JUDY WOODRUFF: Now: the debate over where to hold the trials of suspects accused of masterminding the terror attacks on the World Trade Center and the Pentagon.
Margaret Warner has our report.
MICHAEL BLOOMBERG, mayor of New York: There are places that would be less expensive for the taxpayers and less disruptive for New York City.
MARGARET WARNER: In a sharp reversal, Mayor Michael Bloomberg spoke out this week against holding the trial of alleged 9/11 mastermind Khalid Sheikh Mohammed in Lower Manhattan.
MICHAEL BLOOMBERG: It would be phenomenally expensive, and it is very disruptive to people who live in the area and businesses in the area, so that the economic impact is detrimental. It's detrimental. And nobody knows how big. And it would be better to do it elsewhere, if they could find a venue.
MARGARET WARNER: The trial for Mohammed and four of his co- conspirators was scheduled to take place here, at a federal courthouse just blocks from where the World Trade Center once stood.
That announcement was made in November by U.S. Attorney General Eric Holder.
ERIC HOLDER, U.S. Attorney General: They will be brought to New York, to New York, to answer for their alleged crimes.
MARGARET WARNER: That same day, he told the "NewsHour" he was confident the city was prepared.
ERIC HOLDER: And New York has also done a number of these trials in the past, has a track record for doing these high-profile terrorist trials.
JIM LEHRER: But you -- you coped with the thought of their -- of your decision creating a big red bullseye for every terrorist in the world?
ERIC HOLDER: I talked to Mayor Bloomberg. I talked to Governor Paterson. And Mayor Bloomberg especially said, you know, this is the place where this case ought to be brought. We can handle it.
MARGARET WARNER: But estimates of the costs have grown into hundreds of millions of dollars for security and lost revenue for businesses. And fears about a possible attack have grown as well.
Now New York state's senior Democratic senator, Chuck Schumer, has changed his mind, too.
SEN. CHARLES SCHUMER, D-N.Y.: I called the White House and told them that I thought it would be a very good idea that they look for alternative sites.
MARGARET WARNER: By today, it was widely reported that the Obama administration is considering moving the trial. The White House has asked the Justice Department to locate alternative sites near New York City. But a White House spokesman said, the president remains committed to holding the trial in federal court.
In fact, a number of influential lawmakers in Washington originally supported holding the trial in New York, including Senator Dianne Feinstein, who chairs the Senate Intelligence Committee.
SEN. DIANNE FEINSTEIN, D-Calif.: And I happen to believe that New York City is able to handle this in a very professional and definitively legal manner.
MARGARET WARNER: But the attempt to blow up an airliner over Detroit on Christmas Day raised new fears. And Senator Feinstein told NBC News yesterday: "From an intelligence perspective, the situation has changed with the Christmas attack. The administration should take good note of that and make a change as well."
The White House also faces increasing pressure to try all terror suspects before military commissions, instead of in federal criminal trials. Republican Congressman Peter King of New York has introduced a bill to bar use of Justice Department funds for trying Guantanamo detainees in federal courts.
King's fellow Republican Mike Pence of Indiana said today some Democrats may join Republicans at least in blocking funding for holding the 9/11-related trials in New York City.
REP. MIKE PENCE, R-Ind.: This is a terrible idea, to return the mastermind of 9/11 to the scene of the worst terrorist attack in American history, not only the financial cost, but the emotional cost. And, frankly, it really compromises the security of that city by making it a terrorist target.
MARGARET WARNER: In addition, six senators, both Republican and Democrat, sent a letter to Attorney General Holder earlier this week, urging a new site for the 9/11 suspects' trials.
It read, "You will be providing them one of the most visible platforms in the world to exalt their past acts and to rally others in support of further terrorism."
On the streets of New York today, there was still a debate about whether to host the trials.
ROY BABEL: I think it's New York. Nobody really cares, you know? It's just that people are -- people will be disgruntled a little about the security barriers and that kind of stuff. But I think, as long as they get passed it, it is a regular day as usual.
JOSE MONELL: I feel a bit scared for the fact that they going to be here in the States. You know, we're living here. Already, what happened, 9/11, I just don't want that to happen again. You know, I think they should be in the military. You know, I think he should be tried out there, more safer, more security, tighter security.
MARGARET WARNER: Still, Mayor Bloomberg said today, if there are no alternatives, New York City will go through with it.
MICHAEL BLOOMBERG: It's not my job to tell them what kind of a trial. I'm not a legal expert in any case. But, you know, if called on, we will help them. And I will say, I think they're trying. They understand, and they're trying to do something. It's just, there's no easy answers to any of this.
MARGARET WARNER: In the meantime, the mayor of Newburgh, New York, 60 miles north of Manhattan, volunteered his city. He said it would benefit from the attention and possible federal aid.
There have also been suggestions the trial could be held on an unpopulated island near Manhattan or at a nearby military installation.
For now, there is no indication of when the 9/11 prosecutions will begin, wherever they're held.