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Israel-Gaza Conflict; Search at MH17 Site; Ebola Patient in US; Israel Redeploying Forces; Another UN School Hit; Exclusive: Hamas Leader Speaks Out; UN Secretary-General Condemns Attack on UN School; Down Syndrome Baby Abandoned; More Rockets Launched at Israel; Visit to Destroyed Mosque; Cease-Fire Talks in Egypt; Physical Impact of Conflict on Gaza; Economic Impact on Gaza; Gaza in Ruins; Gaza's Marine Gas Field; The Levant Basin

Aired August 3, 2014 - 11:00   ET


RALITSA VASSILEVA, HOST: A meeting in Cairo with a view to brokering peace between Israel and Hamas, but those in the fight are absent from the

discussions and continue to let their weapons do the talking.

Also ahead, an exclusive interview with the political leader of Hamas, who denies using civilians as human shields and says Israel is only committing


And Ebola arriving in the United States. We'll tell you what doctors are doing to contain a virus that killed hundreds of people in West Africa.

ANNOUNCER: Live from CNN Center, this is CONNECT THE WORLD.

VASSILEVA: The carnage rages over in Gaza. Another attack strikes near a UN school, this time in the town of Rafah. The Palestinian Health Ministry

says at least ten people were killed, dozens are wounded. A UN spokesman says more than 3,000 people were taking shelter there. It's not known if

the school was actually targeted. Neither Israel nor Hamas have commented on the attack.

And a new phase in Israel's military operation. New pictures coming in show Israeli tanks on the move. The Israeli army says it is redeploying

ground forces to new positions.

Meanwhile, the Palestine Authority has sent a delegation to Cairo, another attempt at negotiation, but no one from Israel or Gaza is there. More than

1700 Palestinians and 67 Israelis have been killed since the conflict began last month. We'll have the latest in a live report from Gaza in just a few

minutes from now.

But now we want to go to Ukraine, where more than 100 Australian and Dutch experts and sniffer dogs were back on the scene of the Malaysia Airlines

crash. They're racing the clock, looking for human remains before fighting flares up again. That fighting is getting very close.

Let's go, now, to Kellie Morgan, who's following the story live from Kiev. So, Kellie, what do the inspectors hope to find today at the crash site?

KELLIE MORGAN, CNN INTERNATIONAL CORRESPONDENT: Yes, Ralitsa. It's been the same mission as it has been since they were able to finally get that

safe access to the site. The priority is to find and recover any remains that are still at that site.

Now, we know they had finished their work at the site today. We are waiting to hear their report on what they found there and what they did

there today. But as you said, they had sniffer dogs again assisting them. But it is a very challenging and time-critical mission out there at the

site. The temperatures in Ukraine at the moment are in the high 80s.

Coupled with that, they've also -- there are some concerns that there could be some bodies under some of the heavy debris that's at that crash site,

and that's going to require some heavy haulage equipment to be brought in and lift that up to see what, indeed, is underneath.

Now, that's going to be quite a problematic task, because the roads in that area are very poor. And of course, there's a battle raging on the

perimeter of that cease-fire zone. And we're not seeing any abating in that conflict.

The Ukrainian forces have been making some significant gains in terms of regaining rebel-held territory over recent days, and they're really wanting

to push towards Donetsk and Lugansk, those rebel strongholds, and to block off a corridor that links those cities to the Russian border. So, that's

their focus.

But of course, you've got these more than a hundred experts who are trying to do a very important task, and they're doing it in extraordinary

circumstances, and it's a job that's not going to take just days, but rather weeks. And their safety, of course, is of optimum importance.

VASSILEVA: Kellie Morgan in Kiev, thank you very much for this update.

Now, doctors in Atlanta are monitoring the first known Ebola case on US soil. Dr. Kent Brantly was flown aboard a specially-equipped plane from

Liberia to Emory University Hospital on Saturday. Although there is no proven cure for the Ebola virus, doctors are monitoring Brantly's condition

and providing what they call "supportive care."

CNN's chief medical correspondent Dr. Sanjay Gupta shows us how the hospital is prepared to handle such cases.


SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice-over): The fight to keep American Dr. Kent Brantly alive is now in the hands of infectious

disease experts at Atlanta's Emory Hospital. The 33-year-old Brantly, a missionary with Samaritan's Purse, made the long journey from Liberia to

the United States in a specially-equipped jet.

KEVIN BRANTLY, BROTHER OF EBOLA PATIENT: I'm worried about him, yes, I am. But he'll be OK regardless.

GUPTA: After nearly 6,000 miles, 14 hours in the air, Brantly touched down Saturday morning in Atlanta, but not before a brief refueling in Bangor,

Maine. He is the first known Ebola patient on US soil.

I spoke with Dr. Bruce Ribner, one of the leading physicians overseeing Brantly's care. He says there was never a question of bringing the two

Americans who contracted Ebola to Emory. They were ready for them.

GUPTA (on camera): Why take the risk at all?

BRUCE RIBNER, INFECTIOUS DISEASE DOCTOR, EMORY UNIVERSITY HOSPITAL: I think you've been in that part of the world, and you know the level of care that

can be delivered. These are Americans who went over there to supply a humanitarian mission of medical care for these individuals, and our feeling

is that they deserve the best medical care to try and resolve this infection that they can get.

GUPTA (voice-over): By early Saturday afternoon, Brantly was transferred from his isolation onboard the plane into an ambulance on the tarmac, then

a caravan took to the streets of Atlanta, where is every move was tracked by air and ground. Awaiting him at the hospital, a specially-outfitted

containment unit, one of only several in the world.

NICK VALENCIA, CNN CORRESPONDENT: What sort of message do you have for folks at home, general public that are concerned about having an American

with the Ebola virus here in their back yard?

JAY VARKEY, INFECTIOUS DISEASE DOCTOR, EMORY UNIVERSITY HOSPITAL: I think that's the key point, that this is not a virus, this is a patient. This is

one of our neighbors, this is a parent, this is a child, this is a spouse, this is a sibling. This is a sick person who needs our help.

GUPTA: The other American missionary, Nancy Writebol, is awaiting her trip back to the United States as well. Around 12:30 Saturday afternoon, about

an hour after the plane landed at Dobbins Air Force Base, it was back in the air, and she's expected to join her colleague at Emory early next week.

Dr. Sanjay Gupta, CNN, Atlanta.


VASSILEVA: And now, let's return to the conflict raging between Israel and Hamas. Our John Vause is covering the fighting for us from the Gaza side

of the border. John is joining us now, live from Gaza City. John, this is a conflict with no sigh of let-up on both sides. Tell us, what is the

situation where you are?

JOHN VAUSE, CNN INTERNATIONAL CORRESPONDENT: Yes, Ralitsa, it seems that the longer this goes on, the more both sides are digging in, hardening

their positions. We know that the Israelis are now redeploying their forces.

They say they're now coming to the end of that tunnel operation and they're actually pulling their troops back to the borders. But the other

operations, according to the Israeli prime minister, Benjamin Netanyahu, will continue for as long as it takes.

Hamas, too, continuing to fire those rockets into Israel, about 80 so far today, and many, it seems, there's been a flurry of rocket fire in the last

couple of hours or so.

We're also hearing that there is intense military operations underway right now down south around the southern border town of Rafah. That has been the

focus of Israeli operations for the last three days, ever since that cease- fire collapsed. Palestinian officials now saying in Rafah, in the Rafah area, 71 people have been killed. That is according to Palestinian


There's also been a hit at another UN school, the third in about ten days. The details at this stage are unclear. The United Nations are saying that

there was a strike in the vicinity. They're not saying who is responsible for that, whether it was an Israeli missile strike or an artillery strike,

or maybe it could have been a misfired Hamas missile. They're not entirely clear.

They are saying that there have been, in fact, multiple casualties at that school. The Palestinians, though, much more definite. They're saying at

least ten people have been killed, and they're saying, of course, that the Israelis carried out the attack on the UNRWA school.

The situation at those schools -- we were down there the other day, we know that thousands of people have actually crammed into these schools because

they believe it is somewhere safe, and again, it seems that those schools are not safe because we've seen it a couple of times already here as well.

One other point in all of this, Ralitsa. We know that Benjamin Netanyahu says that this operation will continue.

And in case people here in Gaza did not get to hear that speech because they don't have power, they don't have television much of the time, they're

crowded around radios, the IDF dropped leaflets from the sky a few hours ago. In Arabic, it said, "Tell your leaders who are underground that this

battle will continue." Ralitsa?

VASSILEVA: John Vause, live in Gaza City, thank you very much.

Well, coming up on CONNECT THE WORLD, the political leader of Hamas speaks to CNN. We will talk to Nic Robertson about his exclusive interview with

Khaled Meshaal in Qatar. Plus, we'll go live to Ashkelon to get the latest on Israel's offensive inside Gaza.

And later, our Karl Penhaul gives us an up-close look at the heavy toll this conflict is taking on countless Palestinians. Also ahead, a

heartbreaking case that sheds light on a controversial issue in Thailand: women carrying children for foreign parents. Believe it or not, this story

is also inspiring hope.


VASSILEVA: You're watching CNN, and this is CONNECT THE WORLD with me, Ralitsa Vassileva. Welcome back to our show.

The fighting between Israel and Hamas has ebbed and flowed over recent weeks, but one thing has remained a constant --




VASSILEVA: The death toll on the Palestinian side has been substantially higher. Critics of Hamas claim the group is using the loss of life in Gaza

as a propaganda tool to win international support. But the political leader of Hamas, Khaled Meshaal, denies this, calling it a lie.

Meshaal sat down with CNN's Robertson in the Qatari capital of Doha, where the Hamas leadership is based. During this exclusive interview with Nic,

Meshaal countered claims that Qatar funds Hamas's military activity. We're bringing you now the first airing of Nic's full conversation with Meshaal.

Nic is joining me now, live from Abu Dhabi.

So, Nic, you had to travel to Qatar to get this interview. Explain to us the relationship between Hamas and Qatar.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, Khaled Meshaal has been living in exile for many, many years. He was in Damascus when the

Arab Spring, if you will, hit Damascus, and the revolution started in Syria. He was forced to leave, and Qatar gave him a safe haven and

somewhere to live.

He has continued to be the political leader of Hamas throughout that time, even though the military wing, other political leaders are in Gaza. And in

fact, I asked him a question about that.

I said -- because the way that the cease-fire broke down on Friday, there were accusations flying that he doesn't really control what's happening on

the ground, the political -- he, the political leader of Hamas, doesn't have control over the military wing inside Gaza because it's so far away.

That was one of the questions that I put to him, and this is what he said.


KHALED MESHAAL, HAMAS POLITICAL LEADER (through translator): Hamas is an institutional movement. It has a respected leadership. All the members of

Hamas, whether in the political or armed wing, are disciplined. The Israelis, the Egyptians, and the US administration know this. Otherwise,

John Kerry would not have intervened.

ROBERTSON: President Obama said it is irresponsible of Hamas to fire their rockets from civilian neighborhoods. That's what you're doing. Why do you

do it when you know civilians are going to die?

MESHAAL (through translator): Look at the results. How many Israeli civilians did our rockets kill? Israel knows the number. Meanwhile, how

many Palestinian civilians has Israel killed? Up until now, it killed 1,700 people, while we killed, by Israel's own admission, 63 soldiers. We

kill soldiers, combatants, while they kill civilians.


ROBERTSON: But -- because you're -- because -- Because you're firing your rockets from civilian neighborhoods. That's where you're firing your

rockets from. Your rockets are fired, Israel says, indiscriminately to civilian areas, Tel Aviv, Jerusalem. President Obama says you're firing

your rockets from civilian neighborhoods, and you know what that means, that you will have high civilian casualties.

Critics are saying that the only reason that you're doing this is so that you get the international outpouring of international sympathy because of

the high civilian casualties.

MESHAAL (through translator): It is unfortunate that the US administration and President Obama have adopted the Israeli narrative, which is a lie.

Hamas sacrifices itself for its people and does not use its people as human shields to protect its soldiers. These are lies, and Hamas does not seek

international sympathy through its own victims.

ROBERTSON: What are you prepared to do to get a cease-fire? Are you prepared to destroy your tunnels? Are you prepared to stop firing rockets

at Israel? Are you prepared to accept the right of Israel as a state to exist?

MESHAAL (through translator): We are ready for a a cease-fire. We don't want war. We want the war to end today, and we did not attack anyone. It

was Netanyahu who transferred the crisis that took place in the West Bank on June 12th to Gaza. He is responsible for this. We are ready to stop

this war, and we want cease-fire.

ROBERTSON: But are you ready to stop building rockets? Are you ready to stop firing rockets?

MESHAAL (through translator): I'll answer you, I'll answer you. Why are there demands only on the Palestinian people to get rid of their modest and

simple weapons, but no similar demands on Israel, the occupying state? We are ready to discuss the removal of weapons.


ROBERTSON: But you're firing at the Israelis. But you have -- the Israelis say you're firing them indiscriminately at Israeli civilians. That's what

you're using those weapons for. When they're not firing at you, you're firing at them. That's how this began.

MESHAAL (through translator): Israel is the one who started the aggression, and it is Israel who is killing civilians. I explained to you in detail

what Israel is doing in Gaza in killing civilians.


ROBERTSON: There was a stability, though. There was a stability. There was a peace. There was a period recently when there were no rockets.

MESHAAL (through translator): Unfortunately, the United States and the West and the Western media have adopted the Israeli narrative. Our

steadfastness is itself a victory.

ROBERTSON: Are you winning this war?

MESHAAL (through translator): Our steadfastness is itself a victory. For us to kill their soldiers while they kill our civilians is also a victory

for the Palestinian cause and for Hamas.

ROBERTSON: How are you having a victory for your resistance for the cause when so many Palestinians are dying? How is that a victory? Your rockets

aren't striking the Israeli cities, you've killed a handful of Israeli soldiers. How are you winning? How is this a strategic victory?

MESHAAL (through translator): Our people are convinced today that the only way to get rid of the occupation and establish their state is through

resistance, like all of the people of the world have done. Just like what the American people did when they got rid of the British occupation, and as

the French did when they got rid of the Nazi occupation.

ROBERTSON: President Obama asked you to be more responsible, to not fire rockets from civilian neighborhoods. What concessions are you willing to

make to get this blockade lifted?

MESHAAL (through translator): We are ready to take all of the positive steps, and we have done it before. Let me say it. Let the aggression end.

ROBERTSON: Get rid of the tunnels? Stop firing rockets?

MESHAAL (through translator): I'll tell you: let the aggression end and the siege lifted, and Hamas and resistance will not fire rockets on anybody.

We're defending ourselves, full stop.

ROBERTSON: You will stop the rockets?

MESHAAL (through translator): When the Israeli aggression ends, we will stop responding to them.

ROBERTSON: So, let's define, what is the aggression that has to stop? Let's be very precise and clear.

MESHAAL (through translator): Israel has to stop all forms of aggression: missiles and jets, attacks by air, land, and sea. They must open the

border crossings and lift the siege. Beyond that, the main issue is to end the occupation and end the building of settlements, because those are the

true root causes of this conflict.


ROBERTSON: Well, I also asked him about the accusations based on the UN and from the Israelis that they've seen weapons being stored in schools in

Gaza, in mosques in Gaza. Certainly this is what Israeli troops are finding as well on the ground. I asked him about that.

He said it's not true. This despite the fact there is evidence of this. However, he said there are 60 -- more than 60 mosques and schools that have

been hit. He said how do you think Hamas can control all of them? So his point was that's not something we're doing. But he did say that he would

invite international monitors into the country to inspect it and make sure it's not happening, Ralitsa.

VASSILEVA: So, Nic, did you get a sense of exactly what the end game looks like from Hamas's point of view? What does victory look like, and what

they're willing to compromise?

ROBERTSON: There's a definite belief, despite saying that they're not counting on international sympathy, they're not looking for international

sympathy, there is a belief that the high civilian death toll is contributing to an increased international pressure to get a more longer,

durable solution.

Their point being that they want the borders opened, that they want their airport open, they want to have free access to the sea, ultimately have a

port. They want to act as sort of normal citizens of the world, if you will.

That's their end point, but how do they get there? What are they willing to concede on the ground? At the moment, that all -- those types of issues

seem to be going on, if they're going on at all and being discussed behind closed doors, Ralitsa.

VASSILEVA: Nic Robertson, thank you very much, with this exclusive interview with the political leader of Hamas.

And some news just coming into CNN, as we were speaking with Nic it came in. The UN secretary-general Ban Ki-moon is calling Sunday's shelling

outside a United Nations-run school in Rafah, quote, "a moral outrage and a criminal act."

That's according to a statement issued by his office on Sunday. He went on to say, quote, "the attack is yet another gross violation of international

law and must be swiftly investigated, those responsible held accountable," end of quote.

"While Hamas is dominating the headlines," it went on to say, "it isn't the only militant group operating in Gaza." One of our top stories online is

at, it addresses that. Paula Hancocks is reporting on the other players and the extent of their power in the territory. That

and all the latest developments are at

Live from the CNN Center, this is CONNECT THE WORLD. Coming up next on our show, abandoned by his parents but embraced by strangers. He's just a few

months old, but he's turned heartbreak into hope.


VASSILEVA: Australia's prime minister is speaking out about a controversial industry in Thailand. It's after an Australian couple hired a Thai woman

to carry twins, but later abandoned one of the children when he was born with Down Syndrome. Angie Asimus of Australia 7 Network has the story.


ANGIE ASIMUS, AUSTRALIA 7 NETWORK CORRESPONDENT (voice-over): Being born with a heart defect hasn't stopped this special little boy from capturing

the love of perfect strangers.

UNIDENTIFIED MALE: He's a very beautiful little boy.

ASIMUS: While Gammy is recovering in hospital, his surrogate mother received a life-changing phone call. Pattaramon Chanbua is no longer

facing crippling medical bills alone.

PATTARAMON CHANBUA, SURROGATE MOTHER (through translator): Thank you so much. I have no words for this. Everyone is very generous. I can't say

anything but thank you. Thank you very much.

ASIMUS: Gammy's Australian parents abandoned him, only claiming his healthy twin sister. But when the seven-month-old's story made headlines

yesterday, Aussies dug deep.

PETER BAINES, HANDS ACROSS THE WATER: The family, I think, are both delighted, maybe a little overwhelmed, even, is the appropriate state that

they're in.

ASIMUS: Twenty-four hours ago, the fund had raised $60,000. Tonight, it has more the doubled to $150,000.

TONY ABBOTT, PRIME MINISTER OF AUSTRALIA: I guess it illustrates some of the pitfalls involved in this particular business. It's a very, very sad


ASIMUS: Pattaramon agreed to the surrogacy, worth almost $12,000. But as a Buddhist, she refused an abortion when the biological parents found out

their son had Down Syndrome.

ASIMUS (on camera): There's now a nervous wait for other Australian parents involved in around 400 similar pregnancies, as the Department of Foreign

Affairs investigates the Thai surrogacy trade.

ASIMUS (voice-over): For this family, the ties of a mother and son will always bind.

Angie Asimus, 7 News.


VASSILEVA: The latest world news headlines are coming up next, plus we'll have the latest on the fighting on the Israel-Gaza border in a live report.

And also, we will update you on the cease-fire negotiations in Cairo.


VASSILEVA: You're watching CONNECT THE WORLD. The top stories this hour. A search is underway for dozens of missing after a strong earthquake in the

southwest of China. This video we received just a short time ago shows rescue workers combing through the rubble. State media say at least 175

people are confirmed dead, 1400 are injured. The 6.1 magnitude quake destroyed thousands of homes.

Doctors in Atlanta are monitoring the first known case of Ebola on US soil. Dr. Kent Brantly was flown aboard a specially-equipped plane from Liberia

to Emory University Hospital on Saturday. A spokesman for the charity that Brantly works for says Brantly is in, quote, "great spirits."

Australian and Dutch experts spent a third straight day combing through the debris of the crashed Malaysian airliner in eastern Ukraine. This as

fighting between Ukrainian troops and pro-Russia rebels goes on just a short distance away. Reports say nine civilians were killed today.

Palestinian officials say the death toll from the Israel-Gaza conflict now stands at 1,839, and that includes victims of a shelling near a United

Nations-run school in southern Gaza. The UN secretary-general calls it a moral outrage and a criminal act.

Meanwhile, a funeral was held for an Israeli soldier that Israel said had been captured by Hamas. But now it says he was killed in a suicide

bombing. Palestinian groups say he was killed in an Israeli airstrike.

Meanwhile, Israel's military says at least 80 rockets were launched at the country today on Sunday. Let's get more now from our Sara Sidner, who is

near the Israel-Gaza border. Sara, are you seeing rockets? Are you hearing rockets where you are?

SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT: We have heard just about a few seconds ago, actually, the interception from the Iron Dome missile

defense system of two rockets just over my head to the right.

Just behind me, you will see one of the Iron Dome batteries. This one didn't go off. One that is located on the other side of us actually

appeared to have gone off. And it sounds sort of like a boom, almost like a rocket itself, when that interception happens.

So, yes, we have been seeing and hearing the result of rockets coming over from Gaza. A total of 80, that is not counting the two that just happened,

because that literally happened just seconds ago, Ralitsa.

Earlier today, we heard the sirens go off in another part of Israel. There have been sirens going off across the southern border with Gaza throughout

the day, over and over again. And there's sirens going off, of course, in the populated areas to warn people.

We're also hearing just now those deep booms, sounds like artillery fire going into Gaza as well. There has just been a lot of fighting, and we've

definitely heard the result of that here on this border.

I do want to talk about some of what's happening. Obviously, the fighting and the devastation and the death happening there in Gaza is absolutely

horrific. A lot of civilians being killed, more than 1700, now, reported by the Health Ministry there in Gaza.

On this side of the border, 64 soldiers, including the soldier that Israeli at first said had been captured, but then said had been killed in an

operation there in Gaza, Hadar Goldin, who is related to the defense minister, we found that out today. He went on Facebook, Moshe Yaalon, the

defense minister of Israel, and said, yes, he is part of my family and they're having a large funeral for Goldin today.

And there have, of course, been injuries throughout this on both sides of the border. Here on the Israel side of the border, there have been

injuries to soldiers, many of them, hundreds of them. And we went into hospitals to see exactly what has happened to these soldiers, the kind of

injuries that are being inflicted up on them, that they're getting, also, inside of Gaza, and what their families are thinking as they fight this



SIDNER (voice-over): A mother sits by her soldier son's side, his head wrapped in a bandage after surgery, wounded while on a mission inside Gaza.

HAYA LAPID, SOLDIER'S MOTHER: When I heard that he got hurt, I said, "Thank God."

SIDNER (on camera): Why?

LAPID: Because we can handle it. Because we will overcome. Everything is OK that he's alive. We earned our son back.

SIDNER (voice-over): He survived a blast of shrapnel to the face and neck.

LAPID: Luke is only trying to recover. He got hurt. A sole band of his friends got killed in front of him. He lost five friends from his group.

What's going to happen to him?

SIDNER: He doesn't want his face shown because he's insisting on finishing his mission, helping complete Israel's objective of blowing apart the Hamas

tunnel network --


SIDNER: -- that it says can be used to strike inside Israel. In another hospital, another wounded soldier, who could talk, telling us detonating

tunnels underground is extremely detailed work fraught with dangers in Hamas territory.

"We saw them carrying RPGs, Kalashnikovs, and grenades," he says. "When we arrived at the tunnel entry, we isolate the area so we can work on it. But

there is always danger." Revealing only his first name, Ron tells us he found himself in the crosshairs of a sniper, a bullet mangled his hand, hit

his hip, thigh, and stomach.

ZEEV ROTSTEIN, SHEBA MEDICAL CENTER: If we count injuries that we see here in this emergency room, which already had more than 100 soldiers pass

through here, it's injuries to the extremities.

SIDNER (on camera): Amputations?

ROTSTEIN: Amputations, open fractures, damage to the major vessels.

SIDNER (voice-over): But Palestinians say their pain and suffering is much greater. More than 1600 people have been killed, mostly civilians,

according to the Palestinian Healthy Ministry in Gaza. Israeli soldiers say they try to avoid civilians, but admit --

"It's a war out there. Unfortunately, civilians will be harmed. Hamas is using children and civilians. They hide weapons in mosques and in schools.

They shoot at us from civilian areas."

Hamas for its part makes clear it should come as no surprise that Israeli soldiers are targets while stalking tunnels and killing Palestinian people

in a territory that is not their own.


SIDNER: And the number of Palestinians has gone up since that report, now passing 1700, according to the Healthy Ministry. And also, the soldier

that everyone once thought was captures, Israel saying actually they think that he was killed during an initial blast from a suicide bomber during

their -- when they were in Gaza dealing with trying to explode a tunnel. Ralitsa?

VASSILEVA: Sara Sidner, thank you very much. Meanwhile, no place in Gaza seems safe from bombardment. Homes, schools, even places of worship have

been devastated. Our Karl Penhaul visited one mosque that's been brought to rubble and gives us Israel's explanation for why religious buildings

have been targeted.


KARL PENHAUL, CNN INTERNATIONAL CORRESPONDENT (voice-over): They've been bombed. But they still bow in prayer.

UNIDENTIFIED MALE: Why? You can see, 5,000 Koran out of this.

PENHAUL: Imam is blind, but says he can picture the ruins. "The mosque is just stone and walls. We will rebuild. We say to the Israelis, 'We will

crush you,'" he says.

Across the road, straight-A student Alaa Redwan dreamed of studying human rights in America. That was until the minaret came crashing through his


ALAA REDWAN, PALESTINIAN STUDENT: This is my room, and this is my house. Everything is destroyed by Israeli occupation. Everything destroyed.

PENHAUL: His history books and political biographies lie in the debris. Seventeen years old, he planned to spend summer cramming English and win a

scholarship to a US college. But he's lost his focus.

REDWAN: Really sad, very sad. Because this is my life. This is your life. Destruction. Destroyed.

PENHAUL: Israel targeted some mosques, accusing Gaza militants of stowing weapons inside. Redwan and others who attend the mosque say they saw no

guns or rockets there. In the rubble below, generations seem trapped in a recurring nightmare. Some say war is the only way. "They must fight for

their country," he says.

But up on the roof, Redwan clings to his dream that would take him far away.

REDWAN: Look. My dream, perhaps is dead, perhaps is alive.

PENHAUL: Karl Penhaul, CNN, Gaza.


VASSILEVA: Well, representatives from Hamas and the Islamic Jihad have reportedly arrived in Egypt for another round of cease-fire negotiations,

but Israel says it won't be sending anybody to these talks. Reza Sayah is in Cairo with the latest. So, Reza, what are the chances of success

without Israel's participation, without anybody from Gaza itself?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: It's hard to say at this point, Ralitsa. Obviously, the ideal situation is to get these two warring

factions to stop fighting, stop the bloodshed, to come here and sit across the table from one another to establish some sort of lasting truce.

The Israelis are not here. The Palestinians are. They've sent two separate delegations, one arriving last night here in Cairo, according to

state media. That particular delegation representing the Fattah movement, also included members of Palestinian intelligence agencies.

And then, this morning, you had representatives from the Hamas movement, seven of them arriving from Doha, according to state media. But again,

what's important to point out is that Tel Aviv, the Israelis, have made it clear, at least publicly, that they're not prepared to send a delegation


However, that doesn't mean that the stage is not set for, perhaps, indirect talks. A scenario where you have the Palestinians here laying out their

demands, their conditions, communicating those demands to the Egyptians, and then the Egyptians passing it along to the Israelis. That is a

possibility, but at this point, there's no indication of the two sides talking here in Cairo, Ralitsa.

VASSILEVA: Reza Sayah, thank you very much, live in Cairo.

I'm Ralitsa Vassileva, and this is CONNECT THE WORLD, thank you for joining me.


JOHN DEFTERIOS, HOST: All eyes on the region as the crisis in Gaza continues. We assess what the economic impact is on a territory lying in


Welcome to MARKETPLACE MIDDLE EAST. It's been over three weeks since the Israeli airstrikes began on Gaza, and the death toll and destruction

continue to mount. This week, we take a look at he economic and physical toll on Gaza after years of conflict with Israel.


DEFTERIOS (voice-over): Palestinian health officials say well over 1200 people have been killed, and more than 7,000 wounded since the Israeli

operation began. The United Nations says nearly three-quarters of those killed were civilians.

Israel Defense Forces say more than 50 Israeli troops have been killed in recent weeks. Despite repeated efforts by the international community to

invoke a cease-fire, the violence continued.


DEFTERIOS: Our correspondents have been on the ground in Israel and Gaza during the conflict. Karl Penhaul took a tour of Gaza after an Israeli

strike to give us a sense of the destruction.


PENHAUL (voice-over): Exodus from the front line. Almost nothing left to lose.

HAMZA AL-MASRI, DISPLACED PERSON: Where I live now? Where I go now?

PENHAUL: Bits and pieces bundled on their heads. His mother's photo under his arm, he says he lost her in the 2009 war. Now, he's just lost his

home. "There's nothing left, nothing left, it's a massacre," he says. In the embers, these men find what they say is the family's safe. A life

savings up in smoke. Amid the destruction, some creation. Lambs born minutes before the truce began.

PENHAUL (on camera): We're only about 700 meters from the border between Gaza and Israel here, and quite clearly, there's been close-quarters combat

here. These are the cartridge cases from a light machine gun.


DEFTERIOS: As Karl's report vividly illustrates, the loss of life can never be valued, but he cost of war is devastating. Palestinians in the Gaza

strip have been living under an air and sea blockade ever since Hamas came into power. This means limited access to building supplies and even



DEFTERIOS (voice-over): While the immediate economic impact of Israel's current incursion in Gaza is still unknown, its 2008 offensive caused a

total of $181 million in direct and $88 million in longer-term costs for Gaza's agriculture, generated about 600,000 tons of rubble, and $44 million

in environmental costs.

1.8 million people live on an area of 140 square miles, or 360 square kilometers. According to the International Monetary Fund, almost 40

percent of those in Gaza live in poverty, and one out of every three workers is without a job.

As Gaza's official economy contracted, the shadow economy, known as the tunnel economy, blossomed. Underground tunnels were built by Gazans to

circumvent the blockade, allowing goods to be illegally smuggled from Egypt. But the tunnels have also been used by Hamas to bring in weapons

and launch attacks on Israel.


DEFTERIOS: David Butter is a Middle East analyst and associate fellow at Chatham House in London, where he joins us now. We often talk, David,

about the intensification or isolation of the Gaza economy. How has it changed, in your view, as a result of the events in the region over the

last 6 to 12 months?

DAVID BUTTER, MIDDLE EAST ANALYST: What's changed in the last year has been the closure of the tunnels by the Egyptian government. This was handling

up to about 200 tons of trade every day. Fuel was running through, cars. It was a thriving entry point for bringing goods in. And, of course, Hamas

derived quite a lot of revenue from customs and licenses on these tunnels.

DEFTERIOS: What are the conditions on the ground today, with the tunnels shut and before the strikes. Is it a very difficult situation for

Palestinians on the ground?

BUTTER: About half of the Gaza population received humanitarian support one way or the other from the UN. There also were salaries coming in from the

Palestinian Authority to its members of the civil service, about 70,000 of those.

But without that trade coming in through the rougher crossings from Egypt, the situation was becoming increasingly more subdued and desperate for the

people on the ground.

DEFTERIOS: Grinding poverty and the desire by Hamas to strike at Israel, would you say there is a direct link?

BUTTER: Well, I think the timing of this escalation is linked to a number of things. Obviously, we have the breakdown of the peace process. We have

the reconciliation, if you like, the unity government between Hamas and Fattah.

But certainly from the Hamas point of view, the desperation they were in may have driven them to risk being -- getting involved in this escalation

on the assumption that a major crisis would result in a major reappraisal of the entire economic situation.


DEFTERIOS: That's our closer look at the economic strains for Palestinians in the Gaza strip, but there's energy in the background as well. Up next

on MARKETPLACE MIDDLE EAST, we look at whether sizable reserves off Gaza and in the eastern Mediterranean will help or hinder the peace process in

the region.


DEFTERIOS: Welcome back to MARKETPLACE MIDDLE EAST. All-out tensions between Israel and Hamas have stood in the way of potential energy

development offshore of Gaza. The Gaza Marine Field was discovered back in 2000, but conflict and politics have stood in the way of actual production.

I asked Simon Henderson of the Washington Institute, what is the potential of this field?


SIMON HENDERSON, DIRECTOR, THE WASHINGTON INSTITUTE: Well, in world terms, the Gaza Marine offshore field is of no particular consequence. It's a

fraction of the size of other gas fields.

But it's just on the cusp of being a size which can be commercially exploited, and in Palestinian terms, it is their largest single economic

asset and could change the way the Palestinian Authority obtains revenues, and could provide much more reliable electricity to both the West Bank and

in particular the Gaza strip.

DEFTERIOS: I remember back in 2000, Yasser Arafat actually described this as a gift from God. Fourteen years later, with formerly British gas group

BG having the rights to explore it, would you still say it's that sort of gift for the Palestinians going forward?

HENDERSON: This is a gas field which would be expensive to exploit in that before you can get it, you have to spend upwards of $800 million, perhaps

even $1 billion. But once you do that, you've got 15, 20, perhaps even more, years of gas, which can come ashore.

DEFTERIOS: in this case, with regards to Gaza, are there territorial disputes over who would actually own the gas still?

HENDERSON: Well, in political terms, Israel conceded the Gaza Marine Field to the Palestinian Authority many years ago. But in strictly legal terms,

there is still ambiguity over who owns it.

The setback to this in oil and gas terms is that off the Gaza strip, there's probably not any other gas field which is worthy of exploiting.

And nor is there likely to be oil to be discovered.

By contrast, Israel continues to discover gas and is on the point of looking beneath its current gas fields to see if, as they expect, there is

some oil there as well.


DEFTERIOS: Simon Henderson, once again, of the Washington Institute. Well, Gaza may be sitting on some sizable reserves, but it's not the only player

in the eastern Mediterranean basin. I had a chance to visit both Cyprus and Lebanon. They're hoping their recent discoveries will radically change

the fortunes for their two countries.



DEFTERIOS (voice-over): It may be early days in the quest for energy underneath the first platform in the crystal-blue waters of the

Mediterranean, but the bounty may be sizable for a small country like Cyprus.

A minister overseeing this portfolio for the island nation says that natural gas will make his country energy independent for a generation.

YIORGOS LAKKOTRYPIS, CYPRIOT ENERGY MINISTER: Cyprus requires about 0.5 trillion cubic feet for 25 years for electricity production in Cyprus.

Now, we have a discover, which ranges between 3.6 to 6, so most of that will go for exports.

DEFTERIOS: The eastern Mediterranean is considered a new energy frontier. Israel, Lebanon, and Egypt have also marked their territories and are busy

evaluating their potential. Texas-based Noble Energy did its first energy drilling work last summer at Cyprus, indicating there is potentially 3

billion barrels of oil in the field with a shared boundary between Cyprus and Israel.

The one block that has been surveyed when brought to market would represent more than 100 percent of the country's GDP of $23 billion. This would be a

massive turnaround for Cyprus, which needed a bank bailout a year ago.


DEFTERIOS: Across the waters in Lebanon, the calculations are much grander. Freddie Baz of Bank Audi says the government's share of energy revenues

could total $700 billion.

FREDDIE BAZ, GROUP CFO, BANK AUDI: Even if we assume a 20, 30 percent haircut on this figure for whatever geological or commercial risk, we are

still talking about a figure which represents 12 to 15 times the current size of the economy.


DEFTERIOS: Energy potentially changing the landscape in the eastern Mediterranean if all the parties can find common ground.

And that's all for this edition of CNN MARKETPLACE MIDDLE EAST. I'm John Defterios, thanks for watching. We'll see you next week.