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NEW DAY

Escalation In Middle East Conflict; Netanyahu Pledges "Lengthy Campaign" Ahead ; Fighting Near MH17 Crash Site Delays Investigations; U.S. Preparing Sanctions Against Russia

Aired July 29, 2014 - 06:00   ET

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


KATE BOLDUAN, CNN ANCHOR: Will Russia blink?

MICHAELA PEREIRA, CNN ANCHOR: They got him. A shootout in New York City after a fugitive featured on CNN's "THE HUNT" is found by police, the accused child molester now dead. Three cops injured. Our John Walsh joins us live with the tip that finally cracked that case.

CHRIS CUOMO, CNN ANCHOR: Your NEW DAY starts right now.

Good morning. Welcome to NEW DAY, Tuesday, July 29th, 6:00 in the east. And we do have developments in two major stories overseas. More and worse bombing you can hear in Gaza made for a very deadly day.

BOLDUAN: And then in Ukraine, investigators, again, have been unable to reach the crash site of Flight 17, now 12 days in, if you can even believe it. Let's begin though with the breaking news in the Mideast conflict.

Wolf Blitzer joining us live from Jerusalem this morning. Wolf, what's the latest from the ground? There seemed to have been a lull, if you will, early yesterday and things got very bad last night.

WOLF BLITZER, CNN HOST, "THE SITUATION ROOM": Potentially could be getting a whole lot worse in the coming hours, Kate. Any hope of a cease-fire seems to be dashed, at least for now, after a very serious escalation of this conflict. Right now, Israel is launching powerful air strikes on Gaza City and other targets inside Gaza.

Overnight 70 sites were targeted. Among them, the home of a senior Hamas leader, a radio station run by militant group and Gaza's Ministry of Finance. Israel is now warning of a prolonged ground war in Gaza as the death toll on both sides continues to climb.

Martin Savidge is with me here in Jerusalem. He's been working all these latest developments. I think you'll agree it could get a whole lot worse, as bad as it is right now.

MARTIN SAVIDGE, CNN CORRESPONDENT: Absolutely. And I think the nation here of Israel is being warned about that very fact. You know, it was just really yesterday at this very time, we were kind of getting a sense maybe it was de-escalating a bit. The level of violence seemed to be down. That all changed tragically and dramatically yesterday afternoon and last night. (BEGIN VIDEOTAPE)

SAVIDGE (voice-over): Explosions rocking Gaza City throughout the night. Accompanied by the sound of Israeli drones overhead searching for more Hamas targets. This morning smoke villas from a building housing a Hamas-run radio station that took a direct hit. The renewed violence began earlier with two deadly blasts on Monday.

The first killing ten people, mostly children, playing on this busy street. The second at Al Shippa Hospital leaving two people injured. Neither side accepting responsibility for the bloodshed. A Hamas-run news outlet blaming the devastation on an Israeli drone. While Israel's military blames Hamas rockets fired towards Israel that fell short.

BAN KI-MOON, U.N. SECRETARY GENERAL: The Israelis and Palestinians have a responsibility to stop the fighting now.

SAVIDGE: World leaders continue to push for a humanitarian cease- fire, which would allow for critical aid into Gaza. Speaking on television, Israeli Prime Minister Benjamin Netanyahu warned Israelis to be prepared for a lengthy campaign.

JOHN KERRY, U.S. SECRETARY OF STATE: Hopefully, if we can make some progress, the people in this region who deserve peace can take one step towards that elusive goal.

SAVIDGE: Secretary of State John Kerry, who admitted Monday there were misunderstandings during talks now under fire for his failure to achieve a week long truce to stop the rising death toll.

(END VIDEOTAPE)

SAVIDGE: It was a deadly day also for the Israeli military. Ten Israeli soldiers were killed. That now brings the total of Israeli soldiers killed to 53 -- Wolf.

BLITZER: I would assume you agree also that the country is getting ready for more Israeli casualties, obviously a lot more Palestinian casualties, but it looks like there are going to be more Israeli soldiers will be killed and injured as this operation escalates.

SAVIDGE: More than they have seen in quite a while.

BLITZER: Yes, small country and a lot of casualties and that is going to go on. Martin Savidge, thanks very much.

As a lot of the casualties here in Israel, serious numbers, but obviously a lot more casualties in Gaza. CNN's Karl Penhaul was live in the middle of a report on CNN when an Israeli air strike landed about 200 yards away from him and his team of in Gaza City. Watch this.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN INTERNATIONAL CORRESPONDENT: You would have seen -- OK. I'm going to move out of the way, Poppy, and we're going to get a camera shot.

POPPY HARLOW, CNN ANCHOR: Let's have him move as far away as he can.

(END VIDEO CLIP)

BLITZER: Karl is joining us now live from Gaza City. First of all, Karl, I assume you and our team in Gaza City, everybody OK?

PENHAUL: Yes, everybody is OK, thanks, Wolf. Of course, we do have to duck down from those kinds of incidents, not only caught us by surprise because also, if you know, if a bomb goes off that close to you, it can also be spreading shrapnel across a very wide area, several hundred yards so we really have to take cover when something like that comes in -- Wolf.

BLITZER: So what's going on right now? What do you see behind you and in the vicinity? More air strikes, more artillery, what's going on?

PENHAUL: Here in Gaza City, we have heard air strikes going in, in the course of the morning. We believe that those are going in from the F-16 fighter bombers. There's also a lot of activity from the Israeli drones as well. They sound like giant lawn mowers and there are a lot of them up there right now as they were last night.

In fact, when those illumination rounds were coming down on Gaza trying to shed some light on possible targets down below and the death toll, of course, is rising that now is close to 1,100 Palestinians killed in the course of this confrontation and the United Nations continues to say that 75 percent of those are civilians.

And that strike that you saw on TV just earlier on when we were on an earlier live shot, that went into an apartment building behind us. We've been here for three weeks now. We haven't seen any military activity going on from that building, and we do know that that building is used as an apartment building for families who are trying to flee the violence elsewhere.

In fact yesterday, the Israeli military warning Palestinians in northern Gaza to flee to safety in Central Gaza and in Gaza City, and so imagine their dismay last night when the place that was supposed to be safe for them was turned into a war zone -- Wolf.

BLITZER: There's entire Gaza strip right now clearly a war zone. Thanks so much, Karl Penhaul and our entire team in Gaza. Please be careful over there. Let's get the Israeli perspective now.

Joining us is Mark Regev. He is the spokesman for Israeli Prime Minister Benjamin Netanyahu. What did the prime minister mean yesterday when he said Israel should be ready for what he called a prolong period potentially of warfare?

MARK REGEV, SPOKESMAN FOR ISRAELI PRIME MINISTER BENJAMIN NETANYAHU: Unfortunately, it appears that Hamas is refusing every serious cease- fire offer that's been put on the table, even humanitarian cease-fire Hamas has rejected them all or violated them. Now, yesterday was another example of this.

Yesterday, we started the day with Israeli military given instructions just to deal with the tunnel threat and to defend themselves, and we actually put a freeze on offensive operations against terrorist targets in Gaza, and that was our attempt to de-escalate. What did Hamas do? We, as the prime minister said, at the end of the day a very, very hard difficult day.

We took casualties. We had Hamas rockets fired deep into Israel, up north overshooting Tel Aviv reaching the Haifa Bay area. We hadn't had that before. We took casualties with the terrorists coming through the tunnels. We had mortars on our borders. We took hits for our soldiers on our side of the frontier. Hamas has to understand a cease-fire is not Israel alone ceasing its fire. Cease-fire means Hamas stops firing as well.

BLITZER: What if they do, tomorrow or today Hamas says we want a cease-fire, 24-hour pause. We won't send rockets. We won't send missiles, we won't send infiltrators through tunnels into Israel. We want to see this stop for 24 hours. The U.N. will support that, the U.S. will support that, will Israel?

REGEV: We've been there and done that two days ago.

BLITZER: What if they do it again?

REGEV: On Sunday Hamas announced a cease-fire and then within 3 or 4 minutes they violated their own cease-fire. We don't need words.

BLITZER: What if they do?

REGEV: We need Hamas to stop shooting rockets on Israeli cities. We need Hamas to stop infiltrating through the tunnels with armed groups of terrorists with explosives and automatic weapons and rocket- propelled grenades trying to kill our people. We need Hamas to cease all offensive operations against Israel.

When that happens you can ask me the question. Up until now we've heard talk of cease-fire. Israel has held its fire and Hamas has refused to do so. You were with me I remember very clearly that morning two weeks ago when Israel unilaterally accepted a cease-fire proposal of the Egyptians.

We held our fire, not for one, not for two hours but for six hours, and Hamas just kept shooting, 50 rockets at Israel. A cease-fire, if it's going to work means Hamas must stop firing.

BLITZER: If that Egyptian proposal could be revived as it was two weeks ago, and I remember we were both in Tel Aviv. We were both on CNN when that cease-fire went into effect and Hamas were to accept it, would Israel accept it again?

REGEV: My prime minister said to CNN's Crowley on Sunday.

BLITZER: Candy Crowley. REGEV: That the Egyptian cease-fire proposal is the only game in town, and why is that? Because the Egyptian cease-fire proposal calls for an immediate cease-fire of all violence, and then we meet in Cairo, Israeli teams, Palestinian teams and we discuss how we can move on from there, and so you stop fire immediately and then you start discussion.

BLITZER: And the reason you didn't like Secretary Kerry's proposal is because he went further than the Egyptian proposal and accepted some of the Qatari and Turkish demands closer to Hamas, is that right?

REGEV: We heard from President Obama and Secretary Kerry, full support and the United States supports the Egyptian proposal. Let's be clear. Why is the Egyptian proposal because it immediately ends all fire and it allows the parties, the Palestinians and us to raise our concerns.

And of course for us the major concern we want to raise is demilitarization. When this is over, we don't want to revisit this conflict in six months or a year. We want it to be behind us.

BLITZER: How strained is the U.S.-Israeli relationship right now because if you read the Israeli press and I do, and you read it obviously as well, looks like there's a real rupture between the Obama administration and Prime Minister Netanyahu's government.

REGEV: Let's be clear. The United States has been standing with Israel with strong support and unequivocal condemnation of Hamas for rejecting the multiple ceasefire options. Multiple condemnation of Hamas for those rocket attacks on our people. Multiple condemnation of Hamas for using Palestinians as human shields.

Let's be clear here. The United States is very strong on Israel's right to defend itself, and I would like to add something. We with the help of iron dome, an American-Israeli joint venture, we've shut down hundreds of rockets that have come into Israel, shot them down before they reached the targets over Israeli open areas.

That means countless Israeli lives have been saved because of American-Israeli cooperation. We understand that America is our partner and ally and together with the United States we've got to defeat terrorists like Hamas.

BLITZER: Mark Regev is the spokesman for the Israeli Prime Minister Benjamin Netanyahu. Mark, thanks very much for joining us.

I've been told by Israeli intelligence sources they believe Hamas still has about 3,000 rockets and missiles in their arsenal, about 7,000, 6,000 to 7,000 have either been used or destroyed by the Israeli military, but they think they have about 3,000 or so and one of Israel's goals in addition to destroying those tunnels is to eliminate that entire arsenal of rockets and missiles.

That could take a while. Back to you guys in New York. By the way, later in the program here on NEW DAY, we'll speak with the Palestinian ambassador and permanent observer at the United Nations, Riyad Mansour, but in the meantime let's go back to you guys in New York.

BOLDUAN: All right, Wolf, great reporting on the ground as always. Thank you so much for that.

CUOMO: Ending munitions certainly won't end the battle there. They have to find a political solution that come short of that.

BOLDUAN: That does not seem like it's coming today.

CUOMO: Not today. A lot of news though today so let's get you right to Mich.

PEREIRA: Certainly. Good morning, everyone. Here is a look at your headlines, House and Senate leaders announced a deal Monday to reform the Veterans Affairs health care system. This proposed bill would provide $17 billion to add medical staff and new facilities. A vote could come later this week. The department has been rocked, as you know, by scandal that was first reported by CNN reporting long delays at the VA Medical Center in Phoenix.

President Obama is reportedly considering granting work permits to millions of undocumented immigrants before the mid-term elections, that's according to the Associated Press. This plan would let them stay in the U.S. without the threat of deportation. The White House has said the president will take executive action if immigration reform legislation continues to stall in Congress. Meantime, Congress will hold two hearings this morning on issues related to the ongoing border crisis.

It may be a losing battle but Donald Sterling is not giving up his fight to keep the Los Angeles Clippers. A California judge has ruled against Sterling in his attempt to block the sale of the team to former Microsoft CEO Steve Ballmer, a deal that his wife, Shelly, brokered. The judge maintained that Shelly acted properly in removing her husband from a family trust that owns the team, and he also ruled the sale can go forward regardless of appeals.

A White House awards ceremony turned into a bit of a presidential confession on Monday. President Obama was presenting the National Medal Of Arts to 12 recipients including Dreamworks CEO Jeffrey Catsonberg, author, Julie Alvarez, and singer, Linda Ronstadt who was singled out for special recognition. The president admitting that he had a crush on the "Desperado" singer back in the day. No word on what Ronstadt replied.

BOLDUAN: I would be probably frozen stiff.

PEREIRA: If you had the honor of presenting somebody with an award, who would you say, young Kate Bolduan fancied --

BOLDUAN: I'm going to blush and I'm not going to say here. I'm not going to say here, because --

CUOMO: That had to be a big shocker though, that the president --

BOLDUAN: That's what I'm saying. Wouldn't you be frozen stiff and said I had a big crush on you? What do you say to that, thanks?

CUOMO: Who is yours?

PEREIRA: I had so many. I had t-shirts -- I wrote a --

BOLDUAN: Someone on new kids in the block would definitely have been on mine.

PEREIRA: I wrote it, remember Theo Huxtable, all about him when I was about 15, yes.

CUOMO: I was talking music, not going --

PEREIRA: Please, don't even get me started there.

BOLDUAN: Oh, yes, exactly.

CUOMO: Much to discuss in the break.

PEREIRA: Apparently.

BOLDUAN: This is only getting started. >

Coming up next on NEW DAY, frosty relations between the U.S. and Russia take yet another hit. The White House accusing Moscow of violating an arms treaty that helped bring about the end of a Cold War. We're live with the details.

CUOMO: Plus, did you hear about this shootout on the streets of New York City? A suspected child molester turns homicidal as officers try to arrest him. How he wounds up dead but not before doing more damage. He had just been profiled on CNN's "THE HUNT."

(COMMERCIAL BREAK)

CUOMO: Welcome back to NEW DAY. It has been almost two weeks since MH17 was believed shot out of the sky, and investigators still have been unable to look for the dead or work in any real way at crash site in eastern Ukraine.

Intense fighting forced the team once again to abandon efforts. The Dutch prime minister is asking Ukraine's president to call for an end to the violence so investigators can finally reach the site and get to work.

Let's bring in Ivan Watson live from Kiev, Ukraine, this morning.

Ivan, what's the latest?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, here's what's blocking the investigators. The Ukrainian military announced yesterday, Chris, that it had launched an offensive to capture several key towns around the Malaysian air crash zone, so as you mentioned, you have the Dutch prime minister, the country that lost the most victims aboard that plane calling the president of Ukraine here in Kiev, asking him to please stop the fighting around the crash zone. (BEGIN VIDEOTAPE)

WATSON (voice-over): This morning, dozens of Dutch and Australian investigators shut out for the third straight day from entering the MH17 crash site -- the fighting so fierce that the team didn't even leave Donetsk to travel to the disaster zone today. According to pro- Russian rebels, Ukrainian government forces gained control of parts of the area, digging trenches and stationing armored vehicles marking their territory.

The international investigation now stalled 12 days after the crash.

PIETER-JAAP AALBERSBERG, HEAD OF DUTCH RECOVERY MISSION: It is frustrating to have to wait to do the job that they came to do. Their motivation comes from the deep conviction that the relatives and all the different countries are entitled to have their loved ones and the personal effects returned to them.

WATSON: On Monday, the U.S. announcing they will impose new sanctions on Russia, the European Union meeting today on the issue. A warning to Moscow: stop providing the rebels with weapons.

TONY BLINKEN, DEPUTY NATIONAL SECURITY ADVISER: Our purpose here again is not to furnish Russia but to make clear it must seek support from the separatists and stop destabilizing Ukraine.

WATSON: This as clashes between Ukrainian militants and pro-Russian rebels are pushing everyone back.

One of our CNN crews en route to the site forced to turn around on Monday by pro-Russian separatists.

Amid the thunder of rockets and artillery civilians caught in the middle, fleeing with their families as their once peaceful home becomes a deadly battleground.

(END VIDEOTAPE)

WATSON: Now, Chris, the Ukrainian military seems to have been making advances in recent days, so they clearly don't want to slow that down. When it comes to the crash site, they deny that they have any presence on the crash site but then they give kind of a contradictory explanation. They say, no, we're not shooting near the disaster zone. We're just trying to capture it which doesn't really seem to add up logically -- Chris.

CUOMO: Right.

And you know that the concern is that this is more of a land grab and power battle than it is putting that priority on securing the crash site and, of course, making the Dutch and so many observers around the world upset.

Ivan, thank you very much for the reporting this morning. Stay safe over there, even in Kiev nothing too safe in Ukraine right now -- Kate. BOLDUAN: Sticking close to this story. Also breaking overnight,

Washington accusing Moscow of violating a landmark 1987 nuclear treaty, pardon me, by testing a new land-based cruise missile. The White House calls it a serious matter and President Obama has apparently addressed it in a letter to Russian President Vladimir Putin.

Elise Labott is live for us in Washington with much more of the details.

So, Elise, the president is calling this a serious matter, but what does this mean?

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Well, this really an old mission. The missile tests began back in 2008. Officials say they first raised the issue with Russia last year and continued to talk about it and the Russians responded and looked into it and considered it closed.

So, you know, President Obama has told President Putin that the U.S. is willing to hold high-level talks to bring Russia back into compliance, because this is seen as one of the major treaties that curbs the arms race and president Obama has, you know, wanted to seek deeper cuts in nuclear arms so it's really a larger issue than what's been going on between Russia and the U.S. over Ukraine.

But clearly the timing, Kate, is very curious as to, you know, officials say, look, this is -- we've been dealing with this on the substance. This doesn't have anything to do with current tensions, but how Russia is going to perceive it right now clearly as a provocation and how they respond, we'll just have to see.

BOLDUAN: Also might fit right in, Elise, with the sanctions as yet another warning to Russia to get in line and stop doing itself provocative action. I mean, what do you know about the new sanctions coming from the United States and probably most importantly at this point also going to be announced coming from Europe that we could be hearing more about today?

LABOTT: Well, that's really the most important thing because, you know, Russia and Europe have really integrated economic ties, and clearly the economic implications are much more serious.

In Europe, we you're expected to see a little bit more what have we've seen over the coming week with the United States. We're talking about energy companies, access to capital markets, more of the officials. But it could also include arm sales and other types of companies that really will put a dent in the Russian economy.

Foreign Minister Lavrov of says as the U.S. continues to tighten the noose it remains to be seen what this does for the Russian economy because it's been teetering on brink of recession for months.

BOLDUAN: Elise, what's your sense? What are you hearing from your sources from the State Department? Do you think this round of sanctions coming from Europe, that it has the teeth that so many have been calling for all along?

LABOTT: You know, Kate, there's always a wide debate over whether sanctions really work, and when you look at what's happened with Iran over the years, clearly at this point it's gotten to the point where the Iranians want to negotiate and end their nuclear deal because of the sanctions.

I'm not really sure at this point that this is going to be enough to have President Putin change course. Clearly, he has a larger agenda here, and he's taken this into consideration. Are these going to be the wide sectoral sanctions that really, you know, kind of squeeze the Russian economy to the extent that brings President Putin to his knees. I don't think so just yet, but what the U.S. and Europe are doing is trying to ramp this up in a way to keep tightening the noose in the hopes that eventually that will bring President Putin to negotiate on Ukraine.

BOLDUAN: We will see, unfortunately, is what we have to say and have continued to have to say.

Elise Labott, great to see you. Elise, our global affairs correspondent -- thank you.

All right. Coming up next on NEW DAY, a suspected sex offender, unbelievable, just profiled on CNN's show "THE HUNT" with John Walsh is tracked down in New York City. We have dramatic details of a shootout that ended with the fugitive's death.

CUOMO: Plus, the Hamas tunnels -- they have been a main focus for Israel and their bombs. The question is what are they like? How far did they go? How real is the threat?

CNN's Wolf Blitzer, you see him right there. He gained exclusive access so you'll get so see for yourself.

(COMMERCIAL BREAK)