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Kerry Issues Blunt Warning on Mideast Peace; U.S. to Hit Back over Russian Hacking; Trump Reverses Himself After Blaming Obama on Transition; Interview with Rep. Sean Duffy; Trump Announces Thousands of New Jobs; Obama and Trump Battle Over Russian Hacking and Israeli Settlement; Democrat and Republican Senators Prepare for Trump Cabinet Nominees. Aired 5-6p ET

Aired December 28, 2016 - 17:00   ET


JAKE TAPPER, CNN HOST: That's it for "THE LEAD." I'm Jake Tapper, turning you over to Jim Sciutto in for Wolf Blitzer in THE SITUATION ROOM.

[17:00:09] JIM SCIUTTO, CNN ANCHOR: And happening now, breaking news. Serious jeopardy. Secretary of State John Kerry warns that a two- state solution for Israel and the Palestinians now in serious jeopardy. He hits Israel hard for its expansion of settlements and forcefully defends President Obama's commitment to Israel's security. Israel's leader responds, calling the speech biased against Israel.

Mideast tweets. Before Kerry's speech, President-elect Donald Trump once again takes to Twitter, criticizing President Obama's approach; and Israel's prime minister follows suit, tweeting right back praising Trump.

Thanks, Donald. Also on Twitter, the president-elect thanks himself for America's strong economy. And goes on to blast the president for what he calls inflammatory statements. Is the transition still really going smoothly?

And crime and punishment. CNN learns the Obama administration is preparing to announce retaliation against Russia for its interference in the U.S. Presidential election. How exactly will the U.S. punish Vladimir Putin?

Wolf Blitzer is off today. I'm Jim Sciutto. You're in THE SITUATION ROOM.

Breaking news. In passionate and exceptionally blunt terms, Secretary of State John Kerry today warned both Israel and the Palestinians that their actions are undermining chances for peace in the Middle East. Kerry especially singled out Israel's expansion of settlements in the West Bank, accusing some Israelis of hoping for a single state with no homeland at all for the Palestinians.

Israeli Prime Minister Benjamin Netanyahu snapping right back, saying that Israel does not need to be lectured by foreign leaders. Netanyahu says the real obstacle to peace is not settlements but the Palestinians' rejection of Israel's right to exist and support for terror. Also breaking now, the U.S. is getting ready to announce its

retaliation for Russia's meddling in the presidential election. CNN has learned that the payback includes covert actions, economic sanctions and the naming of individual Russians involved in the hacking.

Our correspondents, analysts and guests are ready with full coverage of all the day's top stories. We'll also go live to Jerusalem and the State Department to get reaction to the breaking news.

We begin with more on Secretary of State John Kerry's warning about the threat to Middle East peace.


JOHN KERRY, U.S. SECRETARY OF STATE: Friends need to tell each other the hard truths.

SCIUTTO (voice-over): Secretary of State John Kerry delivering a blunt message to Israeli Prime Minister Benjamin Netanyahu.

KERRY: The Israeli prime minister publicly supports a two-state solution, but his current coalition is the most right-wing in Israeli history, with an agenda driven by the most extreme elements.

SCIUTTO: Pushing back following Washington's decision not to veto the United Nations' vote condemning Israeli settlements in Jerusalem and the West Bank.

KERRY: On this point I want to be very clear. No American administration has done more for Israel's security than Barack Obama's.

SCIUTTO: Kerry vehemently defended the U.S. abstention, saying the very prospects of Middle East peace are at stake.

KERRY: The vote in the United Nations was about preserving the two- state solution. That's what we were standing up for. The two-state solution is now in serious jeopardy.

SCIUTTO: Kerry acknowledged the U.S. consulted on the resolution but denies Israel's claim that the U.S. was the driving force behind it.

KERRY: The United States did not draft or originate this resolution; nor did we put it forward.

SCIUTTO: Israel's Netanyahu called Kerry's speech disappointing and more.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: Israelis do not need to be lectured about the importance of peace by foreign leaders.

SCIUTTO: Prime Minister Netanyahu promised Israel has the evidence to prove that the U.S. orchestrated the vote and would show that evidence to President-elect Trump when he takes office in just a few weeks. NETANYAHU: We have it on absolutely incontestable evidence that the

United States organized, advanced and brought this resolution to the United Nations Security Council. We'll share that information with the incoming administration.

SCIUTTO: For his part, President-elect Trump did not stand on the sidelines, tweeting before Kerry's speech, "We cannot continue to let Israel be treated with such total disdain and disrespect. They used to have a great friend in the U.S., but not anymore. Stay strong, Israel, January 20th is fast approaching."

Prime Minister Netanyahu quickly tweeted back, "President-elect Trump, thank you for your warm friendship and your clear-cut support for Israel."

[17:05:05] Despite the public tensions, President Obama recently decided to increase U.S. aid to Israel, committing $38 billion over ten years, part of the largest pledge of military assistance in U.S. history, which Kerry noted was not a new stance.

KERRY: In the midst of our own financial crisis, and budget deficits, we repeatedly increased funding to support Israel. In fact, more than one half of our entire global foreign military financing goes to Israel.


SCIUTTO: Let's get more now on the Israeli reaction to Kerry's speech. CNN correspondent Oren Liebermann is live to Jerusalem. Oren, the prime minister had a direct and immediate response like a coiled spring. He was ready to fire right back.

OREN LIEBERMANN, CNN CORRESPONDENT: I think Prime Minister Benjamin Netanyahu knew much of what he was going to say, because I think the prime minister new much of what Secretary of State Kerry was going to say.

Kerry, through the Obama administration, through Samantha power at the U.N., made it clear that they're trying to display this as a balanced speech and a balanced resolution. Kerry criticized Palestinian incitement to violence before criticizing Israeli settlement building. But to Netanyahu most of the criticism was directed at Israeli settlements, and Netanyahu made it clear he simply doesn't agree with Kerry.

And now with the Security Council resolution it seems he doesn't agree with the rest of the world. His position has always been that settlements are not the obstacle to peace. Netanyahu said recently he doesn't see how removing the settlers from the West Bank or Jerusalem advances peace at all.

He stands at odds there with Secretary of State Kerry, and that was blatantly clear tonight. Netanyahu was ready to springs, as you pointed out, and he very much did, making it clear that he can't wait for the next three weeks to be over. He wants to work with President- elect Trump to undo the damage of the resolution and this speech. SCIUTTO: Now, he also repeated his claim that the administration, the

Israeli government, has secret information that he's going to supply to the Trump administration to bolster Israel's claim that the U.S. actually orchestrated the resolution. Are we learning anything more about what's behind the claim?

LIEBERMANN: We haven't learned anything...

DONALD TRUMP, PRESIDENT-ELECT OF THE UNITED STATES: By the head people at Sprint. They'll bring 5,000 jobs back into the United States, taking them from other countries. They're bringing them back to the United States, and Masa and some other people were very much involved, so I want to thank them.

So One Web, a new company, is going to be hiring 3,000 people. So that's very exciting. We have a combination of Sprint for 5,000 jobs, and that's coming from all over the world, and they're coming back into the United States, which is a nice change. And also One Web, 3,000 jobs. That's a new company. And it was done through Masa. A terrific guy. We appreciate it. OK?

UNIDENTIFIED MALE: Mr. President-elect, did you speak with President Obama today?

TRUMP: I did. I did. He phoned me. We had a very nice conversation.

UNIDENTIFIED MALE: Did you bring up any of your concerns about the roadblock?

TRUMP: We had a general conversation. I think the secretary's speech legal spoke for itself. But we had a very general conversation. Very, very nice. Appreciated that he called.

UNIDENTIFIED FEMALE: You have been critical of the U.N. lately. Do you want the United States to leave the U.N.? Are you considering that move?

TRUMP: The U.N. had such tremendous potential. Not living up to its potential. Such tremendous potential. But it is not living up. When do you see the United Nations solving problems? They don't. They cause problems. So if it lives up to the potential. It's a great thing. If it doesn't, it's a waste of time and money. Thank you very much.

SCIUTTO: We just heard Donald Trump there speaking live outside his residence in Florida.

A couple of highlights there. One on the economic front. He says that Sprint, the telecommunications company, will soon announce that 5,000 jobs are returning to America. Donald Trump, the president- elect, saying that's coming from a number of places around the world.

He also said that the company One Web, a new company, will be creating 3,000 jobs here. He said that Masa, which is related to SoftBank, behind that deal. This following along on his news, you might remember, a few weeks ago about Carrier, claiming credit for bringing back jobs, as well.

He also said there that he spoke to President Obama today, that President Obama called him. That, of course, relevant in light of what appears to be the deteriorating -- deteriorating relationship between the president and the president-elect as the inauguration approaches there.

But again, hearing live just then from President-elect Donald Trump on economic news and news about conversations with President Obama.

I want to return now to our correspondent, Oren Liebermann, who's standing by live in Jerusalem.

If we could just go back to Israeli reaction to Secretary Kerry's speech earlier today on Mideast peace. Again, we heard from the Israeli prime minister, claiming the secret evidence that the U.S. was somehow behind this resolution, orchestrated this resolution, evidence it's going to share with the Trump administration.

Do we have any more details now about what exactly this evidence is?

[17:10:00] LIEBERMANN: None yet. They haven't put out any of this evidence, this ironclad information that they've been talking about now ever since right after the U.N. Security Council vote.

At first it was sort of whispered in off-the-record conversations, and then it was attributed to Israeli officials. Now it's an accusation that's come from everyone from Netanyahu officials here -- that is Israeli officials -- and Israeli officials there, and yet none of them have offered any of that evidence. Their answer is that they'll give it to the Trump administration, and they'll let him decide what they want to do to it.

And yet, it's not an accusation that they're letting go. I suspect we'll hear that even more. The question is will they back it up with some information or some of that evidence that they that they claim that they claim is ironclad.

SCIUTTO: Well, the inauguration, 24 days away. We'll see then. Oren Lieberman in Jerusalem, thanks very much.

CNN global affairs correspondent Elsie Labott, she is at the State Department tonight with more on what exactly led up to John Kerry choosing to have the speech now.

Why now, before the end of the administration. What was he, what was the Obama administration, trying to do here with so little time before Donald Trump takes over?

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Jim, I think they've been wanting to do this for a long time. Then the election got in the way. They didn't want to do anything to hurt the chances of the democratic nominee, Hillary Clinton, who was seen as in strong support of Israel.

When Donald Trump was elected they were afraid it might push him kind of in the opposite, hardline direction of what he said he wanted to do, which was e peace. And they think they started to look at what was happening on the ground in Israel. You have seen a real move to the right. The election of what, you know, this administration has called -- Secretary Kerry has called the most right-wing government in history.

He talked today about the settler movement, which is the most extremist movement. And they see these settlements encroaching on what could be a Palestinian state and risking the chance of that two- state solution.

Then they looked here in the United States, and they saw what Donald Trump was saying, promising to move the embassy to Jerusalem, appointing a hardline ambassador, David Friedman, who supported settlements, who also has policies that echo Benjamin Netanyahu's policies. And they felt they couldn't in good conscience, secretary said, leave, walk out the door without putting their thumb on the scale and putting forward a vision for peace the way they saw it and the policies that were threatening and particularly this settlement policy.

I don't think Secretary Kerry thinks those ideas are going to have a home right now, but they do hope that it could be the basis for peace when the parties do get back to the table; and that's the only way they're really going to end the conflict, Jim.

SCIUTTO: Secretary Kerry and the Obama administration not alone in feeling that the two-state solution is fading away.

Elsie Labott at the State Department. Thanks very much.

Also, more breaking this hour. CNN has learned that the Obama administration is preparing to announce retaliatory measures against Russia for its meddling in the U.S. presidential election.

CNN justice correspondent Evan Perez, he's been working his sources. So Evan, there has been a lot of buildup to this for some time. Appears a decision has been made. And we might hear about this as soon as tomorrow?

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: It could happen as soon as tomorrow. The Obama administration, Jim, is ready to expand sanctions and to name names as the outgoing president tries to respond to Russian meddling in the presidential election.

Officials are expected to announce as soon as tomorrow the series of retaliatory measures, including sanctions and diplomatic measures. Now, they're expected to name individuals who are associated with the Russian disinformation campaign that U.S. intelligence officials say was at least partly focused on harming Hillary Clinton's presidential campaign.

Now, for their part, the Russians say that they're tired of, quote, lies and misinformation from the Obama administration. A Kremlin spokeswoman says, quote, "If Washington really does take hostile steps, they will be answered. Any action against Russian diplomatic missions in the U.S. will immediately bounce back to U.S. diplomats in Russian."

And of course, Jim, as you know Donald Trump says that he doesn't believe the Russians are really behind this. And we still, as you know, expect that the intelligence committee is going to present a report to President Obama before he leaves office in the next few weeks, in which we're going to get a lot more detail into what -- not only what the Russians were up but also what the Chinese were doing back in the elections in 2008.

SCIUTTO: The question will be how much information, intelligence do they declassify and make public.

PEREZ: How much do they declassify? Right.

SCIUTTO: A lot of demands for that, that proof.

PEREZ: That's right.

SCIUTTO: Even Perez, thanks very much. It will be a fascinating story to follow.

Well, it may be a holiday week, but there is certainly a lot of news going on; and there will be even more when the new Congress convenes just next week. And with us now is Republican Congressman Sean Duffy of Wisconsin. Congressman Duffy, we appreciate you joining. We're getting more information. Please stay with us.

And please, you stay with us, as well. We'll be right back with you after this break.


SCIUTTO: Welcome back. And we're back with our special guest, Republican Congressman Sean Duffy as we cover today's breaking news, as well as what could be new friction between the Obama administration and President-elect Donald Trump. Are those good feelings from last month's White House sit-down dissipating? The President-elect seems to be saying yes and no.

Let's get the very latest from CNN international correspondent Suzanne Malveaux. So what's the problem developing here?

SUZANNE MALVEAUX, CNN INTERNATIONAL CORRESPONDENT: Well, you know, Jim, we actually just heard from Trump and Obama. And he said Obama called him today and they had a nice conversation.

But the problem here is that both men are struggling with very real competing interests. On the one hand, both Obama and Trump truly believe they and the country benefit from a smooth transition of power. Obama wants his legacy preserved; Trump wants some guidance on how to govern. But on the other hand, they are both very proud and competitive men who do not allow themselves to be publicly diminished.


DONALD TRUMP (R), PRESIDENT-ELECT OF THE UNITED STATES: It was a great honor being with you, and I look forward to being with you many, many more times in the future.

MALVEAUX (voice-over): So much for the pleasantries. Donald Trump today blasting President Obama on Twitter: "Doing my best to disregard the many inflammatory President O statements and road blocks. Thought it was going to be a smooth transition. Not!"

[17:20:12] But this afternoon Trump seemed to have changed his mind, saying the transition was going smoothly.

TRUMP: I think very, very smoothly, very good.

MALVEAUX: Trump and Obama had been careful to avoid personal criticism of one another in the weeks after the election, but the more combative tone emerged this week after Obama claimed he could have beat Trump if he ran for a third term.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I am confident in this vision because I am confident that, if I -- if I had run again and articulated it, I think I could have mobilized a majority of the American people to rally behind it.

MALVEAUX: Trump counterpunched, tweeting, "President Obama said he thinks he would have won against me. He should say that, but I say no way. Jobs leaving. ISIS. O care, et cetera."

But just days after the bruising election, the two appeared seemingly cordial.

OBAMA: We have done everything we can to make sure that they are successful, as I promised. And that will continue.

TRUMP: I never met him before, but we had -- we had a very good chemistry going. I found him to be terrific. I found him to be very smart and very nice.

MALVEAUX: Since then the two have had several phone conversations, and today Trump's incoming press secretary, Sean Spicer, tried to downplay the public bickering.

SEAN SPICER, INCOMING WHITE HOUSE PRESS SECRETARY (via phone): They continue to talk. I don't know when the last time they did. But as they -- as the inauguration gets closer, both the current president and his team have been very helpful and generous with their time as far as the actual transition.

MALVEAUX: Today, between closed-door meetings, Trump made several brief appearances at his Mar-a-Lago resort.

While Obama is vacationing, Trump has been claiming credit for the country's positive economic outlook, saying, "The U.S. consumer confidence index for December surged nearly four points to 113.7, the highest level in more than 15 years. Thanks, Donald."


MALVEAUX: White House aides say the president is not going to back down from his own record of accomplishments, despite what Trump is claiming credit for. As he noted in his last press conference this year, unemployment rate at 4.6 percent, a nine-year low. Economic growth at 3.5 percent, high. And his approval rating almost at 60 percent.

And of course, we just heard from Trump again, announcing he had more good economic news, saying that U.S. Sprint now bringing back 5,000 jobs from overseas, and a new company, One Web, hiring 3,000 people.

So obviously, again, Trump trying to take credit for some of the things that are happening in the economy over the last couple of weeks.

SCIUTTO: Seemingly personally negotiating those deals, as well. Suzanne Malveaux, thanks very much.

MALVEAUX: Thank you.

SCIUTTO: And we're back now with Republican Congressman Sean Duffy of Wisconsin.

So Congressman Duffy, President-elect Trump, as you saw there, just came out and announced these jobs -- 5,000 from Sprint, 3,000 from One Web. Comes on the heels of the Carrier deal. Somewhat less than a thousand jobs, it seems, in the final accounting. Is this going to be a new hallmark of President Trump's administration, kind of individually negotiated deals where he seems to be very personally involved in these kinds of deals?

REP. SEAN DUFFY (R), WISCONSIN: Well, I think you're going to see Mr. Trump involved in a number of different deals like you just mentioned with Carrier and with Sprint.

But Jim, you know you can't do that with every different American company. What you have to do is set up a set of policies that incentivize growth and repatriating jobs back to America.

And what Mr. Trump was talking about, with fixing the tax code and making sure we can root out some of the bad and oppressive rules and regulations in government to make us more competitive globally, I think is going to be what really drives growth and jobs and better jobs back into America.

So this is just going to be a small slice of a broader plan to make America more competitive, again in tax and regulation.

SCIUTTO: Now, as of course, we know, President Trump has not taken office yet. President Obama still in office. He's been in office for nearly eight years. But we have seen Donald Trump claiming credit for some economic figures.

I'm just going to throw up a tweet that he put up last night, saying that "The U.S. Consumer Confidence Index for December surged nearly four points to 113.7, the highest level in more than 15 years. Thank you, Donald." Of course, thanking himself there. I mean, can Donald Trump really take credit for the economic news, as

it's President Obama who has been in office for eight years?

DUFFY: Well, I think when you see more optimism within the American people and the American economy, I think that is solely related to Donald Trump and his election and his message. When you see the stock market go up because of the anticipation of a change in leadership, again, going from someone who was a community organizer to someone who is a business leader and understands the business of business.

SCIUTTO: Wait a minute, Congressman Duffy. Let's look at the numbers, because the consumer -- the Consumer Confidence Index in February 2009, just after Obama took office, was at 25.3. It climbed to 100.8 in October. So the lion's share of the growth in consumer confidence is under President Obama.

[17:25:09] And frankly, when you look at the stock market, as well, it was at, you know, really the depths after 2008 and jumped since Obama has been in office. Is that not credit to the Obama administration rather than Trump?

DUFFY: But, so -- I'll answer both those questions. But first, we're talking about what's happened since this election. You've seen a great deal of optimism, and you've seen the stock market jump, all in anticipation that there's going to be a better environment for business, which means there's a better environment for jobs and job growth.

Looking back to Obama, he took over in a massive financial crisis. And you know this, that when you have a massive financial crisis, you also would get a massive economic boom after that crisis. And frankly, we've seen lack-luster growth in the economy. We've had, you know, 1 and 2 percent growth, which is historically low after such a devastating downturn.

The reason we haven't had this massive growth in the economy, GDP hasn't grown at 3 percent and 4 percent, is because of tax policy and regulatory policy that has come from Barack Obama.

New job growth isn't really good-paying jobs. We have a lot of part- time jobs that have come into play that have driven those numbers down. What America wants is new jobs and really good jobs that come from businesses coming back to America, but also people feeling comfortable innovating and investing, which is what creates this economic revival in our country.

SCIUTTO: Representative Sean Duffy, please stay there. We have some new comments from President-elect Trump on the U.N., on Israel. I want to ask you about those. Please stay with us. We'll be right back.


SCIUTTO: Welcome back. And we are back with Republican Congressman Sean Duffy. [17:30:38] Congressman, one of the many disagreements we've seen

bubble over between President-elect Trump and President Obama after that initial kind of warm and fuzzy period just following the election is over this U.N. Security Council resolution regarding Israel.

I want to ask you this question. I mean, previous presidents have often held true to the rule, just one president at a time. Do you believe it was wise and right for President-elect Trump to wade into this dispute over the U.N. resolution, in effect going around the current president and telling Israel, as you'll remember in one of his tweets, to "stay strong, January 20 is just a short time away"? Was that wise?

DUFFY: Well, I think -- I think both of these men, Mr. Trump and Mr. Obama, are being a little bit untraditional in the way they've behaved in this transition.

One, you have President Obama, who's doing some historic things, like abstaining from the vote at the U.N. He should have held back and let Donald Trump come in and take over in 24 days.

And Donald Trump probably should stay calm and stay off the Twitter- sphere until the president is done on the 20th of January. So both of them could be better players as they go through this transition.

Obviously, they have different views of the world, different views of the economy, and frankly, you're not going to find a lot of agreement. So if they're both engaging in a public conversation, it's going to look pretty messy, because they don't agree.

SCIUTTO: Well, another thing they certainly don't agree on is Russia's hacking of the U.S. election, even on the premise. Donald Trump repeatedly denying in public that Russia is behind it, despite the assessment of the U.S. intelligence community.

It is now CNN's reporting that the Obama administration is preparing to announce as soon as tomorrow a series of retaliatory measures against Russia for that meddling. What is your view of that, and do you believe that Donald Trump would choose to reverse that retaliation when he takes office?

DUFFY: So first of all, I haven't seen the evidence yet that lays out the case against Russia and how they influenced the -- or tried to influence the American election. Now, I know that you'll tell me that a lot of our intelligence agencies say that that's exactly what they did. I haven't seen it yet myself.

SCIUTTO: Well, not a lot of them; all of them have. All of the U.S. intelligence agencies have.

DUFFY: Should there -- let me finish. Should there be an American response if Russia is meddling in our election? Absolutely. But I also think it should be tempered with that it was a failed ate.. -- attempt. I made this point before.

Do I think the hacking of John Podesta and the DNC, the information that came out from the e-mails had any influence on the voters across the blue wall, which includes Wisconsin, Pennsylvania, Michigan, Ohio? I don't think it had any impact on that.

So we should take action. No one should mess with our elections. And if they do, they should be met with a blunt force from the American people and the American government. But it should also be tempered with the fact that they didn't actually influence the outcome.

SCIUTTO: Congressman Duffy, thanks very much for taking the time with us today. And happy holidays to you and your family.

DUFFY: You too, Jim. Thank you.

SCIUTTO; In our next hour, I will be joined by Israel's ambassador to the United States, Ron Dermer. More on the finger pointing between Secretary of State John Kerry and Benjamin Netanyahu.

Also, presidential historian Douglas Brinkley will tell us about his meeting today with President-elect Donald Trump.


[17:48:01] SCIUTTO: Welcome back. We are following breaking news as President-elect Donald Trump continues his working vacation in Florida. Just moments ago the president-elect became before television cameras to make several announcements starting with word, he says, of new American jobs.


TRUMP: Just had some very good news. Because of what's happening in the spirit and the hope. I was just called by the head people at Sprint, and they're going to be bringing 5,000 jobs back to the United States. They're taking them from other countries. They're bringing beam back to the United States. And Masa and some other people were very much involved in that, so I want to thank them.

And also One Web, a new company, is going to be hiring 3,000 people. So that's very exciting. So we have a combination of Sprint for 5,000 jobs and that's coming from all over the world, and they're coming back into the United States, which is a nice change, and also One Web, 3,000 jobs. That's a new company. And it was done through Masa. And terrific guy. And we appreciate it. OK?

UNIDENTIFIED MALE: Mr. President-elect, did you speak with President Obama today?

TRUMP: I did. I did. He phoned me. We had a very nice conversation.

UNIDENTIFIED MALE (via spokesman) Did you bring up any more concerns about the roadblocks?

TRUMP: We had a general conversation. I think the secretary's speech really spoke for itself, but we had a very general conversation. Very, very nice. Appreciated that he called. UNIDENTIFIED MALE: You've been critical of the U.N. Lately. Do you

want the United States to leave the U.N.? Are you considering that move?

TRUMP: The U.N. had such tremendous potential. Not living up to its potential. There is such tremendous potential but it is not living up. When do you see the United Nations solving problems? They don't. They cause problems. So if it lives up to the potential, it's great thing. If it doesn't, it's a waste of time and money.

OK. Thank you very much.


SCIUTTO: Donald Trump there just a short time ago in Florida. Let's get the insights of our panel of experts. Ryan, starting on the jobs. This seems to be a new hallmark of the Trump -- upcoming Trump administration, these kinds of deals that he claims to negotiate himself.

RYAN LIZZA, CNN POLITICAL CONTRIBUTOR: Look. This is just him talking, throwing out numbers. As Ronald Reagan used to say, about soviet arms agreements, trust but verify.

So one of those things where I think maybe spend some time figuring out exactly what he is talking about, if these numbers hold up. We know from the carrier deal that the numbers announced were actually different in reality.

So maybe there are some companies that, because of whatever Trump or some of his aides put some pressure on them have decided to rejigger some of their job numbers.

But I want to wait and see exactly what happened before I either praised or condemned what he's talking about here. Just generally, politically, um, all presidents take credit for things that happen on their watch. Trump is doing something interesting. He's taking credit for things that are happening on Obama's watch now and is arguing that his election is causing -- is causing these things.

SCIUTTO: Rebecca Berg, referring to Trump, claiming earlier the consumer confidence numbers are his. Granted, they have gone up wince his election, But they've gone up dramatically, from about 25 in February of 2009 in when Obama took over to just above 100 in October. Does it matter?

REBECCA BERG, CNN POLITICAL ANALYST: Well, it certainly matters. We like to see optimism in the markets and optimism in the economy. And certainly, it matters for Trump politically because, if the optimism is growing, even though it grew remarkably under President Obama, he can claim a small victory there.

And I think he alluded to that in his remarks about the investment from Sprint, this alleged investment by Sprint, by saying they had seen hope -- they were acting on the hope and optimism sprung from his election. Certainly, the markets have rallied, and perhaps some of that can be

attributed to the results of the election but it's really hard to take out any of these variables and say this is the one reason this is happening. Certainly companies are responding to promises that Republicans will reform the tax code, especially corporate tax reform.

SCIUTTO: And fewer regulations. There is substantive change they're expecting that could make a difference in the stock market and elsewhere.

Jackie, the other running political soap opera is what is exactly the state of the relationship between Obama and Trump. And today we had both messages. We had Donald Trump tweeting. We'll throw this up on the screen: "Doing my best to disregard the many inflammatory comments Obama statements and roadblocks. Thought it was going to be a smooth transition. Not?

But then we just saw him, in his remarks there, saying they had a very nice conversation with President Obama. Do we have any idea what's actually going on there?

JACKIE KUCINICH, CNN POLITICAL ANALYST: You know, this reminds me of a time long, long ago starring a man named Reince Priebus, who was then the head of the RNC. And Trump would feud with him publicly. He would say, "The RNC is out to get me. They're -- they're trying to undermine me." And then he would get on the phone with Reince Priebus, and he would say, "We had a great conversation. Everything is fine."

So I think a little bit of this is a soap opera, and you know, when he gets on the phone with Obama, everything is fine. They have a conversation, like adults, and move along. And then you saw you him say what he said. And so I think a lot of this is for the show, is for the drama. We can never forget where Trump came from. And I think a lot of this is intrigue.

SCIUTTO: Does it -- I mean, is it drama? Is it also a tool of influence? Right? Is that a way -- is it sort of the carrot and stick? You know? Is it a way to kind of -- to kind of beat people, beat opponents into submission?

KUCINICH: He won. He won. He's going to be president. He beat Obama's party. So I don't know what else he wants at this point, what good it is doing other than, you know, pure intrigue and maybe some entertainment or in playing to his base, which he continues to do, regardless of the fact that, you know, he has to be the president for the whole country.

BERG: That's right. I think part of this is saving face with his supporters because Obama went and said in an interview that he thought he could have beat Donald Trump in this election if he had been given that opportunity. And so, for Donald Trump...

SCIUTTO: Was that the turning point, do you think? That comment?

BERG: I think it certainly set Donald Trump off. As he has said in the past, when someone punches at him he punches back. And I think he took it as a direct attack on him and affront. That doesn't mean they can't work on the transition, still. I think they are two people who are always going to be at odds politically and personally. I don't think you could find two more different people than Donald Trump and Barack Obama if you tried.

SCIUTTO; We've seen that. I had a conversation with Republican Congressman Duffy. He referenced that, too. I mean, part of the reason you're having these public disagreements is that there are actual fundamental disagreements. Whether it's Israel, whether it's Russia hacking, economic policy, environmental policy. I mean, you can't be further apart on these issues.

One thing we learned about Trump is very often there is no relationship with what he says publicly on Twitter about someone, usually that he is attacking, and what he may be saying privately and in his private relationship with him.

[17:45:03] Bill Clinton after the election was talking to some people in New York and said he was astonished when Trump called -- when Clinton called Trump that their conversation was as if it had been like the '90s when they were actually close friends, as if the entire campaign hadn't happened. I think Trump just sees everything, you know, these public battles as political, you know, and his private relationships are often very, very different.

SCIUTTO: Right, understood. Well, listen, please stand by. We have a lot more to discuss regarding Trump and Obama and more.

Also ahead, Israel's Ambassador will join us live here to react to today's American criticism that Israeli settlements are putting the prospect of a two-state solution and Middle East peace in serious jeopardy.

We'll also be joined by presidential historian Douglas Brinkley who met face to face with the President-elect today.


SCIUTTO: We are back now with our panel of political experts. So beyond the kind of, you know, soap opera drama of the relationship between Obama and Trump, I mean, there are substantive issues at stake here and one being this U.N. Security Council resolution regarding Israel, and you have Trump wading right into it.

[17:50:08] I mean, you have this old rule, we thought, of only one President at a time. You know, how dangerous is this? I mean, let's get beyond the politics, Rebecca. I mean, how dangerous is this for one of the key national security relationships, key ally relationships for the U.S.?

BERG: Well, it certainly confuses, I think, not only our allies internationally but every country that we work with internationally.

SCIUTTO: Yes. Who's in charge? BERG: Exactly, because they don't know whether they're supposed to

call Donald Trump, maybe he'll help them out, really a statement, where President Obama wouldn't otherwise have. It really creates this environment of confusion moving forward for the next few weeks.

And I know three weeks might not sound like a long time, but when we're talking about foreign relations and national security, it is. A lot can happen. And there are so many different balls that our country is juggling with foreign policy at one time, it really does become relevant.

LIZZA: And I mean, to me, the one to watch is what happens now. It's been reported today that the Obama administration has decided on some response to Russian hacking this election. And you have this unique situation where the President-elect has publicly said he does not believe there was any Russian cyber warfare against the United States, and you have the outgoing President who is about to respond and we don't know to what extent.

And you have to hope, just as a citizen, that Trump and Obama get on the same page on this because what happens when Putin reacts to whatever Obama is about to do and Trump decides well, I agree with Putin, not the President?


LIZZA: I mean, that is an unprecedented situation.

SCIUTTO: Does he choose to reverse President Obama's measures, whatever he announces?

KUCINICH: And that uncertainty is the reason why the Obama administration, when they were working on this trying to make it public and trying to tell Congress, they want to make it hard for Trump to come in and roll back anything that they do or roll back sanctions. So make it publicly hard for him and, you know, hard for Congress because Lindsey Graham told you yesterday that 99 senators --

SCIUTTO: Well, that's the thing.


SCIUTTO: It's not just Trump versus Obama on the Russia issue.


SCIUTTO: It's Trump versus, well, certainly, the intelligence agencies and the entire U.S. Senate.


SCIUTTO: A Republican Senator told me that.

KUCINICH: It looks like Rex Tillerson is moving into better territory than maybe when he first came but --

SCIUTTO: For his confirmation.

KUCINICH: For his confirmation. That said, he's the one with the Russian sort of shadow on him, and so we'll see how Trump's reaction plays into Tillerson's confirmation hearing because he could shoot himself in the foot here.

SCIUTTO: Yes, you mentioned this. I mean, you know, with the U.N. Security Council resolution, that's a matter of record now in the U.N. in terms of how agreements you'd -- other countries may very well act on this with a number of executive orders relating to environmental issues. You have Barack Obama trying to kind of cement his legacy on Russian hacking. You know, he embarks on retaliatory measures, those are facts on the ground as we call them.

I mean, is it fair to say that President Obama is trying to tie Donald Trump's hands to some degree before he takes office?

LIZZA: I think, you know, that's a good question. I don't know if he's tying his hands but, look, when you're President, you reserve all of the powers and responsibilities of that office until noon on January 20th. And there's no reason that Obama, you know, shouldn't go forward with the agenda he was elected to take care of. Every president has done this.

Remember Bill Clinton in the final days, pushed through lots of things. George W. Bush did the same thing. I think the interesting thing on the hacking is the President-elect should be being briefed on the most sensitive security operations. So presumably the White House and the Trump transition are talking about what's going on with Russia, and imagine there's some kind of a disagreement between the incoming and outgoing presidents about what to do about this and Trump goes public with it.

SCIUTTO: Well, they have to be seeing the same intelligence on Russian hacking. They're getting the same presidential daily briefing. That question is, does one believe that intelligence and one simply not?



BERG: Right.

SCIUTTO: Yes. Really, starting next week, Congress is going to come back into session, you're going to have confirmation hearings. You mentioned Tillerson for Secretary of State. We have Sessions coming up on the 11th. What, Rebecca Berg, do you envision? Which are going to be the toughest appointments for President-elect Donald Trump to get through?

BERG: Well, a lot of this comes down to vetting as we've seen with past confirmation processes. Daschle, for example, might have been a relatively safe pick, except that tax issues came to light and then he had to withdraw his nomination.

SCIUTTO: Back with taxes, right. Right.

BERG: Exactly.

KUCINICH: Oh, don't disappoint now.

BERG: So in this context, that would probably seem a relatively minor controversy. But there are still things that could potentially come to light with all these nominees, we need to keep that in mind. But Democrats have aired concerns obviously about Tillerson when it comes to Russia, even --

SCIUTTO: Democrats and Republicans.

BERG: Democrats and Republicans both, and certainly, I think Republicans are going to need him to arrive at those hearings and basically say something definitive about the Russian hacking, I think.

[17:55:11] But even with someone like Ben Carson, Democrats have questioned whether he has the experience to run a federal agency like HUD. And so I think Democrats certainly will be raising questions about all these nominations.

SCIUTTO: And Sessions too on, perhaps, racial issues from his past. We're going to have to leave it there now. Rebecca, Ryan, Jackie, thank you. As always, great to have you on.

You'll remember Donald Trump just said that the United Nations isn't living up to its potential. Coming up, Israel's Ambassador to the U.S. will be in THE SITUATION ROOM here with me to respond to the U.N.'s vote on Israeli settlements and the very public disagreement between the Obama administration and the Israeli Prime Minister Netanyahu.

Also breaking, new details about how the U.S. intends to retaliate against Russia for its meddling in the presidential election.


SCIUTTO: Happening now, breaking news. Battling over peace. Secretary of State John Kerry defends President Obama's Mid-East policy, warning Israel and President-elect Trump they're heading down a perilous path. Tonight, Israel is firing back, delivering a one-two punch, along with Trump against the outgoing Obama administration.

[17:59:56] Naming names. The U.S. is ready to reveal its punishment against Russia for its election meddling. Officials say specific individuals will be called out for their connection to the hacking operation.