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THE SITUATION ROOM

Four Rockets Reach Jerusalem, Two Intercepted; Interview with Mark Regev; Israel: Gaza Militants Have 10,000 Rockets; Interview with Daniel Shapiro

Aired July 10, 2014 - 17:00   ET

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


WOLF BLITZER, HOST: Happening now, this is a SITUATION ROOM special report, Brink of War.

Air war sirens scream in Israeli cities, sending people running for shelter, as rockets rain down from Gaza. Israeli aircraft pound militant targets in Gaza, as the death toll there rises, especially among civilians.

Is a ground war next?

Tanks deploying near the Gaza border with thousands of Israeli reserve troops on standby for a possible incursion.

And nuclear nightmare -- terrorists seize 90 pounds of radioactive material.

How big a danger does this pose in Iraq and to the United States?

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

I'm Wolf Blitzer in Jerusalem.

You're in THE SITUATION ROOM.

(SIRENS)

BLITZER: We begin with the breaking news. Sirens wail here in Jerusalem today, as smoke trails arched across the sky, as rockets reached far from Gaza, to threaten the very heart of Israel. The Israeli military says four rockets reached this far today. Two were intercepted. The other two fell in open areas.

Israel is hitting back hard at Hamas with dozens more air strikes. But Gaza civilians are paying a very heavy price.

Mourners today buried a young girl killed in one of the Israeli air strikes.

Our correspondents are standing by with the kind of coverage only CNN can deliver. And I'll speak with a spokesman for Israel's prime minister, as well as the United States ambassador to Israel.

We'll also get the Palestinian point of view.

But let's begin with CNN's Diana Magnay.

She's in the Israeli city of Ashkelon. That's right near the border with Gaza -- Diana, what's the latest there?

DIANA MAGNAY, CNN CORRESPONDENT: Hi, Wolf.

Well, we noticed a pattern, really, over the last three days of Operation Protective Edge, that shortly after nightfall, Hamas and Islamic Jihad tend to send out a volley of rockets, which went over our head tonight.

And you see the reaction on the streets around you. You hear the sirens. People have an app that alerts them of incoming rockets.

And they'll go over your head. And then people will make their telephone calls, because they know where they've landed, and check that their friends are all right. And then life goes back to normal.

But Benjamin Netanyahu, the Israeli prime minister, Wolf, has warned the people of Israel that this could be a tough, complex and complicated campaign.

Let's take a look.

(BEGIN VIDEOTAPE)

MAGNAY (voice-over): Hamas rockets, Israeli air strikes and air raid sirens sending Israelis running for shelter. One rocket hitting the Israeli town of Ashdod tonight causing damage. An earlier rocket hitting Beersheba, spraying shrapnel, damaging buildings. In the Eshkol region, two Israeli soldiers injured by a rocket.

Here in Ashkelon, where this rocket fell today, the mayor says he and his people will endure whatever they need to, even if it takes an Israeli ground attack to destroy Hamas' arsenal, believed to be about 10,000 missiles.

MAYOR ITAMAR SHIMONI, ASHKELON MAYOR (through translator): We will have the city in the shelters as long as it takes for the IDF to win, even if it takes a year.

MAGNAY: Air strikes in Gaza were clearly visible from our vantage point on the Israeli side of the border. We could see Hamas rockets going up from Gaza and mid-air interceptions by Israeli defenses, each side's air capabilities playing out in the skies.

Israeli officials say they are targeting rocket launchers like this one, and Hamas command and control centers, often their family homes.

Authorities in Gaza say dozens of Palestinians have been killed so far this week, many of them children. This funeral was for a 9-year-old girl named Yasmin, who died this morning after an air strike in Gaza on Wednesday. Her father carries her tiny body down the street. Her uncle calls the Israelis cowards for targeting a little girl. MUATH AL MAROUF (through translator): What wrong did this innocent child commit for you to deliberately target her?

MAGNAY: Hamas says Israel started it with its crackdown in the West Bank after last month's kidnappings of three Israeli teens. So far, neither side is talking about the kind of cease-fire that has ended past conflicts.

Israeli tanks poised near the border in case Israel orders a ground invasion.

UNIDENTIFIED MALE: Some time in the next few days, fatigue, battle weariness will set in. And that's when either or both parties will reach out for help in achieving that cease-fire. But I wouldn't expect it in the next 24 hours.

I think the goals of both sides right now are to simply to inflict as much harm as possible on the other.

(END VIDEO TAPE)

MAGNAY: Amongst the international community, by the muted nature of their reaction, this sense that they've seen these two warring parties argue and fight in this way so many times before -- Wolf.

BLITZER: Such a sad, sad story.

Diana Magnay in Israel, but very close to the border with Gaza.

We'll get back to you.

Palestinians, meanwhile, they are clearly paying a very heavy price for the hundreds of rockets launched into Israel by Hamas. But amid all the death and the destruction in Gaza, there is also defiance.

Let's go live to our senior international correspondent, Ben Wedeman.

He's in Gaza City for us -- Ben, you got to ride around Gaza today from the northern part to the southern part. Tell us what you saw.

BEN WEDEMAN, CNN CORRESPONDENT: Well, what we saw, Wolf, was in many of the towns and villages of Gaza, that there are a lot of destroyed houses, people really hunkering down in the expectation that things are going to be worse.

Now we were in Beit Hanoun, which is very close to the Israeli border to the north. There, residents told us they had been informed by Israeli authorities that they should leave the area. There had been 100,000 people living in that area. And they really have nowhere to go. Some, in fact, had padlocked up their houses and left. But for the most part, it looked like the residents were still there.

But they're very, very worried. In fact, we went up on the roof of one man's house. We wanted to just take a panoramic picture of the area. But there were drones overhead and he said, please, leave. Get out of here. I'm scared with your presence on the roof. And then we went down in the street. And then moments later, we saw four missiles flying over our head. I believe those are the ones that landed in the Jerusalem area.

Now, normally, when rockets are fired out of Gaza like that, and other volleys we saw this evening near here, there's a quick response. Tonight, it's very eerily quiet.

Now, we also have radios where we monitor the radio traffic of the Hamas security and police. And that's gone very quiet, as well.

So the worry here and the expectation here, possibly, is that a ground incursion of some sort is very close at hand -- Wolf.

BLITZER: Because, as you say, Ben, that quiet could be the quiet just before the storm, because you get a sense that the Israelis are getting ready to move.

But I assume that that's what the Palestinians in Gaza suspect.

WEDEMAN: That is what they expect. And they've seen this before. I was here in 2009 when Israel made an incursion as part of that flare- up. And it was scary. It was very bloody. There was a lot of destruction, a lot of civilian casualties. And people are afraid that that will be repeated again.

So those who can leave will leave. But you cannot get out of Gaza. There's nowhere to go.

We were at the Egyptian border this afternoon. There were a few people trying to get out, but they had Egyptian passports. One man I spoke to had a Canadian passport.

But the Egyptians are not letting Gazans out, so they're stuck and they've got nowhere to go and nowhere to hide -- Wolf.

BLITZER: And, very quickly, Ben, the rockets, though, from Gaza into Israel, there's no indication that's about to stop, right?

WEDEMAN: None whatsoever. Now, normally, about the time of sunset, you have volleys going out. We haven't seen anything in this particular area since. But there's been no indication from any official or spokesman from Hamas or Islamic Jihad or any of the other groups here that they intend to stop. They've said they will not stop. They said they have their conditions and they will not meet quiet with quiet, in the word of one official from Islamic Jihad -- Wolf.

BLITZER: Ben Wedeman reporting for us from Gaza.

Be careful over there.

Let's bring in Mark Regev now.

He's a spokesman for the Israeli prime minister, Benjamin Netanyahu.

He's here with me in Jerusalem.

Mark, thanks very much for coming in.

MARK REGEV, SPOKESMAN, ISRAELI PRIME MINISTER BENJAMIN NETANYAHU: My pleasure.

BLITZER: All indications are Israeli troops are getting ready to move on the ground into Gaza.

Is that -- is that accurate?

REGEV: Those troops are ready to move when we decide it's the right time for them to move. We're ready for any contingency and our overriding goal is ultimately defensive. We want to stop those rockets. We want to protect our civilian population.

BLITZER: The cabinet authorized the activation of up to 40,000 Israeli reservists.

How many have already been called up?

REGEV: I can't go into that sort of operational detail. I can say we've called up the reservists. We've made the deployments. We're ready to go if we need to go.

Our goal here is to protect the people of Israel, who have been on the incoming side of these Hamas rockets from Gaza for too long.

Ultimately, we don't underestimate Hamas. They're a formidable military terrorist machine. They've been building that machine over the last few years. That's why they can target Tel Aviv and Jerusalem, the very heart of our country, with these rockets.

We have to now dismantle that machine. That's what we have started to do. That's what we'll continue to do.

BLITZER: So if they were to stop firing rockets and missiles into Israel, you would still want to dismantle that arsenal, is that what you're saying?

REGEV: Let them first stop firing and we'll see what will happen.

BLITZER: Well, then you're leaving open the possibility that that could result in a cease-fire?

REGEV: I can tell you what we don't want. We don't want a situation where Hamas takes a time out. In other words, we've been hitting Hamas hard. We've been hitting their missiles. We've been hitting their launching sites. We've been hitting their command and control. They have been taking severe blows from Israel.

We don't want a situation where they go, "time out," like in basketball, and they say we time -- we need time to rest, regroup, lick our wounds and then attack Israel tomorrow or the day after. That's unacceptable. BLITZER: Well, so it -- it suggests to me that you are going to go in and try to destroy as many of those rockets and missiles as you possibly can.

REGEV: Wolf, all options are on the table. And we're doing what any country in our situation would do.

Which member of the community of nations would stand by quietly and see its civilian population targeted by terrorists over the -- on the other side of the frontier with rockets day after day, week after week?

It has to stop.

BLITZER: Your U.N. Ambassador today -- there was a meeting of the U.N. Security Council. Your U.N. Ambassador, at the meeting, did something unusual. He played the air raid sirens that have been going off in Israel.

Let me play a little bit of that for you and for our viewers.

(BEGIN VIDEO CLIP)

(SIREN)

RON PROSOR, ISRAELI AMBASSADOR TO THE UNITED NATIONS: Fifteen seconds -- that's how much time you have to run for your life.

(END VIDEO CLIP)

BLITZER: All right, so you heard -- you heard him make that point. He was obviously trying to be dramatic.

But is there anything going on around this region that the U.N. Security Council, elsewhere, Egypt, Qatar, anyone actively seeking a cease-fire?

REGEV: Well, if you want to talk about the regional impact, I think it's clear that Hamas belongs to the same family, for want of a better word, of extremist Islamist groups, like ISIS in Iraq, like Hezbollah in Lebanon, like Boko Haram in Nigeria. These are, unfortunately, very extreme, very dangerous groups of fanatics that have no qualms whatsoever about targeting innocent people, about kidnapping and murder.

And it's clear that the whole region, the moderates have to unite against these extremists.

BLITZER: You know, a lot of civilians, including young kids, are getting killed in Gaza right now by these Israeli air strikes. Some human rights groups are criticizing Israel for engaging in what they call war crimes.

You say?

REGEV: We are making a maximum effort in a very, very difficult combat situation to avoid all possible loss of life amongst innocent civilians. The civilian population of Gaza is not our enemy.

I saw a report yesterday of your own CNN's Ben Wedeman. He was talking about how the civilian population of Gaza are actually angry with Hamas for escalating the crisis and causing this -- this conflict that we're all in now.

The people of Gaza are not our enemies. And we really -- we've invested billions in precision munitions to do whatever is humanly possible to avoid seeing what the expert called collateral damage.

BLITZER: What would be the end game if Israel were to move tanks, armored personnel carriers, ground forces into Gaza?

What would be the point?

REGEV: Two things. First of all, to dismantle that terrorist military machine, those rockets, that infrastructure that threatens every Israeli civilian. So to dismantle that very formidable threat.

And two, we want to come after this -- out of this conflict with Hamas understanding that it cannot target Israeli civilians with these rockets, they -- they cannot continue to do that with impunity.

BLITZER: But you would not want to reoc -- Israel withdrew from Gaza in 2005.

Are you planning on reoccupying Gaza once again?

REGEV: I cannot go into what we might or might not do. I can say the following.

Our strategic goal is defensive. It is to protect our people from these deadly rockets.

BLITZER: Mark Regev, thanks very much for coming in.

REGEV: My pleasure.

BLITZER: Mark Regev is a spokesman for the Israeli prime minister, Benjamin Netanyahu.

Up next, Hamas and other militant groups have already fired hundreds of rockets into Israel, but they may have some 10,000 rockets or missiles. We're taking a closer look at the arsenal they have.

And with the peace process in tatters, is there anything the United States can do about this deadly crisis?

I'll ask the U.S. ambassador to Israel, Dan Shapiro. He's here with me in Jerusalem.

(COMMERCIAL BREAK)

BLITZER: Hamas militants have fired hundreds of rockets from Gaza into Israel. But that's just a small part of the arsenal. Some of those are reaching deep, deep into Israel. So just how strong is Hamas? Our Pentagon correspondent Barbara

Starr, has been looking into this part of the story for us. What are you finding out, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, make no mistake about it. Both sides in this conflict are eyeballing each other's military capabilities.

(BEGIN VIDEOTAPE)

STARR (voice-over): Israelis running for shelter in Tel Aviv and Jerusalem, seeking safety from Hamas rockets launched from Gaza, now a daily occurrence across Israel.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: No country on earth would remain passive in the face of hundreds of rockets fired on its cities, and Israel is no exception.

STARR: Israel calculates there are 10,000 rockets in Gaza in the hands of various terrorist groups.

LT. COL. RICK FRANCONA (RET.), CNN MILITARY ANALYST: The amount of rockets that we're seeing come out of Hamas and the Gaza Strip is really kind of alarming. They're launching salvos of 40 at a time, over 100 a day.

STARR: A huge worry? The Hamas rocket called the M-302. With a range of about 100 miles, it allows Hamas to reach deeper into Israel than ever before.

Israel says Hamas is getting outside help. In march, Israeli forces stopped a ship containing M-302s that the Israelis said came from Iran and were headed for Gaza. Several rockets are also locally produced in Gaza. Israeli air strikes now aiming at rocket launch sites, production factories and other militant targets.

Israel's main defense, this system called the Iron Dome. Strategically placed units around Israel launched missiles against incoming rockets that appear headed for population centers. So far, Israel says it's worked well much of the time, but Hamas is looking for vulnerability.

FRANCONA: I think what they're trying to do is fire as many as they can in a short period of time, because that overwhelms the Iron Dome sensors.

STARR: The U.S. has already spent nearly $900 million on the Iron Dome, just part of the $3 billion in U.S. funding for Israel's defenses. The Pentagon is keeping a close eye on whether Israel will launch a ground incursion into Gaza. U.S. officials say it's not career to them what will happen next.

(END VIDEOTAPE)

STARR: Very little known, Wolf. The U.S. keeps about $1 billion worth of weapons stockpiled inside Israel. And in the event of an emergency, the Israelis can ask to use that gear. Right now the Israelis are saying they have everything they need -- Wolf.

BLITZER: All right. Barbara, thank you. Barbara Starr at the Pentagon.

Let's go in depth now with Khaled ElGindy. He's a former adviser to the Palestinian Authority leadership on negotiations with Israel. He's now with the Brookings Institution in Washington.

Khaled, thanks very much for joining us. How strong is Hamas right now?

KHALED ELGINDY, FORMER ADVISER, PALESTINIAN AUTHORITY: It's actually quite weak. Hamas is in one of the weakest positions that it's been in many, many years. The changes that have happened in the region and especially in Egypt; their closure of the tunnels and its access to finances and weapons have been severely diminished over the last year in particular. So they're in a much weaker position. And I think part of the motivation for sort of, you know, taking the Israeli bait, if you will, in this latest round of violence has been, I think, the fact that they're in a state of disarray and, you know, in a way I think it's an act of desperation by a very weak Hamas.

BLITZER: Where are they getting their support? Because some of these missiles are pretty sophisticated.

ELGINDY: Yes. I mean, they have been stockpiling these weapons for a long time. So, even the disruption of the flow of weapons. I think it doesn't take away from their existing cache. I mean, they have quite a -- quite a substantive stockpile.

So right now I think they're clearly drawing on that. I think it's very hard for almost anything to get in and out of Gaza. So they're -- they're almost, I would say, basically, have reached their capacity as far as being able to arm themselves. But at the end of the day, whatever Hamas has in terms of arms is minuscule in comparison to the massive Israeli force that Israel brings to bear.

BLITZER: Walk us through what would happen in Gaza, in the broader Palestinian community, in the Arab and Muslim world, if Israel were, as I suspect they will, move ground troops, tanks, armored personnel carriers into Gaza in the next day or two?

ELGINDY: Well, I think you're likely to see public opinion be sort of -- you'll see a lot of outrage in the Arab street. Although perhaps not as much as in the past, given the many other crises happening in the region. The Egyptians are distracted. Obviously, the Syrians and Iraqis and sort of major powers in the region are distracted with their own internal problems, as well as citizens in those -- in those countries.

But I think in a ground incursion, certainly would -- would inflict more casualties, would -- is likely to inflame Arab public opinion, especially if it's a prolonged conflict. It's also more likely to inflict Israeli casualties than obviously simply bombing from the air.

BLITZER: That's another excellent point. As you point out, Egypt was able, the U.S. in the background, to broker a ceasefire between Israel and Hamas, but at the end of 2012, but Egypt is sort of staying out of it this time, right?

ELGINDY: Yes. I mean, they're staying out of it, I think, for a number of reasons. One is that they're distracted with their own internal problems and, secondly, the new regime in Egypt is not particularly friendly towards Hamas, which it sees as an ally of brotherhood.

And so Hamas is not in the good graces, unlike two years ago where then-President Morsi had a direct line of communication with Hamas. There isn't that counterpart now in Egypt to serve as a go between. And so, you know, on the one hand, Egyptians are distracted. On the other hand, there really isn't the will to intervene.

BLITZER: Do you believe this sort of new relationship that has emerged between the Palestinian Authority, Mahmoud Abbas, the president and the Palestinian Authority and Hamas, is that going to survive, or is that going to go away?

ELGINDY: I think it will be very hard, from Mahmoud Abbas' domestic political standpoint for him to disavow the reconciliation agreement with Hamas. It was seen as a major accomplishment in an environment where there are very few accomplishments. Certainly, the peace process has been a failure. Everything else that President Abbas has tried to do hasn't worked.

The one area that he can have -- claim relative success is in at least attempting to fix the Palestinian house. So I don't think it will be that easy to completely sever what is essentially a very minimal reconciliation agreement to begin with.

But it does seem clear that I think that was at least one of the goals of Israel in embarking on -- on this path from the beginning, from the West Bank incursions and the campaign that was carried out over the previous three weeks, as well as the air campaign against Gaza. I think one of the major goals was to disrupt, if not completely destroy the Palestinian reconciliation agreement.

BLITZER: I'll be speaking shortly with the U.S. ambassador to Israel. What do the Palestinians want the Obama administration to do right now?

ELGINDY: Well, I think the most urgent priority for Palestinians, particularly those in Gaza, but also in the West Bank, is to see an end to the killing, to see a ceasefire. And at that point, then a political process maybe can be under way.

I think one of the problems with the approaches to Gaza, both by Israel and the United States, has been that there's a tendency to treat Gaza as though it were a separate and distinct conflict from the overall Israeli/Palestinian conflict. That there's something called a Hamas/Israel conflict, and then there's, you know, the conflict with the Palestinian Authority in which they engage in negotiations.

The reality is that Gaza is part of the same conflict. And trying to deal with it separately, I think, is one of the reasons why we're in this mess on a recurring basis. You know, we've seen this before over and over. It's the seventh major military operation by Israel in nine years, and it clearly suggests that the approach to Gaza is simply not working.

And I think the underlying mistake is to try and somehow deal with Gaza as though it were separate from the rest of the Palestinian/Israeli equation. Part of the problem is that there hasn't been a unified Palestinian leadership, and we ought to be supporting that.

BLITZER: Khaled ElGindy, thanks very much for joining us. Good, important insight from you. We'll certainly have you back. Appreciate it very much.

ELGINDY: Thank you.

BLITZER: Coming up, we're live here in Jerusalem. Improved missiles, rocketing deeper and deeper into Israel. A closer look at the size and strength of the Hamas arsenal. That's coming up.

And is a ground invasion by the Israeli military imminent? I'll ask the U.S. ambassador to Israel. My interview with him is coming up live as we continue to follow the breaking news.

(COMMERCIAL BREAK)

BLITZER: And we got breaking news. We've just learned that President Obama has just spoken with the Israeli prime minister, Benjamin Netanyahu, on the phone, on this current crisis between the Israelis and Hamas in Gaza.

Joining us now, the United States ambassador to Israel, Daniel Shapiro who knows all about this phone conversation.

They haven't spoken that much lately. This is an important development. Can you give us a readout, what these two leaders may have discussed?

DANIEL SHAPIRO, U.S. AMBASSADOR TO ISRAEL: Sure. Well, they speak quite regularly on all sorts of matters.

BLITZER: Since this crisis started?

SHAPIRO: No, no. This is I think their first conversation in the last few days, although Secretary Kerry spoke with Prime Minister Netanyahu within the last day or two. But within the last hour they've spoken. President Obama made very clear that we condemn strongly the terrorist rocket fire of Hamas and other organizations in Gaza against the Israeli civilian population.

No country should have to endure that kind of attack from a terrorist organization and he made also clear that we support Israel's right of self-defense and that they have every right to conduct that. We're obviously proud that part of that self-defense effort includes the Iron Dome Missile Defense System which President Obama and the U.S. administration has supported strongly for the last five years.

BLITZER: That's funded a big part of that --

SHAPIRO: Over $900 million.

BLITZER: Because we've been hearing from State Department spokesmen and spokeswoman and NSE officials urging restraint on Israel. I assume the president asked Prime Minister Netanyahu to exercise restraint. Is that right?

SHAPIRO: What the president would have told the prime minister was that we supported Israel's right of self-defense. Obviously we would hope that all sides would try to minimize any civilian casualties. We know that Hamas does not do that. They intentionally target civilian populations and they shoot from within civilian populations.

We believe Israel takes its responsibilities to minimize civilian casualties very seriously. Obviously civilian casualties have happened, will happen on both sides, and that's of grave concern, and we regret them and mourn them and extend sympathies to all families who endure that.

But what we've said to Israel and we've said to others is that our goal is to end the rocket fire by Hamas and other terrorist organizations so that will allow us to deescalate and return to the state of calm that prevailed after the November 2012 ceasefire agreement.

BLITZER: Did the president ask Prime Minister Netanyahu not to send ground forces into Gaza?

SHAPIRO: You know, our focus, Wolf, is on deescalating from the point we're at now. Nobody wants to see a ground invasion we obviously know casualties on all sides would increase if that occurred. The way this needs to end is Hamas needs to end its rocket fire against civilian populations in Israel, that will allow a de-escalation and a return to the calm.

To that end, President Obama, Secretary Kerry and our whole administration are reaching out to various parties around the region, Egypt and other leaders who might be able to bring some influence to bear that would convince Hamas to end that rocket fire to allow that de-escalation and return to calm.

BLITZER: Because earlier this hour we heard the spokesman for Prime Minister Netanyahu, Mark Regev, he was standing right where you are, say Israel is not ready to give to just give them an opportunity to regroup and have a time-out, if you will, even if they were to stop launching rockets and missiles into Israel. If that were just that opportunity for them to regroup that's not good enough for Israel.

SHAPIRO: What I think our discussion with Israel, with Egypt, with the Palestinian Authority and with other leaders in this region is about right now is convincing Hamas through the various means of influence that can be brought to bear, certainly Israel's own self- defense measures against Hamas are included in that. But so are the relationships that some of these other governments have with Hamas, to convince them that ending this rocket fire is the right way to de- escalate, to return to a state of calm that prevailed since November 2012. And that would benefit the civilian population in Gaza as well as of course the population in Israel.

BLITZER: The U.S. government considers Hamas a terrorist organization.

SHAPIRO: Absolutely.

BLITZER: And does not have any contact. Is that right?

SHAPIRO: Correct. That's correct.

BLITZER: Are you doing any indirect communications with Hamas through third parties?

SHAPIRO: We don't have a relationship with Hamas or any contact with Hamas under our law and policy because Hamas is a designated foreign terrorist organization. In the past Egypt has played a key role as the go-between, if you will, between Israel and Hamas during these kinds of --

BLITZER: They're not doing that now?

SHAPIRO: Egypt I think has its contacts. Whether it will play the same role it played in previous rounds is I think remains to be seen. There may be other parties who can step in and --

BLITZER: Who can broker a ceasefire, real ceasefire between the Israelis and the Palestinians in Gaza?

SHAPIRO: What we have said to Israel, to the Palestinian Authority, to Egypt is that Secretary Kerry and our team is available to work with all those parties. And it may include others. It may include Qatar and Secretary Kerry has spoken --

BLITZER: Does Qatar have a good relationship with Hamas?

SHAPIRO: They have relations and of course Secretary Kerry has spoken with the foreign minister in Qatar. There are countries, Turkey perhaps, that have relationships.

What we need to do is draw on those relationships, to draw on the various influence that can be brought to bear to get Hamas to end the terrorist rocket fire against civilian population.

BLITZER: Secretary of State John Kerry, he's not far away. He's in the region, he's in Afghanistan as we speak right now. Some are saying he should come here to talk to the Israelis, talk to the Palestinian Authority, President Mahmoud Abbas, and get back involved in this process. You say?

SHAPIRO: Well, we are talking to them. Secretary Kerry --

BLITZER: But come over here directly. SHAPIRO: If the moment calls for that, and we believe that would be

useful to getting to our goal of ending the rocket fire and de- escalating and returning to the ceasefire, calm, I'm sure Secretary Kerry would be willing to do that. Obviously the moment has to be right. It has to be prepared. Already those conversations are taking place. As you mentioned, President Obama's discussion with Prime Minister Netanyahu this evening and of course Secretary Kerry's active diplomacy and discussions with the prime minister, President Abbas, the Egyptians and others.

BLITZER: Because I know the secretary has spoken with President Abbas of the Palestinian Authorities. Is the president going to call him as well?

SHAPIRO: They have spoken many times. I don't know precisely when that call might take place. But I have no doubt that -- in the course of events they will continue to be in touch. We have many other channels to communicate with President Abbas. And we want to make sure that he and other parties are using whatever means they have to get this crisis to de-escalate rather than escalate.

BLITZER: I am getting all the signals here from various, various sources that the Israelis are going to move in on the ground. I assume you're getting those same signals.

SHAPIRO: We've certainly seen indications that they've made preparations for that. And we know that. They've been open about it. I think nobody wants to see a ground invasion. I think they've been clear that that's not their preference either. Their preference is to see the rocket fire end. That's what we are trying to do. That is the correct way to begin the de-escalatory process. Rather than an escalation which we know will bring about greater casualties on all sides.

BLITZER: Does the Obama administration and you're the -- you're the ambassador here of the United States in Israel. Does the United States want the Palestinian Authority to sever its connection with Hamas?

SHAPIRO: Well, the reconciliation agreement that was signed back in April was one that we thought was unwise and unhelpful and criticized it at the time. Subsequently an interim government was formed that does not include Hamas membership or Hamas individuals and it follows the program of President Abbas, which is to support a two-state solution, nonviolence, negotiations. The Quartet principles. We don't see reconciliation moving forward under the circumstances, certainly after the kidnap and murder of three Israeli teenagers in West Bank, certainly after the rocket fire by Hamas.

And so our focus is on working with the Palestinian Authority to engage in responsible behavior while isolating and changing the behavior of Hamas, which is -- which a --

BLITZER: One final question. The 15-year-old American kid who was brutally beaten by these close -- this Israeli police patrol whatever it was. We've all seen the horrible video. We've seen the aftermath of what happened to this young boy. You're trying to get him out of house arrest so he can go back home to Florida. Is that right?

SHAPIRO: We are, first of all, always concerned any time an American citizen is subjected to any kind of treatment like that. And indeed I think the Israeli government has taken it seriously, they've conducted an investigation by their Ministry of Justice to deal with the issue of the police brutality that appears to have taken place. We are working closely with Israel to resolve this case, to allow Tariq Khdeir to return home to Florida. We think that would be the best outcome and we hope we'll be able to include that in the near future.

BLITZER: Me. Ambassador, thanks very much for joining us.

SHAPIRO: Thanks, Wolf.

BLITZER: All right. We'll stay in close touch with you as this crisis, unfortunately, continues.

And as sirens sound constantly in Israeli towns and cities, Hamas rockets have been reaching deeper and deeper into Israel. Four made it as far as Jerusalem, where I am right now.

Let's get a closer look at those weapons and their growing range.

CNN's Tom Foreman has the latest -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: Wolf, this is exactly one of the reasons the tension is so very high right now because the range has changed from just a couple of years ago.

Let's get some reference points here. This is Israel, it's about the size of New Jersey, about 290 miles tip to tip. And you can see the relative width there. If you look at something like the mortars that they fire out from Gaza, it's going to go about this far. If you add in the very simple homemade rockets, they go about this far. Then you start looking at where they were a couple of years ago where their range, at best, went somewhere out to here. But this time, there has been, according to Israeli military analysts a real emphasis on developing better quality rockets that go all the way out here.

Now I say developing. It means developing in the sense that Hamas says they can manufacture some of these but more importantly you're talking about things like this. The M302 rocket, which was designed by China originally, it's possibly made in Syria. And they have some undetermined number of these. These are much more robust than anything we've seen before. Rockets that have a range of 62 or more miles, maybe 100, like Barbara said earlier. About 16 feet long. Limited accuracy.

But they've increased a sense of vulnerability all over Israel, Wolf, that was not there before. And that's helped to spur the military and political response.

BLITZER: Tom Foreman, excellent explanation. Thanks very much.

We're going to have a lot more live coverage, coming from Jerusalem, on this -- the crisis heating up. Coming up at the top of the hour, a SITUATION ROOM special report.

But up next, the spy scandal explodes. And Germany takes shocking action against the United States.

Plus terrorists with nuclear material. The frightening reality now in Iraq. Do they have enough to make some sort of crude but deadly dirty bomb?

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BLITZER: We're live here in Jerusalem. We'll get back to the escalating tension in the Middle East in a few moments but first, this just in to CNN, House Republicans have decided to sue the president of the United States, using a legal argument he violated the United States Constitution by changing the health care law's employer mandate.

The House Speaker John Boehner said in a statement just released, and I'm quoting now, "In 2013 the president changed the health care law without a vote of Congress effectively creating his own law by literally, literally waving the employer mandate and the penalties for failing to comply with it."

The House is expected to vote on a resolution, authorizing the legal action at the end of this month. The Republicans have a decisive majority, as you know, in the House of Representatives.

Other news, an extraordinary move almost unheard of among close allies. But Germany is now fed up, fed up with American surveillance and now expelling an American who is reportedly the CIA station chief at the United States embassy in Berlin.

Our senior White House correspondent Jim Acosta has details.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, Obama administration officials are staying tightlipped about these new allegations of U.S. spying in Germany but that's not the case back in Berlin, where the Germans are sounding off.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): Sick and tired of being spied on by the CIA and NSA German officials kicked out who they describe as the top intelligence operative at the U.S. embassy in Berlin, a drastic diplomatic step usually deserved for unfriendly nations.

URSULA VON DEM LEVEN, GERMAN DEFENSE MINISTER (Through Translator): The German government has reacted and asked the U.S. intelligence service official responsible for Germany to leave the country. We thus made clear that we do not tolerate this approach.

ACOSTA: Just in the last week the German government has announced two separate cases of officials, including an intelligence operative, accused of passing secrets to Washington. The subject of NSA surveillance on her own cell phone just last year, German Chancellor Angela Merkel has said enough is enough. ANGELA MERKEL, GERMAN CHANCELLOR (Through Translator): We have so

many problems and I think we should focus on the important things.

ACOSTA: Back at the State Department spokeswoman Jen Psaki was less outspoken.

JEN PSAKI, STATE DEPARTMENT SPOKESWOMAN: When we first get out of the way, we don't have any specific comment on that.

UNIDENTIFIED REPORTER: Do you think those reports are true?

PSAKI: I'm not going to have anything more to add on that front.

ACOSTA: Only saying that overtures from Washington to Berlin are under way to ease tensions.

PSAKI: Those will happen through diplomatic channels and we think those are often -- we're better served, our relationship is better served by having those take place through those channels.

ACOSTA: Defenders of U.S. spying say the CIA and NSA are collecting intelligence that saves lives.

ROBERT BAER, CNN NATIONAL SECURITY ANALYST: Look, the 9/11 hijackers started in Germany. We should be spying on them.

ACOSTA: Former CIA operative Bob Baer said the U.S. learned the hard way German intelligence has holes. After a terrorist cell in Hamburg went on to carry out the September 11th attacks.

BAER: If I were chief in Germany, I'd say, yes, I'm going to spy on the Germans. I'm going to find out what are -- what's the threat there? What's the terrorism threat? Because the Germans clearly don't have this completely covered.

ACOSTA: But now that the operative described in reports as the CIA station chief in Berlin has gotten the boot, members of Congress are worried about the damage done to a crucial national security partnership on issues from al Qaeda to Ukraine.

SEN. MARK UDALL (D), COLORADO: I am concerned that we are sending the wrong message to a key ally, which is Germany.

(END VIDEOTAPE)

ACOSTA: The U.S. already had a big diplomatic agenda on its hands before the German spying controversy. Now Secretary of State John Kerry will have to add Berlin to his to-do list, he's expected to speak with the German foreign minister in the coming days -- Wolf.

BLITZER: Jim Acosta, thanks very much.

The breaking news ahead live from right here in Jerusalem.

Is an Israeli ground invasion of Gaza imminent?

But up next, terrorists seize nuclear materials, raising new concern about a possible dirty bomb attack.

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BLITZER: We're live here in Jerusalem. We're going to have much more on the escalating tension between the Israelis and Hamas. This is major breaking news that's unfolding right now, but there's other important news we are watching, especially a potential nightmare scenario that so many of us have worried about for so long.

Terrorists in Iraq have gotten their hands on nuclear materials, raising new fear they may eventually be able to attack with a so- called dirty bomb.

Our justice correspondent Pamela Brown is working this story for us.

Pamela, what are you learning?

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well, Wolf, Iraq's government sending an urgent letter to the United Nations saying Sunni militants seized nearly 90 pounds of uranium. And it says that raises the concern these dangerous terrorists could use this radioactive material to carry out terrorist attacks and it highlights just how quickly security has deteriorated in Iraq's major city.

(BEGIN VIDEOTAPE)

BROWN (voice-over): Nuclear material now in the hands of terrorists in ISIS-controlled Mosul. Iraq's government sounding an international alarm, saying terrorist groups seized control of almost 90 pounds of uranium from Mosul University, asking for help from the United Nations in this letter obtained by CNN, saying it needs support to stave off the threat of the use of a nuclear material by terrorists in Iraq and abroad.

JOE CIRINCIONE, NUCLEAR WEAPONS EXPERT: It's a terror factor that you're never going to be able to eliminate. But not many people are going to die from this.

BROWN: Nuclear experts say the small amount of uranium seized by insurgents is not enriched, and cannot be used to make a nuclear bomb.

CIRINCIONE: And it requires a huge industrial facilities to enrich uranium. It's not something that a terrorist group is capable of. It takes tons of uranium of this kind to make enough for one bomb. These guys aren't even close.

BROWN: And nuclear experts say the uranium seized isn't even enough to combine with conventional explosives to build an effective dirty bomb.

Still, U.S. military officials are telling Congress the threat from terrorists in Iraq, namely ISIS is grows an at alarming rate as insurgents are capturing traditional weapons in Iraq and sending them into neighboring Syria.

SEN. JOHN MCCAIN (R), ARIZONA: The equipment that ISIS was able to get ahold of, and due to their lightning-like success in Iraq is now flowing into Syria.

Do you have any information about that?

UNIDENTIFIED MALE: Senator, I have seen -- at a classified level, I have seen some of that reporting that would indicate that it is moving across what were the former borders there between Iraq and Syria back into Syria.

(END VIDEOTAPE)

BROWN: And sources we've been speaking with saying nuclear material like this is supposed to be a highly guarded, very secure area and the seizure by terrorists shows just how lacks security is, in some places despite the hundreds of millions of dollars spent in helping countries get security systems up to par -- Wolf.

BLITZER: Pamela Brown, what a nightmare scenario that potential is. Thanks very much.

Coming up, a SITUATION ROOM special report, on the brink. The crisis unfolding between here in the Middle East between Israel and Hamas. We'll have detailed report, including interviews with the spokesman for the Israeli military and the Palestinian representative to the United States.

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