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EARLY START

U.N. Urges Ceasefire; Russia Denies Involvement in Ukraine; American Reporter Detained in Iran; Russian Economy Suffers

Aired July 28, 2014 - 04:30   ET

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


(COMMERCIAL BREAK)

POPPY HARLOW, CNN ANCHOR: Breaking news overnight: the United Nations urging Israel and Hamas to stop the violence, calling for an immediate cease-fire at an emergency midnight meeting. This, as the blame game continues over who is responsible for an attack on a Gaza school. We are live in Jerusalem with those breaking developments.

JOHN BERMAN, CNN ANCHOR: Also breaking news this morning. Russia firing back at accusations that it has been arming rebels in Ukraine and it might be in any way culpable for Malaysia Airlines Flight 17 going down. This, as fighting rages between separatists and Ukrainian military near the crash site. There is new hope this morning, though, that investigators will be given access to the scene. We have live team coverage just ahead.

Welcome back to EARLY START. I'm John Berman.

POPPY HARLOW, CNN ANCHOR: And I'm Poppy Harlow, in today for Christine Romans. It is 30 minutes past 4:00 a.m. here on the East Coats.

We welcome all of our viewers both here in the United States and around the world.

And we begin with this, breaking overnight -- fighting overnight continuing despite the humanitarian cease-fire. Hamas launching dozens at Israel Sunday. The Israelis conducting 40 separates attacks on Hamas. Meanwhile, officials in Jerusalem are denying responsibility for 16 deaths last week at a U.N. school in Gaza, although they are confirming there was an errant Israeli mortar that struck the courtyard, but say it was empty at the time.

I want to bring in Martin Savidge with the latest from Jerusalem.

Martin, first, let's talk about the information on the ground. There may have been talk, in a sense that there may have been a lull in the fighting between the two sides. Do you get that sense at this hour or not? It is persisting as heavily as it was in previous days?

MARTIN SAVIDGE, CNN CORRESPONDENT: Yes, good morning, Poppy.

I wish I had better news for you. But no, it appears the conflict is continuing on the part of both sides, Israel and Hamas. You know, there were indications yesterday that we might be inching to some sort of humanitarian pause, is the word that people have used. The Israeli cabinet, Saturday night into Sunday, have voted in favor of that, but Hamas rejected it firing rockets and mortars into Israel.

And then, about 12 hours later, it was Hamas that said it was not ready to declare this 24 hours of temporary halt to violence. Israel did not find that to be a genuine offer and, in fact, it wasn't apparently because Hamas continued to strike Israel, 74 hit yesterday. Meanwhile, the terrible death toll continues to climb in Gaza. There are over 1,032 Palestinians have been killed in the conflict. So, unfortunately, it continues to grind on, despite outside of Israel and Gaza -- all this talk of trying to arrange a cease-fire, Poppy.

HARLOW: And, Martin, if we could briefly talk about what Israel has come out in the last 24 hours, yesterday, coming out and saying, yes, indeed, an errant mortar did hit the courtyard of the school in Gaza used as a shelter. To say no one was in the courtyard at that time. So, there's a lot of discrepancy of who is responsible for the 16 deaths we saw there and many more injuries.

What else do we know about that?

SAVIDGE: Yes, this was the most detailed explanation Israel has given so far as to what happened on last Thursday, and it was horrendous. There had been many in Gaza, but this one stood up particularly because, as you say, it was a U.N. school. It was a place where thousands of people thought they would be safe because it was the U.N.

Unfortunately, it turns out that Israel says it received missile fire on some of its troops from the vicinity of the school. It responded with mortar fire. One shell landed in the courtyard of the school. They released video from a drone flying high overhead. Hard to see clearly, but they say the imagery show the courtyard was empty. Thereby, they can't explain the deaths and so many wounded.

We should point out, people at that time of day, the heat of the day would not be in the courtyard with the sun is, they more likely to be on the periphery to be in the shade, and the camera doesn't show them there. So, it is a back and forth. You're right, Poppy.

HARLOW: Appreciate the update. Thank you, Martin.

BERMAN: Thirty-three minutes after the hour, moving now to the crisis in Ukraine. The U.S. releasing satellite photo showing the Russian forces apparently firing across the Ukraine border in support of the rebels there. This would back the claims that Russia is directly involved in that conflict. Russia's foreign minister telling Secretary of State John Kerry is not contributing to the conflict, or responsible for the downing of Flight 17. The foreign secretary just held a news conference moments ago and reiterated those claims.

Diana Magnay has details live from Moscow. Good morning, Diana.

DIANA MAGNAY, CNN CORRESPONDENT: Yes, that's right. He repeatedly the claims that Russia does not have anything to do with supplying weapons for example to the separatists in eastern Ukraine and really outlining a position whereby the Russian side is following the part of reason and internationally agreed, diplomatically to try and resolve the conflict in the east of Ukraine. It was Kiev and the West that had consistently refused to bring the warring parties together at the negotiating table so they can sit down and talk to try to resolve the crisis in a peaceful fashion.

As for the accusation that Russia is supplying weapons across the border to the rebels in the east, he didn't actually deny it outright. He said we invited OSCE monitors, monitors for the Organization of Security and Cooperation in Europe, who have been active through this conflict, trying to assess what is going on, on the ground.

We invited them to two border check points between Russia and Ukraine so they can see for themselves the situation there. That was two weeks ago and they still haven't come. So, in the telephone call with the U.S. secretary of state, Sergey Lavrov said that he hoped John Kerry would ask his subordinates, presumably the government in Kiev, not to hinder the work of OSCE and waive doubts to supplying militants in the east with weaponry.

So, the position Russia is taking is still that it is in the position of right and reason, that there are thousands of refugees crossing from east Ukraine seeking refuge as a result of this crisis. That as for Russian shelling Ukrainian positions, he's said look at the shelling we experienced from our side with Ukrainians firing shells across the Russian border into Russia.

So, it really is a very, very different picture from the one you will hear from U.S. State Department briefing.

BERMAN: Not us, it's them, he says. The war of words continuing with the overnight news conference.

Diana Magnay in Moscow, thanks so much.

HARLOW: All right. Now, this update: a team of Australian and Dutch investigators on its way, as we speak, to the crash site of Flight 17. This is going on as Ukrainian forces launch a new offensive against pro-Russian rebels in that area.

We have our Nick Paton Walsh, who's on the phone. He's on his way to that site, which is about an hour and a half outside of Donetsk. He joins us by phone.

Nick, I know that OSCE monitors, those international monitors, have said in the last 24 hours they have struck some sort of agreement with both sides. They are hoping for access with the territory because they didn't get it yesterday because of the fighting.

What are the Dutch and Australian investigators on the ground expected to be able to accomplish today?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT (via telephone): We have traveled with them (INAUDIBLE) on the road to the crash site. Now, the media accompanying the envoy being peeled and stopped by gunmen and separatists. At this point, we are moving away from the check point. So, we saw the OSCE convoy continuing on what should be the road. (INAUDIBLE) that check point (INAUDIBLE) saying there had been shelling. One said two flames hit the area recently.

As we stood there at the time being, but we heard slowly, as we're just told right now, shelling in the distance, the far distance, of course. But things like this must surely be playing on the minds of the OSCE monitors (INAUDIBLE) within that convoy.

(INAUDIBLE) quickly as possible. At times, they are trying to make sure it happens. We know from the Ukrainian government, they are moving to reclaim the crash site -- Poppy.

HARLOW: Absolutely. Nick, you, your team, stay safe as you go with them. We appreciate the update. We'll get back with you later in the show as you get closer and to the crash site. Nick Paton Walsh, thank you so much.

Right now to this. Here in the United States, there is a deal in Washington to try to fix the veteran's affair health system. Lawmakers from the House and Senate scheduled to meet details for veteran that is waited too long to get necessary treatment. This measure is expected to pay for visits to other, private doctors. We are told billions of dollars will be earmarked to hire new doctors or to treat the veterans that need so much help.

BERMAN: Just days left for lawmakers to act regarding the crisis at the border, before Congress takes summer vacation, its recess. President Obama has requested nearly $4 billion in emergency funds. He will not get that much. Republicans, Michele Bachmann and Steven King spent the weekend at the border, condemning the way the president is handling the crisis. There are donations are pouring in to help the tens of thousands of children who are fleeing their countries in fear for their lives.

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UNIDENTIFIED FEMALE: These are our brothers and sisters who are suffering and many of whom are not being welcomed.

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BERMAN: National Guards troops sent in to secure the border do not have the right to make arrests. This is because they were deployed by Texas Governor Rick Perry, not federal officials. The governor can give them powers to make arrests, but insiders say he most likely will not.

HARLOW: All right. Time now for an EARLY START on your money this Monday morning.

European stocks are currently mixed in midday trading. In Asia, the stocks ended the day higher. In the U.S., futures are pointing lower this Friday morning after a lower close -- this Monday morning after a lower close on Friday.

Also this, when you look at Wall Street investors, we have a ton of corporate earnings coming up. Also, some important readings on second quarter GDP and also on Friday, the July jobs report. So, really, a big week ahead. Both the U.S. and European Union are expected to announce tougher sanctions against Russia. That will come at a price.

Take a look at this map. This shows trade relations between a number of countries. Further penalties hurt all three economies considering how tightly Europe is linked to Russia, especially energy-wise. The E.U. is Russia's largest trading partner and Russia is the E.U.'s third largest trading partner on the other side.

German leaders warned over the weekend that coming sanctions could cost jobs in Germany alone. About 300,000 jobs directly depend on Russian exports. We'll see what transpires there.

BERMAN: Other business news, Sarah Palin launching her own Internet channel. The subscription-based network promises direct access to the former vice president nominee and her supporters. This access will cost you about $9.95 a month of $99.95 for the year. The programming will include commentary on important issues and behind-the scenes look at Sarah Palin's life as a wife, mother, grandmother and just plain --

HARLOW: Interesting business to see how many people are going to follow her footsteps.

BERMAN: Indeed. She had a lot of followers on Facebook, a lot of followers on Twitter. A lot of people who hang on her every word. A lot of critics, too.

HARLOW: People that like and don't like her may pay --

BERMAN: May pay, exactly.

HARLOW: All right. Well, a walk on the beach ending in absolute tragedy. A father and daughter not able to escape a small plane crashing from the sky. We're going to tell you the latest developments on that, straight ahead.

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BERMAN: A severe storm turned deadly along the California coast. A 20-year-old man was killed Sunday after being struck by lightning at Venice Beach. Thirteen others are also injured. A witness says this severe weather just came out of nowhere.

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UNIDENTIFIED MALE: All of a sudden, a big flash of light and a boom. I felt like someone punched me in the back of my head. It went down the right side of my body. My calf sort of locked up. I looked back and everybody else was fallen over.

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BERMAN: This kind of storm is pretty unusual for a year. Officials say it was sparked by monsoon moisture.

HARLOW: All right. A walk on a Florida beach turned deadly. A 36- year-old Georgia man was killed. His 9-year-old daughter was critically injured on Sunday. They were struck by a plane making an emergency landing on this beach in Sarasota County. The 57-year-old pilot on the plane and passengers walked away uninjured. It's not clear why the pilot had to make that emergency landing. The NTSB, of course, is investigating.

BERMAN: A family of five found shot to death Sunday inside their apartment in Maine. Autopsies will be conducted today, to confirm police suspicions of a murder suicide. Three children ages 4-12 were among the victims. Police say they found a gun near one of the bodies and do not believe anyone outside the family was involved.

HARLOW: All right. The trial of a Michigan man accused of fatally shooting an unarmed teenager on his front porch, that resumes in just a few hours. Fifty-five-year-old Theodore Wafer is charged with second degree murder. The defense claims he thought the 19-year-old Renisha McBride was breaking in and was defending himself and his home when he shot her to death on his front porch. The prosecutors could rest their case as soon as this week.

BERMAN: A weekend accident that shut down a popular thrill ride in Cedar Point amusement park in Sandusky, Ohio, until may shut down a ride until the investigation is complete. Park officials say a cable snapped on one of the carriages of the Skyhawk swing ride. It happened Saturday night. Two people were injured. Both were taken to the hospital and later released.

HARLOW: All right. We could learn as early as today if Shelly Sterling has the green light to sell the Clippers to former Microsoft CEO Steve Ballmer. And we know that he has bid $2 billion for the team. Closing arguments are scheduled in her suit seeking approval to sell the team over the strong objections of her husband and co-owner of the team, Donald Sterling.

BERMAN: I'm sure we have not seen the last twist and turn.

HARLOW: I think you might be right.

BERMAN: Forty-seven minutes after the hour. American journalists arrested in Iran. We are live in Iran with the story, next.

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HARLOW: All right. Developing this morning, a devastating fire near the Tripoli airport in Libya. Fighting between rival militias causing an enormous storage tank filled with fuel to explode there. Rising violence in that region forced the evacuation of U.S. embassy in Tripoli on Saturday. Libya's interior ministry is now asking residents living near the airport as well to evacuate.

BERMAN: Developing this morning, a second American aide worker in Liberia testing positive for Ebola virus. Nancy Writebol of the humanitarian group Serving in Mission was treating Ebola patients in Monrovia. Her diagnosis comes after Dr. Kent Brantley noticed symptoms last week and isolated himself. Health officials say the current outbreak of Ebola is the deadliest ever. Of the 1,093 confirmed probable and expected cases, 660 people have died.

HARLOW: Wow.

All right. Happening now in Iran, four journalists have been detained, including an American reporter for "The Washington Post," his wife and two freelance photographers, who are also U.S. citizens. The Iranians are not offering a reason, at least yet, for the arrest.

Let's bring in Reza Sayah live on the phone from Tehran. This is incredibly troubling. They are well-respected journalists, you know, living, working in Tehran. I know that Jason Rezaian and also his wife had been working there for quite a while time. What do we know about their condition and any reasoning as to why they may have been detained?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT (via telephone): Unfortunately, not a lot of answers at this point, Poppy. When it initially happened Tuesday night, a lot of people were hoping it was a mistake by authorities and they would release them quickly.

Now, roughly six days have passed. A fear is growing that they were targeted by some sort of organized investigation. "The Washington Post" and two government officials have confirmed the four individuals were arrested last Tuesday night. Three of them were Iranian- Americans. Among them, Jason Rezaian, this has been a journalist who's been in Iran from 2008, the bureau chief for "The Washington Post" since 2012.

A lot of people know Jason. He's a well-respected journalist with an exceptional reputation. His wife was also detained as well as two other freelance photographers who have yet to be identified. And what's troubling, Poppy, is six days have passed and Iranian authorities continue to say we'll give you more information. But a lot of people, especially groups and fellow journalists are still waiting for answers.

HARLOW: Yes. So many questions and no answers from the government there. Appreciate the update, Reza. We'll get back to you for more later on the show. Thank you.

All right. Coming up next on EARLY START, the crisis in Ukraine. We're going to talk about how the conflict, the sanctions that are getting ratcheted up are taking a hit on Russia's economy. That's next.

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HARLOW: All right. Let's get an EARLY START on your money.

European stocks are mixed. Asian ended higher. U.S. futures are pointing lower now ahead of the open. Kicking off a big week on Wall Street, investors will be considering a host of major corporate earnings. Also, we're going to get very important readings on second quarter GDP.

Remember, the U.S. economy contracted nearly 3 percent last quarter. Also, we are going to get the July jobs report on Friday morning. Those will give us a clearer look at how the U.S. economy is faring. And now, turning to Russia, Russia is paying a much higher economic

price than previously because of the situation and the crisis between Russia and Ukraine. More sanctions are expected from Europe and the U.S. expected to be really ratcheted up. That is going to hurt the economy.

What is unclear, though, is if that will matter to Russian president, Vladimir Putin. Will that pressure him to change course at all? Investors are rapidly yanking money out of the country. We have seen their currency crumbling there, also raising the cost of imports.

Russia Central Bank raised interest rates to 8 percent on Friday. This is in an effort to try to ease the 7.5 percent inflation they are seeing there. They're really getting hurt, and as some more sanctions just in the past few days. So, the big energy companies there and the big banks.

BERMAN: Yes, but imagine what actual strong sanctions from Europe might do.

HARLOW: Led by Germany, that's going to matter a lot.

BERMAN: If that happens.

HARLOW: Right.

BERMAN: Fifty-nine minutes after the hour. EARLY START continues right now.