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THE SITUATION ROOM

Crisis in Israel; Plane Crash Investigation; U.S. Pushes Mid- East Cease-Fire; MH17 Black Boxes Handed Over to Malaysians

Aired July 21, 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 HOST: Happening now, a SITUATION ROOM special report, breaking news here in the Middle East. The new cease-fire effort is under way with the U.S. playing a key role as Israeli and Hamas attacks take more lives.

The Israeli prime minister is rallying his troops and refusing to rule out the reoccupation of Gaza. Stand by for my interview with Prime Minister Benjamin Netanyahu. I pressed him about his exit strategy from Gaza and all the civilian casualties.

And new movement at the Malaysia air crash site. Bodies are being transferred, but investigators say Russian-backed rebels still are standing in the way and President Obama is asking, what are they hiding?

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.

ANNOUNCER: This is CNN breaking news.

BLITZER: We're following two breaking stories this hour.

Stand by for the very latest from Ukraine on the investigation into the downing of Malaysia Flight 17, but, first, powerful new evidence of just how dangerous it is here in the Middle East right now.

The State Department has just issued a travel warning to all U.S. citizens about the risks of visiting Israel, as well as Gaza and the West Bank, this after another bloody day of attacks and now Secretary of State John Kerry is on the ground in Egypt and he's trying to promote a cease-fire.

There are conflicting reports about whether there's been some progress. We have correspondents around the globe, along with analysts and top news makers to try to bring you all of these huge stories as only CNN can.

Let's begin this hour with a wrap of the latest developments in the battle between Israel and Hamas.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Israeli forces are barreling ahead with their deadly assault on Hamas targets in Gaza. They say they caught militants sneaking into Israel through an underground tunnel to attack civilians that live nearby. The tunnel was later destroyed and Israel says 10 Hamas fighters were killed. This as the United States announced an urgent new push to an immediate end to the fighting.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It now has to be our focus and the focus of the international community to bring about a cease-fire that ends fighting and that can stop the deaths of innocent civilians both in Gaza and in Israel.

BLITZER: Secretary of State John Kerry left for truce talks in Egypt after a spike in the bloodshed. The Palestinian death toll climbing above 500, including new claims of civilian casualties when a Gaza hospital was hit by shelling.

Israeli Prime Minister Benjamin Netanyahu tells me Hamas is to blame for civilian deaths on both sides by using human shields in Gaza and targeting Israeli cities with rocket fire.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: We're sad for every civilian casualty. They're not intended. But this is the difference between us. The Hamas deliberately targets civilians and deliberately hides behind civilians.

BLITZER: Israel says at least seven more of its troops were killed today in addition to heavy losses in a weekend ground assault when 13 Israeli soldiers killed. Two of them were Israeli Americans with dual citizenship.

Israel also says it is investigating a claim by a Hamas spokesman that an Israeli soldier has been captured. The unconfirmed report appeared to spark a celebration in Gaza. Another ominous new development, a leader of the Lebanese militant group Hezbollah says he reached out to Hamas to express support, adding to fears that Israeli forces may face a wider war on a second front.

(END VIDEOTAPE)

BLITZER: Let's go live to Gaza right now. Our senior international correspondent Ben Wedeman is there.

First of all, Ben, what are you hearing about these conflicting reports? We heard Dr. Mustafa Barghouti, a Palestinian parliamentarian who joined me a little while ago from Ramallah. He said he now understands Hamas has agreed to a humanitarian cease-fire starting tomorrow morning and going until 3:00 p.m. in the afternoon and he says the Israelis have not responded. What are you hearing from Hamas, as opposed to the Palestinian Authority? What are you hearing in Gaza?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: We're hearing these rumors, but Hamas has yet to actually say something that we can report.

There have been rumors also that some sort of three-day cease-fire would begin tomorrow. People here are really sort of grabbing at rumors and grabbing at straws, hoping for some sort of cessation if only temporary to the hostilities, but we understand, for instance, that Hamas leaders are talking intensely about the possibilities raised by secretary's visit to Cairo.

It's important to keep in mind that really the Egyptians hold the key in all of this. They control the border between Gaza and Egypt. They traditionally have very good contacts with Hamas, even though the relations have chilled over the last year, but they do have channels and they do have means of pressure to work out some sort of agreement.

But Hamas is at the moment being fairly adamant about holding to its long list of demands which include lifting of what they call the siege, the blockade of Gaza, free movement of people in out of the Gaza Strip, lifting of the sea blockade, and removal of buffer zones where farmers cannot cultivate their land near the border with Israel and on those things there's simply -- they say if we don't get satisfaction on those demands, we're not signing onto a cease-fire they're saying.

BLITZER: Ben Wedeman in Gaza. Thanks very much.

Joining us now is the spokesman for the Israel Defense Forces, Lieutenant Colonel Peter Lerner.

Colonel, thanks very much for joining us.

Is it true that there's a humanitarian cease-fire potentially that will go into effect 6:00 a.m. local time tomorrow morning until 3:00 p.m.? That is what Dr. Mustafa Barghouti told us, that Hamas has actually signed off on that.

PETER LERNER, SPOKESMAN, ISRAELI DEFENSE FORCES: I think the one thing that was repetitive in Ben's report was rumors. The IDF does not deal in rumors.

We get an order and we have a chain of command and it's very clear. We haven't gotten that order at this time. We have proven time and time again when it has come down that we held our fire, we cease fire, we respect that.

BLITZER: What Dr. Barghouti said -- and he's a parliamentarian in Ramallah -- what he said is Hamas has accepted and Israel has not yet reacted, formally given their reaction to this latest Egyptian initiative. It wouldn't be a full scale cease-fire, just a humanitarian truce for a few hours.

LERNER: We have carried these out in the recent days. We haven't received that order in the chain of command. If it happens, then we will hold our fire.

BLITZER: If it does happen, then Israel would be open to that?

LERNER: We have done it in recent days.

(CROSSTALK)

BLITZER: Just humanitarian and then you would deal with longer-term cease-fire down the road and you are open to that as well under the right terms?

LERNER: It happened over the recent days. There's no reason why it couldn't happen tomorrow if there's a necessity for it and we can carry that out.

BLITZER: From your perspective, the Israeli military, how is this current Israeli ground assault working out?

LERNER: We are happy. We're confident that we're moving forward. We're obtaining our goals. It's indeed a slow mission. We realize that with the gradualness and the need to move one step at a time forward to address the tunnels that are even this morning and this evening still posing a serious threat against our security, with four people killed in an attack this morning that originated through these tunnels.

It's unacceptable. These tunnels, they need to be dealt with. We're dealing with them. We're destructing them with explosives and we're finding them in the ground and we are addressing that threat. We're also addressing the threat of rockets and indeed I can indicate there has been a decline in figures in the amount of rockets that have been coming over.

But still they are shooting rockets indiscriminately at Tel Aviv, at the center of Israel. It's still a problem.

BLITZER: You lost 25 Israeli soldiers over the past few days. A small country, 25 soldiers. A lot of soldiers as far as the IDF is concern. Is Hamas putting up greater resistance than you anticipated?

LERNER: The score of Hamas terrorist activities is based on Iran. They have the same education and the same training plans and they train with them. They train with Hezbollah. It's the type of terrorism we prepared for. We know that they have been training for this confrontation so we were not surprised and we expected this type of conflict.

Our job as military is to put ourselves between the terrorists and our civilians. That's our job. It is an inevitable heavy price to pay but we have to be there for our civilians. We have to put ourselves there. That's our job.

BLITZER: It's now been 24 hours since Hamas announced they captured an Israeli soldier. Is that true?

LERNER: I can't confirm that at this time. The circumstances of the battle that he was supposedly abducted or taken in or kidnapped is very sketchy and it's very unclear.

There is a lot of questions that still need to be answered on this case. We are looking into it. We are speaking to the families. We are carrying out forensic investigations. When we have an announcement on this issue, we will make it public. We have a track record of being truthful and coming forward and putting those cards on the table when we have something to say.

BLITZER: But you would know if all Israeli soldiers in Gaza are accounted for?

LERNER: Again, the circumstances of the combat situation, of the battle that took place, the outcome, the carnage, we don't have a clear answer at this time.

BLITZER: This is something that may or may not be true and it's still being investigated by Israel? Is that what you're saying?

LERNER: We are investigating it and we are looking into the circumstances. The forensic investigation is still undecided and we will make an announcement shortly.

BLITZER: There's also some confusion about whether or not the United Nations operation in Gaza found some Hamas rockets in a U.N. facility and then handed those rockets over to Hamas. Are you familiar with those stories?

LERNER: I saw the U.N.'s press release. They said that there were 20 rockets in one of their schools, an abandoned school and they said they passed them onto the authorities. The authorities in Gaza is Hamas. They probably already launched those at us.

BLITZER: OK. But they also say they gave those rockets to a police force that's really aligned with the Palestinian Authority and not necessarily Hamas. Do you buy that?

LERNER: I think Hamas is the sole responsible authority in Gaza. They are carrying out all of the activities, and all of the police forces there are subordinate to them. They are all participating in this aggression against Israel.

BLITZER: Just to be precise right now on the cease-fire, the humanitarian cease-fire, what you're saying is you have not received -- the IDF has not received word from the political leadership to go ahead and cease fire as of early tomorrow morning?

LERNER: We have not received that in the chain of command. We have done in the past. We have held our fire. Unfortunately, most times when we held our fire, it's been met with rockets.

BLITZER: Peter Lerner, lieutenant colonel, spokesman for the IDF, thanks very much for joining us.

LERNER: Thank you.

BLITZER: All right, let's get another perspective right now. Joining us on the phone is the chief Palestinian Arab investigator, Saeb Erekat.

Saeb is joining us from Doha, Qatar, where Palestinian President Mahmoud Abbas has been meeting with officials there.

Saeb, first of all, what can you tell us about these reports that there may be some sort of hut cease-fire in the works starting as early as tomorrow morning? SAEB EREKAT, CHIEF PALESTINIAN NEGOTIATOR: I know that Secretary-

General Ban Ki-Moon is working very, very hard on this. He wants a humanitarian cease-fire for hours and I know that the idea is being -- by everyone and I hope that he will manage to pull this tomorrow morning.

BLITZER: We spoke within the last hour with someone you know well. Dr. Mustafa Barghouti. He was joining us from Ramallah, and he's a Palestinian parliamentarian. He says he received word that Hamas has already accepted that humanitarian cease-fire and it will go in effect tomorrow morning until 3:00 p.m. local time. Israel has not yet responded. Have you heard anything along those lines to back up what we heard from Dr. Barghouti?

EREKAT: Well, I believe Dr. Barghouti is a credible man and he may have been in touch with Hamas and heard them directly. I know that we were meeting with Secretary-General Ban Ki-Moon and he said I introduced the idea and then we fully back it and I hope that it will be honored tomorrow morning by both sides.

BLITZER: They both agree to this temporary -- this would be a temporary cease-fire for a few hours. It wouldn't be much longer than that. Is what you're understanding, Saeb?

EREKAT: That's my understanding.

But I think, look, today we -- Abbas met for a few hours with Mr. Khaled Meshaal, and leader from Hamas politburo, and he (AUDIO GAP) also with the emir of Qatar. And he was, as I told you when we spoke from Istanbul two days ago -- look, Wolf, I think the balance here is very sensitive.

I believe what we should look at is not the chicken or the egg, egg or chicken. I think there should be a balance established between a cease-fire, a full cease-fire and lifting the siege. We understand the deliberation is that Gaza is under attack by guns and cannons and tanks and airplanes and at the same time the siege is affecting the livelihood of 1.5 million Palestinians.

I believe that now Secretary Kerry is in Cairo. Secretary-General Ban Ki-Moon is in Cairo. We have high-level delegation dispatched by President Abbas to Cairo tomorrow. We were in touch. We were in very, very serious and positive deliberations with Khaled Meshaal and Hamas leaders. I believe we should look at ways to find the balance between the cease-fire and lifting the siege.

I heard it from Hamas yesterday they are with the Egyptian -- they're not against the Egyptian role. What they want to see is a balance is created between the cease-fire and lifting the siege. Gaza can no longer live, continue to live under the siege. So I hope that everyone will focus on this balance, which is not impossible.

Getting the movement of people, getting the food supplies, the few supplies, the medical supplies to people, getting freedom of access. This was an obligation on Israel on the AMA agreement, the agreement in movement and access in 2005. This was an agreement reached in 2012. And I believe if we focus on the balance between the cease- fire, not for humanitarian -- not for hours, but it could be a permanent cease-fire -- if we can match this with lifting the siege in accordance with the 2012 agreement brokered by Egypt between the factions in Gaza and the government of Israel.

BLITZER: We keep hearing President Obama say he wants that cease- fire, the same cease-fire that occurred at the end of 2012, the last time Israel and Hamas were fighting, he would like to see that reinstated right now.

Saeb Erekat, we will check back with you tomorrow. We will see if there's a cease-fire and the killing at least temporarily would stop. We're all over this story. We're staying on top of the breaking news.

Saeb Erekat joining us from Doha, Qatar.

Still ahead, we're tracking those black boxes from Malaysia Flight 17 and whether pro-Russian rebels are following through and handing them over to the authorities. Stand by. We will also get a live update on the access to the crash site from a top official with the international group that has monitors on the scene. More of our special report just ahead.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're following the breaking news in Jerusalem but we're also following other breaking news developments out of Ukraine, one concerning those critical black boxes that were aboard Malaysia Airlines Flight 17. The other concerns the people who were on board.

CNN's Phil Black is joining us now on the phone from Donetsk in Eastern Ukraine.

What's going on right now, Phil?

PHIL BLACK, CNN CORRESPONDENT: Wolf, as I speak, really a ceremony, a very public open ceremony is under way here in the headquarters of the pro-Russian rebel movement where the leader of that movement is in a very public way again handing over the flight recorders, the voice and data recorders from MH Flight 17 to a delegation from Malaysia.

It's quite a spectacle. It's being done very openly and very deliberately. We have been waiting for some three hours for this to happen. It was supposed to happen some time ago. He came out and gave a long speech about how the rebel movement had done the best they possibly could in terms of retrieving bodies and handling the wreckage and so forth and is now handing over these flight recorders which they have been safe keeping, they say, to the Malaysian government in the only understanding the information will be shared with the world and in particular with aviation experts around the world.

Wolf, and that's because they say they do not trust Ukrainian government to handle this properly -- Wolf.

BLITZER: But there's no guarantee, is there, that those black boxes haven't been tampered with? I know that some U.S. aviation experts were concerned. We will know soon enough once the real experts get access to the flight data recorder, the cockpit voice recorder, but right now you say they're doing it in some sort of formal ceremony, is that right?

BLACK: Yes, that's right. They called a big media event and invited all the international media that's in this region at the moment which is quite a contingent obviously given the events here, and they're trying to make a very public display of cooperation. It's clearly the message that is being sent out by doing this in this way.

The language, the actions, the sentiment of it all is that this rebel movement is doing all that it possibly can to help the victims and to help the world understand what happened. Obviously, we know the feeling around the world is going to be cynical toward that idea. President Obama himself today said, what are these people trying to hide? Well, if indeed they are acting with the best of intentions, questions will be asked, of course, why did they remove the flight recorders from the wreckage in the first place and why did they deny having them as recently as yesterday?

When you look up close at these devices, they very clearly say flight recorder. There's no doubting what these things were. But for some days now, this rebel movement has denied they had them in their possession and now they're making a very public statement about their supposed willingness to assist the international community in recovering these and find out just what happened to this aircraft.

BLITZER: Yes, it certainly says that. I have seen those flight data recorders, cockpit voice recorders, we call them black boxes, they're really not black at all. They're orange. They're made in the USA. Remember, this was a Boeing 777. Phil, we will stay in touch with you.

Let's get some immediate reaction.

Joining us now is Ambassador Daniel Baer. He's the U.S. representative to the Organization for Security and Cooperation in Europe.

Ambassador Baer, give us your reaction to what we just heard from Phil Black, the ceremony handing over from these pro-Russian rebels, if you will, handing over these two black boxes.

DANIEL BAER, U.S. AMBASSADOR TO THE ORGANIZATION FOR SECURITY AND COOPERATION IN EUROPE: Well, Wolf, I mean, on one hand obviously the goal is to get the black boxes and, of course, the bodies.

There are hundreds of families who have been waiting for four painful days to find out a little bit about where their loved ones are and to bring them home and be able to say goodbye and get closure. Obviously the black boxes are part of telling the story of the flight. And so on the one hand that's a good turn of events obviously if the black boxes are handed over eventually to the international authorities who can analyze them, et cetera, and we hope the bodies too are on their way home. On the other hand, this is a continuation of a kind of circus that we

have seen before and the questions that Phil raised about why they were removed from the wreckage site in the first place. We have seen over the last four days a very distressing number of behaviors at the crash site, where pieces of the crash have been removed, belongings have been picked through. People's bodies have not been treated properly.

And that's all very deeply concerning. Our heart breaks for those who are mourning loved ones lost on this flight.

BLITZER: Are the OSCE monitors who are there -- I know they are getting horrible, horrible treatment the first couple days -- are they now getting full access to everything they want to do or is it still modest, shall we say?

BAER: You're right, Wolf. The first day in particular, they showed up and had really terrible treatment. People were visibly drunk on the scene and they were not allowed to see much of anything.

I'm told that it has got incrementally better each day that they have gone back. They were allowed more latitude today. They actually visited the cars, the train cars that had been loaded with bodies and along with Dutch recovery experts sealed those so they could make the trip.

I think what needs to happen going forward, the crash site is very large as you have heard and it needs to be secured and there needs to be full, unfettered access for an international investigation to come in, and that needs to be provided immediately. One of the things, I saw that President Putin came out with a statement this morning saying that he too supported an unfettered international investigation.

The question is why have we lost those painful four days? If he really cared about unfettered international investigation, we shouldn't have lost that time and he should have used his influence immediately over the separatists to make sure none of the crash site had been molested, nothing had been disturbed and that no time was lost in being able to get the loved ones recovered.

BLITZER: Ambassador, hold on for one moment.

Jim Sciutto is our chief national security correspondent.

Jim, what is the working assumption? You are speaking to a lot of U.S. officials in Washington about the Russian connection, if there was a Russian connection to takedown of this plane.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, I think you have everything but the jury verdict from the perspective of U.S. officials.

They have established based on their intelligence that this was a Russian-made missile system, that it came from Ukrainian side of the border and fired from rebel-controlled areas and that in fact Russians supplied the weapons system and trained the Ukrainians on how to use the weapons system. The only question now that they are looking into is whether Russians were present when the missile was actually launched.

The case is built very strongly and very quickly from the U.S. perspective, leaving very little question at least from the perspective of U.S. intelligence agencies and U.S. officials that Russia at least bears some of the responsibility for this.

BLITZER: Where do we go from here, Ambassador Baer? Because it is heartbreaking. You speak to family members and you see what's going on. They haven't even recovered all of the bodies there. What's next in this whole miserable situation?

BAER: Well, obviously, our sympathies and warmest wishes and deep sadness is shared with the families of the victims and we hope that they can find closure as soon as possible and that those bodies will be on the train to Kharkiv before long and going home.

And in terms of what comes next, I think Jim got it right, you know. The fact is this is happening in a larger context. None of this would happen without Russia's involvement. This is not a tragedy that had to happen. This is a tragedy that was manufactured and that is connected to the fact that Russia has been training, arming separatists, sending fighters across the border for months now.

And where we go from here, I mean, if we want to see this wind down, President Putin and the Kremlin need to make the decision to stop sending fighters and arms across the border and stop training people how to use sophisticated weaponry and turn their eyes toward peace.

And President Poroshenko has himself said that he is committing to a 40-kilometer radius around the crash site to a unilateral cease-fire again. You will remember he did a full unilateral cease-fire last month for 10 days and that was not adhered to by the separatists. Now is the time for us to bring this to an end.

BLITZER: Ambassador Daniel Baer, the U.S. representative to the OSCE, the Organization for Security and Cooperation in Europe, thanks for joining us. Jim Sciutto, stand by. We will be getting back to you.

Other news we're following, four days after the Malaysia Airlines jet was shot out of the sky, world leaders are focusing intently on Russia. They're warning Russian President Vladimir Putin of real repercussions and evidence of what they suspect was going on in Russia. Stand by. We will take a quick break. Much more right after this.

(COMMERCIAL BREAK)

BLITZER: Ambassador Daniel Baer, the U.S. representative to OSCE, Organization for Security and Cooperation in Europe, thank you for joining us.

Jim Sciutto, stand by. We'll be getting back to you.

Other news we're following. Four days after the Malaysian Airlines jet was shot out of the sky, world leaders are focusing intently on Russia. They're warning the Russian president, Vladimir Putin, of real repercussions and evidence of what they suspect was going on in Russia.

Stand by. We'll take a quick break. Much more right after this.

(COMMERCIAL BREAK)

BLITZER: More of the breaking news here in the Middle East. The U.S. State Department a little while ago issuing a strong warning telling all American citizens this is not a good time to travel to Israel, the West Bank, certainly not to Gaza.

All this happening as the secretary of state. John Kerry, is now in Egypt. He's trying to promote a cease-fire. Let's bring in our foreign affairs correspondent, Elise Labott. She's got the very latest on what is going on.

So what is going on, Elise?

ELISE LABOTT, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, Wolf, the U.S. is placing the blame for the violence firmly on Hamas, but as the conflict continues to escalate, Washington is alarmed by the mounting civilian death toll.

(BEGIN VIDEOTAPE)

LABOTT (voice-over): Secretary of State John Kerry arrived in Cairo today to renew cease-fire talks after the bloodiest day in the conflict. Today the president stood by Israel's right to defend itself but warns the situation is spiraling out of control.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We have serious concerns about the rising number of Palestinian civilian deaths and the loss of Israeli lives. And that is why it now has to be our focus and the focus of the international community to bring about a cease- fire that ends the fighting and that can stop the deaths of innocent civilians.

LABOTT: On both sides, the grim task of burying the dead. The violence, now entering its third week, claimed 20 Israeli soldiers' lives in just the last 48 hours. More than 500 Palestinians dead, most of them innocent civilians. Israel says many are used by Hamas as human shields.

The U.N. in Gaza says more than 100,000 Palestinians have fled their homes and are seeking refuge with them. While doing the rounds on the Sunday talk shows, secretary Kerry was caught talking to an aide on an open mike, appearing to show frustration with the Israeli military operation.

JOHN KERRY, SECRETARY OF STATE: It's a hell of a pinpoint operation.

LABOTT: His public comments slightly more balanced.

KERRY: No country, no human being is comfortable with children being killed, with people being killed, but we're not comfortable with Israeli soldiers being killed either or with people being rocketed in Israel.

LABOTT: Israel has agreed to an Egyptian cease-fire proposal if Hamas stops fighting, but Hamas won't agree, insisting on, among other things, an end to the Israeli blockade of Gaza.

KERRY: They must step up and show a level of reasonableness, and they need to accept the offer of a cease-fire. And then, we will certainly discuss all of the issues relevant to the underlying crisis.

(END VIDEOTAPE)

LABOTT: Now, Qatar, with close ties to Hamas, has emerged as a new and key figure in the cease-fire effort, Wolf. Hamas leader Khaled Mashal lives in the capital, Doha, where he met this weekend with Palestinian President Abbas and also met with U.N. Secretary-General Ban Ki-Moon, before Ban traveled to Cairo this evening to meet with Secretary Kerry about these urgent talks on a cease-fire, Wolf.

BLITZER: At the beginning of that meeting between Ban Ki-Moon and Secretary Kerry, Secretary Kerry announced that the U.S. would provide nearly $50 million in emergency humanitarian assistance to the Palestinians in Gaza. Fifty million dollars in U.S. aid right now to the Palestinians.

All right, Elise. Thanks very much.

I asked the Israeli prime minister, Benjamin Netanyahu, what it would take to reach a new cease-fire and for Israel to pull out of Gaza. He's keeping his options open. We sat down at the defense ministry in Tel Aviv.

(BEGIN VIDEOTAPE)

BLITZER: Big question. Your exit strategy from Gaza, what is it?

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: Sustainable quiet. I mean, we didn't seek this escalation. Hamas forced it on us. They started rocketing our cities, steadily increasing the fire.

I called for de-escalation. They refused. I accepted an Egyptian cease-fire proposal backed up by the Arab League and the U.N. They refused. I accepted a humanitarian lull proposed by the United Nations. They refused.

We'll stop our operations when we can bring back quiet to our people.

BLITZER: Some of your cabinet ministers think the only way to do that is to reoccupy Gaza, which you evacuated from and gave it up back in 2005. Do you support reoccupying Gaza?

NETANYAHU: Well, I support taking whatever action is necessary to stop this insane situation. Just imagine, I mean, imagine what Israel is going through. Imagine that 75 percent of the U.S. population is under rocket fire, and they have to be in bomb shelters within 60 to 90 seconds. So I'm not just talking about New York. New York, Washington, Chicago, Detroit, San Francisco, Miami, you name it. That's impossible. You can't live like that.

So I think we have to bring back, restore reasonable sustained quiet and security, and we'll take whatever action is necessary to achieve that.

BLITZER: But that includes possibly reoccupying Gaza? Because a lot of your military planners are afraid of what they would call a quagmire, a dangerous quagmire.

NETANYAHU: Nobody wants to go to extensive military lengths, but what is happening here is excessive. They're not only targeting our cities. They're deliberately firing thousands of rockets. They've already fired 2,000 rockets in the last few days on our cities. You can imagine this.

It's not only that, and they want to kill as many of our 6 million Israelis who were targeted as they could. They haven't succeeded. Not for lack of trying. It's been developed with American help. And I appreciate the help that President Obama and the U.S. Congress have given us to develop these Iron Dome fantastic systems, but some of the missiles perforate and they hit our schools. So we have to stop that.

But in addition to the rockets, they've gotten terror tunnels that they build in Palestinian homes in Gaza and penetrate underground into Israeli territory. Terrorists pop up there to try to murder civilians, kidnap Israelis, as they did with Gilead Shalit, so we're taking action right now to neutralize those tunnels, and we'll continue the action as long as it's necessary.

BLITZER: You see these painful pictures of these Palestinian children and these refugees, thousands of them fleeing their homes. It's a horrendous sight what's going on right now, if you look at the images. Heart-wrenching. What goes through your mind when you see that?

NETANYAHU: I'm very sad when I see that. We're very sad. We're sad for every civilian casualty. They're not intended.

This is the difference between us. The Hamas deliberately targets civilians and deliberately hides behind civilians. They embed their rocketeers, their rockets caches and their other weaponry from which they fire, which they use to fire on us, in civilian areas. What choice do we have? We have to protect ourselves. We try to target the rocketeers. We do. And all civilian casualties are unintended by us but actually intended by Hamas.

They want to pile up as many civilian dead as they can, because somebody said they use -- it's gruesome. They use dead telegenically (ph) dead Palestinians for their cause. They want the more dead the better.

(END VIDEOTAPE)

BLITZER: The prime minister of Israel, Benjamin Netanyahu, speaking with me at the Defense Ministry in Tel Aviv. Still ahead, a crash site in chaos. Could it prevent investigators from finding the answers they're looking for in the downing of Malaysia Flight 17?

And we'll meet a man who was supposed to be on that plane and on the Malaysia flight that disappeared back in March. He shares the twists of fate that saved his life.

More news live from Jerusalem right after this.

(COMMERCIAL BREAK)

BLITZER: We got breaking news on the investigation into Malaysian Air Flight 17.

Pro-Russian rebels have now turned over the jet's two black boxes to Malaysian officials. We have these new pictures just coming to us from Ukraine. We just heard from the Russian ambassador to the United Nations as well, suggesting that rebels were confused when they said they shot down a military jet.

Let's bring our aviation analyst Peter Goelz, our CNN law enforcement analyst Tom Fuentes, and bring back our chief national security correspondent Jim Sciutto.

Jim, first of all, Vitaly Churkin, the Russian ambassador to the U.N. -- Jim, what is he saying?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, these are somewhat confusing comments just with that caveat when we start. But he was asked about the possibilities that pro-Russian rebels shot down the plane and were aware, Wolf, of these recordings which seem to show them admitting to it thinking it was a military plane. So, he says, well, if in fact this was the case, then it was not an act of terrorism. He says, so if they think they shot down a military jet -- again, this is the Russian ambassador to the U.N. speaking, it was confusion. If it was confusion, it was not an act of terrorism -- signaling perhaps just openness to this being an explanation of why this plane was shot down.

To this point, Russian officials denied at every opportunity that the pro-Russian rebels were responsible. Now, I have to be clear, Wolf, he also said in the same press conference that it's possible that the Ukrainians shot this down and questioning some of the pictures put out there showing this Russian missile system, Russian made missile system going from Ukraine back across the Russian border.

So, he's not giving up on that Russian story line, this Russian narrative claiming that the Ukrainians might still be responsible. But it's the first time we've heard from a Russian official at least open to the possibility that pro-Russian rebels may have been responsible.

BLITZER: Thinking they were shooting down a Ukrainian military jet as opposed to a Malaysian commercial airliner. Tom Fuentes, how do investigators handle what's called a really hostile environment, were the plane crashed on the ground. They are trying to piece together what happened. Can they really do that given the hostile environment there?

TOM FUENTES, CNN LAW ENFORCEMENT ANALYST: Well, Wolf, if the environment is secure, even if it's the rebels, if somebody there creates a perimeter and a safe place for them to work, they'll concentrate on what they need to do no matter how difficult. In a way right now, you at least have good weather at the site. But they've done these investigations hostile, the weather can be hostile, they could be on a mountain top or at the bottom of an ocean. There's many situations that are very difficult.

BLITZER: Peter, you've been involved in a lot of investigations. We now had the breaking news this hour, these pro-Russian separatists, they had the two black boxes, the flight data recorder, the cockpit voice recorder. And in a ceremony, as Phil Black described them, handed them over to Malaysian authorities.

Here's the question: those black boxes -- could they have been tampered with to distort some of the information?

PETER GOELZ, CNN AVIATION ANALYST: No, it's highly unlikely. I mean, these boxes -- you can tell whether someone has been in them or not. You can't go in and fool around with the data, exchange -- move data points around. These are solid, secure devices. If there was any kind of attempt to alter them, investigators would know immediately.

BLITZER: Do you have confidence, Peter, that the Malaysians have the know-how, if you will, to really go through the information contained in those black boxes, or should they hand them over to the NTSB or some other international organization that really knows what they're doing and have a lot more experience?

GOELZ: There's really only four or five independent safety boards that have capability to download the data. The dangerous part in data recording retrieval is the initial download. You can -- if you don't do that right, you could lose data. They should turn it over to the NTSB. They can turn it over to the British, the French or the Australians. The NTSB is there.

It was a U.S. manufactured plane. We should do the job.

BLITZER: Let's go back to Jim Sciutto.

And, I want to really dwell on this new Russian statement the Russian ambassador to the United Nations, Vitaly Churkin, he's been there forever, he is a real knowledgeable guy. He knows what he's talking about.

So, this is a little new twist in the Russian explanation and it could be really significant, Jim.

SCIUTTO: It is. Well, at least it's an opening here. You know, to this point, four days in, Russian officials have not only denied involvement, denied that pro-Russian rebels did this but accuse the Ukrainians and come up with crazy theories, including what is widely reported in Russian media, that in actuality, this was an attempt on President Putin's life, that his plane was in the area at the same time, the Ukrainians may have shot it down. That's been the storyline so far.

So, for first time now, you have a Russian official at least referencing this idea that pro-Russian rebels shot it down and saying, well, if they did, it was confusion, his words. It was not an act of terrorism.

But again, like I said earlier, in the same press availability with reporters, he also went on to say it may also have been the Ukrainians who did it, who he accuses of having this missile system as well.

Remember, U.S. officials have based on their intelligence determined that the Ukrainians did not have any missile system like this in the area where U.S. satellites detected this missile launching from.

BLITZER: Jim Sciutto, thanks very much.

Peter Goelz and Tom Fuentes, guys, thanks to you as well.

Just ahead, two flights that ended in disaster, one man was supposed to be on both of those flights. We're going to meet him, when we come back.

(COMMERCIAL BREAK)

BLITZER: There are two disasters that truly stun the world, especially the man who was booked on both of these ill-fated Malaysia Airline flights.

CNN's Tom Foreman is joining us now with this amazing story.

Tom, tell our viewers what happened.

TOM FOREMAN, CNN CORRESPONDENT: Yes, Wolf. Amid all the sorrow over this latest Malaysia air jet going down, one truly remarkable tale of survival has emerged. It was a result of chance, but amazing just the same.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): The Malaysia Air flight over Ukraine was shot down with 298 people on board. The flight from Kuala Lumpur in March disappeared with 239 passengers. And in each instance, one man was missing. Dutch cyclist Maarten de Jonge was supposed to be on both planes but both times changed his ticket.

Most recently, he was headed to a race in Taiwan but wanted to avoid a layover. This is what he posted on his Web site. "How happy I am for myself and my family that I was on this flight and did not take it the last moment. My story is ultimately nothing compared to the misery. Attention should be paid to the victims and survivors. Wishing everyone affected by this disaster a lot of strength." Other similar story have appeared. Izzy Sim, her husband and child were all supposed to be on that flight over Ukraine.

IZZY SIM, BUMPED FROM FLIGHT MH17: I'm shaking, I don't even know what to do and I'm feeling like physically sick. I'm just thinking about it, I feel I've been given a second chance.

FOREMAN: And yet there were others who boarded just as casually unaware of what would follow.

Kaylene Mann lost relatives on both Malaysia Air flights.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Our thoughts and prayers continue to be with their families around the world who are going through just unimaginable grief.

FOREMAN: Surprisingly as families wait to recover the bodies of their lost ones, that Dutch cyclist, he still plans to board Malaysia Air for his next flight. Saying, despite his two close calls, "I got lucky twice. It will go well a third time."

(END VIDEOTAPE)

FOREMAN: For all of his luck, that cyclist is not doing interviews, saying he wants to keep the focus on those who were lost and on their grieving families -- Wolf.

BLITZER: And let me just be precise, Tom, did you just say that he's still anxious, willing to board a Malaysian Airlines flight and try a third time, if you will? He canceled the first two opportunities.

FOREMAN: Yes. No doubt at all. He's very happy to go on. He feels confident that he'll be just fine. He is going to move forward with his plans, although a lot of people have trouble wrapping their heads around that -- Wolf.

BLITZER: Yes, I'm sure a lot of people after two near misses like that would say, you know what, I'll fly another airline just to be on the safe side.

Tom Foreman, that's an amazing story. Thanks very much for that.

Remember, you can always follow us on Twitter. You can tweet me @WolfBlitzer. You can always tweet the show @CNNSitRoom. Go ahead, send me a tweet. I'm anxious to hear what you think.

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That's it for me. Thanks very much for watching. I'm Wolf Blitzer reporting from Jerusalem.

"ERIN BURNETT OUTFRONT" starts right now.