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Sources: U.S. Planning Additional Sanctions on Iran; U.S. Condemns Russian Aggression in Ukraine; Issa Defends Trump's Behavior on Call with Australian P.M. Aired 5-6p ET

Aired February 2, 2017 - 17:00   ET

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


TAPPER: I'm Jake Tapper. I now turn you over to one Mr. Wolf Blitzer, who's right next door in THE SITUATION ROOM.

[17:00:08] WOLF BLITZER, CNN ANCHOR: Happening now, breaking news. Threatening foes. After putting Iran on notice for a missile test, the White House may be ready to unleash new sanctions, and President Trump says he's not ruling out military action.

Fighting with friends. President Trump irritates the leaders of Australia and Mexico in tense phone calls but dismisses any difficulty, saying, quote, "Don't worry about it. We have to be tough."

Unconfirmed. Republicans change the rules to advance President Trump's nominee to head the EPA. But his pick for education secretary is now opposed by two Republican senators. Is that nomination in trouble?

And conflicting accounts. New details are emerging about the Special Ops raid against al-Qaeda in Yemen in which a U.S. Navy SEAL was killed and a U.S. aircraft was lost. There's now disagreement about the success of the bloody operation.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: President Trump says the world is in trouble, and he's the one to fix it. Sources say the Trump administration is now planning additional sanctions on Iran just a day after the president's national security advisor said Iran has been put on notice for a missile test. And the commander in chief says he's not ruling out military action, saying -- and I'm quoting him now -- "Nothing's off the table."

As new details emerge about his tense calls with foreign leaders, including a close ally, the prime minister of Australia, President Trump is downplaying any problems, saying -- once again, I'm quoting -- "Don't worry about it. We have to be tough."

Today again questions an existing agreement to take in more than 1,200 refugees detained by Australia, which the president calls a dumb idea. A dumb deal.

After breaking -- also breaking right now as bloody new fighting rages in Ukraine involving Russian-backed rebels, the new U.S. ambassador to the United Nations, Nikki Haley, has just condemned Russian aggression in Ukraine and says U.S. sanctions will continue as long as Russia occupies Crimea.

Meantime, the U.S. Treasury Department is adjusting a sanction imposed on Russia by the Obama administration. The move lets some companies do limited business with Russia's intelligence agency, accused of cyberattacks on the U.S. election.

I'll speak with Republican Congressman Darrell Issa. And our correspondents, analysts and guests are standing by with full coverage of the day's top stories.

Let's get to the breaking news. As tensions rise with Iran, sources now say the Trump administration is expected to impose more sanctions. At the same time the president is downplaying tense talks he's had with foreign counterparts.

Our global affairs correspondent, Elise Labott, is standing by, but we begin with our senior White House correspondent, Jim Acosta.

Jim, is the president making things tougher for himself with all that tough language?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: It sure seems like it, Wolf. President Trump is trying to lower the temperature after the global uproar that was sparked by some testy phone calls he's had with world leaders.

But there are signs both here at the White House and up on Capitol Hill that Washington is growing weary from the president's blunt talk.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): President Trump is doing some clean-up down under, offering his praise for, of all places, Australia following the disclosure of a tense phone call he had with that country's leader, Malcolm Turnbull.

DONALD TRUMP (D), PRESIDENT OF THE UNITED STATES: We had one instance in Australia. I have a lot of respect for Australia. I love Australia as a country.

ACOSTA: At issue, the president says, is a deal cut by the Obama administration to take in political refugees currently held in detention centers off Australia, who fled from some of the predominantly Muslim nations now barred from sending people to the U.S. under the Trump administration's new travel ban. Refugees the president incorrectly calls illegal immigrants.

TRUMP: We had a problem where, for whatever reason, President Obama said that they were going to take probably well over a thousand illegal immigrants who were in prisons; and they were going to bring them and take them into this country. And I just said, "Why?"

ACOSTA: But sources tell CNN the president was so upset with the prime minister that he abruptly ended their call.

And sources say the president had another testy phone conversation with Mexican President Enrique Pena Nieto, in which he offered to send U.S. troops to Mexico to help go after, quote, "tough hombres south of the border." A source familiar with the conversations told CNN the president's harsh language made the faces of White House staffers turn white.

Not to worry, says the president.

TRUMP: Believe me, when you hear about the tough phone calls I'm having, don't worry about it. Just don't worry about it. They're tough. We have to be tough. It's time we're going to be a little tough, folks. We're taken advantage of by every nation in the world, virtually. It's not going to happen anymore. It's not going to happen anymore.

[17:05:04] ACOSTA: Still, top Republicans were spending the day reassuring a key U.S. ally.

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: I don't think Australia should be worried about its relationship with the new president or with our country for that matter.

SEN. JOHN MCCAIN (R), ARIZONA: This, in my view, was unnecessary and, frankly, harmful open dispute over an issue which is not nearly important as United States-Australian cooperation and working together.

ACOSTA: Those worries come as the president said he is weighing his options on how to deal with provocations from Iran.

TRUMP: Nothing is off the table.

I don't even know if you're Democrat or if you're a Republican, but I'm appointing you for another year. The hell with it.

ACOSTA: The president also took his shoot-from-the-lip style to the National Prayer Breakfast, a typically more solemn affair, where he mocked actor Arnold Schwarzenegger.

TRUMP: Am I right, or am I wrong?

ACOSTA: Replacement on Mr. Trump's old TV show, "The Apprentice."

TRUMP: The ratings went right down the tubes. It's been a total disaster; and I want to just pray for Arnold, if we can, for those ratings, OK?

ACOSTA: Drawing this rebuttal from Schwarzenegger.

ARNOLD SCHWARZENEGGER, HOST, NBC'S "CELEBRITY APPRENTICE": Why don't we switch jobs? You take over TV, because you're such an expert in ratings, and I take over your job. And then people can finally sleep comfortably again.

(END VIDEOTAPE)

ACOSTA: On a more serious note, the White House is making more waves in how it deals with the Muslim world. CNN has confirmed the administration is looking at scrapping the Obama administration's program for countering violent extremism, saying it was politically incorrect. Instead a new program may take its place, Wolf, that focuses on the president's concerns about what he calls radical Islamic terrorism -- Wolf.

BLITZER: All right, Jim. Thank you. Jim Acosta at the White House.

The breaking news as President Trump talks tough on Iraq sources say the White House is planning to respond to the Iranian missile test with more sanctions against Iran.

Let's go to our global affairs correspondent, Elise Labott. What else are you learning about this, Elise?

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Well, Wolf, these are very similar to the sanctions that President Obama put on Iran over the past few years when it launched a ballistic missile test.

And so, what it is, is an existing executive orders, presidential executive orders that deal with both terrorism and also weapons of mass destruction. So, these will be additional designations of entities and groups barring them from doing -- any U.S. companies from doing business with Iran.

Of course, this is in response to that Iranian missile test and it has to be taken into context, Wolf, of that very stern warning by national security advisor Michael Flynn, yesterday saying that they were putting Iran on notice. Today President Trump reiterated that warning, saying they're putting Iran on notice.

And interestingly enough, they're trying to separate this from the Iran nuclear deal, because this missile test is not necessarily in violation of the Iran nuclear deal, but it is, according to the administration, in violation of U.N. Security Council resolutions. So it's really inconsistent with what other administrations have done against Iran.

But the question is what's next, Wolf? President Trump said he's not taking anything off the table. Clearly not ruling out military action. But to be fair, neither did President Obama. He would always say, "I'm not taking anything off the table," Wolf.

BLITZER: All right, Elise, thanks very much. Elise Labott reporting.

Also breaking, the new U.S. ambassador to the United Nations, Nikki Haley, just announced the Trump administration condemns Russia's aggression in Ukraine. Further, Haley served notice the United States will not -- repeat, not -- lift sanctions imposed after Russia took over Crimea.

Here's what Ambassador Haley just said a little while ago at the U.N. Security Council. (BEGIN VIDEO CLIP)

NIKKI HALEY, U.S. AMBASSADOR TO THE U.N.: I consider it unfortunate that the occasion of my first appearance here is one in which I must condemn the aggressive actions of Russia.

The dire situation in eastern Ukraine is one that demands clear and strong condemnation of Russian actions. The sudden increase in fighting in eastern Ukraine has trapped thousands of civilians and destroyed vital infrastructure. And the crisis is spreading, endangering many thousands more. This escalation of violence must stop.

The United States continues to condemn and call for an immediate end to the Russian occupation of Crimea. Crimea is a part of Ukraine. Our Crimea-related sanctions will remain in place until Russia returns control over the peninsula to Ukraine.

(END VIDEO CLIP)

BLITZER: Very strong words from the new U.S. ambassador to the U.N. Ambassador Haley also said, though, the United States is hoping for better relations with Russia.

Joining us now, Republican Congressman Darrell Issa. He serves on the Foreign Affairs, Judiciary and Oversight committees. Lots of committees.

Senator -- Congressman, thanks very much for joining us.

REP. DARRELL ISSA (R), CALIFORNIA: Thank you.

BLITZER: When the president says -- and I'm quoting him now -- "All options are on the table in dealing with Iran." All options on the table dealing with Iran, that includes the military option. Are you OK with that?

[17:10:05] ISSA: I am. It's been consistent with, at least the three previous, four previous presidents. You might remember that it was a military option that attempted to rescue our embassy personnel under Jimmy Carter. And we've had that type of relationship in which only the explicit possibility of military action has caused Iran to even respect some of the U.N. sanctions that have been imposed on it.

BLITZER: If the U.S. discovered that Iran was violating the Iran nuclear deal, would you support military action to destroy Iran's nuclear facilities?

ISSA: I think it has to be, as the president said, on the table. Sometimes that's the best tactic. As you might recall, it became public that we've used a cyberattack to slow down their program. So, I think all options on the table do include military.

But sometimes they include all kinds of other systems that can have a real effect. You know, President Kennedy famously put a blockade around Cuba in order to bring a peaceful resolution. We have to have them all on the table.

Iran continues to be a rogue nation. And it was only a question of time before the president was going to have to face it.

BLITZER: You're referring to that Stuxnet cyberattack against Iran and its nuclear program.

ISSA: Yes.

BLITZER: How successful was that?

ISSA: Well, if I knew exactly, I wouldn't be able to say.

What I do know is that these options in a modern age have to be included. Ultimately, the challenge we have is can we get Iran to stop being part of the problem in Iraq, in the peace process, intervening with Lebanon's sovereignty, and oh, by the way, threatening Israel and all western nations?

BLITZER: We just heard very tough talk from U.S. Ambassador to the U.N. Nikki Haley, saying those sanctions against Russia are staying in effect until they leave Crimea. Very tough talk, very different kind of talk than we've heard from President Trump himself. Are you surprised?

ISSA: No, not a bit. The reality when you take the oath and you're in that office and you start looking at Russia as a bad actor, is you realize that you've got to -- you've got to contain them, because ultimately, they have already done the gobbling away of sovereignty of two of their former satellites; and their intention, Putin's intention clearly is to do more. And I think President Trump now has that full weight on his shoulders and is acting accordingly.

BLITZER: But at the same time today, the Trump administration eased sanctions on one of the key Russian intelligence agencies, the FSB, foreign security service, in Russia, an intelligence agency that the U.S. intelligence community accused of getting involved in hacking the DNC, Hillary Clinton's campaign during the election.

They say it was just a technical easing, but some are thinking it was more significant than that. What do you think?

ISSA: Wolf, we have a very difficult relationship with the Russians, but there are places where we must share intelligence. And I certainly would point to Syria and the fact that we can't necessarily find a solution for Syria with Russia. But we certainly will be unlikely to find a solution if Russia opposes us.

Dealing with Bashar Assad, the growth of ISIS, the expansion of this caliphate is something where Russia is on the same side of not wanting an expansion than we do.

BLITZER: Do you think the Trump administration was sending a signal to Moscow by slightly easing the sanctions that were imposed against this Russian intelligence agency that used to be called the KGB, as you well remember, at this sensitive moment? Those sanctions were imposed at the tail end of the Obama administration.

ISSA: I think that they're -- and I can only speculate, but we have technical cooperation, and that adjustment was likely needed for that.

BLITZER: What do you mean technical cooperation?

ISSA: We must share some intelligence and be able to exchange information with the Russians in some areas where we overlap. One of them clearly being Syria.

So although it's only speculation, I can say this. Having spent time with the now Trump administration, these people are hardliners on trying to get to a peaceful solution, but knowing that Russia has to change their ways if we're going to get there.

BLITZER: So just want to be precise. So you think the Trump administration eased the sanctions on this FSB, this Russian intelligence agency, in order to make sure that U.S.-Russian intelligence cooperation could move ahead?

ISSA: I believe that that could be the only -- one of the only explanations. We are not soft and clearly not softening our position toward Russian aggression, but we are dealing with the fact that there are other places in which we and the Russians must work together. When it's in Russia's best interests, they will be with us. Any other time, they won't be.

BLITZER: Would you like to hear the tough talk we heard from Ambassador Nikki Haley? Would you like to hear that coming out of the mouth of the president? Because we haven't.

ISSA: I want the president to be able to do what President Reagan did, which is -- was go to Reykjavik, go there with all the options and strength, but wanting to find solutions. So, to the extent that he says it, great.

To the extent that he lets others say it and he holds back until the right moment to negotiate some very difficult issues. And Wolf, you and I have spent a lot of time looking at Syria and the Levant. Finding a solution there, which is the heart of ISIS power today, is something that we have to work with a number of countries, including Russia, to do.

It does mean that while Crimea, Georgia, Ukraine, these are areas of contention -- and all of NATO -- at the same time part of our solution in the Lavant is going to include Russia.

BLITZER: Congressman, we have more to discuss, including we're getting some new information on President Trump's phone conversations, very controversial phone conversations with the leaders of Australia, and Mexico. Much more with Darrell Issa right after this.

(COMMERCIAL BREAK)

[17:20:32] BLITZER: Our breaking news sources say the White House is planning more sanctions on Iran following an Iranian missile test, and the new U.S. ambassador to the United Nations, Nikki Haley, has just condemned Russian aggression in Ukraine saying sanctions will continue as long as the Russians remain in Crimea.

We're back with Republican Congressman Darrell Issa.

The president also had what is widely now reported to be very tough phone calls with foreign leaders, including the prime minister of Australia.

ISSA: Yes.

BLITZER: You've seen all of those reports. We just reported. Was it appropriate for President Trump to start off his new administration with such a tough phone call with a key U.S. ally?

ISSA: Well, you know, we always would hope that you can do the best you can when you're ending a deal that shouldn't have happened. You know, President Obama in his last days negotiated roughly 1,200 refugees from a country that doesn't take refugees, for the most part, to come here, and I think, after the president's controversial or not, 90-day stay, it was appropriate for him to say, "We're not doing those. Call us in 90 days." And I'm sure that, with the pressure you have in Australia to get these people off the islands and out of Australia, both were under a lot of pressure.

BLITZER: But, you know, there's -- if the U.S. doesn't live up to that commitment, it will raise questions about America's willingness to honor international commitments, especially to countries that are close allies.

ISSA; Well, side deals done at the end of an administration, somewhat in private, is a long way from a treaty or something else. This was not something where the president, on behalf of the American people, formally made a commitment. This is something where he negotiated something, knowing that he was going to be out the door. One might say he laid a mine, and Donald Trump was forced to step on it.

The 90-day order does create a situation in which, at least for the next 90 days, those refugees are off the table.

BLITZER: Because the White House says the president will honor that, even though president has made it clear he hates that deal. He's not very happy. That was the source of the tension in that phone conversation with the prime minister of Australia.

ISSA: The whole world would like us to take a lot of refugees, but the whole world needs us to engage in those areas the refugees come from and stop the exodus from those countries. We have, literally, King Abdullah was here yesterday, the day before and today, and he's talking about a million refugees in his country, mostly from Syria, some still from Iraq.

BLITZER: So, if he can take in a million in Jordan, which is a relatively poor country, why can't the U.S. take in 1,250 refugees who have been suffering on these detention -- in these detention camps in these islands off the coast of Australia. The U.N. itself says that they have been living in cruel and illegal detention -- detention camps. These people come from Sri Lanka, Pakistan, Bangladesh, Iran and Iraq, all of whom will be very closely vetted before they're allowed in the United States.

Assuming they're vetted, extreme vetting and they're approved, would you be OK letting them come settle in the United States?

ISSA: The first thing that happens is the number changes if they're extreme vetted. They may not all pass.

BLITZER: So let's say a thousand of them pass.

ISSA: So, you know, are we opposed to the next batch of refugees that come to the United States from wherever be -- include consideration of these from Australia? I suspect the president would say, of course, they should be in the mix.

But when you mention King Abdullah, and I met with him. King Abdullah is not holding these people and taking care of a million people. He can't. And to be honest, the Lebanese people, who have a far greater number, a third of anyone -- everyone that's in Lebanon is a refugee. The world is taking care of these people. They're simply hosting them.

So, whether you're talking about camps in Jordan, Turkey, or Lebanon, we, the west, are going to take a big part of the burden of making sure they're not radicalized, making sure they're educated and participating in trying to figure out how they're going to have gainful employment so they grow up with -- with what they need.

BLITZER: Why assume some of these refugees are terrorists? The people who are stranded on these islands off the coast of Australia, they've been there for a long time.

ISSA: First of all, the cruel and unusual punishment you mentioned, that's Australia doing it. So, that's between the U.N. and Australia.

BLITZER: The Australians have a law that, if you try to come into their country by boat, you're kicked out. You're put in this detention camp and you're never allowed in.

ISSA: I understand the way Australia works on that. But again, Australia is the one that the U.N. is talking about being cruel and unusual.

[17:25:05] We take in 1.2 or more million people to become Americans every year, a great many of them being refugees. That is a tradition we will continue.

And as we look at immigration reform, including how we take in refugees, we still have the same problem. There are millions more refugees -- actually tens or hundreds of millions more who would ask for refugee status than we can take. We have to have, and the Trump administration has to have a proactive way to stem the flow of refugees. And in many cases the same amount of dollars goes ten, 20 or 100 times

further if you provide education in Jordan than if, in fact, you take refugees. That's part of the dialogue we're going to have between the president and Congress.

BLITZER: Let's get to a couple domestic issues, important ones. You -- the president, as you know, has promised to reduce, slash federal regulations. You support him on that.

Yesterday, you voted to eliminate what's called the Stream Protection Rule. That's a regulation passed by the Department of the Interior which is meant to prevent coal mining debris from being dumped into local waterways. The Senate has just voted on that rule, as well. They passed it. It's now going to go to the president's desk.

Why did you vote to strike down that environmental regulation that protects waterways?

ISSA: This will be only the second time in history that a regulation has been overturned. The last one was at the end of the Clinton administration, and I was a freshman when it was overturned.

This was a midnight rule done at the end of the president's last -- December 19, the last few days, and it was done to take two-thirds of all coal mines off limits, period. The effect was catastrophic, after there's been a war on coal.

Should there continue to be efforts to make sure that coal is harvested without damage to our environment? Of course.

BLITZER: So, you want a new regulation to deal with that?

ISSA: I will continue to support the fact that coal mining has to be safer for the miners and cleaner for the environment.

BLITZER: But...

ISSA: But this rule was not a rule that was done, if you will, during the first seven years and 11 months of the administration. It was deliberately done at the end. Again, a land mine left for the administration, one that we're clearing.

BLITZER: But once -- once the president signs this legislation into law, they can do whatever they want, the coal mining industry.

ISSA: No. Wolf, no. What they can do is they can return to the status quo. They can return to the way they mine...

BLITZER: But that status quo was not very good. A lot of debris was going into rivers and nice waterways, if you will.

ISSA: Well, Wolf, for the last seven years of the Obama administration, and the previous eight years of Bush, and the previous eight years of Bill Clinton, this has been how coal has been mined, although there have been some other incremental rules that have cleaned it up. We need to harvest energy cleanly, but there are those who wanted to

take the vast majority of coal completely off line; and that is too much too fast, and it's not supported in the regions where those streams are. It's not supported by even hard science of what was the actual environmental damage.

Remember, people in West Virginia drink that water. They're acutely aware that they do have clean drinking water partly because of reforms that were made in mining, but not to the elimination of their job.

BLITZER: So you see yourself as an environmentalist, but you're not going to back away from your vote?

ISSA: I'm not backing away from my vote, because the president did this as a midnight rule. He didn't do it -- he had seven years. He could have passed a law. He was not going to declare a war on coal except incrementally as the time went on, and this took two-thirds of the mining, meaning the rest of the coal jobs, off. It was a dirty trick at the end of the administration.

BLITZER: All right. I want you to explain another vote, controversial vote you just did. A measure set to take effect in 2018 that would have required oil, gas, mining companies in the United States to disclose all payments they make to foreign governments.

This was devised, as you know, to try to stem corruption in countries that have these resources. They want to make sure that U.S. Oil, gas mining companies don't pay, if you will, ransom...

ISSA: Right.

BLITZER: ... or pay corruption, make payments to these countries in order to get benefits for their companies. Why did you vote to overturn that rule, which calls for full disclosure of foreign payments?

ISSA: First of all, I'm very proud of the way American companies operate overseas, partially because they go with an American ethic and ethos, but partially because we have laws that make it a chargeable felony for which you go to jail in addition to civil fines if, in fact, you pay bribes of any sort.

So, we have anti-corruption laws. If you want to enforce those laws, you can have reporting that goes to the IRS, reporting that go to government entities. But when you make it public, what you're really doing is saying that our companies have to put out how they do business so that other countries -- France, Germany and others -- who don't have those...

BLITZER: But after the U.S. enacted this procedure, this full disclosure public information, 30 other countries did exactly the same thing. They followed the U.S. lead. Now, assuming this goes away, they might follow the U.S. lead. You could see all sorts of payments going to foreign countries in order to get various financial benefits.

ISSA: I want to be politic, but let's be candid. France pays bribes to get their contracts, French companies, and there's no law stopping them. China pays massive bribes. They buy government officials with no regard whatsoever to anything, except the gains to China. We compete against those and other countries. So, do I want reporting? Would I support reporting by our companies overseas? Yes. But should it be made public or should it be made available to the government to evaluate whether through the IRS or other means? I think the latter is the right way to do it. I think the Dodd-Frank and other bills have, in fact, wanted to have public disclosure without looking at the impact on our companies, and so I'm very, very proud that we did this. And again, remember, this was at the -- this came to a head at the end of the administration.

BLITZER: Congressman Darrell Issa, no regrets on that vote either, right?

ISSA: No regrets.

BLITZER: Thanks very much for joining us.

Coming up, we're getting new pictures in -- from that U.S. raid in Yemen. New details about how it was planned during the Obama administration and OK'd by President Trump.

(COMMERCIAL BREAK)

[17:35:00] BLITZER: That's a "BREAKING NEWS" coming in to THE SITUATION ROOM. Take a look at this. You're looking at this live pictures coming in from Brooklyn, the south side of Brooklyn Borough Hall. A lot of Yemenis have gathered there to protest what they call the "Muslim ban", President Trump's travel ban, on refugees coming into the United States from seven majority Muslim countries. They are protesting at the Brooklyn Borough Hall right now. These are Yemeni shop owners mostly throughout New York City, but they are obviously very angry. We're going to get more information on this demonstration underway in Brooklyn, update you on that.

In the meantime, let's bring in our political and counter-terrorism analysts who are with us. Philip Mudd, let me start with you. When the president says all options are on the table in dealing with Iranian, as far as the nuclear issue is concerned, what does that say to you?

PHILIP MUDD, FORMER CIA COUNTERTERRORISM OFFICIAL AND CNN COUNTERTERRORISM ANALYST: Doesn't say much. We went from fire to fizzle on this issue in about 24 hours. Yesterday, we had tough talk out of the White House. It suggested we had a red line set. Today, we're talking about sanctions which is -- reflects what we've done in the past against the Iranianians and from the perspective of Tehran, Iranianian leadership, they've got to be saying, "After what you said yesterday, this is it?" Their back door, their pressure valve is the Chinese, the Russians and the Europeans, and the nuclear deal that gets them off the hook on sanctions globally. This to them, I think, after what we heard yesterday is not so much.

BLITZER: But do you worry about a military escalation under President Trump? MUDD: I would for different reasons. We can see things in term of actions. Missile firing sanctions, the problem you see in this circumstance is how people understand what the other person's intent is going to be. The Iranians don't know what we're going to do and I think they're misunderstood in the White House. You get a military engagement, a naval engagement in the Strait of Hormuz. You get an engagement in Syria where we're against each other, that could have unintended consequences because neither side understands each other.

BLITZER: The Iranians are supported Bashar al-Assad's regime. In Syria, Gloria, the sanctions that -- new sanctions that would be imposed against Iranian, that's visible. Everybody knows if there is an announcement, here's what the U.S. is doing. But the Trump administration also wants to send a signal, a message to Iran, that's why the National Security Advisor Michael Flynn said, the Iranians following that ballistic missile test, are now on notice.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Yes, and it makes you wonder whether there is a second part to this.

UNIDENTIFIED MALE: Yes, exactly.

BORGER: But we don't -- we don't -- we don't know that yet. Look, the administration is sending a lot of messages and a lot of signals. Some very blunt as we saw in the president's phone conversations with Australia, but messages matter, but relationships also matter. And this is the question that a lot of people on Capitol Hill are asking, including the Chairman of the Senate Foreign Relations Committee, Bob Corker, who just came out and said, "Look, you may want to send a message. You may want to say to Australia, 'we're not going to accept these refugees', we have a little bit of a different idea than the Obama administration," but to attack over the phone in your first conversation is probably not the best way to get business done. And Corker was saying, "Look, Donald Trump is a businessman. He's use -- he -- this is the way he's used to dealing with people," but when you're president of the United States, maybe you need to kind of think the way you deal with other foreign leaders.

BLITZER: Yes, especially a close ally --

BORGER: Of course.

BLITZER: -- like the prime minister (INAUDIBLE) Australian.

BORGER: With whom you share intelligence and everything.

BLITZER: A very close relationship as Phil can testify. Mark Preston, some mixed messages coming out as far as Russia is concerned, very tough statement from the U.S. Ambassador to the U.N., Nikki Haley, at the U.N. Security Council, sanctions will remain in effect until Russia leaves Crimea. The Russians show no intention of leaving Crimea. At the same time, the Treasury Department easing at least one sanction against a Russian intelligence agency, the FSB, which is accused by the U.S. Intelligence Community of hacking into the U.S. Presidential Elections last year, so, sort of mixed signals going on. [17:40:04] MARK PRESTON, CNN SENIOR POLITICAL ANALYST: Right, and so let's take it backwards. That's -- in many ways a technical correction from when they put the sanctions in place, the Obama administration did, in fact, they were trying to unravel with the Obama administration was. So, it really is a continuation of doing a technical correction on what they wanted on the sanctions. Although timing is everything and given Donald Trump's very kind words about Russia and Putin, it's coming back to bite him a little bit, but to your point about mixed signals, too, Nikki Haley today at the U.N., having these very, very tough talk about Russia just continues to show that there's so much confusion in what our foreign policy is going to be, and folks like Phil, like, you know, who are at the CIA or at the CIA having to analyse all this intelligence and wondering how they're going to use it, just imagine what our confusion is if I'm in the intelligence business right now. I'm very confused.

REBECCA BERG, REAL CLEAR POLITICS NATIONAL POLITICAL REPORTER: Right. And this comes just after yesterday, Sean Spicer was asked directly about Ukraine and Russia and their engagement there. And he said, you know, the president is aware of this. And that was the end of it. He had an opportunity in the press briefing room to give a strong statement like Nikki Haley did today at the United Nations, and he didn't. And so, that's exactly the kind of mixed signals we're talking about here.

BORGER: Well, he may not have wanted to get ahead of her either. You know, she's kind of new. This might have been her first thing. I mean --

BERG: That's right. But --

(CROSSTALK)

BORGER: It could give them a little bit of the benefit of the doubt on that, but your point is well taken.

BLITZER: But we never hear the president of the United States say anything even closely similar to what the U.S. ambassador to the U.N. said. You never hear President Trump or candidate Trump say anything as fiercely tough on the Russians, as Nikki Haley did today at the U.N. Security Council.

BORGER: Right. And, you know, this may be the influence of Rex Tillerson on day one. I mean, you know, he's been accused of being too soft on Russia. Maybe not so much. We don't, you know, we don't know this. Maybe Nikki Haley flexing her muscle, or unleashing some kind of new policy from the administration. Look, they've had a lot of criticism from influential people Like John McCain, Lindsey Graham. So, this may be one way of trying to right the ship to a degree --

BERG: Sure. And --

BORGER: -- but we just don't know.

BLITZER: Curious. What do you think, Phil? MUDD: Be careful here about assuming that the White House didn't know what happened at the United Nations when Nikki Haley spoke. I cannot believe that she didn't vet that with the White House. Remember, during the hearings for secretary of defense and secretary of state, they both spoke very strongly about Russia. I think what's happening is President Trump's summer vacation is over. Secretary of state is in within 24 hours, Nikki Haley speaks about Russia. General Mattis has talked not only about ensuring that we're careful about Russia, but about ensuring up NATO. I think what we're starting to see is the box closing in around the president. He's going to continue to speak and the pros are going to say, "Slow down, son."

BLITZER: Well, the FSB, though, used to be called the "KGB" as a lot of us remember, when they get the word that the U.S. is easing, technically easing some sanctions, may not be significant as far as the sanctions are concerned, but it does potentially send a message to them. I would assume.

MUDD: I think it will, but I agree with Mark. I think this is a technical correction that the Russians are going to over interpret. I do not interpret this as an intelligence officer as a suggestion to the Russians that we're headed in any direction on sanctions, and Haley really put out the word on Crimea unless you get out, sanctions continue. That's tough.

PRESTON: Well, Wolf, to your point, too, we did see Russia come out today, and they put out a statement and said, "This is an example of how we're going to work so well together." So, in many ways, trying to use this as a propaganda tool against, perhaps, our NATO allies.

BORGER: Well, it's a way of keeping people off balance to a, you know, to a -- to a great degree. But I would listen to Nikki Haley here. I really would because I think, you know, in her maiden speech, she's not going to go rogue.

MUDD: That's right.

BORGER: She's not going rogue.

BLITZER: It's very -- Rex Tillerson, he was sworn in last night. He's the new secretary of state. He was at the State Department. Spoke to State Department officials in the lobby, they had gathered over there, gave a very positive message. He's got a difficult challenge ahead right now.

BERG: He does. I mean, in terms of policy and in terms of morale at the State Department right now, we saw this dissent letter come out this week signed by hundreds, almost a thousand officials at the State Department and it was dismissed by the Trump administration, by the White House, who said, Sean Spicer said in reference to that letter, "If you don't want to get with the program, you can just leave." And that's not how that works at the State Department or really any of these agencies (INAUDIBLE) valued. They want to have productive policy discussions. And so Rex Tillerson has to go in there, reassure the career professionals at the State Department that he will hear them out, that he will work with them, and hear their policy concerns, but he also has his work cut out for him on policy. There are some very stark disagreements between what he said at his confirmation hearings in the senate with Russia, for example, and what the administration had to say.

BLITZER: What he told the State Department officials who gathered there today and a lot of other others were listening, he said all the right things.

[17:44:56] BORGER: He did. He also said the prayer breakfast took a little longer because maybe people needed a little bit more time to pray. So, he kind of -- he sort of -- funny about that. Look, I think he was reassuring the people and saying to them, "Yes, the dissent channel is really important. I'm wondering if he's going to meet with the 900 or so people who did dissent. John Kerry met with him on Syria. The Clinton administration met with him on Bosnia. And it is a tradition inside the State Department.

I do think, though, that, you know, Rex Tillerson is one of those CEOs who is used to saying, "This is what I want and it better happen." A lot of these guys are. And at the State Department, he's going to get a lot of push back because people there believe it is their job to do that.

PRESTON: Yes, and I think, you know, Rex Tillerson is in interesting position because he doesn't need this job to continue his career. He is worth gobs of money right now. He could be retired. He ran a major company. He doesn't need to be secretary of state, so to Gloria's point, it would be interesting to see if he does push back, as we expect General Mattis will push back as well on Donald Trump.

BLITZER: Yes, a lot of people -- democrats I'm talking about, I've spoken to up on The Hill, they're encouraged by Mattis at the Defense Department, by General Kelly at Homeland Security, Michael Pompeo over at the CIA, and now they're even saying they're encouraged by Rex Tillerson at the State Department. So we will --

BORGER: Because they don't want Steve Bannon to run foreign policy.

BLITZER: Soon, probably got a little bit more. All right. More information coming in. New information, in fact, about the deadly U.S. commando raid in Yemen, including details of President Trump's central role in the decision making.

(COMMERCIAL BREAK)

[17:50:00] BLITZER: We're getting new details right now about the bloody special ops raid against Al-Qaeda in Yemen in which a U.S. Navy SEAL was killed, a U.S. aircraft was lost. Our Chief National Security Correspondent Jim Sciutto is with us right now. What are you learning, Jim?

JIM SCIUTTO, CHIEF NATIONAL SECURITY CORRESPONDENT: Well, we're learning that the president in ordering his first raid really as commander in chief was deeply involved in the decision-making, including hosting a dinner in the White House for his closest advisers before the president made the final call just three days before the mission.

(BEGIN VIDEOTAPE)

SCIUTTO: Tonight, new information that President Trump was actively involved in the decision-making on the Yemen raid up until the final hours. On January 25th, four days before the mission, the president was briefed by National Security Adviser Michael Flynn, and then again during a 10-person White House dinner later that evening. The dinner as Mr. Trump's request, included his three closest aids, Chief of Staff Reince Priebus, and senior advisers Jared Kushner and Steve Bannon.

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: He then on that evening, had a dinner meeting where the operation was laid out in great extent.

SCIUTTO: Like many high-risk military missions, the planning was months in the making. The initial proposed plans were first sent to the Pentagon on November 7th, during the Obama administration, and one day before the election. Department of Defense lawyers and legal experts then reviewed the details before approving the plan and sending it to the National Security Council on December 19th. Next, the plan was reviewed by officials from defense, state and the National Security Council. But there was one final delay, waiting for a moonless night to help conceal U.S. special operators. That would not come until late in January, after the swearing-in of Donald Trump. The new president gave final approval on January 26th, one day after that White House dinner, three days to mission launch.

SPICER: This was a very, very well-thought out and executed effort.

SCIUTTO: The raid targeted a suspected Al-Qaeda in the Arabian Peninsula compound in Yemen's Al Bayda' province. U.S. Navy SEALs and UAE special operators immediately encountered AQAP fighters as they approached the compound. According to the Pentagon, the fighters including some females, positioned themselves along rooftops on adjacent buildings, pinning down U.S.-led forces. Aircraft conducted an airstrike leading to at least 23 civilian deaths, according to an NGO.

The Al-Qaeda fighters used heavy arms, killing Navy SEAL William "Ryan" Owens. A V-22 Osprey aircraft was badly damaged as it tried to land to rescue the wounded. Special operators then took intelligence materials from the compound including computer hard drives.

SPICER: When you look at the totality of what was gained to prevent the future loss of life here in America, and against our people and our institutions and probably throughout the world, in terms of what some of these individuals could have done, I think it is a successful operation by all standards.

(END VIDEOTAPE)

SCIUTTO: Now, administration officials have said that this operation was first approved under the Obama administration, and that President Trump and the military in effect carrying that on the fruition that I've spoken, Wolf, to a number of Obama administration officials in the national security space. Who said, in their view, that's just not true, that while the military may have first drawn up the plans for this operation before the election that President Obama never OK'd this operation, that the military comes to them with many possible missions, and the President has final approval and that he, President Obama, I should say, never gave final approval for this mission.

BLITZER: All right. What a story that is. Our Jim Sciutto, thanks very much for that. Coming up, after tense phone calls with foreign leaders and growing tensions with U.S. adversaries, President Trump insists he's got it all covered.

(BEGIN VIDEO CLIP)

DONALD TRUMP, UNITED STATES PRESIDENT: The world is in trouble, but we're going to straighten it out, OK? That's what I do, I fix things, we're going to straighten it out. Believe me, when you hear about the tough phone calls I'm having, don't worry about it, just don't worry about it.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Happening now, "BREAKING NEWS", nothing off the table: Sources say, new U.S. sanctions are in the works against Iran, even as President Trump refuses to rule out military action as well. How far will he go to punish Iran for a provocative new ballistic missile test? Lacking diplomacy: America's new secretary of state gets to work while his boss makes waves with another key ally. Our U.S. relations with Australia at risk. I'll ask a former top foreign policy adviser to Hillary Clinton.