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Heckler Interrupts Obama Speech; Intel on Chemical Weapons Claims; Iran Threatens to Destroy Israeli Cities; Obama Pushes for Mideast Peace; New Jersey Weighs Gay Therapy Ban; Palestinians' Big Divide; Did Secret Service Fire Near Iran's President?; Rethinking the Use of Killer Drones

Aired March 21, 2013 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, breaking news -- were chemical weapons used in Syria in recent days?

The first U.S. assessment is just in. Our Pentagon correspondent, Barbara Starr, is standing by.

Right in the middle of President Obama's visit to Israel, Iran's supreme leader makes a chilling new threat.

And did the U.S. Secret Service accidently fire a shotgun near Iran's president when he was in New York?

And why did Iran keep it quiet all these years?

I'm Wolf Blitzer.


ANNOUNCER: This is CNN breaking news.

BLITZER: Let's begin with the breaking news we're watching right now. The stakes certainly couldn't be higher. President Obama has warned that use of chemical weapons by Syria would be a game-changer, his words, game-changer. The U.S. has been investigating reports of chemical attacks. Now the first assessment shows that chemical weapons were apparently not used.

Let's go straight to our Pentagon correspondent, Barbara Starr.

What's the latest -- Barbara?

What are you learning?

BARBARA STARR, CNN CORRESPONDENT: Well, Wolf, I've been talking to officials all day. And they tell me the initial preliminary intelligence assessment is this -- chemical weapons were not used. A chemical substance may well have been.

When you look at that video emerging from Syrian hospitals, they say, it does not appear that the symptoms or the treatment match the use of chemical weapons, such as outlawed nerve or blister agents. They think it is more likely, perhaps, these people were exposed to some sort of chemical substance, non-weapons, a substance such as chlorine in some fashion. And certainly it made them very ill. It probably caused some of these injuries that we've seen in these videos, but not the outlawed weapons.

Now, I have to tell you, they also say they see no evidence of a SCUD missile launch. They are continuing to look at this. This is a preliminary assessment, but they say multiple indicators now chemical weapons were not used -- Wolf.

BLITZER: Well, let me just be precise, Barbara.

What is the difference between a chemical weapon and chemical substance?

How was this chemical substance, for example, conveyed?

STARR: Let's look at it this way. When you talk about outlawed chemical weapons, first you're talking about the agent, such as a nerve or blister agent, outlawed under international conventions, designed to cause mass casualties. Chemical agents such as chlorine has a different purpose, perhaps; perhaps an industrial chemical that still can be very deadly, but doesn't fall into that other category.

How they are delivered, by a missile or a rocket, also becomes part of the equation. They do have any indication that a SCUD missile with a chemical warhead was fired.

BLITZER: Well, how would this chlorine, this chemical substance, be used?

How would it inflict injury or death upon individuals?

STARR: Look, that's what they're still looking at. It is always possible that this was dispersed in some aerosol fashion, perhaps -- you know, this is now in the realm of all the things they will look at. It could have been fired from helicopters flying overhead. It could have been used from storage in ground areas. One analyst even speculating that possibly some of the fighting, an artillery shell exploded near a chlorine storage facility. These are all speculations now.

What the administration is saying, the intelligence community is saying at the moment, they simply don't have the evidence that this kind of red line was crossed. That's what they don't have. That's what they don't think happened.

BLITZER: All right, Barbara.

Thanks for that.

Barbara Starr at the Pentagon.

An ominous new threat today from Iran's supreme leader. With a massive crowd cheering his every word, the Ayatollah Ali Khamenei warned that if Iran is attacked, it will destroy Israeli cities. That, of course, comes right in the middle of President Obama's visit to Israel.

Watch this.



If they do a damn thing, the Islamic Republic will raze Tel Aviv and Haifa to the ground.



BLITZER: Speaking in Jerusalem, President Obama issued some warnings of his own today about Iran's nuclear efforts.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: A nuclear-armed Iran would raise the risk of nuclear terrorism. It would undermine the non-proliferation regime. It would spark an arms race in a volatile region. And it would embolden a government that has shown no respect for the rights of its own people or the responsibilities of nations.

Iran must know this time is not unlimited. And I have made the position of the United States of America clear. Iran must not get a nuclear weapon. This is not a danger that can be contained. And as president, I've said all options are on the table for achieving our objectives. America will do what we must to prevent a nuclear-armed Iran.


BLITZER: The president of the United States in Jerusalem.

Let's go live to Jerusalem right now.

CNN's John King has been watching the president.

A very busy day for the president in Jerusalem, in Ramallah, also meeting with Palestinian leaders. And so much on the agenda, not just Iran or Syria, but the peace process, as well.

JOHN KING, CNN CORRESPONDENT: And let's go through the day, Wolf, and the major takeaways.

Number one, from the Israeli perspective, what they wanted coming in, tonight, Israeli officials saying again after the president's remarks you just played, they have. Even before the new provocative words from the Iranian leadership, what Israel wanted from this trip was clear, muscular language from the president of the United States. And the Israeli officials say they got it. Number one, the president said he will not allow an Iranian weapon from the U.S. perspective, that he will act with military force, if necessary.

And number two, he said if Israel makes a decision that it needs to act unilaterally to defend itself, he would understand that, as well.

So the Israelis got exactly what they most wanted from this trip.

From the president's perspective, Wolf, a long way to go in this. We'll get to peace in a second. But from the optics, remember, for four years, Republicans back home have suggested he's soft on Israel, that the Israeli leadership doesn't trust him.

Well, to borrow an old phrase from our friend, Bill Clinton, that dog won't hunt after this trip, at least in the short-term.

Look at these pictures tonight. President Obama, at a state dinner in his honor here in Israel, sitting shoulder to shoulder, literally, at times, forehead to forehead, with the Israeli prime minister, Benjamin Netanyahu. For several minutes, these two leaders, allegedly this frosty relationship, joking, laughing, talking, all the while covering their mouths to make sure those of us with cameras couldn't figure out exactly what they were saying.

This the latest in several scenes where both of these leaders, maybe they're acting, but if they're acting, they're very good actors. They have made a clear decision to try to get along better as they move on to this long list of challenges.

And, Wolf, as the trip in Israel wraps up in the morning, if there's a risk for the president, it's this. He came in with low expectations. He may have raised expectations and hopes perhaps too high. You've covered this issue for many, many years. The president talking today to young Israelis, saying -- demanding that they challenge their leadership, challenge the old ways of blocking obstacles to the peace process. The president saying he thinks it's possible, promising he will make a personal commitment to get the parties back to the table.

If you look at the obstacles, whether it's rockets from Hamas, continued building in Israeli settlements, it's hard to see a peace process starting up any time soon.

So if there's one risk from this trip, the White House is ecstatic tonight. Trust me, the risk could be if, weeks from now, we don't see the beginnings of a process, the expectations game could come back to haunt the president.

BLITZER: John, stand by.

I want to come back to you in a little while.

But I want to get some analysis now on what we saw today.

Gloria Borger is joining us, as is Richard Haas, the president of the Council On Foreign Relations -- Gloria, in that speech that the president delivered, about 45 minutes ago at the Jerusalem Convention Center, a few thousand young Israelis, we saw the president, as we saw him often out on the campaign trail.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Right, speaking to a different generation, a younger generation. And what was important to me as I listened to this president's speech, he said I'm a politician. Take it from me, politicians aren't going to take the risk on their own. What he said, you need to create the change. We've heard that word, change, from this president. You need to create the change that you want to see.

So he was saying to young people, don't be frozen by the people who came before you and couldn't resolve these problems.

When he talked about an independent Palestinian state, he received a resounding applause in this audience. And we heard this time and time again. And now, even as president, in this country, taking this to the people on issues like immigration, gun control, to a different generation and saying, get beyond us, take this matter in your own hands.

BLITZER: Richard, this was -- my assessment, when I was listening to this speech, very pro-Israel, very pro-Palestine, very pro-peace.

What did you think?

RICHARD HAAS, PRESIDENT, COUNCIL ON FOREIGN RELATIONS: Well, the president didn't come to a plan. But just as Gloria said, he was speaking over the head of the Israeli government, just like here in the United States, he often speaks over the head of Congress directly to the American people.

And he was essentially making the case for peace and signaling both sides that things had to change.

For the Palestinians and the Arabs, Israel was here to stay. Like it or not, it's a fact of life.

For the Israelis, he was making the case that if you want Israel to be prosperous and secure and Jewish and democratic, then you need a Palestinian state, not as a favor to them, but as a favor to yourselves.

And he also said, by the way, settlements are counterproductive and work against that goal.

So this was messaging. This was context creating. This is the sort of thing you do before you actually launch a peace process, much less serve a specific set of plans.

BLITZER: All right. I want everybody to stand by, because we're going to continue this conversation.

Richard Haass, Gloria Borger, John King.

Up next, a heckler steals a little bit of the spotlight during President Obama's big speech in Jerusalem.

What exactly did that heckler want?

We've got the inside scoop.


BLITZER: A long time sticking point between the U.S. and Israel surfaced once again today during the president's visit, stealing a little bit of the spotlight during his major speech in Jerusalem.


(voice-over): The interruption came when President Obama was speaking to Israeli young people about a brighter future, when a heckler brought back some sour memories of the past, shouting at President Obama to free Jonathan Pollard.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I believe your future is bound to ours.


OBAMA: No, no. This is part of the lively debate that we talked about.


OBAMA: This is good.

BLITZER: Pollard, an American convicted of spying for Israel, has served nearly three decades in a U.S. prison. And there have been protests in Israel this week demanding his release.

Before his Middle East trip, President Obama was asked about Pollard in an interview with Israel's Channel 2.

OBAMA: This is an individual who committed a very game-change crime here in the United States. He's been serving his time. I have no plans for, you know, releasing Jonathan Pollard immediately, but what I am going to be doing is to make sure that he, like every other American who has been sentenced, is, you know, accorded the same kinds of review.

BLITZER: This is a story I've covered from day one. In 1989, I even wrote a book about it, "Territory of Lies." Jonathan Pollard was a civilian analyst for U.S. Naval Intelligence, with access to some of this country's most important secrets. He started passing some of those secrets to an Israeli operative, receiving monthly cash payments.

In 1985, he was questioned about the removal of classified documents and was placed under surveillance. But Pollard and his then wife Anne were arrested after trying and failing to gain entrance to the Israeli embassy in Washington. Pollard made an agreement with prosecutors. He pleaded guilty to one count of conspiracy to commit espionage. That allowed the Reagan administration to avoid a trial and the need to release any sensitive or classified information. In exchange, the U.S. attorney worked out an arrangement that Pollard would receive a substantial sentence but not the maximum sentence, life.

Yet, in a stunning turnabout, a U.S. federal judge rejected the plea agreement and did sentence Pollard to life, citing the enormous damage to U.S. national security that then-defense Secretary Casper Weinberger outlined in a classified memo to the court. Pollard remains at a federal prison in North Carolina.


BLITZER (on-camera): And Gloria and Richard Haass are still with us. Gloria, it was interesting. I listened very closely to what the president said in that interview with channel 2. He didn't necessarily completely rule out the notion that someday he might give Pollard some clemency and let him go to Israel.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, do you think it's likely that he will even the fact, the national security community still remains opposed, the vice president of the United States remains opposed. Do you think --

BLITZER: Yes. There's strong opposition to releasing Pollard. But, I wouldn't necessarily completely rule it out. Almost 30 years in prison, a long time for conspiracy to commit espionage with a friendly country. But let me ask, Richard Haass, because when you served in the government, Richard, you worked for the secretary of state, Colin Powell.

You're very familiar with this case. What do you think the chances are that this president might do what other presidents repeatedly rejected in the face of requests from Israeli leaders, release Pollard?

RICHARD HAASS, PRES., COUNCIL ON FOREIGN RELATIONS: It probably depends upon the larger context of U.S./Israeli relations, Wolf. I can imagine at a certain moment, this might be something useful to introduce into the mix depending upon what the president was asking, of Bibi Netanyahu was asking of Israel.

So, I think it's unlikely to be decided, shall we say, in isolation. It's been a big political issue, particularly, in Israel on the right as you know better than anyone else for some time. So, my hunch is this is not something again that will be given away, if you will, for free.

BLITZER: Let me bring Gloria back and talk a little bit about the political fallout from the president's visit to Israel. Coming back now, the secretary of state, John Kerry, will remain at least a little bit trying to maybe get this Israeli/Palestinian peace process off the ground.

BORGER: Jump-start it.

BLITZER: But he's got some political issues he's got to deal with major issues here. How much of a subject of importance will this be for the president?

BORGER: Look, I think this has been very good for the president because there were lots of people in the American/Jewish community, particularly, during this last election who saw Bibi Netanyahu kind of cozying up to Mitt Romney, who were very skeptical about the president and Israel.

I think this trip, as John King was saying earlier, makes it very clear, particularly, when the president on the question of Iran said all options are on the table, period. The president made it very clear as he said in his speech today, you are not alone. So, I think domestically, politically, this trip is only good for the president.

It makes him be seen as a leader, next to Bibi Netanyahu. These two men both need each other in many ways right now, Wolf. And I think that's why you see this relationship blossoming.

BLITZER: And Richard Haass, do you think anything is going to come of this? Will there be a peace process any time soon?

HAASS: Again, the situation is decidedly unripe given what's the divisions of the Palestinians. The Israeli government is not a government that was elected to make peace. This was a government that was elected to deal with the special privileges of the orthodox within Israeli society. You got the turbulence in Egypt. You will have turbulence in Jordan.

It's -- this is not if you will, again, a prelude to peace. I would just say one thing slightly, perhaps, different than Gloria, which is I don't think the United States and Israel quite see eye-to-eye yet on Iran. The president made it clear that he doesn't want Iran to have a nuclear weapon. The real question is whether the United States and Israel can agree on what Iran should be allowed short of that.

What kind of capacities are tolerable from our and the Israeli point of view as opposed to intolerable, and I think that's the gray area where there's still some difference. But the president did succeed at kicking this down the road, I think, to 2014 and all things being equal.

He has something of the upper hand in the relationship for all the political reasons that have been discussed, mainly his strong re- election and the fact that Bibi Netanyahu has now returned as prime minister with a weaker hand than he had before.

BLITZER: Richard Haass, thank you. Gloria, of course, thanks to you as well. We're going to have much more on this story later here in the SITUATION ROOM.

When we come back, North Korea's bold new threat against the United States.

And is Harrison Ford planning a return to "Star Wars?" He's revealing the answer. That's coming up here in the SITUATION ROOM.


BLITZER: North Korea is issuing a bold new threat against the United States. Lisa Sylvester is monitoring that and some of the other top stories in the SITUATION ROOM right now. What's the latest?

LISA SYLVESTER, CNN CORRESPONDENT: Hi, Wolf. Well, the country's military warned today on the North's state run news agency that U.S. bases in Guam and japan are within what North Korea calls its striking range, this on the heels of an announcement by the United States that its B-52 bombers are making flights over South Korea as part of annual military exercises.

Despite the rhetoric, no U.S. navy submarines are based in Japan. Tensions have spiked in the region since North Korea's latest underground nuclear tests last month.

And, don't expect to see any bans on your super-sized sodas in Mississippi. The state's governor has just signed a law preventing counties, districts, and towns from enacting rules limiting portion sizes. The measure dubbed the anti-Bloomberg bill follows New York City mayor, Michael Bloomberg's, failed attempt to ban the sale of large, sugary drinks in New York City.

And sales of previously owned homes reached an annual rate of nearly five million in the month of February, the highest in more than three years. Today's report is the latest sign of a housing recovery that has become a strong positive force for the economy. It's due in part to a drop in foreclosures and near record low mortgage rates. A decline in the national unemployment rate is also a factor.

And Harrison Ford is hinting that he could be returning to "Star Wars" as the legendary Han Solo. The 70-year-old actor was asked by CNN Chicago affiliate, WGN, whether he's reuniting with original cast mates, Carrie Fisher and Mark Hamill, for "Star Wars" episode seven. This is what he said.


HARRISON FORD, ACTOR: I think it's almost true. I think, you know, I'm looking forward to it. It's not in the bag yet, but I think it's happening.


SYLVESTER: Almost true is how he puts it. So far, Lucas' film is neither confirming nor denying whether the actors are officially making the return, but I have a feeling, that would be a big blockbuster if they do another "Star Wars" with the original casts.

BLITZER: Amazing. I'd go see it.

SYLVESTER: Yes, I would. You could see sort of Han Solo -- I almost called him Han Solo -- Harrison Ford through the years and such. So, it'll be interesting to see what roles they play in this new movie, Wolf.

BLITZER: We'll be looking forward to it. Thanks, Lisa.

Up next, New Jersey governor, Chris Christie, he's forced to take sides in a heated debate over banning so-called gay conversion therapy. The pressure on the rising GOP star. What's going on? We'll tell you.


BLITZER: Happening now, did the U.S. secret service accidently fire a shotgun (ph) near Iran's president when he was in New York?

The debate over banning so-called gay conversion therapy heating up in New Jersey, and now, the pressure is on the Governor Chris Christie to choose sides.

And she's a beauty queen with such a unique story that President Obama wanted to meet her in Israel. She tells us about that meeting. That's coming up.

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


BRIELLE GOLDANI, AGAINST GAY CONVERSION THERAPY: Because this program, I attempted suicide three times. This is nothing more than legalized child abuse.


BLITZER: It's one of the most controversial forms of treatment in this country, so-called gay conversion therapy based on the premise that homosexuality can be reversed. The debate is heating up in the state of New Jersey, and now, the pressure is on the Republican star, the governor, Chris Christie, to take a stand.

Let's bring in our chief Congressional correspondent, Dana Bash. She's looking at this story and has got the latest details. Explain what's going on.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Well, it really comes down to a question of whether being gay is a choice or not. But it also reminds us of the issue of gay marriage which is something that is in front of us politically and how much things have changed just even over the past four and a half years. It has gone up nine points, nine points, that support.

But it really is only among Democrats and independents. For Republicans it is really stagnate. And that is why, probably, gay rights are such a thorny issue for Republican politicians who may be eyeing a Republican primary race for president like Chris Christie who now faces a decision on a very controversial topic.


ADAM HOOD, SELF-IDENTIFIED FORMER HOMOSEXUAL: Homosexuality is an abomination.

BASH (voice-over): In this 2012 documentary, "Curing Gays," Adam Hood, identified as a former homosexual, talks about his work in what's known as gay conversion therapy.

HOOD: Many people hate me temporarily and get saved a month later and thank me for holding the line.

BASH: In New Jersey a bill to ban gay conversion therapy with minors is making its way through the state legislature.

Jacob Rudolph, a self-described bisexual teenager, testified in favor of the New Jersey ban earlier this week.

JACOB RUDOLPH, SELF-DESCRIBED BISEXUAL TEENAGER: I am not broken. I am not confused. And I do not need to be fixed.

BASH: In order for the ban to become law Republican Governor Chris Christie would have to sign it but the normally outspoken governor is not ready to say what he'd do, telling reporters he is of, quote, "two minds on the issue."

"I think there should be lots of deference given to parents on raising their children." Going on to say, "On bills that restrict parents' ability to make decisions on how to care for their children. I'm generally a skeptic of those bills. Now there can always be exceptions to those rules and this bill may be one of them."

Christie's indecision underscores how dicey issues relating to gay rights have become for Republicans. Especially those who may have ambitions for higher office.

GEORGE W. BUSH, 43RD PRESIDENT: Protecting marriage as a union of man and woman as husband and wife.

BASH: Not too long ago opposing gay rights was a no brainer for Republicans. George W. Bush won re-election in part by endorsing state bans on same sex marriage. Now?

SEN. ROB PORTMAN (R), OHIO: My son came to Jane, my wife and I, told us that he was gay, and that it was not a choice.

BASH: A slow move in favor of more gay rights. Republicans like Senator Rob Portman are reversing opposition to gay marriage in part because of people close to them are more open about being gay.

(On camera): What was your reaction when he told you?

PORTMAN: Love. Support. You know, 110 percent.

BASH (voice-over): GOP leaders against gay marriage appear to get that their opposition has become a minority view in America and they're increasingly careful to strike a more tolerant tone.

REP. JOHN BOEHNER (R), HOUSE SPEAKER: I respect everyone's opinion. I just gave my opinion. My opinion is born out of my childhood, my faith, my beliefs, that marriage is between one man and one woman. I respect other people's views.


BASH: Now anecdotally in conversations with Republicans in the hallways of the capitol it seems as though Republicans, especially those on the younger side, believe that this should be not a federal issue anymore but a court -- excuse me, a state issue. And we'll see if the Supreme Court decides because they're going to hear a pair of really important cases next week.

BLITZER: Yes. Big cases on gay marriage here in the United States.

All right, Dana, thanks very much.

Let's dig a little bit deeper in our "Strategy Session." Joining us our CNN contributors, the Democratic strategist Donna Brazile, and the former White House Bush press secretary, Ari Fleischer, he's a consultant and a board member, by the way, of the Republican Jewish Coalition as well.

Ari, what do you think about this decision that the governor of New Jersey needs to make? How do you think it will play out politically one way or another?

ARI FLEISCHER, FORMER BUSH WHITE HOUSE PRESS SECRETARY: Well, Wolf, number one let me state at the outset I think gay conversion therapy is wacky. I just -- I have a hard time understanding this. All my gay friends, people I know, and I think logic tells you that this is the way people are born, and as they get older there is just something inside them, inside their nature that moves them into one direction.

And I'm glad we're a society increasingly respecting of that and accepting of that. And so I do think it's wacky. Having said that, though, you know, I do wonder about what role government should have in outlawing procedures that a parent wants to have for a child or for that matter for anybody.

If this is something that somebody on their own free volition decides to do even though I think it's wacky and I would advise them not to do it, does the state have the right to say to them, you may not do something that you might think is good for you that you want to do? That's a different issue and that's the role and the power of the state to outlaw things that many of us just don't agree with.

That's a different issue and I think that's why this is a little more delicate than it appears at first blush.

BLITZER: How do you see it, Donna?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, I believe that Governor Christie has come out in the last few hours, at least a spokesman, said that he doesn't believe in this -- he doesn't believe in gay conversion therapy. I think it's ineffective. I think it's harmful. And I think it's destructive to the individual.

Gay children needs to be loved and nurtured and respected. Not tortured and put through these untested therapies. When you read some of the therapies used, inducing vomiting, showing them horrible pictures of people doing things I can't say right now on television, I really do believe that the practice should be outlawed and in California they have an assembly bill that the New Jersey legislative body has taken up. It may all end up in the courts. But I think the practice itself should be banned.

BLITZER: If you were Christie, Ari, and you were thinking of running for the Republican presidential nomination in 2016 what would you do?

FLEISCHER: Well, he cross pressured on this because his base in the party is not the conservative base. His base in the party are -- is a much more moderate base and it's a base of crossover Democrats or independents who would be drawn to his candidacy. Independents of course a huge constituency in New Hampshire that can vote.

And so if he does sign this, he supports himself among his core constituency. If he fails to sign it or doesn't sign it, then he is moving toward what you might call the right on this issue and I think that's going to alienate his core group that would be more inclined to support him because conservatives don't trust him on issues other than some of the economic issues to begin with.

BLITZER: Republicans, I assume, Donna, you agree, as we go down the road, they will become more liberal on these gay issues. Given the nature of public opinion especially among young people in the country?

BRAZILE: You know, when it comes to human rights, civil rights, and equality, I don't believe we should have the left versus right. These are moral issues. These are issues that goes to the heart of what human beings -- who we are and what we should be about not toward the partisan politics but like everything else it's going to get played out in a partisan atmosphere but I would hope that we respect the individual people who through no fault of their own are just trying to live their lives and not be tortured or be subjected to these type of conversion therapies.

BLITZER: Donna and Ari, guys, thanks very much.

Just ahead, did the U.S. Secret Service accidentally, accidently fire a weapon near Iran's president when he was in New York? And why would Iran keep quiet about something like that? Stand by.



BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Today I want to tell you, particularly the young people, so that -- so that there is no mistake here, so long as there is a United States of America, (speaking in foreign language).


You are not alone.


BLITZER: The president making a strong statement of support for Israel. He traveled earlier in the day to the West Bank to meet with the Palestinian Authority President Mahmoud Abbas. He made a pitch for renewed peace talks and said Palestinians deserve an end to the occupation and the daily indignities, his words, that come with it. Later he told Israelis to empathize with the plight of the Palestinians.


OBAMA: Put yourself in their shoes. Look at the world through their eyes. It is not fair that a Palestinian child cannot grow up in a state of their own. Living their entire lives with the presence of a foreign army that controls the movements not just of those young people but their parents, their grandparents, every single day. Just as Israelis built a state in their homeland, Palestinians have a right to be a free people in their own land.


BLITZER: Let's bring back CNN's John King, he's in Jerusalem for us.

You did get a chance, John, to see the world as Palestinians see it. You had trips to Gaza, to the West Bank. They don't all necessarily see the world the same way. In fact, a hard line Gaza group fired two rockets, Hamas, into Israel today and then fired off a message calling President Obama a dog.

What's going on? What did you see?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Wolf, it is one of the huge obstacles to resuming a peace process. In the West Bank you have Mahmoud Abbas and his Fatah Movement. The president said they are maybe not doing everything he would like but they're making important political and economic reforms. And then the president said there is a huge divide, a huge difference, both politically and economically, when you look at Gaza.

And on that point, from our visit on that point you'd have to say the president is dead right.


KING (voice-over): To visit Gaza is to step back in time. And to wonder if hate will ever give way to peace. Celebrations of the Hamas military wing that lobs rockets into Israel. And tributes to men Hamas calls martyrs but who by most any other definition would be called murderers and terrorists.

Poverty, rundown housing, mules and horses alongside beat-up cars. Here, though, proof Gaza doesn't have to be so bleak. Hammam al Yazegi says those with jobs are less likely to choose hate and violence. Six hundred workers here at the plant's heyday , just 300 now, most of them part-time. HAMMAM AL YAZEGI, MANAGER, GAZA SODA FACTORY: We've got actually five lines and we used to have three shifts a day. Now we've only one shift for like three days a week.

KING: It is the price Gaza pays for Israel's anger at Hamas. The plant once shipped drinks to and through Israel, but now it's limited to selling locally. This truck once drove to the Israeli border for CO2, now the factory pays five times as much for tanks smuggled from Egypt.

Al Yazegi blames Israel.

AL YAZEGI: They just want to control Gaza, they want to control people, they want to control the economy, they want to control everything.

KING: Welcome to the great Palestinian divide. Ramallah is hardly boomtown but it is a galaxy apart from Gaza. The market is busy and nine different Arab bank compete for customers at this Ramallah mall. Sam Bahour helped built the mall. He says better than Gaza isn't good enough. And, again, he blames Israel.

SAM BAHOUR, PALESTINIAN-AMERICAN BUSINESSMAN: But that doesn't mean that Ramallah is not under military occupation. We very much are in a cage and around this cage is either Israeli settlements or military checkpoints.

KING: Bahour lives here but was raised in Youngstown, Ohio. An American citizen who voted twice for President Obama but believes visiting Israel and Ramallah now is a big mistake.

BAHOUR: Coming and going without bringing any kind of political movement is emboldening Israel and emboldening Israel with this new right-wing government means more settlements, means more potential collapse for the Palestinian society.

KING: Zare Azuro (ph) doesn't like to talk politics. Instead he wishes the economics of peace would take hold. His furniture factory is a few steps from the Gaza-Israel border. And his products not too long ago were sent to Israel by the truckloads. Now Israel won't allow it. The price of hate, he says.

But Azuro says Hamas shares the blame. One hundred and fifty workers here before Hamas came to power in Gaza. Just 20 now. A border once busy with trade now a no-man's land. Under the watchful gaze of Israeli surveillance balloons.

Of the 100 factories and warehouses near the border, all but five locked and shuttered. It's the price of hate, mistrust and violence.


KING: And Wolf, it is like going back in time and I cannot tell you how depressing it is. You see these wonderful, beautiful Palestinian children in Gaza, hope in their eyes, but then you walk the streets and you see the devastation, and that gentleman at the end of the furniture factory, perhaps a minority but not alone. When we were there, several people have to looking around a little bit nervously, said yes, they blame it most on Israel, but many also said that as long as Hamas will not acknowledge Israel's right to exist, they see no hope for peace and that means no hope for jobs.

BLITZER: Let's hope the president's visit can revive that peace process. That would be good for Israelis and for Palestinians.

John King, in Jerusalem for us.

Coming up, a shot fired near Iran's president by the U.S. Secret Service, extraordinary new details coming to light about a potentially catastrophic incident.


BLITZER: So was the shot fired in the direction of Iran's president by the United States Secret Service? An extraordinary new account of an incident which could have been disastrous.

Brian Todd has been looking into this for us. He's here in THE SITUATION ROOM.

What's going on?

BRIAN TODD, CNN CORRESPONDENT: Wolf, the Secret Service is saying Iran's president not only was not in danger in this incident, but that he was nowhere near it. The authors of this new book say Mahmoud Ahmadinejad was there, noticed it and was surprised. The story adds more controversy to what have often been contentious visits by Iran's president to New York.


TODD (voice-over): His visits to the U.N. were often laced with intrigue and tension and one had an errant gunshot mixed in. That's according to a new book which tells of an incident in New York involving Iran's President, Mahmoud Ahmadinejad. The book "Deep State" says it happened in 2006. But the author now acknowledges it was in 2007.

The book says when U.S. Secret Service personnel were standing by in or near their vehicles at a staging area in New York, a Secret Service agent in an apparent accident discharged his shotgun as Iranian President Mahmoud Ahmadinejad was loading his motorcade. No one was hurt and co-author Marc Ambinder says Ahmadinejad didn't come close to getting hit with the bullet. But --

MARC AMBINDER, CO-AUTHOR, "DEEP STATE": My understanding is from the Bush administration officials, who looked into it at the time, is that Ahmadinejad was aware of it. Certainly heard the shot. And, you know, was surprised by it. But kind of looked ensconced a little bit and then walked and got into his car.

TODD: Ambinder says Iranian security personnel were nearby as well and noticed it. He says that's based on accounts he got from two Bush administration officials, who read the president's daily brief on the matter and looked into it. Ambinder said a Secret Service official also confirmed the basics of what happened.

(On camera): The Secret Service acknowledges one of its agents accidently discharged a weapon while inspecting equipment. The agency says the round went into the floorboard of a Secret Service vehicle. But in a statement to CNN, the Secret Service is pushing back hard on a key contention in the book. The agency said neither Ahmadinejad nor any Iranian security personnel were anywhere near the vehicle at the time.

(Voice-over): Ambinder says he stands by that reporting. The Secret Service won't say if the agent has been disciplined, only that he or she could have gotten anything from a letter of counsel to a suspension.

Larry Johnson, a former special agent in charge at the Secret Service who worked the U.N. detail says this.

LARRY JOHNSON, FORMER SECRET SERVICE SPECIAL AGENT IN CHARGE: Almost definitely the agent would have been disciplined and put on some administrative leave, and then recycled through not only weapons training, but detailed training.


TODD: An official at the Iranian Mission to the U.N. says neither he nor his staff are aware of that incident in 2007 but says his team also was not at the U.N. at the time. The U.N.'s top security official tells us he is not aware of that incident -- Wolf.

BLITZER: Did Ahmadinejad ever say or hint anything along these lines?

TODD: Marc Ambinder says that the people in the Bush administration who he spoke to were sure at the time that Ahmadinejad would speak loudly about it, that he would try to demagogue the U.S., maybe even claim that the Americans were trying to kill him. He says these officials were surprised when Ahmadinejad never said anything about it, and neither did any other Iranian official.

BLITZER: Thanks very much, Brian Todd reporting. Interesting story.

Now to one of the most secret and sensitive issues in the war in terror. The use of killer drones. The new issue of "TIME" magazine reveals the program's secrecy is now becoming a political problem and President Obama may be planning some public remarks on the U.S.' use of pilotless aircraft to hunt down and kill potential terrorists.

"TIME" magazine's Michael Crowley, the author of this very insightful article, is here in THE SITUATION ROOM right, he's got some details.

How politically risky is this whole issue of drones becoming for the president?

MICHAEL CROWLEY, "TIME" SENIOR CORRESPONDENT: Well, Wolf, isn't it remarkable? During the presidential campaign, this was a real asset, a selling point for the president, that he was tough on terrorism, he was decimating al Qaeda's core leadership in Pakistan, which he certainly has done. And when the new -- when "The New York Times" wrote a big story on Obama's personal involvement in the drone program to the point of approving a kill list, many administration officials cooperated.

What I understand is that when that story came out, there was some discomfort, there was talk about the president being a kind of executioner-in-chief. And now we've seen more recently with the left and the right converging, Rand Paul filibustering John Brennan's nomination, some Democrats voting against the Brennan nomination in protest of the White House's refusal to turn over legal documents, that you're having new political opposition to this drone campaign. So it went from the campaign asset now to real political headache for the president.

BLITZER: You write this in the article, the article entitled "So Who Can We Kill."

"In the U.S. Obama's biggest political problem may be secrecy by treating the drone campaign as a state secret, the White House has invited broad suspicion and paranoid scenarios like the casual killing of Americans at home."

The secrecy is becoming a big problem for the president.

CROWLEY: A huge problem. I think that the White House understands this. And in fact, this is why it appears that the president is going to give some kind of a speech on this subject. The White House won't confirm this on the record. There's a lot of buzz in these circles right now that they're putting this speech together. May be coming in a matter of weeks. And I think the goal here is for the president to try to calm people down, to say, this is -- we can be transparent about this.

This is just another tool that we use to fight terrorism. It's a military tool, a new technology that people don't understand. But I think there's a feeling that because people don't understand it that well, they're leaping to wild conclusions and you see things like the Rand Paul filibuster that was about these pretty farfetched scenarios of killing Americans casually on U.S. soil.

BLITZER: And the courts may get involved in all of this as well.

CROWLEY: Yes, there's talk about a drone court where you would have -- a judge is essentially acting as a check-and-balance against decisions about who to put on these kill lists. And I should say also, Wolf, there's been some good reporting just in the last day or so about talk of moving the drone operations that the CIA now conducts over to the Pentagon, taking the CIA out of the process.

Does that mean there are fewer drone strikes? Does that mean a big change in the strategy? Probably not. But I think to some degree, the optics of having it not be part of the CIA, which is a shadowy, covert organization that a lot of Americans are suspicious of, would make it helpful for people to be comfortable with these drone operations.

BLITZER: Michael Crowley is a senior correspondent for "TIME" magazine. I have no doubt that Senator Rand Paul's filibuster has played a significant role in all of this.

CROWLEY: Pay close attention to it.


BLITZER: They're certainly getting --

CROWLEY: They are getting uncomfortable about the politics over there.

BLITZER: Michael, thanks for coming on.

CROWLEY: Thank you.

BLITZER: Just ahead in our next hour, we're following the breaking news in the killing of Colorado's prison chief. We'll have an update for you.

Also, a moment more than two decades in the making. This man walks out of prison after his murder conviction is thrown out.