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STARTING POINT WITH SOLEDAD O'BRIEN

Israel Puts Ground Invasion on Hold; Discussion on the Israel- Hamas Conflict; Intelligence Community Altered Talking Points; Allen West Concedes Florida's Congressional Race; Stock Futures Flat This Morning

Aired November 20, 2012 - 08:00   ET

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


SOLEDAD O'BRIEN, CNN ANCHOR: Welcome back, everybody.

Our STARTING POINT this morning: halting its troops. Israeli stops its military ground offensive, hoping for a diplomatic solution. Will it work to create peace with Gaza?

And bombs and rocket fly for a seventh day.

Plus, Secretary of State Hillary Clinton is now headed into the region. Can she help broker a ceasefire?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: The turmoil overseas affecting markets here at home. Oil prices up sharply yesterday. But so were stocks. Will it last as the violence escalates?

JOHN BERMAN, CNN ANCHOR: They held on tight for two weeks but now a Tea Party favorite has faced the facts. An update on Congressman Allen West just ahead.

O'BRIEN: It's Tuesday, November 20th. And STARTING POINT begins right now.

(MUSIC)

O'BRIEN: Good morning. Welcome, everybody.

We'll get right to breaking news this morning, Israel agreeing to hold off on a ground invasion into Gaza as the United States sends in its top diplomat to try to negotiate an end to the crisis.

Here's the very latest: Secretary of State Hillary Clinton is heading to Israel at this hour. She's going to be meeting with political leaders in Israel, and then in Egypt and Ramallah. That begins tomorrow morning.

This morning, new rocket launches into Jerusalem for people ducking for cover. And Israelis carrying out more than 80 air strikes overnight. Hamas fighters launching 95 rockets back across the border, 38 more Palestinians have been killed in the last 24 hours.

CNN has the Gaza conflict covered from all sides. Arwa Damon is on the ground in Gaza City. Frederik Pleitgen is reporting from Ashkelon in Israel, which is right on the Gaza border.

Let's begin with Frederik with more of what he's seeing. Good morning, Frederik.

FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: Hi, Soledad.

Yes, I'm in the new vantage point now and I have Gaza right behind me. I'm going to let you take a look, I just get out of the way here. You can see that city that you see down here, that is already part of the Gaza Strip.

And what we're hearing, as we're reporting here, is that Israeli warplanes are overhead. There are also drones that are circling in the area, basically constantly.

There's also some firing going on. We believe that's outgoing artillery fire probably by the Israeli military. We're not sure what that's about, whether they're targeting anything or just calibrating their weapons, because very close to here, obviously, they have a big military buildup that is going on. So, they have a lot of forces there and those might be calibrating their weapons, of course, for a possible ground invasion.

And as you said, that ground invasion at this point is currently on hold. What we've seen throughout the course of the day is that there have been rocket attacks on various Israeli towns, 16 rockets came down on the town of Beersheba, 13 of those were intercepted by that Iron Dome missile defense system. However, there was one Israeli officer, a reserve officer, who was severely wounded in a rocket attack, Soledad.

O'BRIEN: Frederik Pleitgen for us this morning with an update. He is right on the border there. Appreciate that update.

Israel's president, Shimon Peres, is blasting Iran, offering praise for Egypt's new president. President Peres says he is very concerned about stopping the Iranians from sending long-range missiles to Hamas. He told CNN's Piers Morgan that there are two very distinct story lines that basically are developing in that region. One is positive and one, he says, is very negative.

Listen.

(BEGIN VIDEO CLIP)

SHIMON PERES, ISRAELI PRESIDENT: The positive is the constructive role that the Egyptian president is playing right now, and we appreciate very much his efforts. The other is the Iranians. They are trying again to encourage the Hamas to continue the shooting, the bombing. They are trying to send them arms. They are out of their mind.

(END VIDEO CLIP)

O'BRIEN: Peres calls Iran the world's problem. I want to introduce the team this morning. Joining me at the desk: Will Cain is a CNN contributor, columnist for TheBlaze.com. Michael Skolnik is political director for Russell Simmons, editor-in-chief as well at the GlobalGrind.com. Dana Bash is CNN's senior congressional correspondent.

John Berman sticks around with us as well. Christine Romans sticks around and talk about business.

Let's begin -- you know, let's get right to Robin Wright. I think we have here. She's a veteran foreign affairs analyst. She a joint fellow at the Woodrow Wilson International Center for Scholars, the author of a terrific book called "Rock the Casbah", just returned from a trip to the -- throughout the United Arab Emirates.

It's nice to have you with us. We appreciate your time this morning.

ROBIN WRIGHT, VETERAN FOREIGN AFFAIRS ANALYST: Good morning.

O'BRIEN: Walk us through -- this ground operation we're told is on hold while there's an opportunity for negotiations and diplomacy to work. How long is on hold for? So far, nobody has really given me -- you know, a window of how much time they realistically have. What do you think it is?

WRIGHT: Well, look, there's the potential for, at any moment -- whether it's one of the real extremist groups like Islamic jihad to start firing missiles to try to undermine diplomacy. But the sequence of events will likely play out for two or three days. Hillary Clinton doesn't even arrive until much later today.

And then you have to deal with the core problem, and that's the chicken and egg argument. The Israelis are saying we want a ceasefire and then we'll talk about the political issues. Whereas Hamas is saying, we want a package that includes not just the process of a ceasefire, but the substance, the political substance of what are we going to get out of this.

They believe they've lived under an Israeli cordon for years now and the missiles were, in part, an effort to force Israel to kind of recognize that it had to deal with the Hamas government in Gaza. So you have this core problem of what are you even negotiating?

O'BRIEN: All right. So you've been in the region and you're just back. What are people there saying to you? What have you seen there? I mean, how -- what do you think is a way forward in terms of what the people want?

WRIGHT: Well, that's the important question. And over the last two years, we've seen that the streets are really determining so much of what's happening in the region.

And many of the governments that are involved in trying to negotiate, whether it's Egypt or you've seen the Arab League, Tunisian foreign minister has been in Gaza, a lot of them have to respond to the mood in the streets. And the longer this goes on, the angrier the streets are going to get.

And they also have the problem of delivering the kind of economic benefits that most people engaged in the uprisings really want. So, there's an enormous pressure on the Arab governments, including President Morsi in Egypt, to try to get a solution to this as soon as possible.

And one of the most interesting dynamics has been the number of calls between President Obama and President Morsi. They are developing a functioning, working relationship. And now, Hillary Clinton's most important stop on this trip will be in Cairo for talks with President Morsi.

WILL CAIN, CNN CONTRIBUTOR: Hey, Robin, this is Will Cain.

I want to ask about one of these dynamics, that between Hamas and Iran. Earlier, we had an official on that said these missiles that launched have three words on them, "made in Iran." But we also have heard that Hamas and Iran have had somewhat of a tense relationship since Hamas supported the uprising in Syria.

What's that relationship and what's Iran's role right now?

WRIGHT: Absolutely. Remember, there are sectarian issues here. Iran is predominantly Shiite, and Hamas is predominantly Sunni. And the interesting fact is that the leader of Hamas moved headquarters out of Damascus and sided with the opposition. There is that real tension.

In many ways, Gaza reflects the kind of rivalry playing out in Syria and elsewhere in the region. Hamas relies on Iran for military training and its most important weaponry. But there is this tension over Syria. It's in Syria's interest right now to see all the world's attention focused on Gaza rather than on Damascus to take some of the pressure off.

But these relationships in the region are shifting. Part of what we're seeing, little Gaza, it's important not just for what happens on Arab-Israeli issues but also on the wider dynamics of the shifting sands across the Middle East.

O'BRIEN: Let me ask you a question about what happens with Hamas, depending how this plays out, right? There's one theory, Dennis Ross from the Washington Institute of Near East Policy said this on Monday.

He said, "One of the things that may have affected Hamas' calculus in terms of being able to run more risks with Israel is a sense that there's a new Egypt, there's sympathy in Egypt for what's going on. War with Israel is not attractive to Egypt, that there's a risk."

And Helene Cooper of "The New York Times" said this, "Though President Obama uttered immediate and public and private assurances that Israel has itself -- a right to defend itself, blah, blah, blah, a move -- they're urging Israeli officials not to extend the conflict, a move that many American officials believe could benefit Hamas."

So, the first guy, Dennis Ross, says this could really hurt Hamas. It looks like Helene Cooper from "The New York Times" is saying this could actually benefit Hamas, which is why apparently the president would be having conversations about not escalating the crisis.

Where do you think it -- you know, is Hamas getting stronger over time because of these sorts of conflicts?

WRIGHT: Well, remember, Hamas really had been marginalized recently with President Abbas talking about resuming the peace process, even putting on the table the issue of the Palestinian refugees right of return, which is a core issue to many Palestinians and he was saying it's now negotiable or indicating it might be. Also, that he was going to the United Nations to ask for an elevation of Palestinian status to nonmember statehood. That he looked like he had the power of the Palestinians.

And these two entities, the West Bank and Gaza, have been now divided since 2007, and they've been rivals in trying to be the main representative of the Palestinian people. And Mahmoud Abbas had been the primary figure. Now, you find Hamas is playing its cards to become the recognized -- not just in Gaza, but in the West Bank as well, this is likely to increase its support and getting far more attention from across the Arab World.

O'BRIEN: Robin Wright joining us. She's joint fellow at the Woodrow Wilson International Center for Scholars, the author of "Rock the Casbah" as well.

Nice to have you with us. We appreciate it. Thank you.

WRIGHT: Thank you.

O'BRIEN: John Berman has got a look at some other stories making news.

BERMAN: Thanks so much, Soledad.

You know, the events in the Middle East overshadowing President Obama's historic trip to Southeast Asia. He's three Asian visit wrapped up today in Cambodia. The president attended a regional summit and held sideline meetings with China's premiere and Japan's prime minister. Mr. Obama now on his way back home to Washington.

New information on the investigation into Benghazi: who knew what, when and where? The spokesman for the Director of National Intelligence says the intelligence community, not the White House, State Department or the Justice Department, made changes to talking points to government officials. The Obama administration, especially Ambassador to the United Nations, Susan Rice, she's taking a lot of heat over those talking points. Rice used them as the basis of saying just five days afterwards that the attack was a spontaneous reaction to an anti-Islamic video.

Indianapolis detectives say a recent explosion at an area subdivision was no accident. The homicide investigation is now under way. Two people were killed, seven injured in a November 10th blast that leveled several homes and damaged more than 30 others. Investigators now are searching for a white van that was spotted in front of one of the homes shortly before the explosion.

It's been two weeks since Election Day and Republican Congressman Allen West of Florida is now conceding defeat to Democratic challenger Patrick Murphy. West, a Tea Party favorite, released a statement this morning saying, quote, "While many questions remain unanswered, today I'm announcing that I will take no further action to contest the outcome of this election."

Final results of a recount Sunday put Murphy ahead of West by about 1,900 votes. That really only leaves one too close to call race, that one in North Carolina, and there's another race in Louisiana decided in December.

O'BRIEN: Wow, it's interesting. I was surprised he held in as long as he did because I think -- legally, the time was up.

BERMAN: It was up. They did a recount. When they recounted more votes the margin spread further.

(CROSSTALK)

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Allen West, I'm not surprised. He's a fighter.

O'BRIEN: Yes, you're right. I agree with you on that. We know him well.

All right. Still ahead this morning on STARTING POINT: trying to bounce back from Superstorm Sandy, a family business now swimming in debt after the storm all but wiped them out, starting the slow climb back to comeback. We'll have their story straight ahead.

And with gas prices, why are so many of us about to pay record prices to drive over this --

CAIN: Thanksgiving.

O'BRIEN: Thank you.

Thanksgiving is the word I'm trying to say. This Thanksgiving holiday. We'll examine that ahead as well.

(COMMERCIAL BREAK)

ROMANS: Welcome back to STARTING POINT, "Minding Your Business."

U.S. stock futures basically flat this morning. Yesterday's optimism, big optimism that Congress will avert the fiscal cliff given way this morning to revive concerns about Europe. Moody's downgraded France's credit rating late last night. And Europe's finance ministers are meeting in Brussels today to talk about Greece.

Yesterday, the Dow jumped 207 points yesterday, more than 1.5 percent. It was the best day in months yesterday.

Strength to real estate adding to yesterday's good mood. Existing home sales rose more than two percent in October. Home prices are up more than 11 percent over the past year. According to the National Association of Realtors, the median price of an existing home now $178,600. Home prices have risen for eight consecutive months. We're going to have little more housing data in about 15 minutes.

Meantime, gas prices have been falling a little since the summer, right? But, this will still likely be the most you've ever paid for gas on Thanksgiving, ever. That's right. Today's national average from AAA, $3.41 a gallon. Last year, gas was almost a dime less. So, pack your money when you drive the ground.

O'BRIEN: But down from that ridiculous high of --

ROMANS: Yes.

O'BRIEN: What was that --

ROMANS: Ridiculous.

O'BRIEN: -- cost me from insane amount of --

(CROSSTALK)

O'BRIEN: All right. As we have been talking about all morning, there are reports now. It's been confirmed that Israel is stopping its ground troops at this hour but only for a short time. The goal is to see if diplomacy can work in the conflict with Gaza. This as Secretary of State Hillary Clinton is on her way to the region with the goal of helping broker peace there.

Our team coverage continues this morning with Arwa Damon. She's in Gaza City for us this morning. Arwa, tell me a little bit about what you're seeing.

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Well, from this vantage point, it seems increasingly difficult to see how those diplomatic efforts are, in fact, going to come into play throughout the morning hours and now into the afternoon. We have been seeing strikes coming in from the Israelis.

We also saw a rocket being fired from Gaza City towards Israel as well. It came from that direction. Just a short while ago, we saw what seemed certainly to be leaflets being dropped. And the Israelis have been doing this on occasion. That was dropped a few days ago was warning residents to stay away from areas where militant commanders live, where there is what the Israelis call terrorist operations, where these rockets are being launched from towards Gaza.

There have also just in the last few months been a number of thuds in the distance in the other direction. We're not exactly sure what it is, but when we look in the street here, most certainly, they are deserted. Most of the shops are closed. People who've been talking to saying that they don't really believe that there is going to be any ceasefire in the short term.

We do now know that the Arab league delegation that we have been expecting has crossed into the Gaza Strip. They are here on a diplomatic mission, also an effort to show solidarity. So, there has been a lot of diplomatic activity, very intense diplomatic activity. Egypt, of course, has been trying to mediate negotiations between both sides.

But as of this point and time, there is no ceasefire that seems as if it is going to come into play any time soon.

O'BRIEN: Diplomatic activity on one hand and all those rockets firing on the other hand that makes it sort of a contradictory message there. Arwa Damon for us this morning. Thank you, Arwa. Appreciate it.

Still ahead on STARTING POINT, slow recovery after Superstorm Sandy, one family business is trying to bounce back. It's finding out it's going to be a very long struggle. We'll have their story coming up next in a live report.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. An industrial gas and welding business in Brooklyn took generations to build. Superstorm Sandy almost destroyed in minutes. Now, the challenge after and during the rain and flooding is not to drown in debt. Poppy Harlow has that story.

(BEGIN VIDEOTAPE)

POPPY HARLOW, CNNMONEY.COM (voice-over): Right before superstorm Sandy, the streets were quiet outside Liberty Industrial Gas and Welding.

UNIDENTIFIED FEMALE: Yes. That's been less than ten minutes.

HARLOW: This is nightfall, as the waters begin to rise.

UNIDENTIFIED FEMALE: So at this point, I think it's gone.

HARLOW: An industrial park in Red Hook, Brooklyn, sandwiched between two bodies of water.

ASHLEY MURRAY, PRESIDENT, INDUSTRIAL GAS AND WELDING: So, this is the Gowanis Canal coming into the harbor, which is going to meet up with the river, and liberty is right here. We really had quite a surge because of the Gowanis, you know, and the river essentially meeting in this area and flooding these streets.

HARLOW: Ashley Murray's family business devastated.

This is very hard for you personally?

MURRAY: Yes

HARLOW: I can see it in your eyes.

MURRAY: Yes. It's just -- we're devastated. It's just been a devastating process and there needs to be a little bit more help. HARLOW: Do you feel forgotten?

MURRAY: A little bit, yes. Yes. So, this was once a really nice showroom.

HARLOW: Eighty percent of her inventory, gone.

MURRAY: Essentially, we have moved everything into our stockroom so that we can work from the sidewalk. So, now, this is where we are functioning our store from. We have one functioning computer, one printer, and we have people coming in from the roll down door.

HARLOW: Before Sandy, you didn't have any debt.

MURRAY: Right.

HARLOW: Now?

MURRAY: Now, we're probably looking at $700,000 to $800,000 of debt.

HARLOW: Of debt. What kind of help have you gotten from the government?

MURRAY: Nothing from the government.

HARLOW: Ashley found government loans with six percent interest. Her bank did better with a line of credit at just over three percent.

MURRAY: We had shop saws and boxed items that -- there go the lights again.

HARLOW: The challenge of doing business these days even the generators fail.

(on-camera) Things are so bad here in Red Hook that this business right next door to Ashley's is literally drying invoices like this with a hair drier.

What does this business mean to you?

UNIDENTIFIED MALE: Everything. It's my life.

HARLOW: Ashley's employees watched her grow up, working alongside her father. If this business went under?

UNIDENTIFIED MALE: I would think I would go under, too, you know?

HARLOW: Now, it's up to her to save their jobs.

MURRAY: There's so much history here, the community, our customers. We really do have -- we have a great business here, and I think we can make it great again.

(END VIDEOTAPE)

HARLOW (on-camera): Well, she is the first female president of this company. And, boy, does she have a challenge, guys. She thinks $700,000 to $800,000 in the hole is where this is going to leave her. No help from insurance yet. No government loans that she thinks are affordable yet. Business down 30 percent. Competition taking away business day by day.

But other competition, she said, actually coming in to help her. So, she's trying. But, you know, I think the point here is that as a small business, it's very hard. They're not really getting the help that individuals are from FEMA. And every day, you lose that business you get further and further in the hole.

(CROSSTALK)

O'BRIEN: I mean, is she an outlier --

HARLOW: No. I think it's very typical, especially in Red Hook, Brooklyn, that whole area, I think it's very typical that when you're a small business if you don't have flood insurance or much flood insurance, then you're really on your own and you've got to get that assistance and those loans.

CAIN: -- Long Beach, Long Island, it's not atypical. I saw small business every small business destroyed, and it's cruel how one stands and then one next to it is destroyed.

MICHAEL SKOLNIK, EDITOR-IN-CHIEF, GLOBALGRIND.COM: I was at Rockaway. You just saw -- with no power for weeks. No business can open.

ROMANS: Absolutely.

O'BRIEN: All right. Some breaking news to get to. We're hearing that Egypt's president, Mohamed Morsi, is saying that Israel's aggression, as he calls it, against Gaza will end in a few hours. We have an update on the story. Our Reza Sayah is there reporting for us. We're going to get right to him for an update on that story. This breaking news coming to you. We got to take a short break. We're back right on the other side with his report.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back. Some breaking news to get to. We were hearing and we're waiting for a report from our Reza Sayeh about what Egypt's president, Mohamed Morsi, is now saying. He is saying that Israel's aggression, as he calls it against Gaza, will end some time today, maybe in a few hours and that Egyptian-mediated efforts will produce positive results.

Again, all of that in just a couple of hours. Reza Sayeh is reporting for us on this issue, and he joins us live.