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ANDERSON COOPER 360 DEGREES

Deadliest Attack Yet in Gaza Crisis; Would-be Obama Senate Replacement Turned Away

Aired January 6, 2009 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Tonight, breaking news from the Middle East, where, today, the conflict took its bloodiest turn yet, after Israel struck a school being used as a shelter by hundreds of Palestinians. Civilians, Israel says, were used as human shields by Hamas. At least 40 people, we know, were killed. The United Nations is calling for an independent investigation.
It's the deadliest incident since Israel began its ground invasion into Gaza. And it prompted president-elect Obama to speak out for the first time in public about the rising civilian death toll.

Here's what he said.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT-ELECT: The loss of civilian life in Gaza and in Israel is a source of deep concern for me. And, after January 20, I'm going to have plenty to say about the issue.

(END VIDEO CLIP)

COOPER: There's a lot happening right now over my shoulder in Gaza, and a lot happening on the diplomatic front.

The U.N. Security Council has been discussing for the last several hours diplomatic ends to end the conflict, in the wake of today's deadly school attack today.

(BEGIN VIDEOTAPE)

COOPER (voice-over): This is what war looks like, the wounded, the dead, victims of an Israeli strike near a United Nations school. The U.N. says, scores of Palestinian civilians, including many children, were killed.

Israel defends the strike, claiming the casualties were human shields sacrificed by Hamas who were firing shells from inside the school.

MAJOR AVITAL LEIBOVICH, SPOKESWOMAN, ISRAELI DEFENSE FORCES: When Hamas chooses to locate civilians in areas filled with ammunition around it, then Hamas should be accountable.

COOPER: The deadly incident comes as Israeli Defense Forces cite progress in the ground offensive. On day three of the Gaza incursion, the IDF released this video showing targets being destroyed, tunnels revealed, and rocket launchers obliterated. Israel also says several more militants have been killed, among them, a top Hamas commander. At least one Israeli soldier died in today's fighting.

(on camera): Israel's military says they have the city of Gaza surrounded. Eyewitnesses on the ground have also seen Israeli forces move on the southern city of Khan Yunis.

In the coming days, though, Israel is going to have to decide whether or not they move their troops deeper into those cities. If they do that, there is no doubt the battle will intensify.

(voice-over): Even with Israel's superior military power, the Hamas rockets continue to rain down. At least 30 were launched on Tuesday. One child was reported injured.

At the U.N. tonight, frantic efforts to reach a cease-fire and a way forward. Secretary of State Condoleezza Rice, who briefed president-elect Obama today, said the status quo must change, with Hamas prevented from rearming in the future.

CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: It is imperative that any cease-fire is durable and sustainable and that it ensures the safety and security of Israelis and Palestinians alike.

COOPER: Rice said, the crisis must be resolved urgently, but only if there's a real peace and a long-term solution. Until then, there will only be more suffering, with civilians caught in the crossfire.

Late today, Israel announced it would open a humanitarian corridor into Gaza, one that will bring much-needed aid in.

(END VIDEOTAPE)

COOPER: As Israeli tanks press on in Gaza, the backlash across the Muslim world has intensified. In an online message today, al Qaeda's number two, Ayman al-Zawahiri, called on Muslims to respond to the assault on Gaza with attacks on Israeli and Western targets around the world.

He also placed the blame for Israel's offensive squarely on incoming U.S. President Barack Obama. As we said, diplomatic efforts to end the conflict have intensified tonight, but the fighting continues, with no end in sight.

Chief international correspondent Christiane Amanpour joins me now from Jerusalem.

Christiane, this reported al-Zawahiri message, al Qaeda clearly sees this crisis as an opportunity.

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, you know, they're desperate and they're lashing out at everybody. They're using the Palestinian suffering to try to get Muslim sympathy back towards them. They're bashing Hosni Mubarak, the president of Egypt, who has been a longtime thorn in the side of al-Zawahiri. And they're bashing the new president of the United States, Barack Obama, because the last thing they want to see, al Qaeda, is Obama having a better relationship between the United States and the Muslim world.

So, that seems to be his target of opportunity right now.

COOPER: The -- the humanitarian corridor that Israel is now saying they are going to open up, that's clearly a reaction to international pressure. I mean, for days, as you well know, they have been saying there -- there is no humanitarian crisis in Gaza.

AMANPOUR: Well, that's right.

And, when we spoke -- I spoke a couple of days ago to the foreign secretary here, the foreign minister, Tzipi Livni, and she admitted full well that the civilian casualties would bring pressure on Israel. And so it has, particularly this terrible loss of life at the UNRWA, the U.N.-run school in Gaza, 40 people who were killed.

And, so, this is obviously shaping the way the diplomacy is going as well. And that's also bringing to a head the efforts to reach diplomacy.

COOPER: What -- what would a cease-fire require? I mean, Egypt has sort of taking the lead. France's President Nicolas Sarkozy is -- is also taking the lead.

But -- but -- but Israel is insisting, look, this just can't be a matter of the rockets stop, and we pull out, or we pull out, and the rockets stop. This has to be a serious, long-term solution.

AMANPOUR: Exactly right.

I spoke to the former British Prime Minister Tony Blair this morning, who is the envoy for the Quartet, and who has been in touch with all sides on precisely this issue. And everything he told me this morning seems to be coming true, that, A, there needs to be a cease-fire that shows the Israelis that they have achieved something tangible from this military incursion, in other words, that they must get a commitment from Egypt to stop the smuggling of weapons and cash from Egypt across the border into Gaza, that Egypt must do much more to police that, and that perhaps there need to be potentially some international monitors.

Also, there needs to be a rapprochement between the Palestinian factions, between the Palestinian Authority, President Mahmoud Abbas, who has just been at the Security Council, and Hamas, because neither the Israelis nor the Americans are going to engage with Hamas. But there has to be some Palestinian engagement with Israel to hammer out a cease-fire, so rapprochement with those factions.

And then there has to be an opening of humanitarian corridors between Gaza and the rest of the world, whether it's on the Israeli side or on the Egyptian side. So, in short, a cease-fire needs to be accompanied by a definite crackdown on the ability to get weapons and -- and -- and cash into Gaza. Apparently, the Egyptian proposal for a temporary cease-fire while a full deal is hammered out is not getting support by the United States.

COOPER: Made all the more complicated by the divisions among Palestinians themselves, between Hamas and the Palestinian Authority.

Christiane, appreciate the reporting from Jerusalem.

We have a lot more on the situation here on the ground throughout this hour.

In Washington tomorrow, a historic meeting -- Barack Obama is going to have a chance to ask advice on the Mideast from four former U.S. presidents who have faced the same challenges that is coming his way.

From our 360 transition team, here's Ed Henry.

(BEGIN VIDEOTAPE)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): In his most extensive comments yet on the crisis in Gaza, president-Elect Barack Obama vowed to get actively engaged in the Mideast, but not until after he's sworn in.

OBAMA: The loss of civilian life in Gaza and in Israel is a source of deep concern for me. And after January 20th, I am going to have plenty to say about the issue.

HENRY: He's in listening mode until then. Another phone briefing from Secretary of State Condoleezza Rice. And Mr. Obama will be front and center at an historic white house meeting Wednesday, getting counsel from all four of his living predecessors.

AARON DAVID MILLER, AUTHOR, "THE MUCH TOO PROMISED LAND": It seems to me the ghosts of the past will be everywhere at tomorrow's meeting. I am just hoping President-elect Obama draws the right lessons.

HENRY: Former Mideast negotiator Aaron Miller believes the incoming commander in chief can learn from former President Jimmy Carter, who brokered the 1979 Camp David accords between Israel and Egypt, and the first President Bush, who, in 1991, brought Israel together in Madrid with all of its Arab neighbors for the first time in 43 years.

MILLER: I think the message from Bush 41 and Carter will be, look, you can be Israel's best friend and we are, but you also have to be tough, smart and fair. And if you are, you'll be able to get in the game. That is the lesson it seems to me to be drawn.

HENRY: Former President Bill Clinton had the famous handshake in 1993, but tried and failed to deliver a more lasting peace in his final days.

While the current President Bush has rebuffed criticism he should have gotten more actively involved earlier, Mr. Obama is now vowing to get in the game from his first day in office.

OBAMA: We are going to engage effectively and consistently in trying to resolve the conflicts that exist in the Middle East. That's something that I'm committed to. So, on January 20, you will be hearing directly from me and my opinions on this issue.

HENRY (on camera): But experts like Aaron Miller says the president-elect just can't interfere. He's not in charge of U.S. foreign policy yet, and he needs to reserve his political capital. He will need it in two weeks, when this challenge gets dumped on his lap.

Ed Henry, CNN, the White House.

(END VIDEOTAPE)

COOPER: We are going to have much more from the Middle East ahead tonight.

You can join the live chat happening now. Let us know what you think about the situation here on the ground and the diplomatic efforts under way at AC360.com.

The crisis in the Middle East is one of the things that is about to land on president-elect Obama's plate. But don't forget the side dishes -- also ahead, the bizarre showdown on Capitol Hill over Obama's old Senate seat. Roland Burris shows -- showed up today to be sworn in, and was turned away. We will have details on that.

Also, CNN's chief medical correspondent, Dr. Sanjay Gupta, becomes the story. He's been approached by the Obama transition team to take the job of surgeon general, a new surprise from the team that has promised to shake things up.

And the rockets in Gaza that Israel is trying to stop, they come in different shapes and sizes, all of them capable of inflicting fatal wounds.

(BEGIN VIDEO CLIP)

COOPER: Upon impact, each of these diamond-shaped (INAUDIBLE) will explode out, and each piece can be deadly.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

(CROSSTALK)

UNIDENTIFIED MALE: Out of the street.

(END VIDEO CLIP)

COOPER: That is what you call a media circus -- Roland Burris showing up today, saying he's a senator, wanting to serve. He was told his credentials were not in order. He said he would consult his attorneys. And, no doubt, that story is to be continued.

Candy Curry -- Candy Crowley has complete coverage.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): A circus surrounding his old Senate seat, a finger-pointing front-page story, and a bit of a rebuke from his vice president, just another no- drama Obama day, relatively minor problems he created and major ones that come to him.

There's the Middle East, and there's a stimulus plan he needs to sell a Congress that is controlled by Democrats, who will not be controlled by Barack Obama, who says he will not allow members to attach pet projects, known as earmarks, to his still-gauzy proposal. Still, the definition seems squishy.

OBAMA: And I describe earmarks as the process by which individual members insert pet projects without review. So, what I'm saying is, we're not having earmarks in the recovery package, period.

CROWLEY: Obama made his remarks during a meeting with economic advisers, where he also found himself defending a CIA chief he hasn't announced.

OBAMA: I have the utmost respect for Leon Panetta. I think that he is one of the finest public servants that we have. He brings extraordinary management skills, great political savvy, an impeccable record of integrity.

CROWLEY: Senator Dianne Feinstein thinks, incoming chairman of the Select Committee on Intelligence, thinks someone from the intelligence community should run the CIA. And it didn't help that she found out about Obama's pick in "The New York Times." Bad form.

On Capitol Hill, for Senate swearing-in ceremonies, even Obama's vice president-elect couldn't defend it.

(BEGIN AUDIO CLIP)

SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENT-ELECT: I think it's always good to talk to -- to talk to the -- the requisite members of Congress. I think it was just a mistake.

UNIDENTIFIED MALE: So, why didn't -- why didn't that happen?

BIDEN: I think it was just a mistake.

(END AUDIO CLIP)

CROWLEY: Feinstein says Obama has since apologized profusely. There's also linger blowback over the withdrawal of Bill Richardson as commerce secretary, a spat over who overlooked the seriousness of a federal probe into a Richardson donor.

And there is this three-ring circus around Obama's old Senate seat.

QUESTION: Sir, what is your expectation? What is your expectation, sir?

CROWLEY: Roland Burris showed up Tuesday to sit at Obama's desk...

UNIDENTIFIED MALE: Here, let me hold it over him.

CROWLEY: ... and found himself standing in the rain.

ROLAND BURRIS, FORMER ILLINOIS ATTORNEY GENERAL: I presented my credentials to the secretary of the Senate, and advised that my credentials were not in order and I would not be accepted, and I will not be seated.

CROWLEY: Many Democrats, including Obama, don't think Burris should be seated, because he was picked by Illinois Governor Rod Blagojevich, accused of trying to sell the Senate slot.

Late in the day, Dianne Feinstein, outgoing chairman of the Rules Committee, said Burris should be sworn in.

No-drama Obama is finding he can't always write the play in a city that thrives on political theater.

(END VIDEOTAPE)

CROWLEY: Certainly, the Burris problem is not of Obama's making. Nonetheless, it does one of the things that Washingtonians and particularly politicians don't like. It takes all the attention away from what's going on -- Anderson.

(LAUGHTER)

COOPER: Candy, we're going to talk to you shortly. In our panel, coming up, we will talk about the Roland Burris situation, and also the story that caught a lot of us here at CNN by surprise today, our own Dr. Sanjay Gupta being asked to be surgeon general of the United States by president-elect Barack Obama. We will try to get some details from Ed Henry on that coming up.

We will also take a look at what happened today on the ground in Gaza, a U.N. school hit by Israeli rocket fire -- by Israeli tank fire, more than 40 people killed, many of them children. We will have -- we will find out -- try to find out exact details on what went on and who's to blame.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: We are going to engage effectively and consistently in trying to resolve the conflicts that exist in the Middle East. That's something that I'm committed to.

(END VIDEO CLIP)

COOPER: President-elect Obama today talking about the intensified fighting going on today in -- in Gaza. But president after the president have tried to broker peace deals in this region for decades. Sooner or later, they all fall apart, and more bloodshed and more death. President-elect Obama will have a chance to talk to three former presidents tomorrow at the White House.

Let's talk strategy, though, with our panel, not only on the situation here in Gaza, but also a lot of domestic issues brewing at home, senior political correspondent Candy Crowley, CNN contributor and "Daily News" columnist Errol Louis, and our own Jeffrey Toobin, a senior political NATO and "New Yorker" columnist, whose profile on Congressman Barney Frank is featured in the current issue of the magazine.

Candy, why is president-elect Obama so hesitant to talk about this crisis?

CROWLEY: Well, first of all, because, as he always says, listen, there's only president at a time. And this is particularly true in foreign policy.

You don't want anyone waiting out the time right here, if, in fact, Barack Obama plans something different. But I have to tell you, I don't think there's probably anyone happier than Barack Obama that, right now, he doesn't have to comment. He can say things like, "I'm certainly concerned about the loss of life." He doesn't have to make a move.

Two weeks is a long time in the Middle East. Things may -- we're watching the U.N. We're watching Israel. We're watching in the Gaza. And I -- I think he really, at this point, doesn't want to talk, and, as well, thinks it would be the wrong thing to do.

COOPER: Yes, Jeff, I guess -- and, politically, it's a no-win situation for him to get involved on this point.

JEFFREY TOOBIN, CNN SENIOR ANALYST: It is.

And one of the big decisions of his presidency is what model of peacemaking he's going to follow. Is he going to be like Bill Clinton, deeply engaged, negotiating, you know, hour after hour himself? That worked early in his presidency, when he helped with the Oslo accords, but it didn't work at the end, when he -- when he failed to get an agreement.

Or more like George -- George Bush, who stayed away from these negotiations, also without success? That's going to be a big choice that he has to make. He seems like he's going to be more like Clinton, but we will see whether he makes any progress.

COOPER: Errol, let's talk about this political circus and media circus, Roland Burris turned away from the Senate today. Dianne Feinstein now speaking out, saying he should be seated. What's the endgame for all of this?

ERROL LOUIS, CNN CONTRIBUTOR: I think the endgame is -- is known to most people.

Constitutionally, the governor has the power to appoint. He's exercised that power. You know, the folks who are now saying that this is somehow illegitimate, you know, this same governor has, you know, pardoned prisoners this year. We didn't hear anything from Congress. This same governor took the credentials from Rahm Emanuel, the new chief of staff, announcing a vacancy in his old congressional seat. He was governor enough to do that.

If there's a snowstorm in Illinois tomorrow, he will mobilize the National Guard, and everybody will accept that, too. So, I think it's pretty clear that, in the end, it's not a question of if, but when, they will recognize that this was a legitimate appointment.

TOOBIN: Errol, I don't -- I don't agree with you either on the politics or the law.

I think it is not at all clear that the Senate has to accept Burris. The -- Article 1 of the Constitution says that the Senate judges its own qualifications. I think it's likely that there will be a political compromise here.

LOUIS: The Powell -- the Powell -- the Powell case -- but isn't the -- the Powell case is still good law, isn't it, Jeffrey?

TOOBIN: The Powell case, which is the 1969 Supreme Court case that said Adam Clayton Powell had the right to sit in the House of Representatives because he would had election, yes, that's still good law. But I don't think that necessarily controls this case here.

Look, I think nobody wants a constitutional confrontation, but it's likely that the best Burris is going to do is two years with an agreement not to run again. But I think the Senate does have some legal arguments here to keep him out.

CROWLEY: I have to tell you something. Burris is...

COOPER: Candy...

CROWLEY: Go ahead.

COOPER: Do you expect, Candy, some sort of political deal to be worked out at tomorrow's meeting between Burris and Harry Reid?

CROWLEY: I suspect there will be a political deal at some point.

And I'm also told that what went on behind close doors when the two met today with others was a lot calmer than what you saw in public and that big press scrum, so that there's no animosity that anyone can detect here.

And they say, look, it's not about Burris. It's about Blagojevich. But the fact of the matter is, they do have to come to some -- this is a total distraction. They have got to figure this out. And I think they will. And I -- I agree that I think, in the end, Burris will be seated.

And he has shown no inclination to say, "I'm not going to run again."

So, it is interesting to me. I don't know what other compromise there is out there that would satisfy both sides. But I think, in the end, just to get this story off the front page, Congress, which is facing the same serious problems that Barack Obama is, want to do something to end this story.

COOPER: But, Jeff, you think maybe a two-year compromise?

TOOBIN: I think that's the -- that's the most likely compromise, if there is going to be a compromise.

But Burris may now think that he has the Constitution on his side, and he may think he doesn't have to compromise. This is a guy who really likes running for office. He's not very successful at it. He hasn't won anything since the early '90s, but this is a guy who runs often. And he may want to say: "Look, I'm only 71 years old. I can run when I'm 73. And, you know, sue me if you don't -- if you don't want me to -- if you don't want me to do it."

(CROSSTALK)

(LAUGHTER)

LOUIS: You know what's going to bring this to a head is, the NAACP is going to get involved on the side of Burris. A number of senators, not just Dianne Feinstein, are going to discover that black voters are going to get riled up in their districts about the idea of this guy being blocked in this way for purely political reasons. And I think other members of the Senate are going to reconsider their position.

TOOBIN: Again, I'm skeptical of that view, as well.

COOPER: Jeff...

TOOBIN: I'm sorry.

COOPER: No, Jeff, I think I -- I was surprised -- I don't know if you were surprised -- by -- by word that our own Sanjay Gupta has been asked by president-elect Obama to be surgeon general.

Are you now angling for, like, a chief justice of the Supreme Court position?

(LAUGHTER)

TOOBIN: Why is that funny, Anderson?

(LAUGHTER)

TOOBIN: Why? You think that's really funny? You trying to hurt my feelings here?

(LAUGHTER)

TOOBIN: Because you know what? I have had not a single feeler for any job in the Obama administration.

(LAUGHTER)

TOOBIN: And I just want to say, that's OK. I'm very busy. I have lots of other things to do. I have got O.J.'s appeal coming up.

(LAUGHTER)

TOOBIN: So, I really don't think I can, you know, spare the time to serve in the Obama administration.

No, I'm very happy for Sanjay. I feel nationally more healthy already knowing that he's going to be surgeon -- surgeon general.

COOPER: Yes, well he also get -- will get to wear a uniform, which, you know...

TOOBIN: That's cool.

COOPER: ... you would not get to wear as...

(LAUGHTER)

TOOBIN: No. No.

COOPER: Well, I guess you would be...

TOOBIN: I would. I would. I...

(LAUGHTER)

COOPER: But, yes.

(LAUGHTER)

COOPER: All right.

(CROSSTALK)

COOPER: We're going to leave it there.

Errol Louis, good to have you on the program, Candy Crowley, as well.

And -- and, Jeff Toobin, as long as we have you before you get nominated to the Supreme Court, appreciate you showing up tonight. (LAUGHTER)

TOOBIN: OK.

(CROSSTALK)

COOPER: Coming up: new details on the Gaza school attack which happened today here, 40 people dead. Who is to blame for the loss of life, the Israelis, Hamas, or both? Ben Wedeman has the latest on this tragic incident.

And, later, witness to the weapons -- my up-close look at the rockets being launched -- still being launched -- despite these 11 days of -- of bombardments and four days of ground incursion into Gaza. The rockets are still coming. We will take an up-close look at them -- ahead.

(COMMERCIAL BREAK)

COOPER: The war -- the fighting between Israel and Hamas continues to claim innocent lives. As we told you at the top of the hour, dozens of people were killed earlier today in an Israeli tank strike on an elementary school. They were seeking shelter at the school.

Israel says Hamas was launching missiles from the school, or mortars, and used the innocent live as shields.

More now on the story from Ben Wedeman.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN SENIOR CORRESPONDENT (voice-over): The pictures, the ones we can show, don't do justice to the horror of the scene. About 40 people were killed when Israeli mortar rounds slammed into a United Nations school in the Jabalia refugee camp, where residents of northern Gaza had sought shelter from the Israeli air and ground offensive.

The senior U.N. official in Gaza is calling for an investigation.

JOHN GING, DIRECTOR OF OPERATIONS IN GAZA, UNITED NATIONS RELIEF AND WORKS AGENCY: We're demanding full accountability, in accordance with international law and the duty of care that -- that the parties to the conflict are obliged to adhere to. We don't care to pass judgment. We have to deal with the consequences.

WEDEMAN: The Israeli military was quick to put forth its version of events.

MAJOR AVITAL LEIBOVICH, SPOKESWOMAN, ISRAELI DEFENSE FORCES: According to our initial investigation with the Southern Command, we understand that, from the schoolyard, there was fire towards Israeli -- towards IDF sources, really, and we retaliated with fire.

UNIDENTIFIED FEMALE: Immediately? LEIBOVICH: We retaliated, yes, immediately.

WEDEMAN: The Israeli army claims that Hamas fighters who fired the mortars were among those killed in the school.

The Israeli military has distributed and posted on YouTube what it says is footage of a militant firing a mortar next to another U.N. school in Gaza, proof, Israeli officials say, that militants are firing from the vicinity of civilian buildings.

Tuesday's strike on the U.N. school is reminiscent of Israel's 1996 artillery bombardment of a U.N. compound in Qana in South Lebanon that killed more than 100 civilians who had taken refuge in the compound during fighting between Israel and Hezbollah. Israel claimed it was responding to rockets fired from nearby. The U.N. flatly denied it.

(END VIDEOTAPE)

COOPER: Ben, whether it was this incident in particular or just growing international pressure, Israel has now said they're going to open up a humanitarian corridor into Gaza. What is that going to look like? What kind of an impact is that actually going to have on the situation on the ground, the humanitarian situation?

WEDEMAN: Well, Anderson, it depends upon the level of fighting within Gaza itself. From what we've heard already, is that there is humanitarian aid getting into Gaza from Israel.

The problem is really once it gets inside, because Gaza has cut into their Israeli troops in many places. There are Hamas militants in others. And these humanitarian convoys are in danger of getting caught in a crossfire. So it's not just a question of getting in; it's getting around.

COOPER: Ben Wedeman reporting tonight from Jerusalem. Ben, thanks.

Up next, the Hamas rockets hitting Israel, still, after all these days of Israeli ground operation. They are still coming. What they look like up close and what they're made of. We got a chance to see some of the weapons today.

And later, running for their lives. How there's no escaping the front lines in this brutal war.

(COMMERCIAL BREAK)

COOPER: Israeli tanks opening fire near the Gaza border. This video was released today by the Israeli Defense Forces. It says its goal is to eliminate the Hamas rocket threat.

But since we've been here near the border, Hamas has managed to fire off dozens of more rockets. They may be primitive, but as we found out, these weapons are powerful and can be lethal. Take a look.

(BEGIN VIDEOTAPE)

COOPER: All along the border with Gaza in most Israel towns, you can find a police station that has a collection of the rockets that have fallen in that town the last couple months.

This station has one of the Kassam rockets that fell here. You can see it's pretty -- it's handmade, essentially. It's got welding here. The lines are not all that straight. A rocket like this can be made relatively easily, the police say, in someone's home or a kind of makeshift factory.

These Kassam rockets have a change of about nine miles.

Far more deadly are the Garrard (ph) rockets. This is one of them. Police tell me this is most likely made in China. It's clearly made in a factory. It's got a range of about 24 or 25 miles and is actually smuggled in underground through tunnels from Egypt. That's one of the -- that's been the prime targets of Israeli air strikes over the last week or so, knocking out those tunnels.

And just about all these rockets -- and you can see what happens to them when they land. They impact in different ways. But they're filled with fuel. They're also filled with shrapnel like this or ball bearings sometimes or metal that have grooves cut into it. Upon impact, each of these little diamond-shaped grooves will explode out and each piece can be deadly.

Just over the last month alone, this is how many rockets this one police station has collected in the town of Ashkelon.

(END VIDEOTAPE)

COOPER: Four Israelis have been killed by Hamas rockets since this crisis began. But the rocket fire is a terrifying way of life for Israelis here in the south, and it's been that way, literally, for years now. Hamas has launched thousands of rockets from Gaza.

When the alarm sounds, Israelis only have a few seconds to escape the danger, about 15 seconds or so.

Nic Robertson has more.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN CORRESPONDENT (voice-over): Watch this video closely. Israelis crowding in a shelter. Sirens have just gone off, warning Hamas has fired rockets. Seconds pass, but they seem like hours.

This man appeals to our camera to show the outside world what's happening, he says, and the rocket. There is shock, relief, and fear. We go outside to find out what's happened.

(on camera) We can see just the smoke rising down here. That's where it landed. We're going to go and see what happened. There were three -- three impacts from this one. (voice-over) It's safe, because the siren is not going off. Everyone points the way. Everyone is running to help.

The rocket landed just a few feet from another shelter.

(on camera) This is where the rocket impacted, right on the ground here. A taxi was just on the other side of the road. It's blown out the windows. But within seconds the emergency services were right on the scene.

(voice-over) Incredibly, no one in the taxi is hurt. Everyone managed to get into the shelter. This was the ninth rocket to hit the town since day break. The ninth reason taxi driver Yacov Shoshan backs the government's decision to go into Gaza.

YACOV SHOSHAN, RESIDENT: We are out here under attack day after day, night after night. It is not right.

ROBERTSON: We spot Sivan taking photos. She tells me she's a film student and lives nearby.

SIVAN COHEN, RESIDENT: I don't support the operation, and I think I'm against violence on both sides. I think this operation just divides us and makes the hate bigger. And...

ROBERTSON (on camera): So what's the solution?

COHEN: I think the solution is -- is citizens talking.

ROBERTSON (voice-over): It's not the answer I would expect from someone living in the line of fire.

(on camera) You were on the street just before this happened. This rocket could have hit you.

COHEN: Yes. But it didn't. And I have a place to go. I have alarms to help me to run away. They don't have all that stuff.

ROBERTSON: In Gaza, you mean?

COHEN: In Gaza, yes.

ROBERTSON (voice-over): She admits it's a minority opinion. Latest polls show 80 percent of Israelis support the move into Gaza.

But the funerals of soldiers lost in combat may test that support. So far six have been killed. It's sad, but to Yacov Shoshan, it's reality.

SHOSHAN: We don't have a choice. Maybe ten be dead; maybe 20. I'm sorry, but there is a job. These soldiers fight against terror.

ROBERTSON: Compromise and cease-fir, it seems, still a long way off.

(END VIDEOTAPE) COOPER: You know, one of the things I found interesting, just watching Israeli television today, is -- is they show the funerals of Israeli soldiers or people who have died. And they're very emotional, and you see soldiers crying and stuff, which are really images we don't see in the United States, of funerals of our troops.

ROBERTSON: Yes. And it is important, I think, for -- here in Israel for people to see what's happening, because so many of these families -- because it's a conscript army. You know, people feel very passionately about the soldiers who are going to war and the loss of blood. And they know -- you talk to them here. They say, "We can't gain anything without a loss of blood."

But every family has somebody who's serving or knows somebody who's serving, so it's a very close, it's a very, very emotional issue for people. And to show that, I think it helps people through it.

COOPER: There's pain, obviously, on both sides of this border. Let's talk about something we haven't talked much about in the last two days, the divisions among Palestinians themselves, between Hamas and Fatah. Mahmoud Abbas, who is at the U.N. tonight pleading for some sort of a solution.

There are very huge divisions between these two groups, and that will play a role in whatever peace -- will affect any kind of negotiations.

ROBERTSON: Absolutely. About just over a year ago I met with Halid Bashar (ph) in Damascus, who is sort of one of the political heads of Hamas. And he's very clear. He think Fatah is completely discredited, that they have shown the people that they're corrupt, that they're corpulent, that they can't serve the people.

And he believes that Hamas -- he absolutely believes it, that they are going to be the party of the future. And that Fatah is on the way out. And that's why he really has no truck with them and won't deal with them.

COOPER: And yet, in the discussions already about some sort of diplomatic effort that Egypt is taking -- having, they've been discussing with the U.N. tonight that France's president, Nicolas Sarkozy, has been discussing. It would basically be Palestinian authorities, Fatah Party officials, overlooking the border with -- between Egypt and Gaza. That would be a huge blow to Hamas.

ROBERTSON: It would be after they just -- they kicked them out -- they kicked them out of the Gaza Strip. They won the elections by a relatively narrow margin. And then months later they just took it out on Fatah and kicked them all out of the Gaza Strip and wanted to take control completely. So it would be a huge climb down for them. Very difficult to see how this is going to work.

COOPER: All right. Nic Robertson, appreciate it. Thanks for the reporting today.

Back in the U.S., big news on the economy and on your tax-paying dollars. You won't believe how much money may have been wasted, completely wasted. Tonight, we're Keeping Them Honest.

Also tonight, the fog of war. How Hamas and the Israelis are both trying to control the images that you see.

And later, coming home: John Travolta's farewell to his 16-year- old son. We'll have the latest on the heart-breaking tragedy.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA (D), PRESIDENT-ELECT: We're going to have to stop talking about budget reform, and we're going to have to fully embrace it. It's an absolute necessity.

(END VIDEO CLIP)

COOPER: Not many people disagree with President-elect Obama on the need nor budget reform, but the question is how exactly do you get it done? There's news today about billions more of your tax dollars -- billions more -- that have literally gone up in smoke. Joe Johns, tonight, "Keeping Them Honest."

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT (voice-over): From the last Congress, a final kick in the pants for the Bush administration. A report prepared by the Democratic staff of the House Committee on Oversight says that, since 2001, the Bush administration has failed to implement more than 13,800 recommendations made by inspectors general, the watchdogs of various federal agencies, costing taxpayers almost $26 billion.

REP. HENRY WAXMAN (D), CALIFORNIA: When you have thousands of recommendations that can add up to billions of dollars, it seems to me they ought to be taken seriously.

JOHNS (on camera): "Keeping Them Honest," what it means is that the government never went after billions of dollars of your money that somebody else got, somebody who probably wasn't supposed to get it.

(voice-over) The report says that $2 billion could have been saved just by cutting off Social Security disability benefit payments to people who were able to work.

Then there's the $837 million in overpayments that the Pentagon handed out for military telecom contracts.

And don't forget Hurricane Katrina. The report cites $16 million in questionable costs for a single base camp.

SEN. CLAIRE MCCASKILL (D), MISSOURI: You know, 16 million here, 100 million here, 300 million there. Pretty soon you've got billions and billions of dollars that we could be saving.

JOHNS: The White House attacked the report as a hyper-partisan hatchet job, telling CNN, "Literally, in the last minutes of the 110th Congress, it appears the partisan Democratic staff has dumped out an incomplete report whose facts," the White House says, aren't exactly factual.

A top Republican on the House Oversight Committee said that, while the report looked to him like one more attempt to pile on George W. Bush, it still raises serious accountability questions.

REP. DARRELL ISSA (R), CALIFORNIA: It's a parting shot, and it's popular to kick somebody on their way out the door. But I'm going to take it along with Chairman Townes (ph) that there are 13,000 issues that we're going to follow.

JOHNS: Not entirely by accident, today Senator Claire McCaskill, a former state auditor, is calling on the incoming Obama administration to beef up resources for inspectors general.

Joe Johns, CNN, Washington.

(END VIDEOTAPE)

COOPER: Up next, life inside a war zone. We're going to talk with someone caught in the crossfire in Gaza. We checked in with him last night. We'll talk to him again tonight.

Also, fighting to enter the fight. The media are being shut out of Gaza. Limited -- access to the Israeli forces is limited, as well. For reporters on the ground in Gaza, their access is limited by Hamas. We'll show you how both sides are trying to shape the message you see.

And he pleaded not to be tasered. Instead, a subway police officer fired his gun, killing a 22-year-old father. Details ahead on 360.

(COMMERCIAL BREAK)

COOPER: If you were with us last night, you know that we spoke by phone to a man who lives in Gaza City. His name is Sami Abdel- Shafi. Today we interviewed him on TV, and he told us what life is like now inside Gaza.

(BEGIN VIDEO CLIP)

SAMI ABDEL-SHAFI, GAZA CITY RESIDENT: You can see that there is nowhere safe to go. Those who have left their homes to seek refuge in a different place, be it a school or be it a different house, a different building, they are moving twice and three times. I have known people who have moved four times within four days.

This really shows us the magnitude of the suffering, the fear, and the possibility that any civilian may be affected by this.

(END VIDEO CLIP)

COOPER: It's important to point out that we can't verify the reports coming out of Gaza independently. We can't see the battles first hand. The Israeli government won't let us into Gaza. This is about as close as we can get.

At the same time, Hamas is trying to control its message, showing the suffering but little else. Clearly, both sides are fighting a propaganda war, and when that happens, like it is here, the truth sometimes can become twisted, the facts elusive.

(BEGIN VIDEOTAPE)

COOPER (voice-over): On a hilltop overlooking Gaza, dozens of journalists gather each day, training their lenses on a battle they can barely see.

(on camera) It's a strange sight to see so many reporters and camera people clustered together on this one tiny Hill, watching a battles that's being waged miles away. It's not how most of us would like to cover the story. The Israel government won't allow international reporters to go into Gaza. This is as close most of us can get.

How frustrating is it, trying to cover the story from so far away?

ROBERTSON: It's really frustrating, because you don't know what's going on. You can't see there, be there and feel it. You can't see -- we get these pictures from the hospital, but what's happening on the back streets behind the hospital? What's Hamas doing? You know, the sort of questions that we would ask that go beyond the immediacy of the civilian casualties that you want to know about, but the other stuff that really informs you.

COOPER (voice-over): Even access to Israeli soldiers has been cut off.

In 2006, in the fight against Hezbollah, reporters were allowed to broadcast from Israeli artillery positions.

(on camera) With these soldiers, the real concern is...

(voice-over) I even embedded with an Israeli army unit on a mission into Southern Lebanon. This time around, however, Israel is not permitting any access like that.

DANNY SEAMAN, ISRAELI GOVERNMENT PRESS OFFICE: There was too much exposure, and it had an effect on our ability to achieve strategic goals. That's one of the lessons we learned from the war in Lebanon.

COOPER (on camera): So you're saying you're preventing reporters from being embedded from being that close, because it's in part interfering with military operations?

SEAMAN: Absolutely, absolutely.

COOPER (voice-over): Israeli officials are also acutely aware they're fighting not just a military campaign but a public relations battle. Limiting access is a way to alter how the war is reported. ROBERTSON: The officials we talk to say it's security and it's for our safety. But it creates an impression that they don't want the suffering that's happening in the Gaza Strip right now to be witnessed by the world. But it is.

And right now you could make a real case that the message that's coming out is one that's essentially controlled by people that are perhaps more partisan to the situation inside the Gaza Strip than a lot of international journalists.

COOPER: Inside Gaza press control by Hamas is heavy-handed. There are few press freedoms inside Gaza, and Hamas controls who reports from there and where they can go.

While pictures of wounded children being are brought to hospital are clearly encouraged, we rarely see images of Hamas fighters or their rockets fired into Israel.

In trying to shape public opinion, both sides know the importance of pictures, and both sides want to shape the story those pictures reveal.

(END VIDEOTAPE)

COOPER: And the public relations battle and the military battle continues tonight.

Tonight's other headlines coming up. The death certificate of Jett Travolta reportedly lists seizure as his cause of death. The Church of Scientology, of which the Travoltas are members, put out a statement today. We'll have that for you next.

Also, a fatal shooting caught on tape: the victim held face down by police while another officer takes out his gun and shoots him on a crowded subway platform. We'll show you the tape when 360 continues.

(COMMERCIAL BREAK)

COOPER: We'll have all the late-breaking developments from the border between Gaza and Israel ahead, but first, Erica Hill joins us with a "360 News and Business Bulletin" -- Erica.

ERICA HILL, CNN ANCHOR: Anderson, John Travolta and his wife, Kelly Preston, have returned home to Florida with the ashes of their 16-year-old son, Jett.

Meantime, the Church of Scientology today saying, quote, "Scientologists seek conventional medical treatment for medical conditions." There have been suggestions that Travolta and Preston, who were both Scientologists, might have influenced -- been influenced by their religious beliefs in their approach to their son's health.

A $25 million wrongful death suit filed today in San Francisco by the family of an unarmed man who was shot and killed on New Year's day. Twenty-two-year-old Oscar Grant was allegedly shot in the back by Bay Area -- by a Bay Area Rapid Transit or BART officer while another officer held him down.

An investigation is underway into the shooting. It has caused outrage in the Bay area.

One of the world's richest men, German billionaire Adolf Merckle, committed suicide on Monday. His family said his companies have lost hundreds of millions of dollars in the global financial crisis.

And new prices for iTunes. Apple announcing today downloaded music will now cost you either 69 cents, 99 cents or $1.29. The songs will also now be made available to consumers without copy protection, Anderson.

COOPER: All right, Erica. Thanks.

Coming up at the top of the hour, the latest from the Mideast. Crisis in Gaza intensifying after an attack on a school being used as a shelter by hundreds of Palestinians. Israel says they would be used as human shields. At the same time diplomats are working overtime to try to stop the fighting.

All of the breaking news ahead.

(COMMERCIAL BREAK)

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