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Ferry Disaster in South Korea; Crisis in Ukraine; New Bluefin- 21 Mission after Technical Glitch; Divers Search for 300 Missing after Ferry Capsizes in South Korea; New Obama Remarks About Ukraine Crisis; Pro-Russian Militants Stop Ukraine Military Push

Aired April 16, 2014 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now: We're awaiting the results of the latest underwater search for Flight 370 after the Bluefin drone suffered its second setback. Are more search vehicles needed to get the job done?

Plus, harrowing new details of a deadly ferry disaster. Hundreds of people are still missing. Survivors are sharing terrifying stories about their escape from the sinking ship.

And pro-Russian militants gaining new ground in Ukraine, despite the government's attempts at a crackdown. CNN is live at the center of this dangerous international crisis.

We want to welcome our viewers in the United States and around the world.

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

Right now, planes are preparing to take off to scour the surface of the Indian Ocean, while an underwater drone maps the ocean floor searching for any scrap of Flight 370. We're standing by for an update on the third mission of the Bluefin-21. At any time, we could get the results of an investigation also into an oil slick that was found near the search area, this as Flight 370 families are making new demands of the Malaysian authorities.

Our correspondents are following all the new developments around the world, along with our team of experts here in THE SITUATION ROOM.

Let's get the very latest now from our aviation correspondent, Rene Marsh.

RENE MARSH, CNN AVIATION CORRESPONDENT: Well, Wolf, as much as we have focused on the search, at the heart of all of this are the families of the people on board who 40 days in know nothing other than the plane that was carrying their loved one is missing. Some of those families are now at an emotional boiling point.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: You're all bloody liars and you're lying to us again now. MARSH (voice-over): Families explode in anger and storm out of a briefing in Beijing, after technical glitches prevented a promised video conference with Malaysian officials.

UNIDENTIFIED MALE (through translator): We will request their team of experts to come to Beijing to conduct face-to-face communications and fulfill their commitment. What is truth? What problem do they want to cover up?

MARSH: Families still waiting for answers to a laundry list of technical questions they sent to Malaysian authorities earlier this week. Did Malaysia Airlines have regular maintenance checks for the emergency locator transmitters? Their disrupt apparent in their demands for a copy of Flight 370's logbook and the raw audiotapes from air traffic control.

JOHN GOGLIA, FORMER MEMBER, NATIONAL TRANSPORTATION SAFETY BOARD: These are not state secrets, so the families should have access to all of that kind of information.

MARSH: Meanwhile, the search in the Indian Ocean remains stop-and-go, with the second setback in as many days for the Bluefin-21, the underwater robot's 24-hour mission cut to about 11 hours, after an oil used to protect its electronic components from saltwater ran low.

Data collected again showed no sign of Flight 370. Mission three is now under way. The stop-and-go process is frustrating, but not unusual.

UNIDENTIFIED MALE: It may happen once or twice more. In the Air France 447, we had a lot of aborted runs from our robots, but you learn.

MARSH: Three days after Ocean Shield discovered an oil slick, the two-liter sample has finally arrived in Perth for testing. The Australian Transportation Safety Board now has custody of the sample, but still no timeline on when the results will come in.

RAGHU MURTUGUDDE, UNIVERSITY OF MARYLAND: Would the oil have survived this far? Temperatures are cold, so it depends on how warm the temperatures are and how strong the winds are for how long the oil takes to either evaporate or emulsify and sink to the bottom.

(END VIDEOTAPE)

MARSH: Well, I went through line by line all of the families' questions with former NTSB board member John Goglia. And this is the list.

It is a very long list. He said on this list there are only two questions that he would have reservations about. The families wanted Flight 370's logbook which contains recent maintenance. He says that wouldn't happen. They also wanted direct phone numbers of people involved in the investigation. That wouldn't happen either.

But the majority of the questions here on this list here, fair game, he says. The rule simply is if it's a question that you can answer before the accident occurred, then there's no reason to keep -- you know, keep it away from the families.

BLITZER: Good rule. But they're not obeying that rule, unfortunately. Thanks very much, Rene. Don't go too far away.

Let's go live to the staging ground right now for Flight 370.

CNN's Michael Holmes is joining us from Perth, Australia, with the very latest from there.

What is the very latest, Michael?

MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT: Yes, Wolf, Bluefin- 21 still down, we understand, on its third run above the ocean floor, been down there now for hours all night. It's just after 6:00 a.m. here now in Perth.

No word of any further difficulties so far, but those who run the Bluefin-21, too, they say the two prior incidents are not really that much of a big deal. It was nothing going wrong, per se. It was just some tweaking that needed to be done, and we're hoping to get an update on this third run in the next few hours, the data, as Rene said on the previous two runs, not showing anything, but, again, not surprising. This is a process as we have said that could take anywhere from six weeks to two months to cover that search area.

We're also expecting the planes to be up again today and the ships are still out there looking for surface wreckage. That's despite the man heading up this search effort, Angus Houston, saying that that search for surface wreckage would be round down this week.

And Rene mentioning that oil sample, too. It is on land, we understand, being analyzed. Hopefully, we will know in the next few hours what it is -- Wolf.

BLITZER: Will they make a formal announcement? How are they going to release that information about that oil sample?

HOLMES: Yes, well, what we have had in the days gone past, Wolf, is actually in about an hour or so from now, we normally get a briefing released from the search headquarters.

And they tell us things like what planes are up and what ships are up, what data was analyzed and the like. And I expect we will get an update from them as soon as they get it and they will put out a release. They're very tight-mouthed, tight-lipped about everything that's going on and release stuff only when they know about it.

So that does keep down the speculation, it has to be said. I think in the next, perhaps, four hours, we might hear something about that, Wolf.

BLITZER: And if you hear anything from the New Zealand air force about that breadbasket that they found floating atop the Indian Ocean, they have been checking that now for a couple days to see if it actually came from inside the cabin of that plane. Let us know, because, last hour, we spoke with the wing commander from the New Zealand air force and he said they're still taking a close look to determine if that came from a plane or someplace else.

Michael Holmes, we will stand by, get new information from you as it comes in. Thanks very much.

We also have more now on the newest anger, the newest demands coming in from the families of the missing passengers.

Our senior international correspondent, Nic Robertson, is joining us now from the Malaysian capital of Kuala Lumpur.

What's the latest there, Nic?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: A list of 26 questions, Wolf. We have seen some of the questions before, but as the time has gone by that the families haven't had answers, this list has grown.

The first 12 questions are all about the emergency locator transmitter, this transmitter or transmitters that could be or should be deployed if the plane crashes, if it impacts water. So some of the questions that they have, how many of these ELTs, emergency locator transmitters, were on board? And when were they checked? Did they have physical protection? Should they float to the surface on impact with water? Should they begin transmission on impact with water?

What are the frequencies that they use? A lot of very, very detailed questions where there should be very specific answers. They haven't got those answers yet. They would also like to know the serial number of the black box. They would like to know precisely what data can be expected from the black box. They have asked the question about contact phone numbers for Captain Zaharie Shah, who was the pilot, the lead pilot aboard the aircraft.

So there are a long list of questions, and they're becoming increasingly frustrated. A teleconference that was supposed to happen between Malaysian experts here in Kuala Lumpur and families in Beijing broke down in acrimony when it didn't work at a technical level.

So, for the families, all this is distressing because these questions are precise, and they're really all about trying to figure out if there's a chance that their families, their loved ones are still alive, Wolf.

BLITZER: Any indication, Nic, the Malaysians are ready to provide answers to those questions?

ROBERTSON: Well, the Malaysian authorities say that they are, and you have given -- when the Chinese families were here in Kuala Lumpur here before, gave them technical experts to talk to, several briefings they have had.

But out of those briefings, the continuing narrative, if you will, has been that, yes, we get to ask some questions, but we don't get all the answers. And there's just a growing level of frustration, and with a lack of answers, or lack of answers that the families feel that they're getting, the frustration grows into mistrust. So Malaysian officials do say that they are willing where they can to answer the questions that they can. It's not happening to the satisfaction the Chinese families so far, Wolf.

BLITZER: Certainly not. Can't blame those families for being so, so frustrated and angry. Nic Robertson in Kuala Lumpur, thank you.

Let's bring back our panel. Our aviation correspondent, Rene Marsh, is still with us, along with our aviation analyst Peter Goelz and our law enforcement analyst Tom Fuentes.

You worked with families, Peter, when you were in the NTSB in other aviation disasters. They want answers. They're not getting those answers. You can't blame these folks for being so angry.

PETER GOELZ, CNN AVIATION ANALYST: No, absolutely not.

They had an opportunity to establish some level of trust early on, and it just -- the Malaysians just missed that opportunity for a variety of reasons. And now anything they say is going to be challenged and questioned. And after 40 days, the frustration is understandable.

BLITZER: And you -- in your reporting, Rene, you have been told by U.S. sources there is plenty of information that hasn't been provided that could be provided to the families without jeopardizing any criminal investigation or anything along those lines.

MARSH: Right.

Again, so Nic was just outlining some of those very technical issues about how certain components of the plane, how they work in certain situations. And many of the people that I have spoken to, former NTSB folks, they all say, look, if it's something that you can answer about the plane, how it works, before the accident actually occurred, there's no reason why you can't talk about it.

Certain things that you would hold back, the cockpit voice recorder, what the final words were, those are things you might not share right away because you don't know who it is, whether it was the pilot, the co-pilot. You want to make sure you're 100 percent certain before you're on the record.

But this information, they all agree, families should get answers.

BLITZER: What are you hearing, Tom, about interviews? Because we know a lot of family members presumably have been interviewed about their loved ones. Crew members, their families have been interviewed. But I'm hearing that maybe not as many interviews as, for example, the U.S. would have been doing in a situation like this.

TOM FUENTES, CNN CONTRIBUTOR: Well, I'm hearing that they're doing as many interviews as they think is practical, and especially having the assistance from so many law enforcement agencies around the world, including the U.S. But you're right, in a case this size here in the United States, by now, the FBI, the interviews would be in the thousands.

BLITZER: And here, apparently, a couple hundred or something along those lines, which seems to me that they're missing an opportunity. But you know a lot more than I do about these investigations, Peter, than I do.

GOELZ: I think they have missed the opportunity.

And they have missed an opportunity to develop the trust of the family members. The more in-depth the investigation is, the better they're going to feel about it. And, as Rene reported, many of these questions could simply have been answered during the first week of the investigation, how the ELT works, whether it's protected. It's not -- you know, those are simple questions and a simple answer develops a bond of trust.

BLITZER: Some missed opportunities.

All right, guys, hold on for a moment. I want to go back to Perth, Australia, right now.

Geoffrey Thomas is standing by. He's the editor in chief of AirlineRatings.com. He's been very helpful to us over these past few weeks.

What's the latest you're hearing, Geoffrey, over there on a couple specific issues, first of all, that oil sample from that oil slick? Any indication yet that it may have come from the actual plane?

GEOFFREY THOMAS, EDITOR IN CHIEF, AIRLINERATINGS.COM: Wolf, not at this time. They are being very, very tight-lipped about this.

The Australians have learned very much from the Malaysian experience in the early part of this disaster. And they have been very, very -- holding this information very close to their chest. They don't want anything to leak out at all, which is, you know, a very good thing,, obviously.

So in this particular case, in the case of the oil, no indication as yet of whether it is from that airplane or not. Hopefully, we will know later on this morning Perth time. Possibly about 10:00, 10:00 p.m. Eastern U.S. time, we may learn something.

BLITZER: Also, presumably that breadbasket that was discovered by New Zealand, the New Zealand air force, they're trying to determine whether that came from the plane. We should be getting an answer fairly soon on that, right?

THOMAS: I would certainly expect so, Wolf.

I mean, we have known about this for a couple of days and they have certainly had time to analyze it. I do know, for instance, that there are crash investigators out with the fleet from the Australian Transportation Safety Bureau. I know there's one on board the Ocean Shield, for instance. So there are personnel out there with crash investigation experience.

So hopefully we will know something to confirm yes or no later on today.

BLITZER: Have you heard anything, Geoffrey, about the cell phone from the co-pilot that apparently was trying to make a connection with a cell tower in Penang in Malaysia after it made that turn, after the transponder went dead? It's raising all sorts of suspicions. What, if anything, have you heard about it?

THOMAS: Well, it's a very interesting comment, Wolf, because some of those suspicions, of course, have been unfortunately fueled by the media up there, where sort of the headline was last desperate call from co-pilot.

Well, there wasn't actually a call. There wasn't any words exchanged, we understand. It was simply that the phone was on and there's a connection with the tower. There's also speculation that that meant the plane had to be at 5,000 feet. Well, I know from personal experience, I'm afraid to say, that at 35,000 feet, your phone can make contact with a tower.

So there's been lots of unfortunate speculation from that part of the world about what this meant. As far as we are concerned, all we know is that there was contact made as far as the tower to the phone, but nothing more than that.

BLITZER: Hold on for a moment, Geoffrey.

Rene, a question for you. The Echo, one of the ships there, it's in the area where the Bluefin has been going down. You're learning from your sources, has it picked up anything? Anything important going on there?

MARSH: Yes. And actually we just learned just a short time ago -- do you remember that first mission where Bluefin had to abort because the water was just so deep in that area?

Remember, the limit for Bluefin was programmed for 4,500 meters. Well, Echo moved in that area to get more details about the situation in that as far as the ocean floor, how deep is the water, what's the topography, and now we know that it was only 100 meters deeper than it was programmed to, so it was about 4,600 meters.

That's new data the U.S. Navy now has from HMS Echo, that area that forced Bluefin to abort was about 4,600 meters deep. They're saying they could maybe push it to 5,000. It looks like that would be something that Bluefin will be able to handle.

BLITZER: We asked Brian Todd -- I asked Brian Todd to check with the manufacturer, Peter, of Bluefin, if they have done any tests, any rehearsals, test runs with the Bluefin. They had, what, 35, 40 days to get ready for this before. They said not in the Indian Ocean, but they did do some testing in Hawaii, off the coast of Hawaii, in March. Is that good enough?

GOELZ: Well, you would think if they were going to be brought online and they knew they were coming, they might have got it out there and started doing some testing in the actual Indian Ocean.

But I have got confidence in the Bluefin. I think it's going to do the job, and I think that they're on the right spot.

BLITZER: What if they don't find one of these, the flight data recorder or the cockpit voice recorder, for a long, long time, and they find no wreckage? They still haven't found any wreckage. Where does this investigation go?

FUENTES: Well, it will be completely stymied if they don't find the wreckage and the black boxes. They need both to even come close to being able to solve what that plane did and why it did it.

And without these items of evidence, they may never know what happened here.

BLITZER: And if there was some -- some criminal action by someone in the cockpit, or a passenger, or someone along who snuck on the plane, all these suspicions out there, they wouldn't be able to determine that without wreckage or...

FUENTES: No, they wouldn't be able to prove it. And even if somebody at some late date tries to take credit on land for this, that our group did this or I did this, you won't have the evidence to prove it or disprove it.

BLITZER: Yes.

GOELZ: The simple truth is commercial aviation can't stand a vacuum. They have got to find out what happened.

BLITZER: Hope they do. All right, guys, thanks very, very much.

Still ahead, why is the Bluefin-21 the only underwater search vehicle looking for the plane? We're going to show you why the options right now are limited. We also have new information on the Bluefin-21's cost.

And later, the desperate search for hundreds of missing passengers in a deadly ferry disaster. Survivors recorded the nightmare on their cell phones. They believe some died because they were given bad information.

(COMMERCIAL BREAK)

BLITZER: "CROSSFIRE" won't be seen so we can bring you more of our special coverage of the search for Flight 370.

Right now, we're getting some new information about the enormous cost of this search.

Brian Todd is here in THE SITUATION ROOM. He's been working his sources.

What have you just learned?

BRIAN TODD, CNN CORRESPONDENT: Wolf, reporting new information tonight on the costs of this phase of the particular operation here.

Getting this from sources close to the operation. We're told this particular Bluefin-21 which had those two glitches in its first two missions this week cost $3.5 million. It was manufactured by Bluefin Robotics, purchased by Phoenix International. Phoenix has nine operators on board the Ocean Shield running the Bluefin.

Phoenix is the owner and operator of the Bluefin, but the U.S. Navy is contracting with Phoenix to deploy the Bluefin, Wolf. So the Navy is footing some of those costs for this phase of the operation.

BLITZER: You're also getting some new information on the overall costs of this search.

TODD: That's right. An official with Naval Sea Systems Command says the U.S. Navy has budgeted $3.6 million approximately for its portion of this operation.

Now, that covers the deployment of the Bluefin. It covers the towed pinger locators deployment. That's the device which found those underwater signals more than a week ago. It also covers the costs for 10 operators on board the Ocean Shield. That would include those nine Phoenix operators plus probably one Navy operator.

It also covers their transportation to the region and then back to the United States, presumably also transportation for the equipment on board the Ocean Shield. But, again, this is just the U.S. Navy's allocation for this phase of this operation. It does not include what the Australians are spending to deploy the Ocean Shield.

BLITZER: That number is obviously going to go up, up, up.

TODD: Absolutely.

BLITZER: Thanks, Brian, very much.

The Bluefin-21 already has suffered two setbacks in its first days of operation, so why not send in additional drones that can scan deep water?

Tom Foreman is taking a closer look at that. He's in our virtual studio -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: Yes, Wolf, that seems to make sense, doesn't it?

After all, in terms of the aerial search, there have been dozens of planes up there on top of the water. There have been dozens of ships. Why wouldn't we do the same thing below the water? Why wouldn't searchers release a whole fleet of these Bluefin robotic subs down there? The idea is fairly simple. If you think about it, what's been going on down there is the Bluefin has been trying to get into position to go back and forth like this. They call it mowing the lawn to get a sonic image of the ocean floor. So, if you had five or 10 or 20 of them doing it, look how much faster it could happen.

Instead of taking weeks or months, maybe you could get the whole job done in just a matter of days. But here's why it doesn't work, and Brian just hinted at it a moment ago. First of all, there's a question of availability. There are only about 100 of these in the world. They have been purchased for specific purposes.

So you would have to get governments and businesses and research organizations to hand them over for this job for an indefinite period of time. Secondly, you need support for them. Brian mentioned about 10 people per vessel out there. These things are huge. You have to have people who know how to program them, how to operate them, how to retrieve them, how to get the data off of them.

They weigh about 1,700 pounds each. Putting one in and out of the water is dangerous and difficult, not unlike taking a small car and lowering into the ocean and retrieving it time and time again. You're going to need more ships, more support for the ships, everything, Wolf.

And then beyond that, the basic question we have come back to time and again, think about a whole fleet of them out here mowing the grass on a flat surface like this three miles down, two miles down. That's already a difficult job, but, remember, we don't know. Down here, it may be more like this. It could be like the Rocky Mountains with hills and valleys and crags and crevices and all those different robotic subs competing for space up and down and back and forth, sending signals to the surface.

We have seen the difficulty operating one, Wolf. This is a great piece of technology, but turning loose a bunch of them down here might, in fact, create problems a lot quicker than it created solutions -- Wolf.

BLITZER: Important information from Tom Foreman. Thanks very much.

Let's get some more now from ocean scientist and author Ellen Prager, along with former Naval oceanographer Van Gurley.

Ellen, you remember the tsunami in Japan. Eventually, some of the debris from the tsunami wound up in the West Coast of the United States because of ocean currents and waves and whatever. Is it possible some of the wreckage of this plane, if there's wreckage in the Indian Ocean, will wind up on the Australian coast?

ELLEN PRAGER, OCEAN SCIENTIST: Well, it's possible, Wolf. I'm sure that the team is working with scientists who have computer models of ocean currents and winds.

They take into account storms. You can actually put a drifter in the ocean and track it with a satellite to see where it will go to calibrate those models. So once you have an idea of where the wreckage may be, you put an artificial drifter in the model, you might know where it goes, so you could tell if some might end up on the Australian coast. I'm sure they're talking to those people.

BLITZER: Van, is the Bluefin-21 the best piece of equipment right now to find one of these, a flight data recorder or any wreckage that may be on the floor of the Indian Ocean?

CAPT. VAN GURLEY (RET.), FORMER NAVY OCEANOGRAPHER: Well, Wolf, I'm not exactly familiar with the Bluefin-21. I never operated with it while I was in the Navy. We operated with similar equipment. So I don't want to say that that isn't the right piece. But I can say it's the right technology. You've got a reliable vehicle that has operated many times before. Maybe not at these depths. With the right types of sensors. The side-scan sonar that's been talked about so much the last couple days.

So if there is something down there, the -- this is the type of vehicle that can absolutely find a manmade object on the ocean bottom.

BLITZER: What happens, Ellen, if that Bluefin-21, it's now down for the third time, comes back once again and says, you know what? We didn't find anything of value, nothing substantive. Saw a lot of silt or whatever down at the bottom of the Indian Ocean but not much else.

How long does it keep on going?

PRAGER: Well, you know, nobody likes to have a negative result, but in fact, in this case, not finding anything is very important. Because then it starts to narrow down the search area even more. So you know, it's not a sexy thing to have a negative result, say, we didn't find anything. But it's actually very important, because, again, that makes your search area get smaller and smaller to where you can still look. So they've got to just stick with it and perseverance and keep going.

BLITZER: You have a sense, Ellen, how long potentially they could stick with it and keep going?

PRAGER: Well, I think, you know, everybody's been saying, weeks to months, and that -- the way it's going, I think that's true, and especially if they have to keep tweaking it.

But, again, this is a slow process. It's a big area. And just the fact that it will take two hours down, however many hours they can get on the bottom, and then two hours up, and then another four hours to dump the data and process it. So it's a long -- it's a long haul.

BLITZER: Does it make any sense to bring a second Bluefin in, Ellen?

PRAGER: Well, I think what you've heard, there's issues with that. There's availability. There's the team to launch it.

I would hope that, you know, one of the things you always want to do with equipment in the ocean is have a backup, because things go wrong. So I would suspect they're right now looking for other assets that might be deployable if they need them.

BLITZER: Well, what about that, Van, because when you were in the navy, there were other assets you used to use. What else is out there?

GURLEY: Well, there are a number of other vehicles and other technologies, so in terms of AUVs like we've been looking at with the Bluefin, there's also a class of vehicles called the Remus 6000. Those are -- that's the kind of gear that I was familiar with in my Navy experience. And there's also things like towed sleds, where we put the side scammer on a towed sled and it's connected to the ship, and you drag it along the ocean bottom. Each has its strengths and weaknesses.

But as Ellen said, the fact that it's going to take a while should not distract us. We've said all along that even the small area where they think they're at, this could be anywhere from six weeks to two months, and you're going to have a lot of days when you don't think you got anything. But as she said, the negative information of looking in a spot on the ocean floor and saying for certain there was nothing there helps you figure out where to look next.

BLITZER: But they send that Bluefin down from a ship that's there in the Indian Ocean. It's going to have a lot of wear and tear on the men and women on that ship. Just staying out there.

GURLEY: Absolutely. But these are professional mariners. They're used to going and spending months at sea at a time. That part doesn't worry me.

As Ellen said, the thing that you've got to start looking at is, you know, if there was a real big mechanical fault. Something that they can't fix on the deck right away. Then you're going to have a problem in getting another vehicle out.

BLITZER: We're now told, Ellen -- I don't know if you know about this -- that there's what they call a garbage patch in this area that they're searching right now. Potentially, that could disrupt this whole search effort. What do you know, if anything, about that?

PRAGER: You know, the whole idea of a garbage patch is sort of a misconception. What they may be suggesting is that there is an eddy that concentrates some marine debris which, unfortunately, there's way too much in the ocean. And so, you know, that could disrupt the search on the surface.

Again, if you look at computer models, there aren't that many places in the world's oceans where you actually have concentrate marine debris. There could be one here. Most of the time it spreads out over time and it drifts with the currents.

Honestly, I haven't heard that. Could be. Unfortunately, our oceans are full of trash, particularly plastics. And, you know, you never want to see that.

BLITZER: Because you know that they dump a lot of garbage in the Indian Ocean. Ships going back and forth. What do you know about this so-called garbage patch?

GURLEY: Well, as Ellen said, there are a couple places in the ocean where we know things get concentrated on the surface by the winds and seas and the currents.

But for the search they're doing on the ocean bottom, it's actually the opposite. Many times when we go and use these AUVs in coastal waters near a shoreline, you find lots of garbage on the bottom. Fishing gear. Oil drums. Refrigerators. Even cars that have been dumped overboard or lost overboard. The fact that we're in such an isolated part of the ocean, way, way from normal shipping lanes, tells me that we're not going to have that kind of problem on the ocean floor here, which is good news for the search team. Those are the false positives they don't have to go back and worry about.

BLITZER: Van Gurley, thanks very much.

Ellen Prager, thanks to you, as well. We'll check back with both of you tomorrow.

Just ahead, students screaming out of terror. Survivors sharing their horror stories after a ferry capsizes in cold water. We'll have the latest on the search.

And we're also awaiting the results of an investigation. An oil slick discovered in the Indian Ocean potentially a clue from Flight 370. Stand by. We're expecting results fairly soon.

(COMMERCIAL BREAK)

BLITZER: Our special coverage of mystery of Flight 370 will continue shortly.

But right now, another major story we're following. Search crews desperately looking for survivors after a ferry capsized off South Korea. Throwing hundreds into the freezing waters, many of them high- school students.

CNN's Paula Hancocks is joining us now from the scene. She's in South Korea. What's the very latest, Paula?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, Wolf, I'm just on the harbor here in Jindo on the southwest tip of South Korea. The people you can see behind me are the family members of those passengers who are still unaccounted for.

Now, they have been here all night. They have been sitting by the water's edge, staring out to the sea. This is all they can do at this point. Willing their children, these high-school students, to come back to them.

But hope is fading. It's almost 23 hours since the first -- the first sign that there was trouble from this ship.

(BEGIN VIDEOTAPE) HANCOCKS (voice-over): All day, rescue helicopters and boats rushed to the scene, as panic-stricken passengers clung to life: some holding onto the capsized ferry, others floating in the water. More than 160 have been rescued.

Tonight, divers are still searching for almost 300 people still missing. Officials say hundreds were onboard the South Korean ferry, bound for a resort island off the southwest coast of Korea. Most of them high-school students on a field trip.

This cell-phone video, claimed to be taken inside the sinking ferry, shows passengers in life vests taking cover, raising questions about how the crew handled the incident.

UNIDENTIFIED MALE (through translator): Don't move. If you move, it is more dangerous. Don't move.

HANCOCKS: Some passengers say they were given conflicting instructions over the P.A. system.

UNIDENTIFIED FEMALE (through translator): We were told to stay where you are, so we kept staying, but later on, the water level came up, so we were beside ourselves. Kids were screaming out of terror, shouting for help.

HANCOCKS: The ferry tilted to one side and sunk within two hours of the first distress call. Investigators still don't know why it went down.

UNIDENTIFIED MALE (through translator): People screamed in the ship. It tilted, and stuff fell down. Even people came sliding down.

HANCOCKS: Tonight, parents are left gripping cell phones, waiting for calls that may never come.

Officials are posting the names of passengers. When a name is circled, it means the person has been rescued. For those whose loved ones have been found, uncontrollable emotion.

For others, heartbreak.

(END VIDEOTAPE)

HANCOCKS: And it's heartbreak coupled with desperation here in this harbor, and, of course, that is now turning into anger in some cases. Anger against the coast guard. Some of these families simply believe that not enough is being done. They're going out on boats to see the scene themselves, and they're saying it doesn't look like a search and rescue operation; simply a search operation -- Wolf.

BLITZER: Paula Hancocks. A heartbreaking story there. We'll stay in close touch with you. Thank you very much.

Just ahead, Ukrainian troops and tanks marching into cities under pro- Russian control. Are they headed for a conflict?

We're also standing by for today's search results from its latest dive.

(COMMERCIAL BREAK)

BLITZER: All right. This just coming in to THE SITUATION ROOM: new remarks by President Obama about the crisis in Ukraine.

Let's bring in our White House correspondent Michelle Kosinski.

Michelle, what did he say?

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Hi, Wolf.

The president said neither U.S. nor Russia at this point want war. But today, senior administration officials told us that these talks coming up tomorrow, U.S., Russia, Ukraine, and the E.U., that they have very little confidence that that will lead to anything positive.

As a result, the administration has already established expanded sanctions ready. They've identified targets. But we know now that they will only include more individuals and entities. Not those expanded sweeping sanctions over entire sections of Russia's economy. They told us that will only happen if Russia invades Ukraine.

They also say those sanctions, thus -- this far, have been a deterrent. Here's the president.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What you've already seen is the Russian economy weaker, capital fleeing out of Russia. You know, Mr. Putin's decisions are not just bad for Ukraine over the long term. They're going to be bad for Russia.

(END VIDEO CLIP)

KOSINSKI: I think what was interesting today was to hear senior administration officials talk about what they see as Putin's mindset. They don't think he had plans to invade Crimea, that it was opportunistic. Then massing troops at the border, they believe that Putin is just sort of testing his luck, seeing how far he can go, putting pressure there and still leaving some at least show of a diplomatic window open -- Wolf.

BLITZER: All right. Michelle, thank you. Michelle Kosinski with the latest from the White House.

Ukraine's push to quell its eastern provinces is backfiring. As troops and armored vehicles move east, pro-Russian militants appear to be seizing their equipment, even taking two soldiers hostage.

Our senior national correspondent Nick Paton Walsh is on the ground for us in eastern Ukraine with more.

Nick, what are you seeing?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Wolf, ahead of the talks in Geneva, it seems as though pro-Russian militants here are giving Putin the ideal position to negotiate with the momentum, absolutely the past few days. They're going from town to town and today, as you said, beginning to take over Ukrainian armor.

(BEGIN VIDEOTAPE)

WALSH (voice-over): Ukraine's army in a spin. These vehicles began this day in Ukrainian hands but are now paraded by pro-Russian militants. The armored personnel carriers were blocked by local residents for these men to seize.

Concerned local activists, or Russian special forces depending on whether you're listening to officials in Moscow or Kiev.

The best equipment: sniper rifles, very disciplined.

(on camera): These pictures are pretty much the worst nightmare for the Kiev central government. They're seeing here the force they sent in to take on these pro-Russian militants effectively giving up their armor within hours of being here.

(voice-over): They at the power here in control. Locals quite relaxed.

Backed by this man who says he's from Simferopol in Crimea that a month ago Russia annexed.

"People of Donetsk (ph) ask for our help," he says.

The Ukrainian minister of defense trying to find out what happened could only fly overhead. "The self-declared new mayor tells us the Ukrainian soldiers haven't surrendered yet and are being fed lunch." Even he takes his orders from the men in green.

Ukraine's army stuck in the skies and the nearby airfield, still trying to drive through this village when this happened. They're stuck, swamped by locals furious at shots they say they fired in the air and damage they did by driving into a car. Paratroopers groggy, grimy, sleepless for two days.

(on camera): It is supposed to be some of the most elite troops Kiev could throw at eastern Ukraine. And here they've run into an almost insurmountable problem based on the fact rightly or wrongly a lot of these locals in this very throw at eastern Ukraine. Here they've run into an almost insurmountable problem based on the fact rightly or wrongly a lot of these locals in this very poor village simply don't like the government in Kiev.

(voice-over): They're physically closer to Russia here than the Kiev government they feel ignored by.

(INAUDIBLE) Alexander tries to talk a way out.

"We were once ordered to intervene in the protest in central Kiev," he says, "but not one of our paratroopers obeyed. I ask you to let us go out the way we came in." This woman says she was shot at. Listen to the reaction, but the colonel says they didn't shoot.

An Afghan war veteran and police chief try to mediate. A pro-Russian militant leader joins. Eventually, the soldiers agree to give up their firing blocks, counting them out slowly, and leave.

Kiev yet to regain any authority here, stumbling (INAUDIBLE)

(END VIDEOTAPE)

WALSH: In many ways, we're seeing a repeat of Crimea here, suggestions we could even hear calls for referendum from these pro- Russian protesters, and really, the issue is do we see an intervention from Russia? It seems this kind of guerrilla war on the ground is doing very well in taking territory. Does Moscow need to intervene fully with its army?

Well, if we see proper bloodshed here, that's entirely possible. Despite Kremlin assurances they don't want warfare, there's still 40,000 troops across the border, which NATO today said they are at a high state of readiness.

But final call, that's in the mind of Putin and no one can really look into that -- Wolf.

BLITZER: Good point. Nick Paton Walsh, thank you.

Amid the tense standoffs on the ground, U.S. and Russian officials are preparing to meet tomorrow with representative from Ukraine and the European Union.

Our foreign affairs reporter Elise Labott has been tracking all the high level diplomacy that's going on.

Elise, so, what can we expect from this meeting?

ELISE LABOTT, CNN FOREIGN AFFAIRS REPORTER: Well, Wolf, this was build expectations are low. This was build as an opportunity to try and de-escalate the situation. President Obama just telling CBS moments ago we don't need a war. But the U.S. is certainly bracing for some kind of conflict. Just about an hour ago, the State Department sent out a travel warning urging Americans not to travel to eastern Ukraine because of some type of potential conflict.

But when you look at these talks and going into them, Wolf, it does seem that the Russians and Foreign Minister Lavrov have the leverage here. Even with 40,000 troops at the border and Russian provocateurs in the country trying to provoke the Ukrainians, these talks are -- when you hear from U.S. officials, they're saying what the Ukrainians are going to be presenting. And that's a lot of things the Russians have been asking for, such as decentralization of these regions in eastern Ukraine, more autonomy for that region, constitutional reform.

So, the Russians seem to be dictating the terms, Wolf, not negotiating. BLITZER: Good point as well. So what happens if there is no political solution at this upcoming meeting?

LABOTT: Well, I think both sides want to check the diplomatic box, if you will. President Putin certainly isn't going to roll into Ukraine any time in the next 24 hours. They think he wants to see what happens after these talks.

And the U.S. has already said it's readying these sanctions, getting them ready. I think some of the targets that they're looking at, possibly these leaders of these known institutions, this is what the U.S. feels is really going to put the pressure on President Putin. If these cronies are the ones that are siding with him and their pocketbook is affected, they're hoping that that would put the pressure on him.

BLITZER: Do you see any indication, Elise, that the U.S., the Obama administration is getting ready to provide military equipment to the Ukrainians?

LABOTT: I think they're very reluctant to do that, wolf, for a couple of reasons. First of all, what are they going to send them in the next 24 to 48 hours that could really repel the Russian army with 40,000 troops at the border? The light arms small weapons that they could send right now really would not make a difference. And they don't want to have the Ukrainians engage in more conflict and escalate the situation.

And also, the U.S. doesn't want to get involved in a proxy war with Russia, Wolf. You saw this reluctance with Syria. Certainly, if the U.S. is aiding Ukrainian army in a proxy war with Russia, that could be a big problem going forward.

BLITZER: Elise Labott, reporting for us from the State Department -- thank you.

Just ahead, new information coming into THE SITUATION ROOM on the search for Flight 370. Stand by for the latest developments.

(COMMERCIAL BREAK)

BLITZER: We're following all the developments in the search for Flight 370.

We could get new information coming in the next few hours about a potentially critical piece of evidence, an oil slick that was discovered near the search area in the Indian Ocean. It's being analyzed right now to determine if it may have come from the missing plane.

We're also standing by to see if an underwater search drone is able to complete this, its third mission. The Bluefin 21's first two dives were first cut short because of problems. So far, it hasn't detected any sign of jet debris. Hopefully, we'll get some new information soon. Finally, we're getting some indication of the cost of the U.S. portion of the mission. An official with the naval systems command says the U.S. Navy has budgeted about $3.6 million for its portion. That covers the deployment of the Bluefin and the towed pinger locator, which originally found those underwater signals more than a week ago.

Remember, you can always follow us on Twitter. Go ahead and tweet me @WolfBlitzer. You can tweet the show @CNNSitRoom.

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Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.

"ERIN BURNETT OUTFRONT" starts right now.