Federal law prohibits the unauthorized disclosure of a covert agent's name, punishable by up to 10 years in prison. The CIA officer's name was published by syndicated columnist Robert Novak, who said he based his report on two senior administration officials.

News executives expressed concern that the investigation could lead to subpoenas of reporters' notes and phone records, and the journalists themselves.

"The question really comes down to whether there are other ways to do this that do less damage to the idea of the First Amendment," said Bill Felber, editor of The Manhattan (Kan.) Mercury, who handles freedom of information issues for the Associated Press Managing Editors. "This ought to be last resort, not a first resort."

On Monday, White House spokesman Scott McClellan said it was "ridiculous" to suggest Karl Rove, Bush's chief political strategist, had played any role in disclosing the name of Wilson's wife.

In an interview with ABC-TV's "Nightline" program, Wilson said he would tell the FBI, if asked, the names of "everybody who called me and told me" about conversations with Rove.

Wilson had traveled to Niger in 2002 to investigate allegations of uranium sales to Iraq. He concluded the allegations were not credible. On July 6, 2003, he wrote a commentary in The New York Times that said some intelligence related to Iraq's nuclear weapons program was "twisted to exaggerate the Iraqi threat."

White House counsel Alberto Gonzales, in two e-mails to White House staff on Tuesday, ordered the preservation of any documents relevant to the investigation, including phone logs, memos, notes and calendar entries from Feb. 1, 2002, and later that relate to Wilson, his fact-finding trip to Africa in February 2002 and his wife's purported relationship with the CIA and any contacts with anyone in the news media about those subjects.

In particular, Gonzales cited any contacts with columnist Robert Novak and Timothy M. Phelps, Washington bureau chief for Newsday newspaper, and Knut Royce, a staff writer for the paper.

Newsday Editor Howard Schneider said Tuesday evening his newspaper has had no contact with the White House or Justice Department about the memo. He said, however, that Newsday was probably singled out because the newspaper was the first to report that a CIA officer revealed in a Novak column was an undercover employee.