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Bombs Rain Down on Gaza; Egypt's Prime Minister Visits Gaza; Obama's Response to Middle East Violence; Iranian Nukes May Be Closer Than Feared; Israel Ready to Invade Gaza?

Aired November 16, 2012 - 17:00   ET

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

WOLF BLITZER, HOST: And you're in THE SITUATION ROOM.

Happening now, violence in the Middle East escalates despite plans for a cease-fire. Just ahead, we're going live to Israel -- Israel, where the rockets are falling and tens of thousands of people right now fear for their lives.

Plus, tens of thousands of reservists in Israel being called up, as well.

Will Israel invade Gaza on the ground?

We're going to show you just how deadly that scenario could be.

Also, could Iran be on the verge of having a nuclear weapon?

We have details of a disturbing new report.

We want to welcome our viewers in the United States and around the world.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Right now, growing fears and frantic runs for cover, with rockets now striking dangerously close to Israel's two most populated cities.

And in Gaza City, this.

(VIDEO CLIP)

BLITZER: A fiery blast at the Interior Ministry, believed to be the work of an Israeli air strike. Hamas says its field commander was killed today, as endless explosions rocked the city.

We'll get to our senior international correspondent, Sara Sidner, inside Gaza, in just a second.

First, though, our senior international correspondent, Ben Wedeman, is joining us now from Ashkelon in Israel.

What's it like there -- Ben? BEN WEDEMAN, CNN CORRESPONDENT: Well, Wolf, it's sort of surreal. We're next to a sushi restaurant that is not, in any sense, full. But people have been coming all evening and dining. But nonetheless, just 15 kilometers south of here is the Gaza Strip. We've heard steady explosions coming from there, as Israel continues its campaign of air strikes.

We also saw, just to the north of here, three streaks of light going into the sky. That is Israel's Iron Dome system in action once again. Now, of course, you've heard that the Israeli security cabinet has authorized the call up of 75,000 Reservists in anticipation of a possible ground incursion.

Now speaking to people around here, it's interesting. They are telling us that, ironically, they are happy that Jerusalem and Tel Aviv came under missile strikes from Gaza, happy, they say, because finally they feel that the rest of the country is beginning to experience it -- what here, for instance, in Ashkelon, they say they've experienced for the last three days intensely, but for more than 10 years.

So they do seem to voice a certain strain in the Israeli population, that's increasingly fed up with this.

And what residents here are telling us, Wolf, is that they want the government to go in, the Israeli Army to go in and finish off Hamas.

So there does seem to be -- there is a lot of support on the ground for some sort of military incursion -- Wolf.

BLITZER: And do you see evidence of that?

I don't know if you've been out toward the border with Gaza.

Are Israeli troops, tanks, armored personnel carriers, are they poised?

Does it look like they're ready to move in?

WEDEMAN: Well, certainly, there -- there is armor on the move going toward Gaza. As we saw back in 2008, 2009, it takes some time to really get the forces ready to go into Gaza. In that, four years ago, what we saw was an intense air campaign against targets in Gaza preceding a ground invasion.

So, certainly, the signs are all there. It's just a question of when it's going to happen -- Wolf.

BLITZER: Ben Wedeman is on the ground for us, just north of Gaza, in Ashkelon in Israel.

Thanks, Ben.

Let's go to Gaza right now.

Sara Sidner has been watching what's going on.

A constant bombardment from the air and the sea by Israel in Gaza right now -- Sara, set the scene for our viewers.

What's the latest?

Are they bracing for a ground assault from Israel?

SARA SIDNER, CNN CORRESPONDENT: Well, they're certainly worried about one. What we've been hearing is, actually, a lull for the past 20 minutes. But then, just before you came to me, Wolf, another huge bang, arguably, probably an air strike here.

We can also hear the sounds, oftentimes, of the missiles coming out of Gaza, heading toward Israel, as well. We have seen the sky littered with the trail of rocket fire and also with the big black smoke from air strikes.

We went to one neighborhood where a bomb had fallen and killed a child. We went to the hospital today, where the staff there is simply overwhelmed with injured people, people coming in with things like shrapnel wounds or worse.

There are doctors there who we spoke with who said they just could not believe what they were seeing. They had not seen something this bad in so many years and couldn't believe that war had come to Gaza. And a lot of people have talked about this idea that no war has been declared as of yet. But for the people here in Gaza, they feel like war has already come to their city -- Wolf.

BLITZER: Is there any indication at all, Sara, because I know you've spoken with representatives from Hamas, that they're ready to back down and stop launching rockets and missiles into Israel?

SIDNER: The wording that we keep hearing over and over again from the Hamas leadership is that if Israel stops bombarding its people, then Hamas will consider stop sending rockets into Israel.

Both sides saying that they're protecting their own people from the other.

But they, you know, they're sort of saying, look, we're going to keep bombarding places like Tel Aviv, like Ashkelon, like Beersheba, if our people are in Gaza are danger, as well. It's one of those difficult Catch-22s, who started what first.

At some point, someone's going to have to mediate.

What we're hearing now, again, Wolf, is an airplane overhead. Usually, that means within a few minutes, we'll hear the sound of an air strike. We have also been hearing, throughout the day, drones in the air. It sounds really so much like a lawn mower, if you will, in the sky. And everyone here knows the difference between a plane and one of the drones. We heard quite a few drones in the area where we were and then the sound of planes, and soon after, the sounds of bombs hitting their targets. Now Israel has constantly said that they're trying to do pinpoint targeting. We know that they ended up killing a -- a member of Hamas' -- a commander from Hamas' military wing today. We also, though, know from hospital officials that several civilians have been injured. And so far, 29 people have been killed, including nine militants -- Wolf.

BLITZER: Be careful over there.

Sara Sidner is in Gaza for us, watching what's going on.

A tough assignment.

Israel had planned a cease-fire today ahead of the Egyptian prime minister's visit to Gaza. Those calls to end the violence, though, were ignored.

Joining us now from Cairo, Reza Sayah, our correspondent there -- Reza, the Egyptian prime minister made a visit to Gaza and met with the Hamas leaders. He's back in Cairo now.

What, if anything, was achieved?

REZA SAYAH, CNN CORRESPONDENT: Well, beyond a lot of tough rhetoric against the Israeli government and loud support for the Palestinian people, this is going to be viewed by many people as an ineffective trip into Gaza by this delegation led by Egyptian Prime Minister Hisham Qandil.

Remember, the mission, the immediate goal of this delegation was to get into Gaza and establish a truce, some sort of cease-fire, even if it were to be for a short time. That, obviously, failed.

In many parts of the region, in Palestinian territory, Israeli territory the -- the violence escalated.

That certainly doesn't bode well for what Egypt says it wants to do in playing the role of peacemaker. And it seems to undermine and weaken this notion that Egypt could play an influential role in this conflict. So some say they did score some P.R. points appearing with the Hamas leaders. But beyond rhetoric, they didn't achieve much when it comes to ending this conflict -- Wolf.

BLITZER: As you know, the Egyptians recalled their ambassador from Israel. The Israelis then recalled their ambassador from Cairo.

How likely is it that the overall Egyptian Israel peace treaty, which has been in business now since 1979, could collapse?

SAYAH: Well, I think it's important to point out, there is absolutely no indications that that's going to happen. Egyptian leaders have come out and said that that peace accord, the Camp David Accords, are going to be maintained by the Egyptian leadership. There are a lot of factions here that are pressing Cairo to back out of that accord. But Egyptian leaders have said that's not going to happen.

And that could be an early indication that this government, led by President Mohammad Morsi, is going to take a measured and diplomatic approach in an effort to maintain the alliances they have with Israel, with Washington, with Western powers. That, obviously, is going to come as a relief to Israel and Washington. But that could anger the Egyptian public, the Arab world, that is increasingly frustrated and impatient as the violence escalates in Gaza -- Wolf.

BLITZER: All right, Reza.

Thanks very much.

Reza Sayah is our correspondent in Cairo, watching all of this unfold.

There are major implications for the United States in all of this. And the White House is certainly closely watching the crisis play out. We're going to tell you what President Obama is doing about it right now.

Plus, a look at the likely consequences of an all-out ground war in Gaza. They are very disturbing.

(COMMERCIAL BREAK)

BLITZER: Violence exploding in the Middle East right now could have huge implications for the United States. The Israeli ambassador to the U.S. telling me that Prime Minister Benjamin Netanyahu is keeping President Obama informed of what's taking place.

Our White House correspondent, Brianna Keilar, is over at the White House watching all of this unfold -- what is the president doing, Brianna, about this really dangerous escalation in the region?

BRIANNA KEILAR, CNN CORRESPONDENT: Wolf, officially, the White House is condemning the violence. It's urging Israel to not have civilian casualties, while also walking the line of putting forth its longstanding support for Israel to defend itself.

But behind the scenes, there is urgent diplomacy underway, both on the part of President Obama and folks here at the White House and also Secretary of State Hillary Clinton.

The U.S. obviously doesn't have leverage with Hamas. But it does have leverage with some countries that have leverage with Hamas -- Turkey, of course, Egypt, Qatar. And because of that, President Obama today, for instance, called Turkish Prime Minister Erdogan to talk about this. Two days ago, he talked to Egyptian President Morsi, in addition to talking to Israel's prime minister, Netanyahu.

And Egypt key, of course, because of its peace agreement that it has with Israel. So you see Secretary Clinton has made two calls to the foreign minister of Egypt. She's called the foreign minister of Turkey.

The goal here, obviously, to stop any escalation into a ground war, into a conflict that would pit Israel not only against Hamas, but other Arab nations, as well. BLITZER: As you know, the Egyptian prime minister was in Gaza, met with Hamas, expressed total support for Hamas, recalled their ambassador from Tel Aviv. The Israelis recalled their ambassador from Cairo.

Is the Obama administration, Brianna, confident that the Egyptian president, Mohamed Morsi, can deliver right now?

KEILAR: I've been told by one senior administration official that they are confident, that they feel like Egypt has some skin in the game and really does not want to see this escalate.

But the thing is, looking to, for instance, to September, this official told me they feel like Egypt has come through on small tests. When more security was needed at the embassy in September because of protests there, Egypt came through. But of course, that's on a very small scale, Wolf.

And the thing is this post-Mubarak era, this post Arab spring era, the equation is very different. The U.S. has somewhat of a relationship with the Muslim Brotherhood ruling Egypt, but it's nascent. It is largely untested in a big way at this point. So, this is really seen as the big test. There is a bit of a question mark, but yes, I'm told that they are confident that, for now, Egypt can help them.

BLITZER: Let's see if they can. Brianna Keilar over at the White House, thanks. Let's bring in our chief national correspondent, John King, who's been watching what's going on. The president's in a tough position right now. What can he effectively do?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Not a lot in the sense that the administration, as Brianna just noted, is on (INAUDIBLE) saying Israel has every right to defend itself. And what the Israeli says -- what would the United States do if, say, Cuba were lobbying missiles into Florida, of course, you would respond and retaliate.

So, at the moment, Wolf, and you know the language because this has happened too many times in our past, the question is proportionality. I know White House trying to telling the Israelis we understand your right to respond. As you respond, please don't let the situation spiral more out of control. So, there's the urgent short-term challenge which is why the president is reaching out to Egypt, to Israel, to Turkey.

Then, there's a longer term challenges. The president starts now moves into a second term. There will be more and more pressure for him to get actively involved in trying to turn down the temperature, try to recreate some sort of a peace process in the Middle East at a time when he wants to move onto a second term.

He'd like to turn his view of the world away from the Middle East to Asia and elsewhere, and needs a new secretary of state.

BLITZER: He needs a new secretary of state but since George Mitchell left, and that's more than a year ago, as his special envoy for the Israeli/Palestinian peace process, there's been -- they basically thrown their hands up in the air saying there's not much they can do.

KING: There really is no process, let's be honest. They say, you know, they talk about riding the process. They have to have a process. There has been no process for some time. And Tony Blair as the representative of the so-called Quartet has been really the senior western diplomat who goes in from time to time to take the temperature to try to get things done.

But look, not only is there huge mistrust between Netanyahu and Hamas, other huge distrust between Hamas and the Palestinian authority in the Gaza -- not in Gaza, up in the west bank. And so, you have internal Palestinian issues as well. This is a tough one for the president. And the question is, if you have a full-scale ground war, not just what is the impact right there, what is the impact in the neighborhood?

In the past, the Mubarak government would condemn Israel in such things, but there was good intelligence cooperation between the United States and the Egyptian government. I spoke to somebody in the U.S. government today who says it still exists, but it's not as robust as it used to be. But the longer this goes on, if you just look around the neighborhood, Wolf, the more profound the question.

BLITZER: Yes, they had a good working relationship the U.S. with President Mubarak with Gen. Tantawi, but they are now, both of them, long gone. So, that working relationship not necessarily very good between the U.S. and Egypt right now.

KING: And one of the questions is, these are longer range missiles. And there is no question in the U.S. intelligence community, the rockets coming from Gaza, they're longer range. There's no question that they come with the help in assistance of Iran. The question is, how are they being smuggled in?

Remember, Egypt does share a border there. And again, that's a place where the United States used to have more cooperation than it has now in terms of communication and intelligence from the Egyptians.

BLITZER: All the public statements coming from the White House, the state department, they also say Israel has a total right to defend itself. It's unacceptable for these rockets and missiles to be launched into Israel from Gaza, but they also call on Israel to exercise restraint and avoid civilian casualties.

But you know Gaza. It's about twice the size of Washington, D.C. 1.8 million people crammed in there. If you go in there, a lot of civilian casualties.

KING: And so, there is the Israeli government's conundrum, too. Do you just do this with air strikes which actually increases the risk of air and bomb and more civilian casualties. Or do you go in on the ground where you can hunt down certain targets? But when you do that, those Israeli forces would come under fire and they would come under fire from not only Hamas militants but maybe from gangs as well. And do they respond? So, the more military escalation, the more risk of what nobody wants, which is more civilian casualties.

BLITZER: And what do you do, let's say the Israelis do go in there and, quote, "clean out" the area, then you got to have a prolonged occupation. They recreate a situation they try to get out of, obviously, unsuccessfully.

KING: History in this part of the world. Unfortunately, history does repeat itself.

BLITZER: They went into Lebanon a few times, didn't work out well. They've gone into Gaza before, that didn't work out well. This is a real tough one for the Israelis.

KING: It's sad, as you know, in this region more than anywhere else the frustrating parts of history tend to repeat themselves.

BLITZER: Yes, unfortunately. Thanks very much, John, for that.

Iran possibly closer to a nuclear weapon than anyone thought. We have details of the disturbing new report that has just been released.

(COMMERCIAL BREAK)

BLITZER: An Iranian nuclear weapon could be closer to reality than feared. That's just one of the findings in a disturbing new report by the International Atomic Energy Agency. CNN's senior international correspondent, Matthew Chance, has more.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Wolf, it's another highly critical report of Iran's nuclear program from the U.N.'S nuclear watchdog. It's filled, of course, with stuff about how Iran continues to fail to cooperate with U.N. inspectors and refuses to answer questions about the alleged military dimensions of its nuclear activities.

Iran, of course, says its nuclear program is for purely peaceful purposes. But of most concern say western diplomats is the fact that Iran has stepped up its capacity to enrich uranium adding more centrifuges to its highly secure underground bunker at a place called Fordow which is built into a mountain to defend it against potential air strikes.

The report says Iran has effectively doubled its enrichment capacity at Fordow theoretically making it able to make enough material for a bomb much more quickly than it could do previously. So, to report not exactly a game changer, perhaps, but still a very worrying document for those countries who like the United States, Iran's nuclear program very suspiciously indeed -- Wolf.

BLITZER: Matthew, thank you. If Israel invades Gaza, it won't be easy for Israeli troops to avoid hitting innocent civilians. It's all a matter of geography. We're going to show you why.

(COMMERCIAL BREAK)

BLITZER: As Israel's air assault on Gaza intensifies, there are growing signs now a ground attack by Israel could be next. And if history is any guide, it could mean hundreds of lives lost if not a whole lot more. Our Brian Todd is joining us now with a closer look at what a ground invasion would look like. You've been speaking with experts, Brian. What are you hearing?

BRIAN TODD, CNN CORRESPONDENT: Well, if this happens, Wolf, we're looking at probably weeks of urban combat, a lot of chaos and civilians caught in the crossfire. The signs are getting stronger that Israel is about to go in on a ground because a surgical strike earlier this week followed by more pounding from the air hasn't made anyone pull back.

A precision strike from the air killing the chief of Hamas' military wing, but it appears Israel is getting ready to go beyond pinpoint hits like this to contain the Hamas threat. An Israeli official says the army has already moved nearly a division's worth of troops as many as 2,000 to the border of Gaza. Israel sealed off the main roads around Gaza. Will Israel invade on the ground?

JEFFREY WHITE, WASHINGTON INST. FOR NEAR EAST POLICY: I think the chances are going up.

TODD: Jeffrey White, a former analyst with the defense intelligence agency says an Israeli ground invasion of Gaza would be a brutal bloody grind.

WHITE: There's a pretty high density of population throughout the strip. It's highest in the major areas, Rafah, communist (ph), Gaza city, but there are a lot of civilians in other places as well. But the other part of this is that Hamas fights from inside the cities.

TODD: Cities of narrow streets, bazaars, apartment buildings, translation? A punishing building-to-building slog in a place that's slightly more than twice the size of Washington, D.C. We used a Google map with CNN contributor, General James "Spider" Marks.

What kind of close combat are we talking about here?

GEN. JAMES "SPIDER" MARKS, U.S. ARMY (RET): this is called combat in restricted terrain. And clearly what we have here in Gaza City, there are about 500,000 people that live in this city. And you can only imagine the type of combat that's got to take place in this very restricted terrain.

TODD: Terrain where Marks says Israeli troops will be exposed to ambush, sniper fire, suicide bombings. If a ground invasion's launched, analysts say it could be eerily similar to a conflict four years ago after a series of Hamas rocket attacks on Israel.

(on-camera) in late 2008, early 2009, Israel launched Operation Cast Lead, a short period of air strikes followed by a longer ground invasion of Gaza. These are some scenes from it. Entire apartment blocks destroyed. Estimates are up to 1,400 Palestinians were killed, many of them civilians.

(Voice-over): About a dozen Israelis were killed in that operation. Then the Israelis were able to split up Gaza, cut supply lines. This time analysts say Hamas could make it tougher.

JEFFREY WHITE, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: They have some better weapons, no question about it. They've got better -- much better anti-tank capability with -- you know, with the concourse, Russian APGM. They have a better SAM capability.

(END VIDEOTAPE)

TODD: But White says that in 2008-2009 Hamas units were not good at close combat with the Israelis. He says they broke and ran, didn't coordinate well. White says that since then they have made an effort to improve that with Iran's help. So we'll see what the Israelis encounter if they go in -- Wolf.

WOLF BLITZER, CNN ANCHOR: Big difference between now and then, 2008-2009, when the Israelis went into Gaza as Egypt there's been a huge shift in the government in Egypt.

TODD: That's right. You know, a huge difference. In 2008-2009 the Egyptians kind of tacitly supported the Israeli operation. They did not do it with military help, of course, but they -- White says they kind of kept Gaza isolated and they didn't provide Hamas with any assistance there.

Now of course we have a new Egyptian government that's seen as more sympathetic to Hamas. So, you know, what the Egyptians do here is going to be crucial if the Israelis go in on the ground.

BLITZER: Brian Todd working this part of the story for us. Thank you, Brian. Very, very ominous.

Let's dig a little bit deeper right now. Joining us is Fouad Ajami, the Middle East scholar. He's a senior fellow at the Hoover Institution, knows this region about as well as anyone.

Fouad, Mark (INAUDIBLE), a spokesman for the prime minister of Israeli, told me the Israel Cabinet has approved a plan to activate about 75,000 Israeli military reservists to get ready for a possible ground invasion of Gaza.

Do you anticipate that's going to happen? Or will Hamas back down and stop launching some of these rockets into Israel?

FOUAD AJAMI, SENIOR FELLOW, HOOVER INSTITUTION: You know, we really never can tell. I mean there are red lines for Israel. And these red lines will have to be observed. A government can't simply ask its citizens to endure these rockets and missiles that are being rained on them.

I think generally, if I were to make a guess, I would guess that Israel would come close to a ground invasion but would hesitate. I think Israel knows that these wars are easier to begin than to end. I think the Israelis remember both the war in the summer of 2006 against Hezbollah which ended badly, I think. And then they also remember Operation Cast Lead which was inconclusive.

So I think -- and if you take a look the agenda of Prime Minister Netanyahu, he has pledged to restructure the economy, to check the influence of Iran, and I -- you know, he prides himself rightly so on having been in power for six and a half years without leading Israel into a full-scale war. He will hesitate when it comes to Gaza and for very good reasons.

BLITZER: Why has this escalated right now to be on the brink of war?

AJAMI: You know, Wolf, I think Hamas feels emboldened. I think Hamas believes that this is the age of the Muslim Brotherhood, and that they, of course, are a branch of the Muslim Brotherhood and they look at Egypt, really Egypt as the mothership, if you will, of all the Muslim movements.

And Hamas looks at this region and in a way sees that it has support in Turkey, it has financial support from Qatar, a while ago the emir of Qatar came to Gaza, put on the table $400 million and left. So with Qatar, with Turkey, with the big change in Egypt, I think Hamas has grown emboldened.

BLITZER: I want you to listen to what Aaron David Miller who worked at the State Department for many years, served several secretaries of state, what he told me yesterday about the situation right here in THE SITUATION ROOM.

(BEGIN VIDEO CLIP)

AARON DAVID MILLER, FORMER U.S. PEACE NEGOTIATOR: It's going to get a lot worse before it gets worse. In large part because the factors for a resolution between Israel and Hamas simply aren't there.

(END VIDEO CLIP)

BLITZER: There was effectively, for the last few years, quiet cease-fire between Israel and Hamas. That's gone away obviously. Is he right that it's going to go from -- it's going to get worse before it gets worse?

AJAMI: Well, Hamas has always accepted what an Arabic -- forgive me for this -- (INAUDIBLE), they've accepted cease-fire. They've acceptance cessation of violence. But they've never really accepted any resolution with Israel.

When you have a radical movement like Hamas and it pulls off coup d' etat, basically. It takes Gaza away from the Palestinian National Authority, its pledged to a war of liberation, its pledge to a jihad, and we have to think of Gaza today almost as a kind of Somalia in a way because these are -- it's lawless land. There is no government. There is no responsibility. And I think you can see that the trouble -- I think I can understand why Aaron who knows this region very well and who knows this issue very well would make that statement.

BLITZER: How worried should we be, Fouad, that this -- if it does come -- down to an all-out war between Israel and Hamas it could spread, Hezbollah from Lebanon in the north, which is aligned to a certain degree with Hamas. Syria which has its own problems for the last few days there have been some Syrian rockets coming into the Golan Heights with Israel -- which Israel, as you know, controls.

There's certainly a lot of tension with Iran right now. And some see Iran as fomenting this to sort of try to change the subject. What's your analysis?

AJAMI: Well, look, the Iranians have a beachhead into the Mediterranean through Hamas. And the Iranians have been sending rockets to Hamas, the Israelis have tracked down these Fajr-5 rockets which Hamas has in abundance. So there is support for Hamas from Iran. Some of the other Arab governments -- some of the Arab government I think have doubts about Hamas. They're not going to follow Hamas into a general war.

If you listen to the sounds of silence from Saudi Arabia, all the king of Saudi Arabia said, it is called upon reasonable people to do reasonable thing. He has no intention of wrecking the Saudi economy or Saudi political order to follow Hamas into this war.

And I think even in Egypt when you have Morsi says, well, the Egypt of today is not like the Egypt of yesterday. The Arab world today is not like the Arab world of yesterday. But fundamentally the mandate now, the mandate of Morsi and the mandate of the Muslim Brotherhood in Egypt is to govern this burdened country, 80 some million people, and the idea that the Egyptians, even the Egyptians were the closest to Hamas that they would give a kind of veto over their own policies to Hamas I don't give that much credence.

BLITZER: Do you believe the Israeli-Egyptian peace treaty which was signed in Washington in 1979 will survive?

AJAMI: I believe the Egyptian/Israeli treaty will survive because it's important for both parties. I think the peace was made by Anwar Sadat, it was kept by Mubarak. I think now the Morsi people will not pay homage to this piece, they will not praise it in full daylight but they will abide by it because they know it's essential for their relationship with the United States and for their ability to float loans from the International Monetary Fund and to keep this economy and this society afloat.

BLITZER: Fouad Ajami -- thanks as usual, Fouad, for coming in.

AJAMI: Thank you, Wolf.

BLITZER: We want to show you now some videotape of a dramatic interview that happened right here on CNN. Our Isha Sesay was speaking with residents in Israel and Gaza when suddenly blasts started going off in the background. Watch this.

(BEGIN VIDEO CLIP)

ISHA SESAY, CNN ANCHOR: Mohammed, when you hear him say that, when you hear him describe the situation where he is, what goes through your mind?

MOHAMMED SULAIMAN, RESIDENT OF GAZA: Sorry. There is one thing -- sorry, carry on with your question.

SESAY: We're having --

(CROSSTALK)

SULAIMAN: Yes, you can hear everything. I'm not going to comment on anything that is going on outside. I just --

(CROSSTALK)

SESAY: Mohammed, what was that? Mohammed, what was that noise we just heard?

SULAIMAN: Sorry?

SESAY: What was that noise we just heard? Was that coming from outside?

SULAIMAN: These are Israeli warplanes. Listen, let's just carry on our conversation. We need to have a decent -- yes. You can hear all that by yourself. I'm not going to comment on it. I'm not going to even to allow these bombs to interrupt me from having this with you and your guest.

(END VIDEO CLIP)

BLITZER: Dramatic moment indeed. We're going to get back to that story at the top of the hour. Meanwhile, other important news including urgent talks to keep the United States from going over a fiscal cliff. Who will cave first, Democrats, Republicans? We have details of today's White House meeting.

(COMMERCIAL BREAK)

BLITZER: Severe spending cuts, huge tax hikes for everyone are now just only six weeks away. And with pressure mounting, President Obama sat down at the White House today with congressional leaders from both parties to begin negotiations on a debt reduction deal that would keep the United States from going over the so-called fiscal cliff.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think we're all aware that we have some urgent business to do. We've got to make sure that taxes don't go up on middle class families, that our economy remains strong, that we're creating jobs. And that's an agenda that Democrats and Republicans and independents, people all across the country share.

(END VIDEO CLIP)

BLITZER: Let's bring in our senior political analyst Gloria Borger.

There were some pretty upbeat statements coming from both sides after this meeting.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Yes.

BLITZER: Are we seeing real momentum? Or is this sort of an illusion?

BORGER: Well, I think you'd have to say, Wolf, that the tone is really good on both sides. We haven't seen this in a long time. They came out on the driveway there at the -- at the White House, they were standing together, they were talking to each other. They didn't look like they were on a bad date. They looked like, OK, we're actually going to try and get something done.

What we have heard all week from both sides is kind of the opening gambit. The president saying he's got to raise taxes on the wealthy, the Republicans saying, you know what, we have a little flexibility, but we need serious long-term entitlement changes. And that would mean, of course, Medicare and Social Security.

Everybody seems to know what's going to be -- what needs to be done. It's just a question of how they're going to get there. But look at them together in this picture. When was the last time you saw Harry Reid standing next to John Boehner?

BLITZER: And Mitch McConnell is --

BORGER: And Mitch McConnell, by the way. Right.

BLITZER: The president is in a different position now. Re- elected by a pretty impressive margin than he was the last time he tried to forge a deal that collapsed.

BORGER: Right. I mean that was the debt ceiling. He had -- he had a real problem with that with the grand bargain. He also had after the 2010 midterms when he had a lame duck session of Congress and he had to give on keeping the tax cuts for the wealthy.

This is a president right now who's -- who believes he's got some leverage. He got re-elected. And these are Republicans who are trying to figure out just who they are and what they stand for. And as you saw in the president's press conference earlier this week, he's somebody who studied the flaws of a second term.

What he wants to do is make some progress without overreaching. It's very clear they're worried at the White House about doing some overreach here. If he can get a fiscal deal done, that will be very, very important for his legacy in the long-term. And he knows it.

BLITZER: Are the Republicans operating from the same game plan?

BORGER: No. I think they're not. I mean, the Republicans are on the couch right now in the therapist's office. They're trying to figure out what went wrong, how can we attract more voters. And if you were ever -- if you ever question whether Mitt Romney was a transitional figure in the Republican Party, look at how quickly he's disappeared or they've disowned him, right?

So they don't have a single leader like the Democrats do. And here's one other thing, Wolf. If you look at the exit polls from this election, very, very clear on where the American public stands on the tax question. About 60 percent of the American public believes that taxes should be increased for all or some of the people.

Look at that. And for the middle class, for above $250,000 -- excuse me, for the wealthy, 47 percent. So it's hard to argue with that if you're a Republican you look at those numbers and you say, you know what, this is where the public is. We need to be flexible on tax increases.

BLITZER: But you're hearing voices now, increasing voices from some Republican quarters saying, you know what, maybe a slight increase for really, really rich people, people making more than a quarter million or $500,000 or $1 million a year.

BORGER: Right.

BLITZER: Maybe that's not so bad.

BORGER: Yes. And you know, some of them are saying look, a lot of those folks on Wall Street voted for the Democrats anyway. So why are we protecting them?

BLITZER: Gloria, thanks very much.

BORGER: Sure.

BLITZER: They've got six weeks to fix this. Otherwise we all could see taxes going up. Hundreds of thousands of people increasingly desperate weeks after the superstorm Sandy. Now one man is in charge of helping them.

(COMMERCIAL BREAK)

BLITZER: He is now the man in charge of helping the northeast recover from the superstorm Sandy. And today the Housing and Urban Development Secretary Shaun Donovan got a better sense of the massive task that awaits him.

Here's CNN's Mary Snow.

MARY SNOW, CNN CORRESPONDENT: Wolf, Housing Secretary Shaun Donovan and Department of Homeland Security Secretary Janet Napolitano came here to New Jersey to meet with local and state officials to talk about recovery efforts, and a big part of that is housing needs. To date, some 32,000 people in New Jersey are depending on the federal government to live in shelters, hotels, and temporary apartments.

(BEGIN VIDEOTAPE)

SNOW (voice-over): What normally is a busy thoroughfare at Sea Bright, New Jersey, now serves as a painful reminder of what was. Sandy's storm surge devoured home after home including the house Christopher Capillo lives in with his wife and daughter.

(On camera): Where are you living now?

CHRISTOPHER CAPPILLO, SAN BRIGHT, N.J. RESIDENT: I'm at a friend's house. I have been like a nomad, you know, you go here, you go there, whoever has got room, and cousins, and stuff like that.

SNOW (voice-over): In the best-case scenario, Capillo says he will be without a permanent home for more than a year. And he's not alone.

SHAUN DONOVAN, HUD SECRETARY: We have families that are going to be out for a long rebuilding process, where homes have been completely destroyed. And our experience is that a small group, but some families, it will take years.

SNOW: Overseeing the rebuilding is part of a new roll for Housing Secretary Shaun Donovan. The president tapped him to work with elected state officials to oversee recovery efforts from superstorm Sandy.

DONOVAN: The president has made absolutely clear that our job, first and foremost, is to make sure we cut every piece of red tape, slash every regulation that we need to to make sure help is on the way as quickly as possible.

SNOW: Donovan's new role will look at long-term plans to rebuild. That includes a massive transportation system with lessons learned from the devastating storm that crippled New York and New Jersey. New York's governor alone has requested $30 billion in federal aide. But the more immediate impact on homeowners like Christopher Capillo, rebuilding is daunting enough.

(On camera): How massive is the job ahead?

CAPILLO: Well, the key here is -- for me, it's a mess. You're rebuilding from scratch.

(END VIDEOTAPE)

SNOW: And for the long-term Secretary Donovan says he expects to be meeting with communities on what their vision is to move forward and he says he expects to have a timeline for that in the coming weeks -- Wolf.

BLITZER: Mary, thank you.

As President Obama prepares for his next four years in office, our John Berman has a tip for him. Read up on recent history, Mr. President. A look at second term scandals. That's next.

(COMMERCIAL BREAK)

BLITZER: Here is a look at this hour's "Hot Shots." In India, the sunsets over a city skyline, look at that. In South Korea, 2,000 volunteers gather in a park to make a traditional Korean dish. In England a snowman is seen inside a telephone booth. And in Greece, people gather in front of a monument dedicated to students who rose up against the military back in 1973.

"Hot Shots," pictures coming in from around the world.

President Obama's inauguration is still a couple of months away, but with all the talk of scandal dominating Washington right now, it's starting to feel like his second term has already begun.

Here's CNN's John Berman.

JOHN BERMAN, CNN ANCHOR/CORRESPONDENT: So, Wolf, it took like 76 hours for the president's reelection to get subsumed in the whole Petraeus-Broadwell-Allen-Kelley mess, you might think it's a tough way to start a second term, but the truth is it may be the perfect introduction to the realities of re-election. It really is enough to give you second thoughts about that second term.

(BEGIN VIDEOTAPE)

BERMAN (voice-over): President Obama, you were just elected to a second term, what are you going to do next? Go to Disney World? Doubtful. Embark on immigration reform? Possible. Avoid the fiscal cliff? Maybe.

But if history has taught us anything, perhaps the first thing he should do is lawyer up. We're not suggesting the president is in any kind of legal jeopardy, it's just that second terms have become synonymous with scandal.

Richard Nixon's second term?

RICHARD NIXON, FORMER PRESIDENT: Well, I'm not a crook.

BERMAN: He resigned in the wake of Watergate.

Ronald Reagan's second term?

RONALD REAGAN, FORMER PRESIDENT: A few months I told the American people I did not trade arms for hostages. My heart and my best intentions still tell me that's true, but the facts and the evidence tell me it is not.

BERMAN: The Iran contra affair. Bill Clinton.

BILL CLINTON, FORMER PRESIDENT: I did not have sexual relations with that woman.

BERMAN: Impeached after the Lewinsky mess. And George W. Bush, well, there was the Valerie Plane spy leaks scandal, not to mention the handling of Hurricane Katrina.

That's trouble for roughly 100 percent of reelected presidents since 1972. Yes, it's enough to give you second thoughts about that second term. So is there anything the Obama team can do to prevent this? Now as Bill Clinton might say --

CLINTON: It depends upon what the meaning of the word is.

BERMAN: The fact is, if there is going to be a second term scandal, its seeds were probably sewn in the first term. The Watergate break in, Nixon's first term. The actual Iran contra deal, Reagan's first term. Bill Clinton's liaison with Lewinsky, first term. The actual Plame leaks, first term.

So if the Obama team was going to mess up, history suggests they already did. Maybe it's something that has made headlines already, but maybe not. Remember, the Lewinsky scandal didn't surface until 1998. Maybe the Obama administration will make its own history and avoid a second term scandal. But if not, Disney World may seem very appealing.

(END VIDEOTAPE)

BERMAN: You know, it was interesting in the president's news conference, he said he was well aware of the history of presidential overreach in second terms. That's a little bit of a different subject, but you get the sense that anyone that much aware of presidential history knows that second-term scandals can be a problem and will most likely be really, really careful -- Wolf.

BLITZER: Happening now, Israel on the attack in Gaza, taking steps to mobilize tens of thousands of troops for a possible ground war. Hamas rockets land near Jerusalem, striking fear across Israel. This hour we'll hear from officials on both sides of the conflict.

And scandal takes a backseat as David Petraeus testifies before Congress. We'll talk to a lawmaker who was inside the hearing on the Benghazi attack.

I'm Wolf Blitzer, you're in the SITUATION ROOM.