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EARLY START

Gaza on Fire: Violence Escalates; New Sanctions for Russia

Aired July 30, 2014 - 04:00   ET

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


JOHN BERMAN, CNN ANCHOR: Gaza on fire this morning. Israel pounding the streets with bombs, taking out Hamas targets. This morning, power knocked out for nearly 1 million Palestinians. Another U.N. school bombarded. And there seems to be no end in sight. We're live in Gaza with the very latest.

CHRISTINE ROMANS, CNN ANCHOR: Happening now: Russia paying the price for arming separatists in Ukraine, hit with worldwide sanctions that could cost the country billions. This as fighting between pro-Russian rebels and Ukraine's military keeps investigators from reclaiming bodies still at the crash site of Flight 17. Live team coverage ahead.

Good morning. Welcome to EARLY START. I'm Christine Romans.

BERMAN: And I'm John Berman. It is Wednesday, July 30th. It's 4:00 a.m. in the East.

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

ROMANS: Let's turn this morning first to the crisis in Ukraine. The West delivering a one-two punch aimed directly at Russia's economy. The E.U. imposing new sanctions on Moscow, limiting Russian banks' access to Europe's capital markets. The U.S. quickly following suit by announcing sanctions, targeting key sectors of Russia's economy.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is a choice that Russia and President Putin in particular has made. There continues to be a better choice, the choice of de-escalation, the choice of joining the world in a diplomatic solution to this situation.

(END VIDEO CLIP)

ROMANS: The question this morning, will these sanctions work? I want to bring in Nic Robertson live from Moscow.

And, Nic, when you look at the economics, they will work, they will hit the Russian economy. But will they work? Will they change Putin's strategy? That's the big question.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, and certainly, what we're hearing, Russian institutions playing it down. The Bank of Moscow today reassuring its clients, saying this is not going to affect us. It is one of the state banks being targeted by these sanctions that are going to limit the amount and the ability of these state-owned banks to borrow money from European institutions.

We've also heard from the deputy prime minister as well, saying essentially that the arms sanctions, it's sort of water off a duck's back, if you will. He says this just shows that the West is worried about Russia navy and ability to build its navy. The arms sanctions supposed to thwart exports from Russia and thwart imports of raw materials, goods that might be used in the civilian side, that can be used in the military sector as well, components, those sort of things, thwart those. The oil sector also targeted.

The head of the Russia's Rosneft, the largest oil company here, has said, we will work economically. We will shift around things on our time line.

So, everyone trying to put a spin on it so far, $500 billion business with Europe, yes, some of this is going to bite. But will the Russians know about it? President Putin pretty much controls all media here. World of its impact may filter out very slowly, Christine.

ROMANS: Until now, Nic, there's been too much caution on putting the sanctions on Russia because it will hurt the people who are putting the sanctions on Russia. For years now, Russia has been more integrated with European economy, more integrated with the global economy than ever before. That's what makes this so tricky.

ROBERTSON: Sure, it does. BP saw 2.5 percent of its shares slump on the news of this breaking because it has a 20 percent almost stake in Rosneft, that big oil company. The French auto maker Renault seen its profits hit because of this.

So, yes, it will impact them and British financial institutions connects back to be hard hit there. That's where a lot of these money deals are done. So, there's no doubt about it, the Europeans will feel an impact but these are graded. It's targeting oil not gas. Europe imports 30 percent of its gas from Russia. It's targeting new military contracts not old one. The French are selling two warships that are just about completed going through testing to Russia. Those are not being put on hold at the moment.

So, this is -- this is clearly graded and clearly, there's more space for more sanctions in the future as well.

ROMANS: All right, Nic Robertson on that for us -- thank you, Nic.

ROBERTSON: But they are real and this could force the hand of President Putin one way or the other.

ROMANS: And you made a good point. You know, I mean, officials in Europe have said, look, the longer term, if we don't do this, the cost could be bigger to us if the Russian bear is too aggressive.

BERMAN: The backdrop here, of course, is the downing of Flight MH17, the team of investigators still being thwarted in their attempt to reach the wreckage of this plane. There's heavy fighting in the area. The Ukrainian military trying to regain this region from pro-Russian rebels. Defense officials in Ukraine insisting that investigators will be allowed to access the site only when the area is safe and under Ukraine's control, even with little hope of recovering more of the bodies anytime soon.

Our Ivan Watson tracking the latest developments live this morning from Kiev.

Ivan, these investigators try still trying to get there still little success?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's right. They set out about an hour and a half ago, this group with Australian and Dutch investigators from the rebel-controlled city of Donetsk, on this increasingly perilous journey to try to get to the MH-17 crash site. They have failed for the last three days to complete that journey because of heavy fighting along that road.

The Ukrainian military had launched an offensive on Monday. Ukrainian military says it is trying to capture the crash site, so that then, the investigation can be conducted basically in an area controlled by the Ukrainian government.

But it doesn't seem to control the crash site, this sprawling area yet. Though there have been reports that some Ukrainian government units have taken control of parts of it.

Now, the OSCE, the international monitors who have helped lead daily visits to the crash site, until the last four days, they've said that they're very concerned that they haven't been able to reach, for example, a chicken farm where they believe debris rained down and that there may also be some human remains there. They're saying that every day that goes by means critical evidence could be destroyed and remains of some of the dozens of missing passengers could be lost.

There are also reports of dramatic escalation in this civil war. A senior ranking Ukrainian military source telling CNN that on Monday, the Ukrainian military used for the first time, to the best of our knowledge, a cruise missile firing it -- a missile that could travel some 50 miles at least. It's called a Tochka-U ballistic missile from basically the last days of Soviet Union, against the rebel target, in a hill area called (INAUDIBLE), which has been the scene of fierce fighting between Ukrainian government troops and rebel groups over the course of the last two weeks. In fact, the rebels shot down at least two Ukrainian fighter jets in that same area last week.

The death toll continuing to rise. Provincial government sources reporting at least 19 dead in the area around the rebel-held city of Donetsk. That's where the Australian and Dutch investigators are traveling from. Again, underscoring how dangerous, how volatile this area is where an international investigation is being attempted -- John.

BERMAN: You know, serious fighting with serious weaponry all around this area that is a crime scene where investigators want to go and do their job, as you said, Ivan, an incredibly difficult task, one that's barely even began.

Ivan Watson for us covering the story -- thanks so much.

ROMANS: Israel stepping up the bombardment of Gaza, in an attempt to bring Hamas to its knees. Another U.N. school shelled overnight, 19 people dead there. This as the U.N. confirms a stockpile of Hamas missiles has been found in another one of its schools.

More air strikes also leaving the region's power plant in flames, hundreds of thousands of Palestinians this morning without electricity.

And this new disturbing video showing five Israeli soldiers slaughtered by Hamas gunmen who infiltrated the border and videotaped this violent attack using helmet cams.

Israeli officials insisting the only way to end this conflict is to ramp up the onslaught.

(BEGIN VIDEO CLIP)

RON PROSOR, ISRAELI AMBASSADOR TO THE UN: We're dealing in essence not with a country. We're dealing with a terror organization that doesn't recognize Israel's right to exist and basically has a clear goal, and that is the eradication of the state of Israel.

(END VIDEO CLIP)

ROMANS: John Vause for us this morning live from Gaza -- John.

JOHN VAUSE, CNN CORRESPONDENT: Hey, Christine, yes. In fact, here in Gaza City overnight, there was just explosion after explosion, went well into the night, well into the early morning.

And within just the last hour or so, a number of buildings not far from we are here right now were hit by Israeli airstrikes. That building just behind me, hit yet again. So, too, are other targets out there. We don't know exactly why they were hit but what could be an ominous sign, the Israelis did drop these leaflets once again, warning residents in this area to get to safety, wherever that may be, we don't know, because there will be further military operations in this area.

Now, Israel says overnight it hit about 75 targets, including five mosques, which according to the Israelis were, in fact, housing weapons. They're also concealing entrances to those Hamas tunnels. The Israelis have also been hitting command and control centers for Hamas.

And you mentioned that U.N. school. Yet again, the IDF, the Israeli defense forces investigating an incident at a U.N.-run school. The Israelis say they don't know what happened. We've been speaking with the U.N., they tell us it was Israeli artillery fire which hit this school. Around 4:30 in the morning local time, just a few hours ago, at least 19 people were killed. Many people are using the school as a shelter because at some point, they probably received a leaflet like this telling them that they should leave their homes and make their way to safety because of these military operations. And now that school was hit.

We should mention this -- the hit on that school in the camp came just a few hours after the U.N. reported once again, for the third time, one of its schools is being used to house weapons. The U.N. is not saying where that school is, not saying who the weapons belonged to, not even saying what type of weapons were found.

But I did say the school was closed for the summer and was not being used as an evacuation center.

And overnight, a very rare public statement from the founder and the head of Hamas' military wing, Mohammed Deif, very defiant, it was just an audio recording, but he came on and he said that there would be no cease-fire with Israel until, in his words, Israel lifted the siege. That's the reference to opening up the borders and stopping the naval blockade and the air blockade as well. And he did add that Hamas fighters are in fact craving death -- Christine.

ROMANS: All right. John Vause -- thanks this morning, John.

BERMAN: Breaking overnight, the attorney for Bowe Bergdahl says the army sergeant could meet next week with the general who is leading the investigation into Bergdahl's capture by the Taliban in 2009. Some of Bergdahl's former comrades have accused him of deserting the unit in Afghanistan. Bergdahl was released back in May, in a controversial prisoner exchange with the Taliban.

ROMANS: So, privacy advocates like what they see in the USA Freedom Act. The Senate measure would clamp down on the NSA's domestic activities. It would impose tough new sanctions -- restrictions, rather, on the bulk of surveillance of Americans' cell phone records. It also calls for restrictions on the government's collection of business records. Not clear if the full Senate will take up the measure before the November elections.

BERMAN: President Obama in Kansas City this morning to deliver a speech on the economy. The president visited a barbecue restaurant last night in Kansas City because, frankly, if you're in Kansas City, you don't do that, it's foolish.

ROMANS: K.C. barbecue very good.

BERMAN: Very good.

He met with local residents who have written him letters. The dinner was arranged as part of the president's summer campaign to meet with everyday Americans, who apparently also eat excellent barbecue.

ROMANS: Because there are no everyday Americans in Washington, D.C.

BERMAN: Exactly.

ROMANS: For the record.

All right. An EARLY START on your money now.

European shares lower. The U.S. and Europe imposing those new sanctions against Russia. Asian shares ended the day mixed.

U.S. futures at the moment pointing a little bit higher. Stocks have barely budged so far this week but news from the Fed and first reading on second quarter GDP, that might change today.

One stock that is not stalling, Twitter. Shares soaring 27 percent in premarket trading. The report is strong user growth, especially in mobile which is good news for Twitter in otherwise a tough year. Look at that, shares have fallen more than 40 percent. Thanks to slow growth. The company, by the way, didn't make any money, losing $145 million.

BERMAN: Still -- still even with the World Cup, every human being and their grandmother was on Twitter during the World Cup, and they still can't make money.

ROMANS: It's hard to make money from snark (ph) and random --

BERMAN: Look, I'm 40 years old. I have a house only because of that. So, I am proof you can make money off of snark. That's a whole other story.

ROMANS: Yes.

BERMAN: Thirteen minutes after the hour right now.

Ebola coming dangerously close to the United States. Airlines shutting down routes as we learn how close an American came to bringing the virus on to American soil.

ROMANS: Plus, 10 million gallons of water flooding the UCLA campus. A pipe burst creating a dangerous situation. We have that story for you, next.

(COMMERCIAL BREAK)

ROMANS: The Ebola crisis is widening in West Africa. ASKY, a major airline in the region, has stopped flights to Liberia and Sierra Leone amid growing fears about spreading the virus. U.N. figures now put the death toll at 672. Among them, Dr. Sheik Umar Khan. He had been leading the charge combating the outbreak until he contracted the virus himself. He's the second doctor to succumb to Ebola in the last few days.

The U.S. may have also dodged a bullet. We're learning that an American citizen who died of Ebola was on his way back to the U.S. Patrick Sawyer had flown from Liberia to Nigeria where he was to attend a conference but he got sick before his scheduled flight to America. (BEGIN VIDEO CLIP)

PAUL GARWOOD, WORLD HEALTH ORGANIZATION: He apparently arrived in Lagos, I understand, by plane. He left -- he departed on the plane initially with no symptoms. He reported being symptomatic on arrival. So, I understand he was vomiting, and he then turned himself basically over -- he made it known that he wasn't feeling well.

(END VIDEO CLIP)

ROMANS: Oh my.

OK, there's no known cure for Ebola. It's transferred through bodily fluids.

BERMAN: This morning, we are also learning that former Congresswoman Gabrielle Giffords lobbied against the death penalty for Jared Loughner. He's the man who killed six people and shot Giffords in the head in Tucson back in January 2011. This revelation comes at a new book by Giffords and her husband, Mark Kelly. Giffords says that being locked up for the rest of his life would be worst punishment for Loughner, worst punishment than she says than execution.

ROMANS: All right. This morning, crews are trying to repair the damage from a massive pipe break that flooded the campus of UCLA and the surrounding areas. The rupture of this 90-year-old main sent a geyser shooting 30 feet into the air, made a raging river out of Sunset Boulevard. Fire and police officials trying to stop people from playing in the water.

(BEGIN VIDEO CLIP)

JAMIE MOORE: We had someone some who were in the water, they got swept off their feet. With the current that was pushing, they got trapped underneath their car. Our swift water rescue team pulled them out and rescued them.

So this isn't something we want to go and play and have a good time in the water. There's a lot of debris there. The ground has been undermined. It's very, very dangerous.

(END VIDEO CLIP)

BERMAN: There's like a geyser behind him while that is going on.

ROMANS: Look at that. That's millions of gallons of waters flooding UCLA's athletic facilities and parking structures, which took the brunt of the damage.

BERMAN: Look at that. I still am talking about the Pauley Pavilion, the famous arena where UCLA plays among other places, basketball and stuff. They said they hope to play basketball there this year. This year. They're not even sure of getting the place cleaned up by then.

ROMANS: Infrastructure, my friends, 90-year-old water main.

BERMAN: That is not supposed to happen. Technically, stairs are not supposed to be flood zones.

ROMANS: Technically.

BERMAN: Oh, wow.

All right. Twenty minutes after the hour right now.

Wildfires and natural floods a rare summer chill. Extreme weather from coast to coast. We're going to tell you what you can expect today.

(COMMERCIAL BREAK)

ROMANS: More than 3,000 acres of Yosemite National Park on fire this morning. Flames limiting access to the park and they're threatening right now a grove of giant redwoods. Nearly 20 percent of the fire's perimeter is contained and some residents who were evacuated are now being allowed back in their homes. But they got a lot of work still to do there.

BERMAN: Severe flooding north of Denver to tell you about. This is one day after tornadoes touched down there, up to five inches of rain falling in just a few hours. That triggered flash flood warnings and watches statewide. Residents were being warned to prepare for possible mudslides today.

ROMANS: Oh, wow. All right. Millions of Americans will be bundling up this morning. Let's get an early look at the forecast.

Chad Myers has that.

CHAD MYERS, AMS METEOROLOGIST: Good morning, Christine and John.

Folks across the Northeast today will need a coat this morning. I know, it's hard to say. But temperatures from 50s and 60s from New York, all the way down to D.C. and Virginia and West Virginia right now. Even very low humidity, keeping the temperatures cool all the way down to the Deep South.

Now, there will be showers around this afternoon, but not the heavy severe-type weather. There will be some heavy showers across parts of Oklahoma and they can use that rain anyway. But other than that, 75, Chicago, 82 the high in New York City. And temps, I'll tell you what, temps upstate are approaching 50 in some spots. That's the recovery, 30 degrees warmer with the sunshine -- 85 at Atlanta, 92 in Tampa, and still steamy in Miami all the way to 89. There will be a lot of showers across Miami and the Florida peninsula today and tomorrow, and more showers will build in the Ohio Valley from Pennsylvania even Kentucky will see some showers.

That's the next batch of rain. Now, the thing with this batch of rain here is that a lot of humidity will be gone to the South because of the first front. There will be showers not severe weather with this weather across the Upper Midwest and the Ohio Valley for tomorrow.

And also, more scattered showers into the West, again this afternoon and tomorrow as well, simply because the front is backed up against the mountains right there and that allows the showers to pop up in the afternoon -- 77 in Denver, 87 in Albuquerque for tomorrow, and 81 in New York City.

Enjoy your day. Guys, back to you.

ROMANS: All right. Thanks, Chad. We will. Enjoy your day.

BERMAN: I will enjoy my day. I already am.

ROMANS: That's a time.

All right. War raging in Gaza, our top story this morning. Israel increasing attacks as Hamas shoots down hopes of a cease-fire. Millions of innocent people caught in the crossfire here. We are live this morning in Gaza with what's happening right now, right after the break.

(COMMERCIAL BREAK)