Question:

Jan Kavan, who was the Foreign Minister-- and Coordinator For Intelligence-- of the Czech Republic told me that the allegation that hijacker Mohamed Atta,met with the Iraqi consul al-Ani in April 2001, if it turned out to be true, could potentially embarrass American intelligence.  How could the FBI or CIA be embarrassed by such a Prague connection?

Answer:

Yes, it could embarrass the FBI if, as Kavan has also said, "American intelligence had failed before 9/11 to adequately appreciate the significance of the April meeting."
The putative meeting between the Iraq consul, al-Ani, and the 9-11 hijacker, Atta, took place on April 8, 2001, 5 months prior to the attack on the World Trade Center. The consul was expelled on Kavan's order two weeks later. That April the CIA, which maintained a liaison with the Czech counterintelligence service, was briefed on the expulsion. Because of the circumstances surrounding it-- in particular, a possible Iraq-sponsored bombing plot against an American target, the Radio Free Europe building-- the case presumably would have been of interest to the FBI.
The FBI also had a liaison officer in Vienna in neighboring Austria-- a city of some interest in this case. The Czech deputy foreign minister, Hynek Kmonicek, personally arranged for the Austrian embassy to issue al-Ani an emergency transit visa when he was expelled so he could wait in Vienna for a flight back to Baghdad. Vienna was also the city where Czech intelligence suspected that the person who had met al-Ani had gone. So al-Ani was a candidate for surveillance in the Vienna airport.
The issue is what, if any, actions, were taken, and what traces were left in the paper trail.
My article Prague Revisited in Slate <http://slate.msn.com/id/2091354/> describes the background of this briefing.