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THE SITUATION ROOM

Hamas Commander Rejects New Truce; Interview with Yuval Steinitz; Conditions in Gaza Deteriorating

Aired July 29, 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, a SITUATION ROOM special report, breaking news.

Cease-fire rejected -- Hamas says no to a truce with Israel, even as the Gaza offensive is clearly escalating.

Tunnel warfare -- Israel says taking them out is a top priority. We'll have more of my report inside one of Hamas' underground passageways.

Putin under pressure -- the U.S. and Europe step up sanctions against Russia.

Will it be enough to rein in Moscow from the fighting in Ukraine?

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.

(VIDEO CLIP)

BLITZER: We're following the breaking news. The commander of Hamas' military wing rejecting the latest proposed cease-fire with Israel, which had said it was ready for a truce. With fighting escalating to deadly new levels, Mohammad Deif released a defiant message saying -- and I'm quoting him now -- "There is no middle ground," regarding a possible cease-fire until Israel ends what he calls, "its aggression and siege of Gaza."

Israeli forces have dramatically stepped up their offensive in Gaza, pushing the death toll there to almost 1,200 people. Fifty-three Israeli soldiers have been killed, along with three civilians.

We have CNN's global resources on this story, with our correspondents and guests standing by.

CNN's Sara Sidner begins our coverage. She's near the Israel-Gaza border -- Sara, in the last 48 hours, Israel has been hitting a wider set of targets in Gaza. What's behind this apparently new Israeli strategy?

SARA SIDNER, CNN CORRESPONDENT: Well, I think what you're seeing is Israel looking to try and really keep those rockets from coming over. We know that they've been going after the tunnels. Even in 2012, they went after, for example, a Hamas police station, trying to knock that out and scaring Hamas and trying to send a message that if you send rockets over into Israel, you're going to pay the price, trying to stop that.

We do also know that there is some controversy over the only power plant that is in Gaza that was hit.

Israel looking into investigating that particular incident.

And, as you know, there was huge plumes of smoke from that. And it was building all day. We could actually see it from Ashkelon. Looking over the border, you could see it billowing for hours and hours. Today, Israel investigating how that happened. That may have been an unintended target, but that investigation will continue.

And certainly, we want to show you, also, some new video that has been released. Israel releasing several videos. The military showing in this particular video that you're going to see a bit now, what has happened inside of Northern Gaza with the Nahal Brigade there. And there you can see, it's kind of in green. And you will notice it's at night.

Now, the IDF says its soldiers started taking fire from militants inside of Gaza and were forced to fire back. Some very dramatic video there.

And I do want to mention, too, because I am on this side of the border, the Israeli side of the border, and we've been listening to sirens going off. We know there was one at 10:00 local time. We were here about to go live and a siren went off and people started trying to get out of the way. There have been sirens all over Israel.

And we know there have been, in Tel Aviv, two interceptions by the Iron Dome. So the Iron Dome in full effect and the rockets have been coming over the border and strikes have been happening inside of Gaza -- Wolf.

BLITZER: Sara Sidner in Southern Israel, near the Gaza border, for us.

Thanks very much.

Let's go to Gaza right now.

It's struggling for electricity after a strike on its only power plant.

CNN's Karl Penhaul is in Gaza for us.

What's the latest? What are you seeing there now -- Karl?

KARL PENHAUL, CNN CORRESPONDENT: Well, certainly, part of the Gaza Strip, as you can see behind me, is very, very dark. And I attribute that to the damage to the Gaza power company's power plant, particularly the diesel storage tanks.

They have been burning for much of the day.

Now, of course, the chief of the power plant is blaming an Israeli tank round, but we have had word from the Israeli military saying that certainly that power plant was not on its target list, although it is checking to see if any of its munitions slammed into there. But we're going to have to wait and see what word they have.

But last night, of course, around this time, things got very dramatic, as we saw illumination flares light up the sky, drones whirring overhead to spot targets, and then a series of artillery and aerial bomb strikes.

Among the targets hit yesterday were the homes of senior Hamas officials and also mosques that the Israeli military alleged were being used as weapons storage dumps. I can't independently confirm that, but that is certainly why they were on Israel's target list.

And tonight, pretty important developments -- I've just paused a moment there, Wolf, because behind us, a strike going in. There's a tall building there, so that obscured where that strike was going in.

But in the course of this evening, we have heard Israeli F-16 fighter bombers overhead. We can spot them, because as they go, they're pumping out decoy flares. That a sign possibly the pilots fear that Hamas and the other militant factions may have some kind of surface to air missiles.

But as we were saying and as you mentioned, that televised speech here in the Gaza Strip by the supreme commander of Hamas' al-Qassam Brigade. And he, as you again stated that there would be no middle ground. He said that as a condition for cease-fire, then Israel would have to lift what he termed the blockade of the Gaza Strip.

And that certainly falls into line with what the political wings of the groups here in Gaza have been saying, that in this fight with Israel, they will defer to the military wings of the militant factions and let them decide whether they make peace or continue to make war with Israel. And certainly tonight the Al-Qassam Brigades are saying the war will go on -- Wolf.

BLITZER: Yes, I suspect it's going to get very, very lively, shall we say, in the next hour or two where you are. And we will constantly check back with you, Karl.

Be careful over there.

Thanks very much.

Let's get to reaction to what's going on.

Joining us here in Jerusalem is Israel's minister of intelligence, Yuval Steinitz.

Minister, thanks very much for joining in.

What would it take -- and you're a member of the cabinet. You know what's going on.

What would it take for Israel to accept a cease-fire with Hamas right now?

YUVAL STEINITZ, ISRAELI INTELLIGENCE MINISTER: Look, Wolf, we accepted already four cease-fires. One was an Egyptian proposal. We adopted it. We implemented it. It was violated by Hamas.

And then three humanitarian cease-fires. All were violated by Hamas.

So next time, we will be very cautious and careful before we consider another proposal.

Meanwhile, we have to defend our people. They leave us with no alternative. They're launching hundreds of rockets every day to our cities and towns. And like any country -- like any democratic government, we have to protect our people and to fight and to strike back.

BLITZER: Because you know Israel is going to come under increasing international pressure, not only from the U.N., the Europeans, but even from the United States, from the Obama administration, to accept some sort of cease-fire.

How much longer do you think Israel can go on without a cease-fire?

STEINITZ: Well, you know, if they're shooting at you, if they're attacking you, if they're accumulating thousands and thousands of rockets in an area that was supposed to be totally demilitarized -- let's not forget, Wolf, you know, people tend to forget, Israel withdraw from Gaza, and under clear Palestinian commitments that Gaza will remain demilitarized forever, come what may.

Instead, thousands and thousands of rockets were smuggled into Gaza, mainly from Iran, also from other sources. And now they're launching hundreds of rockets each day to our cities.

We will fight back. We strike back. We have no other alternative but to try to destroy the Hamas military infrastructure and to try to minimize political damage to civilians in Gaza.

BLITZER: You want a demilitarized Gaza?

Can that be achieved diplomatically, politically or only militarily?

STEINITZ: Look, I hope it will be achieved diplomatically. It will be achieved, either militarily, if we will have to capture Gaza, if it will be necessary in order to demilitarize... BLITZER: By capture Gaza, you mean reoccupy Gaza?

STEINITZ: For some time, for some time.

BLITZER: Is it possible that you would go that far?

STEINITZ: This is one option that we examined -- that we will have to examine if there is no other alternative.

I still hope that there will be a diplomatic solution.

But let's not forget, this is the core of the problem in Gaza. People should ask themselves why in Nablus or Ramallah people can go to work even in Israel?

Why we have to put those restrictions around Gaza?

Only for one reason -- because a terrorist organization, fanatic barbaric, terrorist organizations like Hamas and Islamic Jihad has accumulated thousands of rockets. If Gaza would remain demilitarized, like Nablus, there would be no war now around Gaza.

Israelis would not suffer from terrorist attacks. Palestinians in Gaza would not suffer from this unnecessary violence.

BLITZER: Let's go through some specifics. You're the minister of intelligence, so you know what Israel's intelligence community believes right now.

How close is Israel to destroying, eliminating the tunnels that go from Gaza into Israel?

STEINITZ: We already discovered 31 terror tunnels leading from Gaza underground into Israel. Some of them have been used even yesterday. We had some casualties. There were some incursions.

We destroyed approximately half of them by now, 15 out of 31. And we have to destroy the rest of them.

BLITZER: How many more are there, besides the 31 that you discovered?

STEINITZ: Probably there are some more. We are looking, you know, searching to see if there are some more. We will do our utmost to destroy those incursion tunnels. No country will tolerate -- would accept tunnels, underground tunnels leading to its territory. And believe me, Wolf, they didn't build the tunnels to grow mushrooms. We know very well what is the purpose of those tunnels.

BLITZER: How many rockets and missiles does Hamas still have?

STEINITZ: It's difficult to say, but we estimate they had 10,000 at the beginning of this round of violence, when they start launching rockets in Israel. Now we destroyed many of them, several thousand. They have used already -- they have launched already 2,600 rockets into Israel. We assume there have been -- now they have a stockpile of 3,000. This is too much still, because there was supposed to be no rockets whatsoever in Gaza. But this is a reality. This is the situation.

BLITZER: We know that Israeli strikes blew up the Finance Ministry in Gaza City last night.

What was the point of that?

STEINITZ: Look, this institution has delivered a lot of money to finance their organization, to finance illegal weaponry, to finance the building of those underground tunnels.

By the way, you know, a few years ago, there was a debate. The world pressured us to enable the delivery of cement -- of cement into the Gaza, in order to build children (INAUDIBLE) and schools and so on. They were using this cement in order to build those underground tunnels, terror tunnels leading into Israel.

So it's a very grave situation. And unfortunately, again, let me remind us, the core of the problem is that Gaza is not demilitarized, as was signed on the White House lawn. And therefore the core of the solution, if we want something more than just an end to this round of violence, if we want to put an end, once and for all, to the suffering of both Israelis and Palestinians in Gaza, on other side of the fence...

BLITZER: Would it...

STEINITZ: -- the core of the problem is also the core of the solution. The core of the solution is that Gaza will be demilitarized again.

BLITZER: One final question.

Would you support the Palestinian Authority of President Mahmoud Abbas taking charge of Gaza?

Would that alleviate your concerns?

Because they're in charge of the West Bank. It's a very different situation there.

STEINITZ: Yes, of course, this is better than to have the Hamas. This is a terrorist organization. And the Palestinian Authority seem to be more responsible.

But let's not forget it, Wolf, Gaza was delivered by Israel to Mahmoud Abbas, to the Palestinian Authority. Nine years ago, we uprooted all the Jewish settlements in Gaza. And Mahmoud -- and Abu Mazen said publicly -- I quote now. He said once the Israeli occupation inside Gaza is over, once there are no Jewish settlements in Gaza, there will be no hostilities and no terror attacks, no rockets whatsoever.

Since he gave us this commitment and we pulled out from Gaza and we uprooted all the Jewish settlements from Gaza, 14,900 rockets were launched so far, in the last nine years, from Gaza into Israel; 2,600 only in the last two weeks. So it's a big question if we can really trust Abu Mazen. Still, of course, it's better not to have a terrorist organization, a terrorist regime in Gaza, like Hamas or Islamic Jihad.

BLITZER: We've got to leave it there, but you remember, Hamas was elected by the Palestinians over the Fatah and the PLO leadership. There was an election...

STEINITZ: This is bad enough, that the Palestinians elected a terrorist organization to lead them. I think many of them regret this terrible mistake.

By the way, it was totally inconsistent with the Oslo Accords, that said clearly that no terror organization or any organization that doesn't...

BLITZER: Yes.

STEINITZ: -- accept Israel's existence can participate in the Palestinian parliament or government.

BLITZER: Well, that's history now. Now, you've got to deal with (INAUDIBLE)...

STEINITZ: That's history, but it's very relevant...

BLITZER: Yes.

STEINITZ: -- to the sad realities on the ground.

BLITZER: But at that time, as you well remember, both the Israeli government and the Bush administration said Hamas could run in that election, even though Hamas did not accept Israel's right to exist. We'll discuss the history.

STEINITZ: This was a grave mistake and look to the realities in Gaza in contrast to the much better reality in the West Bank.

BLITZER: Yuval Steinitz, the minister of intelligence, thanks for joining us.

STEINITZ: Welcome.

BLITZER: More breaking news. We're going to get a very different perspective from the Palestinians, the chief Palestinian negotiator, Saeb Erakat, standing by live. We'll discuss with him what's going on. Much more of our coverage when we come back.

(COMMERCIAL BREAK)

BLITZER: We're live in Jerusalem, where we're following the breaking news. The commander of the Hamas military wing rejecting a cease-fire with Israel, saying it's impossible while the Israeli offensive in Gaza continues.

Let's get the Palestinian perspective. Joining us now, the chief Palestinian negotiator, Saeb Erakat. He's joining us on the phone from Ramallah.

Saeb Erakat, thanks for joining us. So what happened? We understand the Palestinian Authority issued a statement saying all the Palestinian factions were on board for a 24-hour cease-fire that could be followed by a 72-hour cease-fire. Then all of a sudden, we hear from the military commander of Hamas, saying no deal, no cease-fire. What happened?

SAEB ERAKAT, CHIEF PALESTINIAN NEGOTIATOR (via phone): What happened last night is that we -- all Palestinian on a cease-fire for 24 hours, and actually, Hamas and other factions accepted that (UNINTELLIGIBLE) which formed a delegation to go to Cairo, met with the Israeli delegation.

At 3 a.m. this morning, the Israelis informed the parties involved that they refused. That is the truth. Now, look, Wolf, I don't want to go and respond to the gentleman from

Steinitz or others, but the point is today now, as we talk to you, 1,210 Palestinians have been killed, murdered mostly women and children; 7,000 wounded. No electricity in Gaza. No water in Gaza. Hundreds of thousands of people are homeless.

And you know, the point is that the person that is really working hard is Secretary Kerry, Secretary John Kerry is in touch with Mr. Abbas, in touch with (UNINTELLIGIBLE), the Egyptians, the Europeans, the Saudis, the Jordanians, Qataris and Turks, and two days ago he offered a seven-day humanitarian cease-fire. We accepted. Palestinians had accepted, and then Israel rejected.

And as Mr. Steinitz told you just a minute ago, that their intention is to reoccupy Gaza. This was done without even consulting with us. And when I went personally to speak to them about the need to do it, I was told that we're not a partner; and now they accuse us of so many things. Actually, this political...

BLITZER: Saeb -- Saeb, let me interrupt for a moment. I want to get to all of that. But on this notion that there could be a huge split between the political arm of Hamas versus the military arm of Hamas, it looks to many analysts like that is what has developed. Do you think that there is a split between the political arm versus the military arm?

ERAKAT: No, no Wolf. The point is, President Abbas spoke to Mr. Mashal. He spoke to Mr. Shalah (ph) of Jihad, Hamas and others, and they told him we are on board. OK, the minute, you know, he was trying to form a delegation and get in touch with the Egyptians with Secretary Kerry, with everyone. The Israelis reject it.

And actually, last night and today was the worst day in the last days of fighting. In the last 30 hours, 154 Palestinians were killed. I'm talking about 30 hours. They escalated, the Israeli army escalated by the way. And now they moved to destroy the infrastructure, electricity, water., Imagine 1.8 million people without water, without electricity, without sewage. There is no place to run. There is no place to hide. So now, I asked Secretary Kerry whose unwavering commitment and effort

and who is capability and ability to be in touch with all concerned parties, from President Abbas to Mr. Netanyahu to the Egyptians to the Europeans, to the Arabs, to everyone, we need to stop this madness. We need to stop this massacre committed against the Palestinian people in Gaza. That's what we need.

BLITZER: Because we were hopeful, Saeb, we were hopeful today -- hold on a second. Saeb -- we were hopeful for a cease-fire earlier in the day when one of the top aides to President Mahmoud Abbas said that all the Palestinian factions were on board for a 24-hour cease-fire. Israel was not commenting on that time, but all of a sudden, the military commander of Hamas seems to pull the rug out from under the political wing, from under the statement that the Palestinian Authority released and said no cease-fire.

ERAKAT: Why can't the Israelis -- Wolf, why can't the Israelis say, "We accept Secretary Kerry's offer for a 7-day cease-fire?" Why can't they test us? Why can't they test us? I mean, it's not about scoring points. This madness is going to lead to Israel's totally occupation of Gaza. That's political blindness. This would lead to an interruption of the West Bank and Jerusalem. This would lead to destruction of the Palestinian Authority.

So as I told you last time, can Mr. Netanyahu or Mr. Steinitz or Mr. Lieberman or any people in his government walk me through the day after? What are they going to do with Palestinians? Millions of Palestinians in the West Bank and Gaza if the whole thing goes down the drain, if we pull out and if they have to recollapse and, if they have to, the reoccupation.

You know that the core of the problem is not that -- the core of the problem is not (UNINTELLIGIBLE) Gaza. The core of the problem is that these people, the Steinitz, the Liebermans, the Netanyahus continue with their occupation with the settlement activities with their siege for seven years. They've been using, you know, their, you know, siege against Gaza to fuel supplies, water supplies, food supplies. Seven years. Seven years.

And what we need to do is to sit down in order to achieve a two-state solution. That's how the violence will end. That's how security will be required. Security is not going to be done by more gun and more orphans on the Palestinian side. Security for Israelis will be achieved as they finish the occupation. They will be fair if they will agree to a two-state solution, and that's my truth and the whole honest truth, Wolf.

BLITZER: All right. Saeb Erakat joining us from Ramallah with the Palestinian perspective. I know he must be disappointed there's no cease-fire, because I know he and President Abbas have been working hard to achieve one. But that has not happened yet.

Let's get some more analysis. Joining us now is one of the top military analysts in Israel, Ron Ben-Yishai joining us right now.

What is the Israeli military strategy unfolding at this minute in Gaza? Is it simply to take out the tunnels. Is it simply to go after the rocket launchers, or is a bigger military strategy to decapitate and effectively destroy Hamas?

RON BEN-YISHAI, MILITARY ANALYST: No, it's more of the same, which means more of the same with the idea of the last, say, three days, it's doing now. On a -- on a lower pace. So to say less intensive than it was yesterday.

BLITZER: Last night it was very intensive. It was pounding. Tonight it seems relatively calm. Is that a new phase or what?

BEN-YISHAI: No, it is a phase of wait and see. Which means let's see if the Palestinians, if they Hamas and Islamic Jihad -- I'm sure that Mr. Erakat and his boss, Abu Mazen, they are ready or are yearning for a cease-fire. But Hamadai (ph)...

BLITZER: He's the military commander of Hamas, there is officially the military commander is not such a figure. The real man in charge is Muhammad. And he rejected it. He rejected it. As you say, as part of the overall Hamas approach that they will have -- they must come out of this situation with some achievement.

Otherwise, why did they open all these things? And this is the main problem for them. That is why they cannot afford a cease-fire when the Israeli -- IDF is still on Gaza inside Gaza Strip, and they have achieved no lifting of the siege.

By the way, the lifting of the siege is not Israeli siege. Israel is the only one that you have seen it with your own eyes. Israel is the only one that is bringing supplies into Gaza Strip. Tonight, there are Turkish planes lending with a lot of supplies for Gaza Strip going through Israeli passages.

BLITZER: Not through Egyptian passages, you're saying?

BEN-YISHAI: Not through Egyptian passages.

BLITZER: All right. Ron Ben-Yishai, we're going to continue our analysis. We're waiting to see what happens in the skies over Gaza City later tonight, see if the same thing happens tonight that happened last night.

But much more coming up. We're also going to go inside Gaza, the death toll clearly climbing. Conditions deteriorating. And we'll also take you inside those Hamas tunnels that Israel is targeting for destruction. You saw my report yesterday inside one those tunnels. Part two, more inside those tunnels coming up.

We're live from Jerusalem. This is a SITUATION ROOM special report.

(COMMERCIAL BREAK)

BLITZER: You are looking at the live picture of the Gaza City's skyline right now. So far tonight, at least so far, CNN crew there has heard some Israeli f-16 fighter jets. Thee have heard some explosions in the distance, but fairly a very different picture tonight thank last night. We will see if that lasts.

We are here at Jerusalem following all of the breaking news, a cease- fire with Israel, between Israel-Hamas rejected by the military commander of Hamas despite of major escalation of Israel's Gaza military offensive.

CNN's John Vause, meanwhile, takes us inside Gaza where conditions are clearly deteriorating.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice-over): Crossing the border from Israel and the destruction is everywhere. The buildings still standing seems deserted.

Well, the area around here seems to be completely abandoned. The only vehicles on the road it seems are ambulances. They've been prepositioned in case there's an Israeli air strike nearby and they need to get to the wounded. But right now amid all this destruction, there doesn't seem to be any signs of life.

So dangerous here, firefighters can't get close enough to put out a blaze at Gaza's only power station. Palestinians say it was hit by the Israelis but Israeli's military says it wasn't a target.

LT. COL. PETER LERNER, ISRAEL DEFENSE FORCE SPOKESMAN: I've gone through our air force, our Navy, ground forces on the ground, haven't been able to confirm that it was IDF activity.

VAUSE: Palestinians say it could take a year to repair the plant. Without electricity many water pumps in Gaza city are no longer working. Sewage systems too have been damaged. Raw affluent is flowing into the sea. Despite the Israeli offensive, Salah Jarour still opens his small shop every day but now he sits there in the dark.

This is not fair. We have children. Hospitals need power, he tells me. The Israelis are not human. Everywhere it seems, there are long lines, especially for bread. And tempers are beginning to fray after waiting here for hours, someone tried to cut in line.

This man told me we want the situation to end because of our families and children.

Along with Hamas rockets and tunnels, Israel is also targeting Hamas leaders. This is all that's left of the home of Ismael Hanir. He is the most senior Hamas political leader in Gaza. It was once a four- story building. Now it's just been reduced to rubble. No one was home at the time of the air strike. But the message from Israel is clear.

And just across the road from the Gaza home of the president of the Palestinian authority Mahmoud Abbas, a mosque was hit by Israeli fire. Three weeks on as the death toll continues to climb many here face life without electricity or running water. The Israeli prime minister has warned the military campaign might still be far from over. John Vause, CNN, Gaza City.

(END VIDEOTAPE)

BLITZER: The Israeli military says it killed five Hamas militants who opened fire as they left the tunnel in Gaza today. Finding and destroying the secret tunnels like the one I visited in southern Israel on the Gaza border on Monday has become a top priority for the Israeli military.

Here's part two of my report.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Right near Israel's border with Gaza a bat is under way. Tunnels have been discovered. Used by Hamas militants to launch attacks inside Israel. The Israeli military is determined to destroy them all. These tunnels are barely large enough to maneuver.

The purpose of this tunnel was to go from Gaza into Israel. There's an Israeli kibbutz right the exit here. The entrance is in (INAUDIBLE), in Gaza. It is almost three kilometers long.

The tunnel threat has Israel on edge. The IDF says the sole purpose of these underground passages is to attack and kidnap Israelis.

UNIDENTIFIED MALE: It's very easy to kill and go and nobody knows that there are people in the tunnel.

BLITZER: The Israeli military discovered this tunnel before it was finished. Lieutenant colonel Oshik Azulai believes it took Hamas about two years to build.

UNIDENTIFIED MALE: One meter for a day, a few meters for a day and they need a lot of time to do it.

BLITZER: The process of locating and destroying the tunnels also takes a long time. Israeli officials say they've destroyed at least 15 tunnels so far. Other tunnels are still being used. Israel said today its troops killed five Palestinian militants as they left the tunnel in Gaza.

Lieutenant colonel, how long have you been working this tunnel?

UNIDENTIFIED MALE: In this tunnel, we are working for like few weeks.

BLITZER: Few weeks already.

UNIDENTIFIED MALE: Yes.

BLITZER: Israeli intelligence officers use radar to track the development of these tunnels. But the IDF says it's an open question as when this network of passages will be fully dismantled.

How long will it take to destroy all the tunnels?

UNIDENTIFIED MALE: I don't know.

BLITZER: Nobody knows?

UNIDENTIFIED MALE: Nobody knows.

BLITZER: Yes.

(END VIDEOTAPE)

BLITZER: The Israelis say they've located 31, once again 31, of those tunnels going from Gaza into Israel. They think they've destroyed 15 of them so far. But they also say they think they have a lot more work to do as far as the tunnels are concerned.

Just ahead, I'll ask the Israeli military analyst Ron Ben Yishai how many more tunnels he believes there may be going from Gaza into Israel and whether Israel's military strategy so far has been effective.

Also, President Obama is turning up a pressure on the Russian president Vladimir Putin. Is a new cold war already under way?

(COMMERCIAL BREAK)

BLITZER: Live here into Jerusalem where we're following the breaking news, the commander of the Hamas military wing rejecting a cease-fire proposal with Israel amid major escalation of the Israeli offense anybody Gaza.

Our CNN correspondent Ian Lee is here just out of Gaza. He is now in Jerusalem along with the Israeli military analyst Ron Ben-Yishai.

What is the Israeli strategy in short right now? What are they trying to do?

RON BEN-YISHAI, ISRAEL MILITARY ANALYST: They're trying to exert pressure on Hamas to agree to a cease-fire to the Egyptian proposal, which means cease-fire first, negotiations afterwards in order to get some kind of arrangement, new arrangement for Gaza. This is the Israeli strategy. The other part of the strategy is destroying all this (INAUDIBLE) tunnel that go from Gaza into Israel -- towards Israeli settlements in the (INAUDIBLE).

That's the Israeli's strategy, exerting pressure and destroying the tunnels. By the way, Israel is not trying to destroy the launchers, the rocket launchers. There is no way in the world to hunt every launcher.

BLITZER: How many more tunnels are there? They found 31 so far going from Gaza into Israel. How many more are there?

UNIDENTIFIED MALE: They -- I don't know. There are more. There are more. And the old ones that we knew about, 31 have deviation, sort of a new route or by passing routes with separate pierce. That's what happened yesterday.

The tunnel itself is well-known to Israel. And as a matter of fact, Israel started to destroy it. It's going from --

BLITZER: But they got different routes that they're taking to get into this.

(CROSSTALK)

UNIDENTIFIED MALE: Yes.

BLITZER: Ian, you were just there for the past almost three weeks. Give us a thought. Does Hamas really think it's winning on the ground militarily? Because it looks pretty lopsided.

IAN LEE, CNN CORRESPONDENT: When you look at what Hamas is trying to achieve, they're a guerrilla unit fighting a guerilla war. And so they're not going to try to gain ground and hold that ground. They want to inflict casualties on Israel. And if you look at their tactics, they're far superior than they were before. They also have better weapons and a greater command of the battlefield.

And when you look at the two wars, the war in 2008-2009 and compare it to now when you had a similar ground invasion, they've inflicted far more casualties, about five times that on Israel. So when you look at them as their tactics as a military unit, they do seem to be doing a lot better now.

BLITZER: Yes. I've heard that from a bunch of Israeli military analysts. They seem to be much better prepared. Have better equipment than they did a couple of years ago.

(INAUDIBLE), stand by.

We've got much more coming up. We're live here in Jerusalem.

In our next hour, by the way, angry words from Iran's supreme leader. We're taking a closer look what could happen if Iran and Hamas were to team up again.

But up next, President Obama turns up the pressure on Russia. Is this the start of a new Cold War? The president's answer to that question is coming up.

(COMMERCIAL BREAK)

BLITZER: We're live in Jerusalem but there's breaking news in the crisis with Russia over the fighting in Ukraine and the shooting down of Malaysia Airlines Flight 17.

Let's go to the White House. Our correspondent, Michelle Kosinski, has the very latest.

Michelle, tell our viewers what happened.

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Hi, Wolf. Well, the U.S. and Europe acted together on this. The White House calling these powerful sectoral sanctions. Although it's not like when we first started hearing about this concept, these don't affect entire sections of the Russian economy, they are still targeted. We're talking several more bangs, certain exports.

The administration trying to keep pressure on while admitting that sanctions have not worked in changing Russia's action.

(BEGIN VIDEOTAPE)

KOSINSKI (voice-over): The U.S. with Europe ratchets up the pressure on Russia.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The United States is imposing new sanctions in key sectors of the Russian economy. Energy, arms, and finance. We're blocking the exports of specific goods and technologies to the Russian energy sector. We're expanding our sanctions to more Russian banks and defense companies. And we're formally suspending credit that encourages exports to Russia and financing for economic development projects in Russia.

KOSINSKI: The administration today clear in its condemnation of Russia's actions.

JOHN KERRY, SECRETARY OF STATE: They displayed an appalling disregard for human decency.

KOSINSKI: As Russia continues, even now, to move heavy weaponry over the border into Ukraine and fire on Ukraine from Russia. So short of getting physically involved in the military conflict, which the U.S. has said is absolutely not on the table, economic pressure is the West's only weapon.

Europe today banned all arms trading with Russia but that only applies to new deals and Russia and Europe don't generally trade all that much in military equipment. Like the U.S., Europe has now frozen out certain banks, Putin cronies and Russian access to technology benefiting its oil companies.

OBAMA: Russia's actions in Ukraine and the sanctions that we've already imposed have made a weak Russian economy even weaker.

KOSINSKI: The White House is also adding pressure by accusing Russia of violating a Reagan Gorbachev era arms control treaty that bans midrange ballistic missiles. President Obama has written a letter to Vladimir Putin about it.

The White House says that the timing has nothing to do with Ukraine but admits there are worries about those weapons being used or falling into the wrong hands.

Despite all of this, just 12 days after the downing of a passenger plane by pro-Russian separatists, there is still talk of diplomacy.

OBAMA: It's not a new Cold War. What it is, is a very specific issue related to Russia's unwillingness to recognize that Ukraine can chart its own path.

(END VIDEOTAPE) KOSINSKI: The administration has laid out this long list of effects that it feels sanctions have had on Russia's economy. Capital flight is one big one. All that investment money leaving Russia, although keep in mind, the desired effect of these sanctions is to change Putin's strategy and so far that has not changed at all -- Wolf.

BLITZER: It certainly hasn't.

All right, thanks very much, Michelle Kosinski, at the White House.

In our next hour, I'll ask President Obama's deputy national security adviser Ben Rhodes about this relationship with Russia. What's going on? Will Vladimir Putin pay attention to the new sanctions or to the president's new letter?

That's coming up in our next hour.

Also after today's angry words from Iran's leader, we are taking a closer look at what could happen in -- if Iran and Hamas were to team up.

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BLITZER: Happening now a SITUATION ROOM's special report.

Breaking news, Gaza under fire. Palestinians brace for another night of Israeli airstrikes after a new and defiant rejection of a ceasefire by Hamas. Hamas fighters suffering new losses on the ground in Gaza amid new fears that they may be re-teaming up with a dangerous partner, namely Iran.