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THE SITUATION ROOM

Death Raining Down from the Sky; Growing Fear of Gaza Ground Invasion; Urgent Effort to Broker Cease-Fire; Iran Fueling Hamas Firepower?; Egypt's Changing Role in Mideast conflict; NYC Serial Killer on Loose?

Aired November 19, 2012 - 17:00   ET

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


WOLF BLITZER, HOST: And you're in THE SITUATION ROOM.

Happening now, deadly new Israeli missile strikes in Gaza. CNN's Anderson Cooper standing by to join us live.

But this hour, also, we're tracing Iran's complicated missile and training pipeline to Hamas in Gaza.

And could former President Bill Clinton help stop the fighting here in the Middle East?

I'll talk about that and more with the former British prime minister, the Middle East special peace envoy, Tony Blair.

We want to welcome our viewers in the United States and around the world.

I'm Wolf Blitzer in Jerusalem.

You're in THE SITUATION ROOM.

We're coming to you live from Jerusalem, where there seems to be, at least for now, no end in sight to the fighting that's been going on between the Israelis and Hamas in Gaza.

Today, sirens warned of more rockets from Gaza coming into Israel, sending terrified residents fleeing for safety, seeking refuge in bomb shelters.

Israeli officials say three people have died, 68 people have been wounded here in Israel, as the result of Hamas rockets and missiles.

And the fear is just as deep in Gaza, as Israeli missiles struck for a sixth consecutive day. Among the latest targets, office buildings by used some -- used by some media outlets in Gaza, according to Palestinian sources. At least two people died in that attack, pushing the Palestinian death toll right now to at least 104, with more than 800 injured since the fighting started.

Let's start our coverage this hour in Gaza.

Anderson Cooper is standing by with more -- Anderson, tell our viewers what you're seeing and hearing.

ANDERSON COOPER, CNN ANCHOR: Well, Wolf, we haven't heard too many explosions over the last hour or two, as darkness has come here in Gaza City. Traditionally, a few hours from now, around 1:00 a.m., 2:00 a.m., is when we really start to hear the most number of explosions, of strikes by Israeli forces here in Gaza City.

We heard that, certainly, last night around that same time. So we -- we're going to be, obviously, up all evening long watching to see what happens.

But throughout the day, there have been a number of explosions, outgoing rockets being fired from Gaza City toward Israel and -- and, of course, incoming ordinance from Israel, most notably an attack on the media center building, which was hit on Sunday, as well. On Sunday, Israeli forces said that they had targeted a Hamas antenna on one of those -- one of those buildings.

Today, three rockets slammed into the building. It's about four blocks from our location right now. We actually saw two of the -- the rockets going into the second floor of the building.

Israeli forces say they were targeting members of Islamic Jihad who they said were inside the building at the time. They said they killed one member of Islamic Jihad. We've also confirmed that with Palestinian sources here on the ground.

One official from Islamic Jihad, which, of course, the U.S. and Israel considers, you know, a terrorist group.

And -- well, we want to bring in our Arwa Damon, who's stand -- who has also witnessed the attack. That was significant. I mean it was the second day in a row that that building had been targeted. One Islamic Jihad official killed.

ARWA DAMON, CNN CORRESPONDENT: Yes, it most certainly was. And this is part of this ongoing expansion campaign that we have been actually seeing on the part of the Israelis, where initially, when this all began, they were really targeting what they were identifying as being the launch sites where the missiles were going from Gaza into Israel. And then after that, we saw this expanded effort where they began targeting government buildings, and then, of course, yesterday and today, targeting a building that, as you were mentioning there, houses one of the TV stations that is affiliated with Hamas and this Islamic Jihad official, as well.

But the other issue, too, is that was a building where, at least as of yesterday, there was a lot of media there. There were Western media that were operating out of it, as well, a lot of them that evacuated today. But many people here look at the fact that that building was struck two days in a row and they find that to be a very, very concerning development, naturally.

COOPER: On Sunday, Israel had given advanced warning to some journalists who were in the building to evacuate, that it was a -- a building that would be on a target list and that large numbers of journalists had left the building, but others went back inside.

And, again, the Israel -- Israel says they were targeting a Hamas antenna. But today, the strike was clearly on lower floors and clearly seemed to, according to Israel, hit their target in -- in the killing of that one -- one official.

We do see, though, continued rocket fire into Israel here and we've seen that throughout the day.

DAMON: Yes, we most certainly have. There has been a fair amount of rocket fire, more, I would say, today, than we actually saw coming out of here yesterday. And then you, of course, see the response coming in from -- from the other side.

Now, a number of the strikes that we saw today, according to hospital officials, were again targeting these small lots that exist. But they're very tiny in between the -- the buildings here; very narrow alleyways, as well, with Israel really trying to eliminate Hamas' and the other groups' here's capabilities to fire back into the other side.

But once again, we speak to residents who live in these areas, who say that oftentimes they are the ones that are ending up bearing the brunt of -- of this ongoing back and forth. Many people who we're talking to say that at this point, the strikes could happen in any neighborhood, at any point in time. And they really don't know what to do or where to go to actually stay safe.

COOPER: Unlike in the regions on the Israeli side of the border, there aren't air raid warning sirens here. So, really, the only sense you get, you occasionally maybe hear something sort of incoming as it whooshes through the air. But it's really -- you don't know where it's going to be until -- until the impact. And then you kind of look around to figure out where it was.

You were actually at the scene yesterday of, perhaps, one of the most controversial strikes.

Israeli defense forces hitting what they said was a building owned by a Hamas official, who was head -- what they said was head of -- of a rocket unit.

Um, initially, they said they had killed that -- that -- that Hamas commander. They then backtracked, saying they couldn't confirm whether or not he was alive or dead. At least 10 members, though, of a family were known killed, four of them, children. You were there on the scene as some of the bodies were being pulled out.

DAMON: We were. And there was so much anger, so much frustration, so much sorrow etched across the faces of so many people who were there. One young man came in and he was shouting, "That's my aunt! That's my aunt!"

And rescue workers are trying to dig up the body of an elderly woman that had been trapped there. We also saw them lifting a certain -- a sizable slab of concrete up. And that was where they actually found the bodies of two of the children there. And for many of the residents living here, they believe that if the Israelis truly knew that this commander was there, they would not have struck the house. They believe that the Israelis are actually trying to punish the population here, for whatever reason it is. And that is one of the many reasons for this rising anger, because all of the people who we spoke to there at the time said that there had been no activity in that area, meaning no missiles were being fired from that area.

And at the same time, after the Israelis identified the individual whom they said that they were initially targeting, who was the head of this Hamas missile launching unit, people that we spoke to said they never actually heard of this individual. And they just simply believe that they keep on paying the heaviest price. And this is Israel's way of trying to punish the population.

COOPER: And, of course, Israel says that they were targeting the house because they believed he was either there or using it as a command and control center, or possibly even storing weapons or -- or -- rockets there at the house and that it -- Israel acknowledges this family was killed and said it was very unfortunate that they were in the house at the time.

Our coverage here, Wolf, obviously, will be going on all evening long. A lot more to report from this region. And we have correspondents, as you know, all throughout the region in Egypt, as well as in Israel on the border. And we'll be hearing from them -- Wolf.

BLITZER: Anderson, Arwa, thanks, guys, very much.

We're going to be checking back with you frequently.

I want to bring in our Pentagon correspondent, Barbara Starr, right now.

She's getting some new information about a possible ground war -- Barbara, what are you picking up?

BARBARA STARR, CNN CORRESPONDENT: Wolf, I'm standing outside the Israeli embassy. I've just come from a closed door briefing.

Ambassador Michael Oren, the Israeli ambassador to the United States, says all of the planning is done now for any possible ground action. They are ready to go in Israel, the Israeli armed forces. The U.S. has been briefed about it, if it comes to it. They are now done with the planning and completely ready to go.

But Ambassador Oren does, very importantly, go on to say -- and I quote, "We would like to avoid ground action," Oren saying they still want to get some sort of solution to all of this, get Hamas to agree to stop firing those rockets.

If it doesn't happen, though, they are ready to go now -- Wolf.

BLITZER: Barbara, where do the Israelis think the weapons are coming from, the weapons in Gaza, the rockets, the missiles? STARR: Well, this is a very important question, of course, because now Hamas is firing in large groups, 15 rockets at a time, up to that many. Iran has been a longstanding source of weaponry. But what we have now just been told is the weapons are also coming in from Libya. Since Gadhafi fell, of course, very little government control in Libya over those weapons and a lot of smuggling, a lot of loose weapons floating around. Now those are coming from Libya into Gaza.

In addition, we are told, Hamas has some new firing techniques. They are burying the rockets in shafts underground, covering them with sand, and then firing. So it's all very dispersed across Gaza. The old days of Hamas storage bunkers, we're told, are long gone. Dispersed weapons. The Israelis have to pick them out one by one with their overhead surveillance and try and strike them, they say, when no civilian casualties are likely. But this is now a key reason why it's all going to be very tough on Israel in the days ahead -- Wolf.

BLITZER: What are you hearing, Barbara, about U.S. military personnel currently in Israel?

STARR: Well, quite surprisingly, we did not think this was the case. But the Israelis now confirm -- they say there are a couple of dozen U.S. troops still in Israel. They were there for part of a military training exercise with the Israelis. That was very well known. Everyone had pretty much thought they were all out. But, no. In the last few days now, the Israelis have moved those U.S. troops from an air base in Southern Israel, where they were in firing range of Hamas rockets, and they've moved them to a more secure location in Central Israel that is now under that Iron Dome of Israel's air defense system we've all talked about so much.

They're hoping to get them out and get them back to their bases in Europe in the next few days -- Wolf.

BLITZER: Barbara Starr outside the Israeli embassy in Washington with that information.

Thank you.

We've seen a ground invasion of Gaza before. This one, if it happens, could be very, very different. We're going to take a look at some of the scenarios.

And as rockets rain down on Israel from Gaza, we're tracing what some call a pipeline funneling weapons and training to Hamas from Iran.

(COMMERCIAL BREAK)

BLITZER: A massive mobilization of Israeli troops -- tens of thousands of soldiers massing near the Gaza border right now. The world is watching very, very closely what's going on, as the pieces of a possible -- repeat possible -- ground war unfold. An actual operation, though, could be very, very complicated. A lot of people are watching what that operation could be like.

Our Pentagon correspondent, Chris Lawrence, is watching, as well.

He's been speaking to experts.

So, what are you seeing about a possible ground invasion of Gaza?

What would that be like -- Chris?

CHRIS LAWRENCE, CNN CORRESPONDENT: Well, Wolf, if it does happen, what we're hearing is it would be one of two options. Either, A, a full scale ground assault involving tanks, airborne, you know, something like what happened four years ago, if not bigger.

The other option is a limited series of incursions by Special Operations forces and small groups of infantry with a very narrow objective, like such as taking out specific rocket launching sites that the air assault wasn't able to get to.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): If Israeli Defense Forces invade Gaza, they'd likely go under the cover of darkness.

HAIM MALKA, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: Where they have a an advantage, a tactical advantage on the battlefield through night vision equipment and the ability to operate in the dark.

LAWRENCE: But they'd likely find Hamas better armed than it was four years ago.

JEFFREY WHITE, THE WASHINGTON INSTITUTE: We have better anti- tank weapons, for sure. And they might be more capable of inflicting damage on Israeli forces.

LAWRENCE: Analyst, Jeff White, says Hamas' first line of defense will be a kilometer or two inside the border fence. They would try to draw the IDF into kill zones of IEDs, snipers, and preset mortar fire. But the Israelis beat that tactic with better Intel four years ago and now have new capabilities.

WHITE: They've developed cameras that they can actually roll or throw into a house that shows them what's going on inside the house.

LAWRENCE: A former Israeli general says Israel is running out of targets outside of population centers while Hamas leaders have holed up inside mosques or among civilians. A ground war could lead to a situation similar to 2009 when a U.N. report accused Israel of committing war crimes in Gaza.

MALKA: And that is weighing on the minds of Israeli policymakers now as they consider whether to go into Gaza on the ground.

(END VIDEOTAPE)

LAWRENCE (on-camera): And there's also the smaller risk of casualties among the Israel defense forces. If IDF troops are kidnapped or even killed, that could cause a public backlash against Prime Minister Netanyahu. And that's something he has to consider heading into an election, Wolf.

WOLF BLITZER, CNN ANCHOR: End of January, the Israeli elections are scheduled. Thanks very much, Chris Lawrence.

About a thousand rockets have been fired at Israel since this conflict began, what, some six days ago. About 300 of those rockets are said by Israeli forces to have been intercepted by what's called the iron dome anti-missile defense system. More than 600, though, have reached Israel, have hit targets, and they forced Israelis to scramble for cover.

(BEGIN VIDEO CLIP)

EFY WIESELHOF, ASHKELON RESIDENT: It's a safe room. It's got thickened walls. And it's more or less blast-resistant. It's got metal windows and a metal door. And this is where the children are going to be sleeping tonight. And that's little been --

(END VIDEO CLIP)

BLITZER: CNN's Fred Pleitgen is in Ashkelon, Israel, right now near the Gaza border with more on what's going on. It looks like that iron dome the Israelis have built to defend population centers, by all accounts, seems to be working rather well, Fred.

FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: It certainly is working rather well, Wolf. And one of the things that we have to keep in mind when we hear those numbers of a thousand rockets fired from Gaza, and only about 300 intercepted is that the iron dome is actually really intelligent system, because what it does, Wolf, is it only takes out rockets that are actually flying towards population centers.

So, if the computer determine that a rocket is actually headed for a field or some other unpopulated area, it won't even attack that target. It will just let it drop. Now, the Israeli defense forces tell us that they can take out about 90 percent of the rockets that are aimed at population centers, but nevertheless, of course, this is not a 100 percent solution.

They say that one of the last things people should do is not heed the warnings that are going out there. When the air sirens go, they tell them, you have to take cover immediately. And certainly, from what we're seeing, that is actually what people are doing.

Nevertheless, there's no doubt that the iron dome with the way that it operates -- and I have seen it in action combating multiple targets, about 200 yards over our heads -- is something that seems to be very, very efficient, Wolf.

BLITZER: Yes. When I was in Ashkelon earlier in the day and those sirens went off, everyone just rushed to a shelter. The military there insisting that everyone get inside as quickly as possible. Fred, we know that even as they're talking about a ceasefire and the Israeli cabinet is meeting here in Jerusalem right now, Israel is moving its military into a position for a possible, repeat possible, ground war.

And you saw evidence of that, firsthand. Tell our viewers in the United States and around the world what you saw.

PLEITGEN: Yes, absolutely. I mean, we were in the area around Gaza. We traveled very, very far along the border with Gaza. And certainly, you could see military equipment being moved in basically from all directions. There's a lot of trucks down there moving towards the Gaza/Israeli border. They have tanks on the backs.

They have armored personnel carriers on the backs as well as armored bulldozers. And when you get inside the military zone, what you see is collection points where that armors being collected. The way the Israelis are doing it right now is they don't have one big place where they're collect all their troops.

But it's sort of smaller, little places where these troops are being gathered, because of course, those are harder to hit by rockets from Gaza as well. So, we've seen a lot of soldiers come in. We've seen a lot of armor comes in. That seems to be continuing. And from what we're seeing, there is already a lot of hardware in place.

And certainly, what we're hearing from the Israeli government, as you said, is that they haven't decided whether or not a ground offensive is going to be happening. However, they do say that it is something that's a very real possibility, that they're both willing and capable of doing that if they don't achieve their objective of stopping the rockets from Gaza.

And from what we've seen today, they seem to be pretty serious about it. And it is certainly something that would be a real possibility. The capabilities are certainly there, Wolf.

BLITZER: Yes. The Israelis making it clear they're keeping that option open. In the next hour, by the way, I'll be speaking with a spokesman for the Prime Minister, Benjamin Netanyahu. Mark Regev is here. We'll talk about what's going on. Fred Pleitgen, thanks very much.

A dramatic new show of support for Hamas from an historic new government in Egypt. We're going to tell you why and what that could mean for this conflict. Stay with us. You're in the SITUATION ROOM.

(COMMERCIAL BREAK)

JOE JOHNS, CNN ANCHOR: It was the best day in months for the markets. Lisa Sylvester is monitoring that and some of the other top stories in the SITUATION ROOM right now. Lisa, what do you have?

LISA SYLVESTER, CNN CORRESPONDENT: Yes. Certainly, it was a good day for the markets, Joe. The Dow Jones up more than 200 points today or 1.7 percent. The S&P and NASDAQ both rising about two percent. Investors are optimistic that Washington may reach a deal on the fiscal cliff, however, experts are warning that trading will still be a little choppy until there is a final deal. Also boosting markets today, two better than expected housing reports.

And also a sign of improvement for the battered housing market. Existing home sales climbing two percent in October and up 11 percent since a year ago. According to the National Association of Realtors, home sales are up nationwide, despite the devastation of superstorm Sandy and record low mortgage rates are key reason why people are buying right now.

And the shutdown of Hostess brands, put on hold, at least for now. A lot of folks were wondering, the maker of the Twinkie and wonder bread has agreed with a key union to try to mediate their dispute. A bankruptcy judge says he wants the two parties to try to come together to an agreement one more time.

Hostess' CEO says he needs a final decision tomorrow. More than 18,000 workers that could potentially lose their jobs if hostess shuts down. And I don't know about you, but I know a lot of people would also be sad if the Twinkie --

JOHNS: Absolutely.

SYLVESTER: -- is no more. It's such an icon.

JOHNS: It's true. And who knew that a junk food pastry could create so much drama. It's amazing.

SYLVESTER: Well, 18,000 jobs also on the line. That's also something to keep in mind. We hope that they're able to work it out. Certainly, you don't want people losing jobs right around the holiday season.

JOHNS: That's for sure. Thanks so much, Lisa.

It's a huge stumbling-block in the quest for Middle East peace. Will Hamas ever accept the existence of Israel? Wolf will talk about that and more next with a special Mideast envoy, former British Prime Minister, Tony Blair.

(COMMERCIAL BREAK)

BLITZER: As the fighting between Hamas and Israel enters the second week, diplomats are urgently working behind the scenes to try to broker a ceasefire. The Israeli cabinet is meeting right now to consider one Egyptian proposal. We'll update you as soon as we get new information.

We also got an update on all the efforts just a little while ago from the international Middle East peace envoy, the former British Prime Minister, Tony Blair.

(BEGIN VIDEOTAPE)

BLITZER: What are the chances of a ceasefire?

TONY BLAIR, FORMER BRITISH PRIME MINISTER: Well, I hope we can get one. People are working very hard for it. The Egyptians, the U.N. secretary general, ourselves, everybody is doing their best because if you don't deescalate this and get a cease-fire and then be able to sort out some of the longer-term issues, then you'll have an escalation. Then that could be extremely serious, result in more innocent Israelis, innocent Palestinian citizens dying.

BLITZER: Who negotiates? Who brokers that kind of deals? Because, as you know, the Israelis don't talk to Hamas. Hamas doesn't recognize Israel's right to exist. Who brokers a deal like that?

BLAIR: Egypt is obviously very important. But, you know, so is the United Nations. And we all play our part in it. But you know, it's not -- it's not that it's a great problem of communication, frankly. I mean everybody knows what has to happen. And the single thing that would make the biggest difference is if there was an agreement that everyone pursues their political objectives by peaceful means.

Now, right now you've got a situation where as the rockets come out of Gaza, so Israel retaliates, that puts innocent Israelis at risk. It means that innocent Palestinians are at risk and as we've seen in the last 24 hours, die.

You know this is a terrible situation. The human tragedy of it, on both sides, is colossal. And, frankly, unacceptable. So I think the important thing right now is just to get the cease-fire in place and deescalate. But you've then got to deal with these two questions. I mean if you carry on stockpiling and rearming and there are other players from outside, Iran, notably that is providing those types of weapons for people inside Gaza, you know, you're not going to get peace.

If Gaza carries on but we don't try and lift some of the -- you know, what's called the blockade, you get more stuff going into Gaza, you get some sense of normality back in people's lives, then people get a stake in the future.

BLITZER: You've spoken to U.S. officials, I assume at very high levels. The Israeli government, I assume you've spoken to Prime Minister Netanyahu and the foreign minister.

BLAIR: Sure.

BLITZER: As we speak, you've just come here to this meeting -- from a meeting in Ramallah with the Palestinian leadership. Who did you meet with?

BLAIR: So I've met with President Abbas, I've met with Prime Minister Fayed, and you know, of course they won't proceed --

(CROSSTALK)

BLITZER: What do they want? Because there's been a rivalry between the Palestinian Authority in the West Bank and Hamas in Gaza.

BLAIR: Right now, to be fair, I think their concern is the people in Gaza. So the desire is going to have the thing deescalate and stop. And -- but, you know, again, longer term, we're going to have to work out how we bring about unity in Palestinian politics on terms that mean there's genuine agreement.

And the only way you're ever going to get peace and the two-state solution we all talk about is if there's a united Palestinian politics in support of the objective of the Palestinian state by negotiation. Now, that's, you know, as we speak right now, you've got division, you've got disunity and you've got no credible political negotiation.

So I think the other thing that has to happen with the reelection of President Obama, we've got a chance of doing this. We've got to put back in place a credible political negotiation. And then start to make changes on the ground that support the politics and don't operate against it.

BLITZER: What about you? You represent what's called the quartet. Do you meet with Hamas?

BLAIR: We don't meet with Hamas ourselves because of the quartet principles. I have a team of people down in Gaza. And --

BLITZER: Who report to you?

BLAIR: Yes.

BLITZER: And they're allowed to meet with Hamas officials?

BLAIR: No, they don't meet with Hamas officials but --

BLITZER: Because, what? The U.S. regards Hamas as a terrorist organization?

BLAIR: There are things called the quartet principles which basically mean that if Hamas wanted to engage in a political process, then they've got to at least say, we're giving up the violence and we -- if we participate in the two-state solution, you've got to accept one of the states is going to be the state of Israel. So we don't. I mean I've worked primarily on the economic and security issues, on the West Bank and then with Gaza, trying to get a lifting of some of the measures.

By the way, some of them have been over the past couple of years. But on the politics, the absence of a political negotiation impedes everything.

BLITZER: You know, there's been some speculation, some talk -- and I've suggested this myself. I know John McCain did over the weekend, the senator. That Bill Clinton, the former U.S. president, be named a special U.S.-Middle East envoy. George Mitchell had that until about a year and a half or so ago. Nothing much was achieved. What do you think of that idea?

BLAIR: Well, there's no bigger fan of Bill Clinton than me. And then he's got a huge experience in the Middle East. But I think that, frankly, all these decisions have to be taken by the president and the new secretary of state. And -- but, you know, whatever you do by way of people coming into the situation, whether it's Bill Clinton, me, George Mitchell, whoever it is, the essential thing is you've got to have a strategy to move this situation forward.

And I think the basic three principles offered are, one, a credible political negotiation, which has some shape or framework to it. So we're negotiating a void, we know we're negotiating about the basic outlines of that negotiation. Secondly, that there are changes on the ground, both in the economy and development that support the negotiation, don't operate against it.

And thirdly, you know, there's got to be some way of reconciling Palestinian politics on the right type of basis so that you're dealing with a united partner on the Palestinian side as well as the Israeli side. Now, I mean, frankly, whoever of us come into this situation, if those three things aren't present, then it's going to be very tough.

BLITZER: Would you see Hamas accepting Israel?

BLAIR: I don't know. And, by the way, you know, we always assume that an entity like Hamas is homogenous with one view and not different factions. What I do know is that if they -- if they think about this in a serious way and genuinely -- if the bit of Hamas that is Palestinian nationalists, if you like, right, and rather than being motivated by some broader ideology actually wants the best for the Palestinians, the only way you're ever going to get a Palestinian state is through negotiation.

You won't get it any other way. We're here in Jerusalem now. You see the state of Israel. It's not going to disappear. This state is not -- they're not going to pack up and go. And, you know, you can wait one year, one decade, one century, several centuries. It's going to be here. And the Palestinians aren't going anywhere either. So what seems to me to be sensible is that we agree, we pursue the political objectives peacefully.

And then, by the way, that would hugely liberate the United States and the international community to help because whilst you have events like Gaza happening, they just put a great shroud over any political advance. So it's really not complicated what needs to happen to get the politics moving again. But this is a region in upheaval and this is another part of the upheaval.

BLITZER: Where does Iran fit into this current crisis?

BLAIR: Iran is there in the background of everything. And, look, as I always say to people -- and it's a somewhat controversial thing to say. But it's true. And I'm not suggesting we go and do this, by the way. But the truth is, if there were change in Iran, I would become 100 percent more optimistic about the whole region.

And the fact is, it's not just the issue to do with this acquisition of nuclear weapons capability, it's the instability they just push around the region the whole time, including in Gaza. I mean, some parts in some of the groups in Gaza are absolute proxies for Iranian power and they push these missiles into Gaza which then, you know, cause the type of issue we've got today.

So you know I think -- well, let us -- let us hope that in the end it changes. You know the thing about this region is the whole of it is undergoing a huge process of change in which, to put it very crudely but I think reasonably accurately, you've got the kind of forces of modernization and open-mindedness here and the forces of closed-mindedness there. And we've got to be on the side of the modern minded people to try and win the region for the future.

BLITZER: I know you're doing your best. Good luck, Prime Minister.

BLAIR: I'll need it. Thank you.

(END VIDEOTAPE)

BLITZER: Sirens have been going out -- going off throughout the day here in Israel, warning of incoming rockets and missiles from Gaza. And we were caught up in it at one point earlier in the day. We were ordered to seek shelter. Take a look at this.

I'm going to tell you exactly what happened. By the way, we're beginning to hear sirens going off in Jerusalem right now. I don't know if you can hear them behind me. But we're hearing sirens, first time we're hearing sirens right now in Jerusalem. We'll have a lot more on the breaking news coming out of Israel right after this.

(COMMERCIAL BREAK)

BLITZER: First of all, false alarm. No sirens going off in Jerusalem right now. What we heard were not sirens. Want to make it clear. Sirens have not, repeat not, gone off in Jerusalem. They had a few days ago, but not right now.

Earlier in the day, we did hear the sirens going off in Ashkelon where we were. We're going to bring you that report right at the top of the hour. Meanwhile, Hamas is stepping up its fight against Israel with sophisticated new military power that's beginning to show a pipeline that's moving along from Sinai into Gaza. And some of it associated, we suspect, from Iran.

Brian Todd has been taking a look at this part of the story.

Brian, what are you seeing?

BRIAN TODD, CNN CORRESPONDENT: Wolf, this is an extensive network of support coming from Iran that has emboldened Hamas and has led directly to this conflict getting ratcheted up. Part of that network is a new missile system Hamas has at its disposal that has terrorized Israel in recent days.

(BEGIN VIDEOTAPE)

TODD (voice-over): Its name means dawn in Arabic and it's considered a game-changer for Hamas. The new Fajr-5 missile with a much greater range than anything Hamas has had before, capable of striking Tel Aviv and Jerusalem from Gaza. It's now a menace to the Israeli population and a major reason why this conflict has accelerated.

How did Hamas get this sophisticated system? An Israeli official tells CNN the Fajr-5 is from Iran.

Matthew Levitt is an expert on Hamas with the Washington Institute.

MATTHEW LEVITT, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: The Israeli say that Hamas weapons experts are traveling with some of these weapons. That the weapons in some cases are delivered whole. But in more cases, especially for the larger ones, are delivered in parts.

TODD: Officials and analysts say this is part of an extensive pipeline of support from Iran to Hamas that has only grown in recent years. Part of Iran's shadow war against Israel, the U.S. and their allies.

(On camera): U.S., Israeli and Egyptian officials have long suspected that the pipeline works this way. Missiles and other weapons are flown from Iran into Sudan, they're then driven through eastern Sudan, across the Egyptian border, and to the Sinai Peninsula. An Israeli official told me some missiles are disassembled, brought through tunnels from Sinai into Gaza, then reassembled inside Gaza by Hamas.

(Voice-over): Egypt's government has at certain times tried to disrupt the pipeline. But Levitt says now --

LEVITT: These weapon systems are being moved primarily by Sinai- Bedouin criminal families. This is what they do. They are smugglers. They're good at what they do. And to take them on is something that the central government in Egypt, the Morsi government, does not want to do and may not even be all that capable of doing right now.

TODD: We were not able to get Egyptian officials to respond to that. But in recent months, the Egyptian military has acknowledged that extremist groups and weapons are proliferating in Sinai.

The Israeli official we spoke with says Hamas is also getting grad missiles, other munitions from Iran, as well as communications, command and control systems, and the official says Hamas fighters and commanders have for several years received training inside Iran, from the feared Revolutionary Guard.

(END VIDEOTAPE)

TODD: We couldn't get response from an Iranian official at the United Nations to that today. But in recent weeks, when we reported on the overall pipeline from Iran to Hamas that official called the allegations baseless and unfounded -- Wolf.

BLITZER: Brian, you're getting some other information as well about just how sophisticated this Hamas missile system has become. What are you learning.

TODD: Well, just a short time ago, Wolf, an expert with a weapons publication "IHS James" told me that their research indicates those new Fajr-5 rockets are being launched from underground sites. He says they have the capability of popping up out of the ground, launching one or two missiles at a time at Israel.

This expert say that if Israeli forces can target launch sites once they've been fired. But beforehand, of course, much more difficult to find them.

BLITZER: Brian Todd reporting for us. Thank you.

Meanwhile new signs the historic Arab Spring may have empowered Hamas. Up next, the dramatic role and it's a new one, that Egypt is now playing in this conflict.

(COMMERCIAL BREAK)

BLITZER: The U.N. Secretary General Ban Ki-Moon is in Egypt right now pressing for talks to end the Middle East fighting. He's expected here in Israel tomorrow.

Egypt is playing a critically important role, very different role this time around in the conflict following a dramatic shift in its relationship with Hamas.

Here's CNN's Nic Robertson.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the situation has changed hugely since 2008, 2009 conflict and perhaps the biggest place that has changed is in Egypt and if you look at this map you begin to see why some of the details. Zooming in to the border here between Egypt and Gaza and in to the Rafah crossing. The Rafah crossing perhaps symbolizing the way that Egyptians in 2008, 2009 did not support Hamas in Gaza.

Look what happened back then. This border was key for Hamas in Gaza to bring in humanitarian supplies to alleviate some of the blockade that was happening with the other border crossing going into Israel. So, this time, it will be different because the political leadership, thanks to the Arab Spring, has now changed in Cairo. It is essentially a Muslim Brotherhood government.

Hamas is a militant offshoot of the Muslim Brotherhood and when the prime minister of Egypt, Hesham Kandil, went to Gaza late last week, he said that this situation was terrible. That it must stop and when you listen to the political leader of Hamas speaking in Cairo today, and noting that he was speaking at a time when Palestinian broadcasters in Gaza were being struck by Israeli missiles, the very fact that he was speaking would never have happened under the previous Egyptian leader Hosni Mubarak.

This time when he speaks out, he makes very clear note that Egypt's position has changed and Israel needs to learn from that.

(BEGIN VIDEO CLIP)

KHALED MESHAAL, HAMAS LEADER (Through Translator): Netanyahu wanted to test the new Egypt. The great Egypt. An Egypt of the May 25th revolution, the leadership of Egypt, and the sons and daughters of Egypt, the answer he got was not what he had expected. He wanted to test the countries of the Arab Spring and the Arabs in their spring but the Arabs did not fail us. Rather, failed him.

(END VIDEO CLIP)

ROBERTSON: So when's clear is that Hamas' calculus now is different. That they believe that they can expect more regional support, specifically from Egypt, can perhaps negotiate during these talks around a cease-fire better terms with Israel so this is the difference. That just wouldn't have happened back in 2008, 2009.

Nic Robertson, CNN, London.

(END VIDEOTAPE)

BLITZER: We're going to take you to that border crossing coming up in THE SITUATION ROOM. Also ahead, Anderson Cooper, he's standing by live. He'll joins us from Gaza City. There's a lot going on in the Middle East right now.

(COMMERCIAL BREAK)

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: A string of murders in New York City all tied to the same weapon. The victims sharing many of the same characteristics. Now police are trying to determine whether it's coincidence or something much more sinister.

Our Mary Snow is joining us with the details -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Joe, police are stopping short of calling this a serial killer but they aren't ruling it out either. And they've gone to the FBI for help with a profiler to track a killer who's committed three murders within miles of each other.

(BEGIN VIDEOTAPE)

SNOW (voice-over): New York City Police are asking, is the murder of another Brooklyn store owner possibly the work of a serial killer? And that's because ballistic tests showed the same .22- caliber gun was used in the murder of three store owners. The first victim, 65 years old, was killed in July. Then in August, another shop owner, 59, was gunned down inside the store.

(On camera): Here at the scene if the third shooting, police say they found the store owner's body inside the store Friday night. They say he had been shot three times in the head and torso.

(Voice-over): In this case, as in the two others, law enforcement sources say each body was covered with clothes or merchandise. Police are not ruling out a potential hate crime. Two of the victims they described is Jewish. One was Egyptian. Also possible link in police commissioner says none of the three stores had surveillance cameras.

COMMISSIONER RAY KELLY, NYPD: Here you have three stores where the proprietor is there by himself, no cameras in any of these stores. So you would have to speculate that some sort of reconnaissance was going on, I would say, before the murder took place.

SNOW: At least one store owner near the scene of Friday's murder plans to add surveillance cameras.

MOHAMED ELSAYAD, STORE OWNER: If you work here, you've got to be scared. Not just residents and Egyptian but if you work in this area you're going to be scared.

SNOW: Investigators are scouring surveillance tape from the street where the latest killing happened. They're looking to question this man to find out what he might have seen. But one CNN legal contributor who worked as a prosecutor on the Son of Sam case says police tend to be very careful about calling homicides the work of a serial killer.

PAUL CALLAN, CNN CONTRIBUTOR: Usually serial killers involved in far more homicides than that so I think it's premature to label it but it's certainly shaping up to be something very, very dangerously close to a serial killing.

(END VIDEOTAPE)

SNOW: And Joe, one other connection that's been talked about. The addresses of all of the victims contain the number 8 but police are down playing any connection -- Joe.

JOHNS: Mary snow, thank you for that.

BLITZER: And you're in THE SITUATION ROOM. Happening now, we should know in a matter of days, maybe even in a matter of hours if Israel's air assault on Gaza leads to a deadlier ground invasion. We are live in the region. We are covering the attacks on both sides of the border.

Also, I have experienced firsthand the threat of Hamas rocket attacks on Israel and the race to take cover after six days of destruction and bloodshed will desperate international appeals lead to an actual cease-fire. I'll speak with the spokesman for the Israeli Prime Minister Benjamin Netanyahu.