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Early Start with John Berman and Zoraida Sambolin

Gaza Bombarded by Airstrikes; Russian Economy Targeted; Ebola Outbreak Grows in Africa

Aired July 30, 2014 - 04:30   ET

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

(COMMERCIAL BREAK)

CHRISTINE ROMANS, CNN ANCHOR: Breaking news this morning: Gaza on fire. Israel pounding the streets with bombs, escalating its attacks as Hamas refuses a cease-fire. We are live in Gaza with the very latest.

JOHN BERMAN, CNN ANCHOR: Russia paying the price this morning. World leaders slapping that country with new sanctions supporting separatists in Ukraine. The cost could be billions.

This as pro-Russian rebels keep the investigators from reaching the crash site of Malaysia Airlines Flight 17. The victims, many of them, still waiting to be claimed in that field.

We will have live team coverage, ahead.

Welcome back to EARLY START, everyone. A lot going on. I'm John Berman.

ROMANS: I'm Christine Romans. It's 30 minutes past the hour. We welcome all the viewers in the U.S. and those around the world. Israel determined more than ever to bring Hamas to its knees.

Breaking this morning, another U.N. school in Gaza shelled leaving 19 people dead. This after the U.N. confirmed a stockpile of missiles has been found in one of its schools for the third time, stepped up air strikes. Look at that, hundreds of thousands of Palestinians now without electricity.

And this morning, this disturbing new video showing five Israeli soldiers being slaughtered by Hamas gunmen who infiltrated the border and videotaped their deadly attack using helmet cams. Israeli officials insisting the only way to end this conflict is to ramp up the onslaught.

(BEGIN VIDEO CLIP)

RON PROSOR, ISRAELI AMBASSADOR TO THE UN: We're dealing in essence not with a country. We're dealing with a terror organization that doesn't recognize Israel's right to exist and basically has a clear goal, and that is the eradication of the state of Israel.

(END VIDEO CLIP) ROMANS: John Vause live for us this morning from Gaza.

John, what are you seeing now?

JOHN VAUSE, CNN CORRESPONDENT: Yes, hey, Christine.

That is really a campaign certainly has been ramped up. There are loud explosions throughout the night in the early hours of the morning, a number of buildings not far from where we are have in fact been hit.

But what would be controversial for the rest of the today is exactly what happened at the camp at that U.N. school. The IDF says it's investigating it does not know what happened at this point.

But the U.N., they're fairly adamant. They say that school was hit by five rounds of artillery, coming from Israeli forces. It happened around 4:30 a.m. local time, just as many people were getting out for morning prayers, I should say, leaving 19 people dead, 126 others were wounded. Many of the people in the school have decided to use it as a safe place, they were taking shelter there, either because homes coming under attack. Or they fear they had would.

And you did mention, there is some other incident at a U.N. school for a third time. Once again, the U.N. investigating weapons found, being stored at a U.N. school. The U.N. not saying what school it was, but it was closed for the summer. It was not being used as an evacuation center.

One last point, too, here, Christine. You did mention that the power plant here in Gaza has been hit. It's not far from us. Nothing is very far in Gaza.

What we can see in the distance, once again that smoke, that diesel thick black smoke continues to come from that area. And last night, pretty much all of Gaza was without electricity. That is the main power station here. It is the only power station in Gaza.

The people, the Palestinians here do get electricity from Israel. They pay for that. But early on in this campaign, those transmission lines have been damaged. Some of by Israeli forces, some damaged by rocket fire. So, right now, we have a situation when it comes to electricity, which is you imagine is crucial, it's very, very grim -- Christine.

ROMANS: And the diplomatic off-ramp just isn't there today. It's two sides entrenched in a conflict that escalates?

VAUSE: Well, it seems that right now both sides are talking across each other. Hamas is entrenched. They're refusing to back down from their claims. I think they feel if they come out of this without anything to show for it, it will be the end of them politically.

And it could even be divisions between the political wing of Hamas and the military wing of Hamas. In fact, overnight, there was a very rare public statement coming from a man known as Mohammed Deif. The Israelis have tried to kill him on a number of occasions. They have not succeeded.

He did pop up last night with his recorded audio statement saying there would be no cease-fire with Israel until they end the blockade of the Gaza Strip -- that's a reference to all the borders ending the blockade.

Of course, we know from Israeli point of view, they're saying this won't stop until all the tunnels have been found and destroyed, until all the rockets are gone, rocket launchers are gone. And in fact, until this entire Gaza Strip, this coastal community, this area right along Mediterranean, they want it completely demilitarized. So, both sides here digging in.

No one at this point, willing to give an inch, and caught in the middle in so many ways 1.7 Palestinians who really have gone through, what, 27 days of this now?

ROMANS: Unimaginable. All right. John Vause, thanks for that, John.

BERMAN: Turning now to the crisis in Ukraine. In a new round of sanctions finally being leveled against Russia, the E.U. hitting Russia's banks, limiting their access to Europe's capital markets, and the U.S. quickly following suit, announcing new sanctions, targeting key sectors of Russia's economy.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is a choice that Russia and President Putin in particular has made. There continues to be a better choice, the choice of de-escalation, the choice of joining the world in a diplomatic solution to this situation.

(END VIDEO CLIP)

BERMAN: Now, the West waits to see whether these sanctions will work.

I want to bring in Nic Robertson live now from Moscow.

Nic, these sanctions are real. The question now really forced by the United States and Europe, what will Russia do about it?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, President Putin is due to meet with the government in about an hour's time. Normally, there's a camera spray on the top of that meeting so we can expect perhaps some comments on that. He already met with the government on Monday to tell them to accelerate alternate means to bring in necessary equipment, raw materials, products to support the military here. That's one of the things -- the arms industry is one of those things that's being targeted here.

But we're seeing today, an impact already on at least one of those state-run banks that's being targeted here. VTB Bank, its shares open almost 2 percent down. They've fallen another 3 percent on the markets here already today. It is the second largest lender in Russia. But the political message here, however, has been essentially one of

defiance, that the country is doing well. The Bank of Moscow also targeted, said it won't be affected by the sanctions.

We heard from the deputy prime minister as well saying that the sanctions that will target the arms industry here really show just how worried the West is about the growth of Russia's navy. So, really, the political message is one of defiance. Economic impact -- well, it does seem that already it's having a small effect, but to have a long- term effect to bring political change, that's another thing -- John.

BERMAN: But it also shows, Nic, that again, months and months and months after this whole crisis in and around Ukraine began, it does show the United States and Europe are showing solidarity. That Russia can no longer simply get away with things without repercussions.

ROBERTSON: The repercussions, however, with what -- with what the United States and the Europeans say is Russia's support of the separatists in eastern Ukraine. The repercussions here for President Putin has been absolutely to boost his popularity over 80 percent.

Now, it has to be said that he does control the state media here. There really is no strong opposition media, or opposition political voice. He has a run of the field there.

So, he can control the message, but it's working for him. If this is about politics and the need to affect and impact his decision making, it's not affecting his political standing. Obviously, economically, longer term that may all change. But at the moment, it seems to be that this is only benefitting him.

So, again, you know, these sanctions targeting the oil sector, they're future sanctions. They will target future oil exploration. The sanctions that are targeting the arms industry won't affect contracts right now, future contracts, future acquisitions.

So, the pain really is so far off. It doesn't seem that it's having the impact that's desired, John.

BERMAN: You make an excellent point, Nic Robertson. Whatever pain they inflict at least at this point, it doesn't look like it's causing domestic political pain for Vladimir Putin.

Nic Robertson in Moscow for us -- thanks so much.

ROMANS: It doesn't look like investigators will be receiving the wreckage of Malaysia Airlines Fight 17 anytime soon. There is heavy fighting in that area. The Ukrainian military trying to seize back the region from pro-Russian separatists.

Defense officials in Ukraine insisting investigators will be allowed access to the crash site, only when the area is safe and back under Ukraine's control, leaving little hope of recovering remains of more victims anytime soon.

Ivan Watson tracking the latest developments, live for us this morning from Kiev. Still a very hot war zone there, very difficult to do an international criminal investigation. Aviation investigation, when the territory is still in such great dispute, Ivan.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: All but impossible. I mean, the OSCE, which has this international monitors mission in Ukraine, it announced that about two hours ago it sent a reconnaissance convoy to try to explore routes to try to reach the crash site. We have not heard about Australian or Dutch investigators. The 50 some odd investigators on the ground in the rebel-controlled city of Donetsk for several days now that they've been able to leave yet. And this is the fourth day that they've hoped to reach the crash site, with their top priority to recover some of the dozens of victims, their bodies still missing now. Nearly two weeks since Malaysian Air Flight 17 went down.

Their second priority to gather up belongings of these victims and to return them to the anguished families in countries like Australia and Netherlands and Malaysian. The Ukrainian government says it is trying to basically capture the crash site so it can enable an investigation to go ahead.

However, last week, when the separatists were firmly in control of the crash site, international monitors, journalists such as CNN, myself, we were able to travel freely back and forth from the crash site, while the separatists were in control of it. Now, it has basically become a battleground. And that is why international investigators cannot reach the scene.

If you want an example of how much the fighting has escalated just in the past couple of days. A high-ranking Ukrainian military source telling CNN that for the first time, Ukrainians fired a cruise missile, a Tochka-U surface-to-surface cruise missile as part of this conflict, targeting on Monday the strategic heights of Saur Mahela (ph), in southeastern Ukraine, not far from the Russian border. This is an area where pro-Russian separatists shot down two Ukrainian fighter jets just last week. And it's only about a half hour's drive away from where the Malaysian Air Flight 17 crash site is.

So, now, we've got cruise missiles being used in and around the area where this plane went down, underscoring again how intense the fighting is, and heavy weaponry that's being used that led to the deaths of at least 13 people in and around the rebel-held city of Donetsk on Monday, the city where the Australian and Dutch investigators are trying to stage their mission from -- Christine.

ROMANS: Complicated, difficult and dangerous.

Ivan Watson -- thank you, Ivan.

BERMAN: Forty-two minutes after the hour right now.

Congress wants to have a say before a final nuclear agreement with Iran is reached. Members of both parties at two congressional hearings Tuesday insisting on a vote for any deal with Tehran. The lead American negotiator declined to give a firm date for an agreement and would only say that the Obama administration will consult with Congress along the way.

ROMANS: All right. Let's get an EARLY START your money.

European shares lower after the U.S. and E.U. announced those new sanctions against Russia. Asian shares ended the day mixed. Futures are pointing higher. You know, stocks have barely budged so far this week, called the summer doldrums.

But we could get news from the Fed. First reading of what economic growth in the second quarter that comes today. Here's what the predictions are, CNN Money predicts that economy grew 3 percent pace in the second quarter. John, that's a big improvement because of the first quarter contraction because of the harsh winter weather. No surprises expected from the Federal Reserve. Today's statement will likely include further tapering of the monthly bond-buying program and no hints of what Wall Street really wants to know, a time line for raising interest rates.

You can imagine raising it. We've been lowering interest rates. Record low interest rates for so long.

BERMAN: I don't remember the last time that was even put in a sentence.

Can you imagine, though, it needs -- the economy needs to grow by 3 percent, almost, to offset what happened last quarter. If it does not, that means this year can be a lot more sluggish than people think.

ROMANS: And it needs to keep growing at 3 percent and more than 3 percent so that it can keep adding the jobs you need to, to get back to where the economy should be at its regular potential.

BERMAN: All right. About a quarter until the right now.

New fears this morning that the deadliest Ebola outbreak ever could be on its way out of Africa traveling now. Airlines cancelling flights as we learn how close this virus came to reaching U.S. soil. That's next.

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BERMAN: The latest now on the Ebola crisis spreading across West Africa. ASKY, a major airline in that region, has stopped flights to Liberia and Sierra Leone. This amid growing concerns about spreading the virus.

U.N. figures now put the death toll at 672. Among them, Dr. Sheik Umar Khan. He's been leading the charge fighting this outbreak, until he contracted a virus himself. He's the second doctor to succumb to Ebola in just the last few days.

The U.S. may have dodged a bullet here. We learned that an American citizen who died of Ebola was on his way back to the United States. Patrick Sawyer had flown from Liberia to Nigeria where he was to attend a conference, but he got sick to his scheduled flight to the U.S.

(BEGIN VIDEO CLIP)

PAUL GARWOOD, WORLD HEALTH ORGANIZATION: He apparently arrived in Lagos, I understand, by plane. He left -- he departed on the plane initially with no symptoms. He reported being symptomatic on arrival. So, I understand he was vomiting, and he then turned himself basically over -- he made it known that he wasn't feeling well.

(END VIDEO CLIP)

BERMAN: There is no known cure for Ebola, which is transmitted through body fluids.

ROMANS: Terrifying.

All right. Water rescue in California, 10 million gallons of water shooting up from the ground, flooding the streets for hours, cameras catching it all. We've got that for you when we come back.

BERMAN: Nuts.

(COMMERCIAL BREAK)

ROMANS: This morning, crews trying to repair the massive damage from a pipe rupture that flooded the campus of UCLA and the surrounding area. The break in this 90-year-old main sent a geyser shooting 30 feet in the air. It's remarkable, raging river on Sunset Boulevard. Fire and police officials trying to stop people from playing in this water.

BERMAN: Look at that.

(BEGIN VIDEO CLIP)

JAMIE MOORE: We had someone some who were in the water, they got swept off their feet. With the current that was pushing, they got trapped underneath their car. Our swift water rescue team pulled them out and rescued them.

So this isn't something we want to go and play and have a good time in the water. There's a lot of debris there. The ground has been undermined. It's very, very dangerous.

(END VIDEO CLIP)

ROMANS: Millions --

BERMAN: Look at that!

ROMANS: Millions of gallons of water. That's UCLA's athletic facilities as well as its parking facilities. The parking structures and athletic facilities got the damage.

BERMAN: And, again, you know, they're saying the Pauley Pavilion, the famous stadium at UCLA, they say they think they'll be able to play games there this year. They think that. Look at the damage.

ROMANS: You know, building infrastructure isn't sexy until this happens, you know? A 90-year-old water mine.

BERMAN: Infrastructure ain't sexy, Christine Romans.

Fifty-four minutes after the hour.

Twitter on fire. Why the stock is soaring before the opening bell. We will get an early start on your money. It's sexier than infrastructure, next.

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BERMAN: Time for an EARLY START on your money this morning.

European shares, European stocks lower right now. You can see them right there. The U.S. announced tougher sanctions against Russia. You can see Dow futures pointing higher this morning. Stocks overall barely budged this week. We can expect news from the Fed and first reading on second quarter economic growth in this country. That comes out later today.

This is what growth looked like. You see that first quarter this year. This year was not pretty. CNN Money expects the economy grew at a 3 percent annual pace in the second quarter. That would be a big improvement from that contraction.

And you'll see if there are any surprises. We're not really expecting any surprises from the Federal Reserve, as it continues to taper.

ROMANS: All right. Twitter is not making any money. It's losing money but, hey, the shares are up 27 percent this morning. The company posted second-quarter earnings yesterday after the bell. In those is that loss, it reported strong user growth especially in mobile.

That's good news for Twitter in what otherwise has been a pretty tough year. Shares down more than 40 percent this year because of slow growth overall. The company as I said still not making money. It's losing $145 million last quarter.

All right. Potentially a big win for low-wage workers. The National Labor Relations Board decided Tuesday that McDonald's is a joint employer with its franchise owners. McDonald's has always shielded itself from liability by claiming its franchises operate as independent businesses.

Now, McDonald's will be held responsible for labor violations at its 12,000 franchisee owned restaurants. That includes claims that employees have been disciplined for protesting low wages. McDonald's promised to fight that ruling.

BERMAN: It's a huge ruling because it goes against McDonald's entire business model with the franchises.

ROMANS: Yes, absolutely. Stay tuned for that one.

BERMAN: EARLY START continues right now.