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Cease-fire between Hamas-Israeli Looks Fragile; Putin Bans Food Imports over Sanctions; Bank of America Nears $16 Billion Settlement; Obama, Netanyahu Stand Up Against Hamas; Kerry Makes Unannounced Visit to Afghanistan; General Killed in Afghanistan Comes Home

Aired August 07, 2014 - 09:00   ET

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

CHRIS CUOMO, CNN ANCHOR: And now she has a gofundme page. She has a gofundme page. Working to make a prototype. They've earned 21 grand so far. So if you want to give, gofundme.com. That's the site. Right.

A lot of news right to the "NEWSROOM" with Miss Carol Costello.

CAROL COSTELLO, CNN ANCHOR: Thanks so much. Have a great day. NEWSROOM starts now.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): Happening now in the NEWSROOM --

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I have no sympathy from Hamas.

COSTELLO: Bold words from President Obama.

OBAMA: Hamas acts extraordinarily irresponsibly.

COSTELLO: As the push for peace gets more intense.

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Critical hours ahead here in Cairo as these two sides set to resume talks.

COSTELLO: And banned in Russia.

UNIDENTIFIED FEMALE: Russia is explaining its ban on food, imports from countries that have imposed economic sanctions, including the U.S.

COSTELLO: No American meat, cheese or seafood. Putin trying to hit back, retaliating over U.S. sanctions.

And -- Bank of America. For nearly 50 million of you, it's your bank. Breaking this morning, the biggest settlement in history, $16 billion for bad mortgages.

MAX FOSTER, CNN ROYAL CORRESPONDENT: Prince William is currently in what the palace describes as a transitional year, focusing on his royal and charitable work, but now he's decided what to do next.

COSTELLO: A major announcement from the royals. We're live in London with the breaking Prince William news.

Let's talk, live in the CNN NEWSROOM.

(END VIDEOTAPE)

COSTELLO: And good morning. I'm Carol Costello. Thank you so much for joining me. We start this morning with the race for a lasting calm in the Middle East. There are just 16 hours left in the current cease-fire agreement and the clock is ticking down to either extend the current truce or put a more lasting deal into place.

There is a glimmer of hope in the negotiation table this morning. Israel says it is ready to extend the current deal unconditionally, while Palestinian officials say there has been some progress at the talks.

To talk about this we're joined by Reza Sayah in Cairo, Egypt, and former ambassador to both Israel and Egypt Daniel Kurtzer. He also participated in peace talks in the region up until 1994.

Reza, I want to start with you with the latest on these talks.

SAYAH: Yes, Carol. These indirect negotiations resumed roughly three hours ago here in Cairo. At this point, according to Palestinian officials it's the Palestinian delegation speaking to the Egyptian mediators who spoke to the Israelis last night. And you get the sense that as 8:00 a.m. Friday the end of the cease-fire approaches the drama is building, the pressure is building on these two sides to make something happen. One Palestinian delegate sounding optimistic, telling CNN that they are making progress, saying, I'm not sure how or when it will come, but we hope for a breakthrough.

When we asked them about the possibility of extending the cease-fire beyond Friday morning, this Palestinian official told us that they're hoping for a longer term agreement beyond just a cease-fire, and that seems to be where this sticking point is, whether to extend the cease- fire or not. The Israelis have made it clear that's what they want. They want the cease-fire, the negotiations to continue.

However, some Palestinian delegates, notably Hamas, don't seem to be on board. Their position is they didn't come here to extend the cease-fire. They want some of their core demands met and addressed, including the lifting of the blockade, the opening of some of the border crossings. Of course, Israel has its demands as well, among them the disarming of Hamas, the demilitarization of Gaza, and it was interesting last night, President Obama in his question-and-answer session with reporters, he suggested that he supports the demilitarization of Gaza as well.

Here's what he had to say.

(BEGIN VIDEO CLIP)

OBAMA: I have no sympathy for Hamas. I have great sympathy for ordinary people who are struggling within Gaza, and the question then becomes, can we find a formula in which Israel has greater assurance that Gaza will not be a launching pad for further attacks.

(END VIDEO CLIP)

SAYAH: Clearly President Obama making an effort to distinguish between the Palestinian civilians who are being killed in Gaza and Hamas. Of course, world opinion has grown against the civilian death toll. President Obama made sure that he addressed that, but he also clearly made sure not to upset the Israelis by condemning Hamas and their actions. So critical hours ahead. Much of the world watching to see in these final hours these two sides can reach some sort of agreement or extend the cease-fire -- Carol.

COSTELLO: All right. Reza Sayah reporting live from Cairo, Egypt.

Now to you, Daniel. It is a tad strange that Egyptian mediators are shuffling between the parties to work out a deal. Why can't everybody just sit in the same room and hash things out?

DANIEL KURTZER, FORMER AMBASSADOR TO EGYPT AND ISRAEL: Well, Israel, as you know, Carol, does not accept to negotiate with Hamas, and Hamas is part of the Palestinian delegation, and so the Egyptians have found a way through this shuttle diplomacy of conveying messages back and forth. It also allows the Egyptians a chance to fine-tune some of what they're hearing so that they can act as a real intermediary. Until now the Egyptians have done a pretty good job but the crunch time is yet to come.

COSTELLO: The United States is sort of playing on the sideline this time around. It sent this small State Department team just in case it's needed. Should the United States even be there?

KURTZER: Well, the United States can play a useful role, as dictated by the Egyptians, as a help mate. Normally in these kinds of situations, at some point Israel will turn to the United States for what might be called off-the-table considerations. In other words, what can the United States do that helps Israel achieve its objectives that may not be achievable inside the negotiating room? So it's not a bad idea to have our team standing by, but the lead is certainly Egypt's at this point.

COSTELLO: Yesterday on Al Jazeera, a senior Hamas official says Hamas' finger is still on the trigger if Palestinian demands are not met. The Israeli Prime Minister Benjamin Netanyahu sort of echoed that sentiment yesterday. Listen.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER (Through Translator): We're ready for any case that the cease-fire will be broken. The IDF is in the area with striking force to be able to respond to any scenario. In any case around the territories around Gaza, our forces will remain. Forces that were not there before the operation, to be able to be -- to be better protecting the area.

(END VIDEO CLIP)

COSTELLO: Should the two sides be talking like this during negotiations?

KURTZER: Well, Carol, it's not unusual that we're seeing a multidimensional game being played out. Both sides are preparing for a renewal of violence, even as they are making demands at the negotiating table. There's also a bit of a game of political narratives, who won, who lost, who is blaming the other side. So this is going on in a variety of flora and a variety of dimensions, and frankly until the cease-fire becomes concretized it's wise for both sides to continue to prepare.

The Israelis cannot let their guard down, and Hamas clearly wants to see some political gain from this. So you're going to see these kinds of various dimensions being played out over the next 24, 48 hours.

COSTELLO: So you've been involved in these kinds of negotiations for a long time. So in your opinion, will anything really change? Because we always hear this time it's different. Is it?

KURTZER: No, it's not been different yet. This is the fourth engagement between Israel and Hamas since 2006, and unless there's some fundamental change in the relationship between Israel and the Palestinian community generally, we're fated to see this recur and what I'm talking about is to get to the idea of a two-state solution. It may not be possible to use this confrontation to immediately get there, but unless we can find a way back to the table and to resolve the underlying dispute, this is going to look like the "Rocky" movies, sequel after sequel of violence and counter-violence until both sides are exhausted to the point where they have to negotiate peace.

COSTELLO: Daniel Kurtzer, thanks for your insight. We appreciate it.

KURTZER: My pleasure.

COSTELLO: Thank you.

Ukraine is fighting for its life and anticipating a Russian invasion. Those 20,000 Russian troops still poised along the eastern border within Ukraine. The fighting has become so fierce between the military and pro-Russian rebels, international investigators say a cease-fire around the MH-17 crash site has now been scrapped.

In the meantime Russian vitriol directed at the United States and President Obama has intensified. First the Foreign minister tweeted pictures of President Putin holding a cheetah, and President Obama holding a poodle, and then there is this, a laser light show in Moscow showing President Obama eating a banana, and also wishing him happy birthday.

Putin's government did not put this out but the U.S. embassy -- but this is projected on to the U.S. embassy in Moscow, and President Putin slapped sanctions on the United States and other countries, in short he says, keep your food. We don't want it.

Phil Black is in Moscow to tell us more.

Hi, Phil. PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Hi, Carol. Yes. As

recently as a week ago the Russian government was saying we don't do tit-for-tat sanctions but now they've clearly thrown that policy completely to one side and you're right, they're saying no to Western food. And this is really significant. For the next year, they are banning all imports of beef, pork, fruit, vegetable, poultry, seafood, cheese, and milk in all forms, fresh, frozen, processed, whatever, and this applies to the -- United States obviously, the European Union, Australia, Canada and Norway.

No to Western food. This is significant because Russia is not capable of feeding itself. Its domestic agriculture industry cannot meet that demand. So what this means is that Russia must now try and boost that -- its ability and its efficiency to feed its own people and it's going to have to look for imports from other markets as well, probably Asia, probably South America, otherwise it could face food shortages, it could face food increases in prices, and that could ultimately blow back against President Putin and his government -- Carol.

COSTELLO: I was just going to ask you, there's some kind of poll that's out in Russia that shows President Putin's approval ratings at 87 percent. Is that accurate?

BLACK: It's huge. It is record levels, almost daily here we read about new polls that put it well above 80 percent. It is absolutely riding on the back of the Ukrainian crisis, Russia's grab of Crimea earlier this year. There is a very strong nationalist sentiment on the streets of Moscow and across this country at the moment, and you can bet that that is what President Putin is counting on by taking this action, because as I say there is risk involved here.

If the Russian people begin to suffer, if consumers begin to find it much tougher here, then that could cause a political price. You could see potentially the government's approval ratings tumble very quickly, but in the short term, President Putin is betting, if you like, that he can handle, he can manage this, he can balance what is a very tricky situation between inflicting harm back on those Western countries, which are sanctioning Russia, and still managing that food supply situation here in the country -- Carol.

COSTELLO: All right. Phil Black reporting live from Moscow this morning.

Checking other top stories for you at 12 minutes past the hour, the deadly Ebola outbreak is getting worse. More than 900 deaths now and 1700 cases reported in four African countries. Liberia has now declared a state of emergency.

Here at home, the director of the CDC is set to go before members of Congress today about tackling the threat. It comes after the CDC issued its highest alert for the global crisis, a level one.

And Bank of America is going down in the record books, but probably not in the way it wants. The bank is nearing a deal with the Justice Department to pay out more than $16.5 billion over allegations it misled mortgage investors in the run-up to the financial crisis. That would be the largest mortgage fraud settlement in history.

Poppy Harlow joins us with more.

Good morning.

POPPY HARLOW, CNN BUSINESS CORRESPONDENT: Good morning, Carol. This is coming to us from some sources very close to the deal. We don't know when exactly we'll get the announcement but it looks like Bank of America will pay that $16.5 billion fine because of misleading investors, borrowers, leading up to the financial crisis, about the quality of its loans. This is a record. If you add it on to what else this bank has paid related to the mortgage crisis that brings their total payments to $72 billion in penalties.

Let's take a look where this money is going to go, $9 billion is going to go to U.S. Treasury, the government, the rest, about $7.5 billion, will go to try to help homeowners refinance, get lower rates, et cetera.

But, Carol, when we talk about this, the big question always comes up, so what else? What about criminal charges? Frankly, it's unlikely that anyone is going to be criminally prosecuted from the bank because if the Justice Department could have brought those criminal charges, they would have. Instead, they threatened to file a lawsuit, a lot of back and forth between the bank's CEO and Attorney General Eric Holder. This looks like they've come down to a big amount of money, but an amount of money that the bank can afford.

The Justice Department would have gone forward likely with criminal charges if they could have. But again you're looking at the numbers there. We're expecting this deal any day now, $16 billion the latest penalty for Bank of America in terms of really cleaning up the mess of the whole financial crisis, Carol.

We will keep you posted on this. But it is certainly a big number. Just to put it in perspective for you, 2013 profit of Bank of America was $11.4 billion. This fine $16.5 billion.

COSTELLO: Wow. Poppy Harlow reporting live for us, thanks so much.

Still to come in the NEWSROOM, pushing back against Hamas. President Obama standing by Israel as it faces down a threat from the terror group.

(COMMERCIAL BREAK)

COSTELLO: Across social media and in several media outlets, there appears to be a growing sympathy towards Hamas and the plight of the Palestinians in Gaza. But despite its democratic election into power, the U.S. classifies Hamas as a terror group, and Israel says the same.

Matthew Chance is here with a look at the political power swinging back against Hamas.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Carol, Benjamin Netanyahu clearly stung by this international condemnation of Israel's military action in Gaza, talking about how he wants to defend the actions of his soldiers there and, of course, laying the blame for the many hundreds of people, Palestinians, who lost their lives in that campaign in the Gaza Strip, at the feet of the Palestinian militant group Hamas.

(BEGIN VIDEOTAPE)

OBAMA: I have no sympathy for Hamas.

CHANCE (voice-over): President Obama standing up for Israel, nearly 2,000 Palestinians have now been killed in Gaza.

OBAMA: It is important to remember that Hamas acts extraordinarily irresponsibly when it is deliberately siting rocket launchers in population centers.

CHANCE: The president echoing points made by Israeli Prime Minister Netanyahu on Wednesday.

NETANYAHU: The responsibility for this tragedy belongs with Hamas.

CHANCE: Netanyahu speaking for the first time since the 72-hour cease-fire. Prime minister says Hamas uses civilian deaths in Gaza as PR fodder, something the Palestinian militant group denies.

NETANYAHU: The tragedy of Gaza is that it is ruled by Hamas. They want civilian casualties.

CHANCE: He's pushing back against international criticism of how they waged war, accused of striking homes, schools, and U.N. shelters.

NETANYAHU: Nearly everyone says that they support Israel's right to defend itself, but there are those who refuse to recognize or to let Israel exercise that right. They would allow Hamas to attack with impunity because they say they're firing from schools or from mosques or from hospitals and Israel should not take action against them. That's obviously a mistake.

CHANCE: U.S. officials have criticized Israel's use of force, calling on it to investigate at least one incident, in which a U.N. refuge was hit, killing 10 people.

Netanyahu says not firing into Gaza would validate and legitimate the use of human shields by Hamas.

(END VIDEOTAPE)

CHANCE: Well, Carol, moral or not, the focus is on trying to extend that 72-hour truce to try to make sure even more people don't lose their lives -- Carol.

COSTELLO: Matthew Chance reporting.

ANNOUNCER: This is CNN breaking news.

COSTELLO: All right. We understand that the Secretary of State John Kerry is making a surprise visit to Afghanistan. We understand it's wheels down. He is there in country right now.

We want to bring in General Spider Marks.

And the timing no accident here, right? It comes a few days after an American general was killed in Kabul.

MAJ. GEN. JAMES "SPIDER" MARKS, CNN MILITARY ANALYST: Oh, absolutely, Carol. I think it's the right thing to do, a senior military officer has been killed in the line of duty in combat.

And it's absolutely appropriate that one of our senior leaders in this administration go to Afghanistan, not only to shore up for those soldiers that are there, those troops that are there, but also to ensure that this relationship that exists with Afghanistan is not in any way impeded or is going to be derailed regardless of what we might think that his presence needs to be there to make sure that everybody understands the United States still remains strong, we need Afghanistan and still remains strong with us.

COSTELLO: The timing even more interesting because, of course, General Harold Greene's body has come back to the United States. In fact, C-17 cargo plane landed at Dover Air Force Base a short time ago. You can see the general's flag-draped coffin being carried to a transport vehicle and it will be taken to where the family wishes, and this must be such a difficult day for the family.

Actually, let's pause for a moment.

UNIDENTIFIED MALE: Ready, raise. Ready. Set.

UNIDENTIFIED MALE: Order!

UNIDENTIFIED MALE: Order!

UNIDENTIFIED MALE: Ready, face. Ready, step. March time. Halt. About-face.

(INAUDIBLE)

COSTELLO: You know, the military does not call this a ceremony but they call it a solemn event. Before the moment you just witnessed while the casket was on board the C-17 transport plane, General Odierno, the Army's chief of staff, and a chaplain said a prayer over the casket and then the family -- and then they joined the general's family. You see the transport vehicle is ready to pull away from Dover Air Force Base.

What will happen next, General Marks?

MARKS: Well, first of all, most importantly, you focus in on the family. General Greene certainly will be taken away, there will be an autopsy. There will be a determination of death. We probably know that right now. And then he will be turned back over to his family for final resting.

But the real focus right now needs to be on that family and the rest of the Army. I mean, in times like this, in a crises like this, it is phenomenal how the real bonds that hold organizations together are strengthened, not ironically, not counter-intuitively, but there really is a coalescing and a single kind of a purpose, and a focus on what the army is trying to accomplish and what this family needs to do, to move forward.

So, it's all about at this point honoring this great soldier and then moving forward, celebrating his life and his contributions and his sacrifices and focusing in on the organization and ensuring that the family can move forward. And it's very personal. My wife's father was killed in Vietnam. So, this is very, very tough.

COSTELLO: I can only imagine the family did not want to appear on camera at all but they were certainly at that solemn event.

MARKS: Sure.

COSTELLO: As we mentioned before, the Secretary of State John Kerry is in Afghanistan at this moment. What should he say to the troops?

MARKS: His only message to the soldiers should be, thank you. Your sacrifices are immense, your focus is magnificent, you make us proud every day and America is behind you, and that should be an unequivocal message. It shouldn't be qualified. He shouldn't get into any other type of message or how the administration wants to move forward.

What he needs to do is embrace this organization, ISAF, as it exists in Afghanistan today. He should say, thank you for all that you do, we are here for you and moving forward. Let's focus in on today, let's focus on our next missions that are coming up, and we are here for you and you are here for the Afghan people and America is proud of what you do -- end of statement. What are your questions?

COSTELLO: Oh.

I want to go to Athena Jones now. She's also covering this event.

Athena, tell us more about Secretary Kerry's visit to Afghanistan.

ATHENA JONES, CNN CORRESPONDENT: Good morning, Carol.

We know this was an unannounced trip by Secretary Kerry, and that he's going in hopes of brokering some agreement between two of the Afghan presidential candidates, Abdullah Abdullah and Ashraf Ghani. We know that that election still has not been finalized. Secretary Kerry arranged for an audit.

But the reason that this needs to be finalized is in order to sign the bilateral security agreement, that's the BSA we've heard so much about.

We know that America's plan is to pull most troops out by the end of this year, but to leave a residual force behind to help with training, to help with preparing the Afghans to take over security for themselves. That cannot happen without this BSA, without this agreement. We know that President Karzai has said he's not going to sign any agreement like that.

And so, they have to make sure they know who the president is going to be and make sure the new afghan president signs this agreement in order for the U.S. to leave these residual forces mi behind. So, it's interesting this dignified transfer is taking place in the context of the continued struggles in Afghanistan and the struggles come to this agreement.

We know that these attacks, these "green on blue" attacks, there have been more than 100 since 2007. The peak year was 2012, and you know, one of our national security contributors, Peter Bergen, said that this -- the killing of General Greene is an ominous sign for what the U.S. troops will face even if they reach that security agreement and begin to draw-down so many troops and only leave about 10,000 behind.

So, that is the context in which this is taking place, that is what Secretary Kerry is going to be trying to do on this trip to Afghanistan -- Carol.

COSTELLO: All right, Athena Jones, General Spider Marks, thanks so much.

I'll be right back.