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THE SITUATION ROOM

Conflict in Gaza; Petraeus Testifies; Rockets Hit Near Jerusalem and Tel Aviv; Petraeus: Benghazi Attack Was Terrorism; Dems Defend Susan Rice's Comments; Political Firestorm Over Susan Rice; Republicans Seek Distance from Romney; Romney Blames Loss on Obama "Gifts"; Christie: Romney's Comments "Divisive"; Parade Crash Kills Four Vets; Two Missing in Oil Rig Explosion; Farthest Known Galaxy Discovered; Twinkie Maker Closing Business

Aired November 16, 2012 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: Happening now: Fighting between Israel and Hamas militants gets more explosive with an attack that could help turn the conflict into a full-fledged ground war.

Also, David Petraeus emerges from the shadow of the scandal to testify before Congress. Did he clear up confusion about the attack on the U.S. diplomats in Benghazi?

And another high-profile Republican now running away from Mitt Romney after he tried to blame his loss on so-called gifts from President Obama. James Carville and Ari Fleischer, they are here this hour. We're going to talk about the GOP's hand -wringing and backstabbing.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Hamas militants, there they are. Hamas militants in Gaza keep unleashing rocket attacks on Israel and get alarmingly close to Jerusalem. It's a new provocation as Israel continues its air assault on what it calls terrorist targets in Gaza. The death toll is rising along with fears of an all-out Israeli ground invasion.

The Israeli cabinet has just approved the call-up of 75,000 army reservists, in addition to the troops already positioned along the border with Gaza. A visit to Gaza by Egypt's prime minister failed to stop the bombardment and pull the region from the brink of all-out war.

U.S. officials blame Hamas for starting this conflict. But they are also urging to be measured in its response. The Defense Secretary Leon Panetta says Israel and the Palestinians need to negotiate a more permanent piece, his words, a more permanent piece in the region.

Our Pentagon correspondent, Barbara Starr, has been watching what's going on.

Barbara, what is the U.S. military most concerned about right now?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, as they watch that call-up of 75,000 Israeli reservists, that is the concern. Is this leading to a ground war? We have talked to officials here who say the major concern, Israel will move in on the ground. And that will be a significant escalation that will reverberate throughout the region. So here's the calculation. How far will Hamas go in continuing its rocketed mortar attacks into Israel? They know that if they pull back, the Israelis presumably will pullback and this escalation, this dangerous escalation can be avoided.

If there is a ground war, if Israeli troops cross that border, the tanks, the troops, and go into Gaza, the next concern is what Egypt will do. Egypt's new government, very fragile, will it feel the pressure to move? Will it come into Sinai? All of this now tonight at the end of a long, difficult week in Washington, the major concern here at the Pentagon.

BLITZER: I know diplomats in the region and indeed from around the world they are working hard behind the scenes to stop this from becoming an all-out war. What are you hearing?

STARR: Wolf, you mentioned Defense Secretary Panetta traveling in Asia, all that way, made the phone call to Ehud Barak, the Israeli defense minister, to talk about this.

Secretary of State Hillary Clinton firing up the diplomatic phone lines. Look at who she's been talking to in the last few days. She's been talking, of course, to the Israelis, the Egyptians, the Jordanians, the Turks, everyone in the region to see what can be done. The State Department spokeswoman, Victoria Nuland, today also hitting the message hard, de-escalation. Listen to what she had to say.

(BEGIN VIDEO CLIP)

VICTORIA NULAND, STATE DEPARTMENT SPOKESWOMAN: In all cases, her message has been the same, that we are urging a de-escalation of this conflict. We are urging those countries with influence on Hamas and other groups in Gaza to use that influence to get a de-escalation.

(END VIDEO CLIP)

STARR: Wolf, our correspondence as you know across the region, Gaza, Israel, watching this every minute, Wolf.

BLITZER: Barbara is watching it as well. Thank you.

Let's go to Gaza right now. Palestinians say 27 people have been killed there and dozens wounded in the intense bombardment by Israeli forces from the air and from the sea.

CNN's Sara Sidner is in Gaza City for us.

Sara, update our viewers. What's going on?

SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT: We have been hearing this place pounded by airstrikes. And we have also seen with our own eyes just behind me rockets from inside the city of Gaza towards Israel. So it is still continuing today in a very severe way, another round of airstrikes and a few rockets coming out from Gaza towards Israel. We went around the city today. For the first time we sort of got out into the city trying to see and talk to people who have been affected by these airstrikes and trying to figure out where these rockets are coming from.

I can tell you when I came out of the hotel this morning and we only got about a couple hours sleep, because all night long there were huge bombardments, we were seeing our windows rattling. We had to crouch down, my photographer Dan and I had to crouch down in the room as we were trying to get some information out to CNN.

Once we got outside during daylight in the morning and in the afternoon, when we looked up into the sky you could see tons and tons, dozens of trails from smoke from the rockets that had left Gaza City. You could also see black smoke from the airstrikes.

We saw damage to a home in particular. And we also saw the prime minister of Egypt visiting. And what we saw there was quite an emotional scene because he went to the hospital where he met the family and saw a young boy who had been killed in an airstrike, Mahmoud Savila (ph).

We went and found that family and we wanted to talk to them about what happened. We talked to the aunt. Their home is riddled with shrapnel. It's pockmarked with the elements from the bomb. And we also know that this young boy, 4 years old, was outside playing with his friends when the bomb fell. And that is how he died.

We did not see any military activity in the area, but we certainly did notice that in the skies in the neighborhood next to the area, there appeared to be some rockets coming from there. And then, of course, we heard the sounds of planes and more airstrikes. It has been a very devastating, day as you might imagine for the civilians living here particularly because we do know that there are dozens now of civilians who have been injured and more who have been killed.

So far, that number now is 29 people have been killed, at least nine of those militants and eight of those children -- Wolf.

BLITZER: Sara, the Israelis say if the rockets stop coming into Israel from Gaza, their airstrikes, their strikes from the sea will stop as well. I know you have had an opportunity to speak with some Hamas representatives.

Is there any indication they are going to stop shelling Israel with these rockets or missiles?

SIDNER: You know, Wolf, it's such a catch-22 because it depends on when you say this all got started. They say as long as the airstrikes keep happening, they're going to keep sending rockets over. Both sides saying they're both going to defend ourselves, both sides saying we have a right to defend our civilian population, and really the civilians getting caught in the middle. I sat down with the deputy foreign minister last night of Hamas. And I asked him, why do you keep sending rockets into civilian areas? And he said, we keep having civilians hurt as well. So, why are you asking me a question like that? He said, look, as long as we keep getting hit, we are going to hit back.

And it is a very difficult situation. It's a situation where you're wondering which side is going to say enough is enough. And usually there has to be a mediator between these two places. Gaza usually and Israel use Egypt as that mediator. But in seeing the prime minister here who we thought would come in and try to broker some kind of a truce or a cease-fire and then seeing the images there and then seeing him leave and hearing all of the rockets leave and then the subsequent airstrikes, it just seems like a very difficult situation.

And we're just not getting an agreement on either side that they will stop sending rockets from here and stop sending airstrikes into Gaza, a hard situation, Wolf. And we're not going to see the end, at least today.

BLITZER: All right. Sara, we will get back to you. I know you're in a difficult situation over there.

Sara Sidner is on the ground for us in Gaza City.

Later here in THE SITUATION ROOM, we're going to hear from the Palestinian Authority representative here in Washington. We're also going to hear from the spokesman for the Israeli prime minister, Benjamin Netanyahu.

Lots coming up on this developing story.

We're talking more about the danger of the fighting between Hamas and Israel. Will it spread? Will it add more instability to an already unstable Middle East? CNN's Fareed Zakaria, he is standing by.

(COMMERCIAL BREAK)

BLITZER: Jerusalem went on high alert with sirens wailing, as two rockets hit an open area just south of the city today. It's new evidence that Hamas now has weapons that can certainly reach farther and farther right into the heart of Israel.

Joining us now from New York, the mayor of Jerusalem, Nir Barkat.

Mr. Mayor, thanks very much for coming in.

When was the last time Jerusalem or at least the outskirts of Jerusalem had rockets or missiles aimed at it?

NIR BARKAT, MAYOR OF JERUSALEM, ISRAEL: Well, the threat always exists. And it's indeed coming closer.

But I think what the terrorists want to do is get maximum people terrorized. And naturally I think it's bloody chutzpah that they're using indiscriminate fire to hit civilians, and then when Israel says enough is enough and we're going after, targeted, of the people that are using terror against us, now they're saying that there's an excuse or there are reasons for terror.

Zero tolerance for terror. Zero accomplishments. Zero achievements for people using terror.

BLITZER: They're saying this is retaliation for the targeted killing by Israel in that airstrike of the Hamas military commander.

BARKAT: Well, unlike the indiscriminate fire of rockets and missiles, Israel targets the people responsible.

I think is a fundamentally different philosophy. We will do everything maximum we can not to hit civilians and people that are innocent. They do the maximum to hit people that have nothing to do with this that are totally out of this picture.

And I think it shows you the difference between the values of Israel, targeting people, doing everything not to hit civilians, and what they are doing. It's 180 degrees one from the other.

BLITZER: In addition to the airstrikes, the strikes from the sea, do you believe Israel is now poised to launch an invasion of Gaza?

BARKAT: Well, I think that Prime Minister Netanyahu and the Israeli government are very responsible. Enough is enough. They understand that we got to get rid of this whole rocket attacks on Israel on innocent people. And whatever it takes, that's what Israel's going to do.

And when the Hamas leaders will understand that using terror against Israel will get them zero, zero accomplishments and achievements and, if anything, they will hunt them down wherever they are, hopefully they'll get -- their sense will come back and they will not use terror at any time against Israelis.

BLITZER: Is your city, Jerusalem, prepared for strikes, rocket or missile attacks?

BARKAT: Indeed I think al Israel is prepared. We all understand that the terrorists have tried to terrorize us. Practically, every city in Israel in one way, shape or form, could be a target for missiles. I think that Israeli public in general, the center and, of course, the south are acting very responsibly, with lots of spine and patience.

And we are enabling the government and Israeli army to take action. We're giving them the backup they need. And I believe in the government and Israeli army that will eventually cut these people short and stop the violence against us.

BLITZER: I want you to listen to what former Senator George Mitchell who was the U.S. envoy during the Obama administration who tried to get Israeli/Palestinian peace talks off the ground. That didn't happen. What he told us earlier in the day. Listen to this.

(BEGIN VIDEO CLIP) GEORGE MITCHELL, FORMER U.S. SPECIAL ENVOY: What's happened in the past is when the damage gets so great, one side or the other, pulls back and stops. Or when the possibility of a much wider conflict emerges, people tend to stop. I think the problem is that you just keep the cycle going unless you address the root causes. And that is getting the parties into negotiations to try to resolve the underlying conflict.

(END VIDEO CLIP)

BLITZER: All right. What do you think? You agree with him?

BARKAT: Well, there are some Palestinians that are willing to talk -- but not to Hamas. The Hamas believe in their charters the destruction of Israel. And they will use the people that do want to speak from the Palestinians to get any accomplishment they can and use their terror and their viciousness to try and wipe us off the map.

These are not people you can speak to. They -- unfortunately, they're using force and try to achieve and get accomplishments through force. And these people have to be very, very clearly addressed. Zero tolerance. Zero accomplishments to the people terrorizing Israel.

BLITZER: One final question, do you expect a full-scale war in the days ahead?

BARKAT: I think Israel's prepared to do that if necessary. And I recommend the other side to think twice as to how they want to continue this crisis. Israel will do whatever it takes and I trust my government and Benjamin Netanyahu to do the right thing.

BLITZER: The mayor of Jerusalem, Nir Barkat -- Mr. Mayor, thanks very much for coming in.

BARKAT: Thank you.

BLITZER: Later, we're going to get a different perspective from the Palestinian representative here in Washington, Maen Areikat. He's standing by. He'll speak with me as well.

We'll talk about the danger that fighting between Israel and Hamas will spread, including unrest in Syria, concerns about Iran. How quickly could things get completely out of control, among other?

CNN's Fareed Zakaria, he'll speak with us as well.

(COMMERCIAL BREAK)

BLITZER: Jerusalem and Tel Aviv targeted by rocket fire, bombs falling in Gaza at the same time.

George Mitchell is the former special envoy for the Obama administration for the Middle East peace process. Take a listen to what he said earlier on CNN about a potential all-out war in the region.

(BEGIN VIDEO CLIP)

MITCHELL: And the danger now is that if it is, it could spread. Not just the damage to Israelis and Palestinians, but if you had a conflict that spreads throughout the region, it could be hugely destabilizing and costly to everyone involved.

(END VIDEO CLIP)

BLITZER: Fareed Zakaria is joining us now. He's the host of CNN's "FAREED ZAKARIA GPS".

Fareed, you heard what George Mitchell is saying, his experience in the region. Do you believe there's a real possibility this could turn out to be an all-out war?

FAREED ZAKARIA, HOST, "FAREED ZAKARIA GPS": No. I don't. I think that at the end of the day, keep in mind, Israel has the most powerful military in the region by far. This provides enormous deterrent capacity by which I mean the president of Egypt might make fiery speeches, the president of Turkey might say some emotional things. None of them are going to risk taking on the Israeli military.

So I think the reality is you will see a very lopsided contest between the most powerful military in the Middle East and Gaza and Hamas who have some few hundred rockets. It's going to raise political tensions. It's going to make Israel -- make it much harder to see how Israel ever gets to a comprehensive peace, ever able to negotiate with the Palestinians. All those things remain true.

But at the end of the day, issues of war and peace -- these countries like Egypt and Turkey are very, very careful and they will not foolishly go into something like that.

BLITZER: But as you heard the Israelis, they're mobilizing -- they're activating about 75,000 military reservists right now. And they're threatening to actually launch a ground invasion into Gaza. Do you anticipate that?

ZAKARIA: That might well happen because the Israeli military, they tend to have a kind of military tactical logic here which is now you've paid the price, you might as well clean up this infrastructure.

The problem is we've literally seen this movie before. The Israelis have done this before it. It doesn't work in the long run. They've tried to embargo Hamas and Gaza and choke it off. That hasn't worked.

Israel has to move beyond the kind of tactical military strategy towards Gaza to a broader political one, which is what are they going to do here? This is one of the true hell holes of the world. Is it possible that they will just continue unendingly to have this continue to fester, or is there some possibility of creating an alternate track where Gaza is -- you know, is shown the benefits of modern middle class life just the way the West Bank has? And as you notice in the West Bank, there's much less extremism, much less terrorism coming out of the West Bank. Maybe there's some path that they can go on. I agree it's difficult because they're getting rockets fired at them. But we've seen the military approach. It hasn't worked so far.

BLITZER: Let me switch gears but stay in the region, Iraq right now. Senator John McCain, he was furious today when he got word that Hezbollah terrorist who's been under U.S. arrest now Iraqi arrest is about to be freed.

I want you to listen to what Senator McCain had to say.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: We've received information that the Iraqi government has released a guy who has flown to Lebanon, the guy named Daqduq, who is responsible for the deaths of five Americans. This is an outrage. Families of those who were killed by this terrorist, they'll also be outraged. And appropriate action should be taken as to regards with our relations with the Iraqi government.

(END VIDEO LCIP)

BLITZER: He's talking about Ali Mussa Daqduq. The U.S. arrested him for participating in that raid that killed five American soldiers.

When the U.S. pulled out, Fareed, they were assured by the government of Nouri al-Maliki in Baghdad he would not be freed. He has now been freed. It's raising all sorts of questions about where the government of Nouri al-Maliki in Baghdad is going right now.

What's your assessment?

ZAKARIA: My view, Wolf, is that we made a mistake right from the start. The Bush administration decided the easiest way to deal with Iraq was essentially to hand over the central government to hard line Shia groups because they were the most organized political opposition to Saddam Hussein. We made the decision knowing that many of these guys have spent decades in Iran, were receiving funding from Iran.

That's who we have. We have a hard-line Shiite government in Iraq, in Baghdad. The Obama administration tried to alter that, they tried to get Mr. Allawi who is kind of a moderate in there. We know this from the Bob Woodward book, didn't work. Now, we're seeing the fruits of that initial decision.

The government in Baghdad is not particularly responsive to the United States. It hasn't been on Syria, it hasn't been on these issues.

I think it would be an exaggeration -- a gross exaggeration to say it's a pawn of Iran. But it's certainly true that they do not take America's concerns particularly seriously. And they have their own internal reasons for doing things that are often quite sectarian.

And we're stuck with the situation. I don't know that there's much we can do. But I share Senator McCain's outrage.

BLITZER: A lot of people do right now. They're wondering what's going on in Iraq.

Fareed, thanks very much for coming in. We really appreciate it.

ZAKARIA: Pleasure, Wolf.

BLITZER: Don't forget to tune in to "FAREED ZAKARIA GPS". It airs every Sunday here on CNN, 10:00 a.m. Eastern and 1:00 p.m. Eastern as well.

David Petraeus returns to Capitol Hill for the first time since his shocking resignation as the CIA chief. What he's now telling lawmakers about the attack in Libya that killed a U.S. ambassador and three other Americans.

(COMMERCIAL BREAK)

BLITZER: Exactly one week after a surprise resignation as CIA director, David Petraeus was on Capitol Hill this morning. He was testifying behind closed doors.

We're now hearing what he told the Senate and House Intelligence Committees about the deadly attack on the U.S. Consulate in Benghazi, Libya.

Our senior congressional correspondent Dana Bash has been watching what's going on. What are you hearing, Dana? What did Petraeus have to say?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, one of the main reasons why lawmakers wanted him to come here even though he is no longer the director of the CIA is because he took a trip to Libya recently that he hadn't had a chance to come here and brief lawmakers on.

That was one big thing, but the other was to try to clear up -- I emphasize try, some confusion about intelligence especially in the days after the attack.

(BEGIN VIDEOTAPE)

BASH (voice-over): Cameras were ready before dawn hoping to catch a glimpse of David Petraeus coming to brief lawmakers about the deadly attack in Benghazi one week after resigning in disgrace. Petraeus came, but no one saw hi him.

(on camera): He went behind those doors, which is where he is right now, you could see back there, without anybody seeing him. In fact, the committee for some reason decided to protect him and they really had to go to great lengths to effectively sneak him in.

(voice-over): Lawmakers admit they protected Petraeus because he agreed to come voluntarily with the hope of clearing up confusion about intelligence in the days after September's deadly attack. But Petraeus' testimony didn't seem to clear much up, especially whether he downplayed information about terrorist involvement. REP. PETER KING (R), HOMELAND SECURITY CHAIRMAN: The clear impression we were given was that the overwhelming amount of evidence was that it was rose out of spontaneous demonstration and was not a terrorist attack.

BASH: That was the Republican reaction. Democrats insist Petraeus has been consistent.

REP. DUTCH RUPPERSBERGER (D), MARYLAND: It's all about your perception and the information you receive. He also said in the group there were extremists and some al Qaeda affiliates. And that was said in the very beginning.

BASH: The most politically charged controversy is over U.N. Ambassador Susan Rice's comments five days after the attack. Why she blamed it on Benghazi demonstrations, officials now say didn't even happen.

And why she didn't mention terrorist forces? Intelligence officials now believe actually targeted the U.S. consulate there. Democrats emerge saying the answer was simple.

She was using these unclassified CIA talking points, which omitted mention of extremist elements because it was still classified and could have compromised intelligence sources.

SENATOR KENT CONRAD (D), NORTH DAKOTA: She used the unclassified talking points that were signed off on by the entire intelligence community, so criticisms of her are completely unwarranted.

BASH: Democrats accused Republicans of unnecessarily assassinating Rice's character.

SENATOR DIANNE FEINSTEIN (D), INTELLIGENCE COMMITTEE CHAIR: To select Ambassador Rice because she used an unclassified talking point, to say that she is unqualified to be secretary of state, I think is a mistake.

BASH: But Republicans say the problem is Rice freelanced.

SENATOR SAXBY CHAMBLISS (R), INTELLIGENCE COMMITTEE: She went beyond that. And she even mentioned that under the leadership of Barack Obama we have decimated al Qaeda. Well, she knew at that point in time that al Qaeda was very likely responsible in part or in whole for the death of Ambassador Stevens.

(END VIDEOTAPE)

BASH: Now, Wolf, our intrepid photographers and producers did finally get a picture just of General Petraeus' car leaving at the end of the five hours that he was here, the five hours he was here for the House and Senate intelligence briefings.

Now during that you might want to know whether or not the whole question of his affair and resignation came up. We're told that it did, particularly at the beginning of the House Intelligence briefing. The chairman said point-blank, do you feel that you're comfortable doing this given what happened? And he said, yes. And he also made the case that he did not resign because of anything having to do with Benghazi.

And one last thing I can tell you is I asked Peter King the congressman whether it was awkward given the state of play right now with General Petraeus. And he said, sure it was awkward particularly because so many people in the room know him well and have long time had respect for him.

BLITZER: I'm sure it was very, very awkward. Dana, thanks very much.

Let's dig a little deeper right now into the controversy including the controversy flaring around the U.S. ambassador of the U.N. Susan Rice what she said five days after the attack about the Benghazi attack.

Let's discuss in our "Strategy Session," joining us our CNN contributors, the Democratic strategist James Carville and former Bush White House press secretary, Ari Fleischer. Ari, is it fair to go after Susan Rice like this?

ARI FLEISCHER, CNN CONTRIBUTOR: I don't think it's a question go after or don't go after, but she did attribute this to the video, she did working off of intelligence say something that was incomplete.

And of course as we learned in that famous second debate, the president apparently did declare this specific attack as terrorist the day after the attack took place.

So if the president could do it one day after, why was she saying something totally different five days after?

BLITZER: Would it be wise, James, for the president to go ahead and nominate here to be Hillary Clinton's successor as secretary of state?

JAMES CARVILLE, CNN CONTRIBUTOR: If that's what he wants to do, he should. I mean, she's been a long distinguished career as a diplomat. She's now U.N. ambassador. She's obviously imminently qualified. She was talking off of the talking points.

I guess, you could criticize the administration to put the U.N. ambassador out on something that really wasn't in her chain of command or line of duty and probably wasn't the most knowledgeable person to be saying that.

That would be a fair criticism. But disqualifying her from secretary of state doesn't seem to amount to anything to me. Like I say, she can go before Congress and testify if she's nominated. I'm sure she'll do a great job. She's a very, very experienced diplomat.

BLITZER: You know, the comparison's been made, Ari, tell me if you think it's a fair comparison, the Senate confirmed Condoleezza Rice as secretary of state even though she had talking points about so-called weapons of mass destruction in Iraq that were really never there. She talked from those talking points, but she was confirmed. Is that a fair comparison?

FLEISCHER: Well, a couple points. One, if the Democratic argument today is as they're saying that if you rely on what the CIA says, then what you've done is proper.

I think they owe a lot of people in the Bush administration an apology because that's exactly what we did repeating what the CIA said about WMDs.

As for the confirmation of secretary of state, I think the one difference and this is pending, is the mistake that was made in the Bush administration was fully investigated and it was revealed that the CIA did get it wrong.

We still don't know who's right and who's wrong here in this instance about whether or not there was a video that was blamed or why the administration blamed it on the video. We still don't have full information.

The investigation's underway about what happened, what was said, why it was said and who got it right, who got it wrong. So that's the difference, Wolf. We did learn from one instance. And people had that information in hand when they voted to confirm. We don't have that yet.

CARVILLE: I think that the administration pick probably the -- to head an investigation. I think General Petraeus has already testified, the head of counterterrorism has testified, the secretary of state is going to testify in December, I think the administration has been very, very, very forthcoming.

I don't recall, maybe I'm wrong, anybody appointing somebody to look into weapons of mass destruction the day after we discovered that -- but they really appointed a top hand to look into this.

And we will find out what it is. I suspect -- and by the way I suspect we can find out we're going to find out people made some mistakes. I don't think there's much doubt about that.

BLITZER: All right, hold on, guys. Hold on because we have more to discuss. I want both of you to keep -- stay with us right now because we're going to talk about a member of Mitt Romney's campaign team who now says Romney lost because Latinos are scared of Republicans. We're learning about a new group being formed to try to solve that problem for the GOP.

(COMMERCIAL BREAK)

BLITZER: We're watching a new Republican to scramble to get some distance from Mitt Romney and to reach out to voting groups he alienated.

The former Bush Commerce Secretary Carlos Gutierrez was in charge of Latino outreach for Mitt Romney. And he's very disturbed right now about the party's failure to win over Hispanic voters.

Now he wants to do something concrete about it. Listen to what he said on CNN's "STATE OF THE UNION" right here after the election.

(BEGIN VIDEO CLIP)

CARLOS GUTIERREZ, FORMER ROMNEY ADVISER: I would lay the blame squarely on the far right wing of the Republican Party. As I talk to Latinos, the insight that I got was that Latinos were scared. It wasn't the economy and immigration -- they were scared of the Republican Party and I think fear is what did us in.

(END VIDEO CLIP)

BLITZER: Let's bring in our chief political correspondent Candy Crowley, the anchor of "STATE OF THE UNION." Candy, you've since spoken with Carlos Gutierrez and he made an announcement that's going to be on your show.

CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: He did. He's telling us that he's going to form a super PAC with a co-founder "Restore Our Future," which was a pro-Mitt Romney PAC that was headed by a guy named Charlie Spees.

The two are putting together a super PAC to back Republican candidates who support immigration reform with, you know, call it amnesty, call it a pathway to citizenship, whatever, to find a way to legalize undocumented workers who are here now and put them on that pathway to citizenship.

So it's a super PAC. It's interesting simply because Charlie Spees in that PAC that he did for Mitt Romney during the primary season hit both Newt Gingrich and Rick Perry for being soft and promoting amnesty.

But this PAC will support those Republican candidates who want to find a pathway to citizenship.

BLITZER: It's a way to potentially reach out and bring some Hispanic voters into the GOP. He also had some sharp words, I take it, about Mitt Romney and the comment he made after the election that Obama won because of the so-called gifts he gave to his constituents.

CROWLEY: Right. And among those who Romney said received these gifts were African-Americans and Hispanics and this was something that clearly pained Carlos Gutierrez. He's interesting to talk to now because he really, you know, there's sort of this sense of freedom like I'm going to say I think Latinos are scared of Republicans.

But he also doesn't have any problem now criticizing Mitt Romney and the way he is talking about things and that includes his recent gift statement. Here's what he said.

(BEGIN VIDEO CLIP)

GUTIERREZ: I was shocked. I was shocked. And frankly I don't think that's why the Republicans lost the elections, why we lost the election. I think we lost the election because the far right of this party has taken the party to a place that it doesn't belong. We are the party of prosperity, of growth, of tolerance. These immigrants who come across and what they do wrong is they risk their lives and they come here and work because they want to be part of the American dream. That is what the GOP is.

(END VIDEO CLIP)

CROWLEY: You know, Wolf, Gutierrez said that he just cringes when he hears the word illegal aliens. He says I understand that, but if you're Latino -- this isn't just about Latinos, everyone who has come into this country for wanting to better themselves that don't have papers.

It just hits very hard when you're called an illegal alien. He prefers undocumented workers. As do a number of people. This is clearly somebody who is trying to get in the forefront of reshaping how the party both speaks to minorities including Hispanics but the policies.

BLITZER: He's a very smart guy Carlos Gutierrez, the full interview airs Sunday morning at 9:00 a.m. on "STATE OF THE UNION" and also at noon. I know you have Dutch Ruppersberger on as well, the ranking member of the House Intelligence Committee. We'll be watching as we always do.

CROWLEY: Thanks.

BLITZER: Thank you.

Mitt Romney has certainly sparked a lot of controversy with what he's been saying about the loss to President Obama. Now one of his major supporters, the New Jersey Governor Chris Christie, guess what? He's lashing out at Romney as well.

(COMMERCIAL BREAK)

BLITZER: Let's get back to our "Strategy Session." Joining us once again our CNN contributors, Democratic strategist James Carville, and former Bush White House press secretary, Ari Fleischer.

They've really been weighing in reacting Republicans to what Mitt Romney has said about the so-called gifts the president gave his base in order to win the election. Listen to the New Jersey Governor Chris Christie.

(BEGIN VIDEO CLIP)

GOVERNOR CHRIS CHRISTIE (R), NEW JERSEY: Can't expect to be leader of all the people and be divisive. You have to talk about themes, policies that unite people. And play to their aspirations and their goals and their hopes for their family and their neighbors. I always think this is kind of scapegoating after elections. When you lose, you lost.

(END VIDEO CLIP) BLITZER: They're sort of piling on Mitt Romney, Ari, right now. You heard from Bobby Jindal here in THE SITUATION ROOM yesterday, Chris Christie, Carlos Gutierrez, what do you think?

FLEISCHER: Well look, I think there's an underlying point that Mitt Romney was trying to make. And that was that the president was going out and trying to give slices of the country different policies that he thought would be effective to help win their support.

If he didn't like Mitt Romney, the fact we put people up to 26 on people's parents health policies, what he should have said by putting people on there every time the government gives out health care for free, it raises the cost of health care for everybody and actually hurts people instead of helps people.

Instead, when he says it's a gift for segments of our society, it makes it sound like there's something wrong with that segment of society that he's looking down or pejorative to that segment. Conservatism is uplifting. It's addition, not subtraction, the problem with his formula sounded like he was subtracting and not adding.

BLITZER: James, is this an etch-a-sketch moment for the GOP to really reorient themselves to win over the base minorities, women for example, Hispanics, sort of like when you were working with Bill Clinton he moved the Democrats towards the center in a key way through the DLC, became a new Democrat as they called him.

CARVILLE: Well, speaking of gifts, if Mitt Romney wanted to give a gift to the Republican Party, he'd spend the next four years in the Mormon missionary in Nepal. Man's just got to shut up. But that's his business.

Look, we lost five out of six elections and then Governor Clinton decided for a change. Mike Tyson said everybody got a plan. They got hit in the mouth. Their plan is end immigration, anti-gay stuff that's all going out the window if they've got any sense.

We're going to see if somebody can bring them along that and they have to win the Iowa caucuses or do well in them and take that message to South Carolina. Remember, their base is still sort of agitated out there.

Somebody's going to have to deal with that. The truth of the matter is they got hit in the mouth and going to have a new plan.

BLITZER: What about that, Ari? Do you think it's time for a new Republican, new Republican orientation?

FLEISCHER: No. But I do think there are some changes that have been to be made. First of all, the biggest factor in politics now is people's ideology. America remains right of center country.

Americans said they were 35 percent conservative, 25 percent liberal. We remain a center right country. Conservatism is a winning message. But it's also important to include people in the party. You know, every time George Bush said family values don't stop at the Rio Grande, Hispanic-Americans knew he understood what they were going through in life.

It's not just policy or immigration reform that I'm for, it's also the way you talk about people. My mother's an immigrant. We are one nation, but the pieces of that make that one nation also have important identities.

And it's important for Republicans to be able to connect with those identities, not push those identities away.

BLITZER: Ari Fleischer and James Carville, guys, thanks very much as always. We're going to get back to our top story at the top of the hour, new fears of an all-out war in the Middle East.

Will that happen? We're going back live to Gaza. We're going to Cairo, we're going to Israel. All of that right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here's a look at this hour's "Hot Shots." In Australia, a photo of the beginning of the solar eclipse. In Nigeria, children swim in flooded streets. In India, a camel roams a deserted street after sunrise. And in Chile, a solar powered car gets ready to compete in a race. "Hot Shots," pictures from around the world.

Kate Bolduan is monitoring some other top stories in THE SITUATION ROOM right now including a tragic ending to a parade honoring U.S. troops. What happened, Kate?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: It's truly a horrible story, Wolf. A freight train slammed into a truck carrying veterans and their spouses in a Texas parade. Four people died and 17 others were hurt in Midland yesterday.

Federal authorities are investigating. Initial reports show the train sounded its horn and the crossing gate and lights were working. But there are conflicting reports about whether or not the crossing arms actually were down.

Also, the Coast Guard is searching for two missing workers after an oil rig exploded off the coast of Louisiana. Eleven people were injured. Workers were doing maintenance on the rig at the time. We're told it was not producing oil at the time. But 28 gallons of fuel spilled into the water. Authorities don't consider it a major environmental threat though.

NASA astronomers have discovered what could be the most distant galaxy in the universe. They spotted it using a combination of manmade and natural telescopes. It's only a fraction of the size of our Milky Way galaxy and more than 13 billion light years from earth.

And it could be the end of an era. It's at least the end of the road for the makers of Twinkies. Hostess brand says it is going to close operations blaming a baker strike for crippling business.

That means the company's more than 18,000 employees will be laid off and assets sold to the highest bidder. Popular products could be bought and produced by another company, very sad day for Twinkies, Wolf.

BLITZER: Very sad indeed, Kate. Thank you.