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The Situation Room

Interview With White House Deputy National Security Adviser Tony Blinken; Netherlands Mourns Flight 17 Victims; John Kerry in Israel; FAA Extends Ban on Tel Aviv Flights

Aired July 23, 2014 - 18:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening now, a SITUATION ROOM special report, breaking news tonight. Urgent new moves towards a cease-fire here in the Middle East. Are Hamas militants giving any new ground? I will ask an insider in the talks.

Plus, a new show of support for Israel, the former New York City Michael Bloomberg flying to Tel Aviv even as the U.S. extends a ban on flights to Ben Gurion Airport. Stand by for my interview with Michael Bloomberg. He has some very tough words for the FAA.

And a sign of -- a grim procession, I should say. The remains of Malaysia Flight 17 victims arrive in the Netherlands as two more jets are shot down in Ukraine.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer in Jerusalem. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Tonight, Hamas leaders are declaring a victory over Israel. Now that the United States is extending the ban on flights to Tel Aviv for at least another day, Israeli officials fear terrorists are getting what they want as the battle with Hamas rages on with deadly results.

We're following all the breaking news here in the Middle East.

And in Europe, we're learning more about the investigation into the downing of Malaysia Flight 17, as the first remains of victims are returned to the Netherlands.

We have our correspondents, our analysts, our newsmakers standing by to keep up-to-the-minute developments for you on all of these major stories.

First, new details on the fighting in Gaza and the devastating fallout.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): It's a massive blow to Israel, traffic at Ben Gurion International Airport dramatically cut back during the busy summer tourist season. The FAA is extending its bans on U.S. flights to Tel Aviv for another 24 hours.

ANTHONY FOXX, U.S. SECRETARY OF TRANSPORTATION: Safety is the very first priority for the U.S. DOT, for FAA.

BLITZER: Many European countries are following the United States' lead, and now Hamas is declaring a great victory. This was the frantic scene inside the airport a day earlier, when a rocket landed about a mile away.

UNIDENTIFIED MALE: The whole airport rushed into the bomb shelters and it was terrifying.

BLITZER: Israeli Prime Minister Benjamin Netanyahu went to Ben Gurion International today to welcome Michael Bloomberg. The former New York mayor flew to Tel Aviv from New York on El-Al Airlines in a show of support for Israel and its insistence that the main airport is safe.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: We protect this airport. There's no reason whatsoever for the mistaken FAA decision to instruct American planes not to come here.

BLITZER: Another American who landed in Tel Aviv, Secretary of State John Kerry. He flew on a U.S. government plane from Cairo to press ahead with the cease-fire talks and hold separate meetings with Prime Minister Netanyahu in Israel and Palestinian Authority President Mahmoud Abbas in the West Bank.

JOHN KERRY, U.S. SECRETARY OF STATE: We will continue to push for this cease-fire. And I can tell you that we have in the last 24 hours made some progress in moving towards that goal.

BLITZER: On the ground and from the air, Israeli forces pounded more Hamas targets in Gaza, including tunnels. Hamas released this video showing masked fighters on the move underground. Israel now says it has killed at least 230 militants, but civilians are dying too.

The U.N. says one child was killed in Gaza every hour over the two-day period. A third civilian was killed in Israel, a foreign worker who was in Ashkelon when a Hamas border shell hit. Now a second Israeli-American soldier was buried, a California native who was killed on the bloodiest day of the conflict so far during an intense ground attack in Gaza over the weekend.

(END VIDEOTAPE)

BLITZER: And right now, Israel is facing the first major disruption of air traffic -- air travel to Israel since the Persian Gulf war of 1991, when Saddam Hussein launched Scud missiles at Tel Aviv.

I spoke a while ago with the former New York City Mayor Michael Bloomberg and the mayor of Jerusalem, Nir Barkat.

I began by asking Bloomberg why he decided to fly to Israel right now in defiance of the ban on U.S. flights to Tel Aviv.

(BEGIN VIDEO CLIP)

MICHAEL BLOOMBERG (I), FORMER MAYOR OF NEW YORK: Well, I just wanted to do something personally to show my support for standing up for what's right.

I think Israel is doing that. Hamas is trying to kill the Palestinians and kill the Israelis, and somebody has got to say that they have got to stop this. And then along comes the FAA, which I think made a mistake. I hope they will rectify it soon, but they said they didn't want American planes flying into the world's most secure airport.

And so I decided I would take a trip over here on the world's most secure airline going to the world's most secure airport. It's a good lesson for all of us how to run security. Unfortunately, in America, too many times we find people walking across runways, people carrying guns and getting through security onto planes, baggage not being claimed afterwards.

And so it's a good lesson for us how to run an airline and how to run an airport and I think the FAA should try to make sure that American airports and American Airlines follow what is done here. And we certainly don't want to stop flights into airports in America. It would be devastating for America. It's devastating for Israel when you stop flights in.

BLITZER: Well, what do you mean, I just want to clarify -- when you say Hamas is trying to kill Palestinians?

BLOOMBERG: Well, Hamas is hiding among Palestinians and firing rockets at the Israelis, knowing full well the Israelis have no choice but to do anything they can to stop the carnage of the rockets falling on Israeli citizens and knowing full well that if Israel does come in and do that, civilians, sadly, are going to also suffer.

BLITZER: The whole notion of coming here, the FAA has extended another 24 hours this ban on United, U.S. Airways, Delta, the major U.S. carriers.

BLOOMBERG: All registered -- planes registered to the United States, including private ones.

BLITZER: But don't you think they're primarily concerned -- their job, these experts at the FAA, is to protect American passengers. And they saw this rocket come into -- near Ben Gurion Airport yesterday, land about a mile away. And they say they want to err on the side of caution, especially after what happened in Ukraine with the Malaysia airliner.

BLOOMBERG: I'm sure they do, but if you have a standard, you would close every airport in the United States. You would close down every airline.

Unfortunately, our security isn't very good then. The real world is that there are things going near airports all over the world. Ben Gurion Airport, because Israel has been threatened since it was formed in 1948, is the most secure air airport. El-Al, because it is the national airlines of Israel, is the most secure airline.

And so we have got to do is say, you have to take reasonable precautions, but you cannot shut down everything just because one terrorist some place on the other side of the world says, I'm going to be a threat.

BLITZER: Here's what folks are going to say. You're a pilot. We know you're a pilot.

BLOOMBERG: Yes.

BLITZER: But these are experts at the FAA. Are you suggesting that the FAA is being politicized, if you will?

BLOOMBERG: I have no idea. You will have to call the FAA.

(CROSSTALK)

BLITZER: But the FAA in their statement, they're...

BLOOMBERG: No, I didn't write the statement. I don't know what they said. You can't put words in my mouth, Wolf.

BLITZER: I'm going to tell you what they said.

BLOOMBERG: I'm just telling you what I think about the FAA.

They are well-meaning. It's a great organization. They make airlines and airports safe in America, but not as safe as Ben Gurion and El-Al are. And the fact that one rocket falls far away from this airport, a mile away, doesn't mean you should shut down air traffic into a country and paralyze the country.

BLITZER: Let me ask the mayor of Jerusalem, Mayor Barkat

Here's what the FAA said today: "The agency is working closely with the government of Israel to review the significant new information they have provided and determine whether potential risks to U.S. civil aviation are mitigated, so the agency can resolve concerns as quickly as possible."

Here's the question. Do you trust the FAA that it is providing accurate information to pilots, airlines and the American traveling public that maybe it's not a wise time to fly in and out of Israel?

NIR BARKAT, MAYOR OF JERUSALEM, ISRAEL: Well, the Israeli government and the Israeli air force and Israeli security forces care about Americans and Israelis the same, about anybody.

So I anticipate that we're talking about rockets that are fired indiscriminately. This is not a missile, not a guided missile like the one that took down the plane in Russia. And if we would have thought that there is a risk for anybody, I would call Michael and say don't come.

On the contrary, this is an indiscriminate rocket. We know how to protect it. Follow our strategy. Follow the Iron Dome. If it would have been a problematic missile, rocket, we would have taken it down.

So the security in Ben Gurion and in Israel is as good as it gets, and I want to repeat and thank Michael for his leadership in coming here. The reality is that the risks coming to Israel is minimal. And if it would be larger, we would take the initiative and tell everyone not to come here.

BLITZER: You know that as soon as the FAA announced that it didn't want U.S. carriers to fly to Israel, the Europeans basically did the same thing.

BLOOMBERG: That's not true. British Airways had the courage to fly.

(CROSSTALK)

BLITZER: I was going to say, Air France, Lufthansa, KLM, most of the major European airlines aren't flying in and out of Israel right now either.

BLOOMBERG: British Airways is. El-Al is. There are other airlines that are.

And they have got to make their own decisions. But we have got to stand up and do what's right. You can't just get cowed when somebody says something and everybody goes on the side of ultimate caution. That's how terrorists win, Wolf. Can't do that.

BLITZER: Here's the statement from Hamas today. And I want both of you to react to this. This is a statement from Fawzi Barhoum, the Hamas spokesman.

"The resistance success in stopping the air traffic and isolating Israel from the world is a great victory for the resistance."

They're pleased.

(CROSSTALK)

BLOOMBERG: I probably don't agree with very many things Hamas says, but that is clearly true.

Somebody who didn't come close to doing any damage at Ben Gurion Airport, didn't come close to doing any damage at any airline has paralyzed air traffic, which is the only way we get around this day and age, in and out of another country. If they were to say that about JFK, what would you expect us to do?

BLITZER: Mr. Mayor, what do you say when Hamas boasts that this is a great victory for them, the decision by the FAA to stop U.S. carriers from flying in and out of Israel? BARKAT: If somebody scares you and goes boo and you get scared,

then it's your problem. We're not scared.

We think it's a non-issue. If we thought it's an issue, we would probably guide all, including and maybe first of all El-Al, to maybe do something else than the normal. But, right now, residents of Israel, Americans, Europeans fly all airlines. They're all the same for us

And the reality is that if Hamas goes boo and you get scared, you're helping Hamas get its goals.

BLITZER: You spent most of the day here in Israel.

BARKAT: Yes.

BLITZER: As you know, a couple of days ago, the State Department issued a travel advisory saying Americans shouldn't come for nonessential visits to Israel or the West Bank.

BLOOMBERG: Couldn't disagree with them more.

(CROSSTALK)

BLITZER: What has it been like? What have you seen that -- you have been here several times.

BLOOMBERG: Everybody seems comfortable. Everybody thinks they're well protected by an army and an air force that knows how to fight and is out there trying to protect them.

And when they walk down the streets, when they send their kids to school, when they go to the parks, when they get to a concert, they feel safe. If you're not -- if you don't feel safe here, I don't know where you would feel safe. And I think the State Department is just overreacting in typical bureaucratic fashion.

BLITZER: Political reasons for that?

BLOOMBERG: That's -- why would you think that, Wolf?

BLITZER: Do you think it -- I'm asking you.

BLOOMBERG: Don't be ridiculous. Why would you think that?

It's an outrage for you to accuse one of our agencies...

BLITZER: I'm not accusing any -- I'm just asking.

BLOOMBERG: By asking the question, you're implying that our government does things for political reasons. And maybe every once in a while, they do. But it's your job to prove it.

Just the allegation against our government, I personally take as an offense.

(CROSSTALK)

BLITZER: No, I'm just asking you if you thought that there was some political motive behind the travel advisory or the FAA decision.

BLOOMBERG: Number one, I wouldn't know.

BLITZER: Because a lot of people in Israel do, you know.

BLOOMBERG: I don't know. You don't know. And the other people don't know.

But just the -- the tone of the question of trying to create dissension, it is insulting to America.

BLITZER: What do you think?

BARKAT: Well, when terrorists try to terrorize us, the reality is that their ability is minimal, especially what the Israeli government and the army does in protection and security, and in offense, by the way, same.

You walk the streets of the city of Jerusalem, speak to people. We just met a group of American teachers that came in for a week. And we asked them, how safe do you feel? They feel safer than they do at home, at least as good, if not safer.

And so you walk the streets, you go to the restaurants, you go to every -- all around the country, practically, and people are very cautious, but running their life as usual. And we don't get scared from terrorists. As a matter of fact, we will haunt them and hit them.

BLITZER: You know, so much of Israel's economy is based on tourism. It's a huge export.

BLOOMBERG: It absolutely is.

BLITZER: But the tourists are not coming right now, because they're worried about what's going on.

BLOOMBERG: Well, tourists -- why do you think that?

BLITZER: Because there is a war with Hamas going on. Sirens are going off.

BLOOMBERG: All I know, if the airplanes can't fly, the tourists can't come.

(CROSSTALK)

BLITZER: Even before that, but now especially.

BLOOMBERG: I have never seen statistics that say tourism slowed down.

Now you're going to see an outflow of people from the around the world who want to come here to demonstrate that they value their freedoms. And if you take away the freedoms of the people here, you will be taking away their freedoms, no matter what country they come from.

BLITZER: Tourism is down, though, right?

BARKAT: Well, one new tourist that just came here tonight, and I want to thank Michael for his leadership.

And the reality is that it's not real. And that's what terrorists try to do. They try to terrorize you. They try to fear you. And the best way to fight terrorism is exactly go on with your normal life. Do the right things.

BLOOMBERG: And that's what we did in New York City. We didn't let the journalists scare everybody away.

More people live in downtown New York than before 9/11. More businesses are down there. Today, it's become a thriving community. And all of those people, the talking heads who kept saying it was the end of the world for New York, they couldn't have been more wrong, because New Yorkers and Americans pulled together. And you see the same thing happening over here of Israelis and people in Jerusalem.

BLITZER: Mr. Mayor, thanks very much for joining us.

BLOOMBERG: Wolf, all the best. Thank you.

BLITZER: Mr. Mayor, thanks to you as well.

BARKAT: Thank you as well, Wolf. You are also...

BLITZER: I have been here for almost two weeks.

BARKAT: How secure do you feel?

BLITZER: I feel very secure.

BLOOMBERG: But you want to make sure that's on television?

BLITZER: It's on television. People are watching you right now back in the United States.

BLOOMBERG: Way to go.

BLITZER: They will be watching you around the world on CNN International.

(CROSSTALK)

BLOOMBERG: Everybody watches CNN.

BLITZER: Gentlemen, thanks very much for joining us.

BARKAT: Pleasure.

(END VIDEO CLIP)

BLITZER: And the allegation that politics may at least partially have been involved, Senator Ted Cruz, the Republican senator from Texas, issued a statement just a little while ago.

And I will read it for our viewers: "President Obama has just used a federal regulatory agency to launch an economic boycott on Israel in order to try to force our ally to comply with his foreign policy demands" -- a strong statement from Senator Cruz. We will get reaction to that from Tony Blinken, the deputy national security adviser to the president.

You heard he got really angry, the former mayor of New York, Michael Bloomberg, when I asked him if he thought politics were involved. How could I raise that question? A lot of people here in Israel are raising that question. And you just heard Senator Ted Cruz of Texas raise that question as well.

Another grim set of numbers today, Gaza officials now say 695 Palestinians have been killed since the Israeli assault began 16 days ago. Israel says its death toll is now up to 35, all but three of them soldiers.

Let's go live to Gaza. Our senior international correspondent, Ben Wedeman, is standing by with the the very latest from there -- Ben.

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, Wolf, it's a fairly loud evening in Gaza today.

We have had a series of large explosions around Gaza City. And just to update you, the death toll, according to the Palestinian Ministry of Health, has now topped 700. And according to the United Nations, around 77 percent of them are civilians.

Now, there were clashes -- we have been hearing clashes to the north of here near the town of Beit Lahia, which is not far from the border with Israel. In several places, however, in Gaza today, there were brief -- they were not even cease-fires. Basically, the Red Cross and the Palestinian Red Crescent went into three separate areas, including Shaja'ia, where you had those intense clashes in recent days.

They went in coordinating between Hamas and the Israeli army to go in, find wounded, care, retrieve the dead, perhaps rescue those still stuck inside. But as we were in with the Red Cross, they came under fire. And the head of that mission, one Larry Maybee was his name was trying to coordinate between the two sides. Listen to this.

(BEGIN VIDEO CLIP)

LARRY MAYBEE, RED CROSS: the fire is increasing in intensity and directed at us. I think the problem is there are too many people here. Too many civilians. If it was just us, it might be different. So we're coming back. There are two people trapped in rubble, wounded. I want to try to go in on foot to get those two before we go back.

(END VIDEO CLIP)

WEDEMAN: Of course, Wolf, what happened was that as they were trying to go down one of these rubble-strewn alleyways, there was small-arms fire and suddenly a very large explosion just up the road and they had to leave -- Wolf.

BLITZER: Ben, the Israeli military says about 200 of the deaths in Gaza are actually Hamas militants. Based on what you're seeing there, what you're hearing, is that number fairly accurate, not so accurate? What's your sense from experts in Gaza?

WEDEMAN: It's really hard to say, because, of course, the U.N. has fairly good statistics. They are saying 77 percent.

So, therefore, 23 percent are fighters. Now, I was in a hospital to the south of Gaza City in Deir al-Balah yesterday and we did see two ambulance -- actually cars ride up. One had a wounded fighter in it. He still had a pistol holster on his belt and then a dead fighter. So what the numbers are, we really don't know.

It's this sort of thing you find out after the conflict is over. But there's no question that Hamas fighters are taking casualties -- Wolf.

BLITZER: All right, Ben, thanks very much, Ben Wedeman in Gaza for us.

The leader of Hamas is rejecting a full cease-fire unless Israel lifts its blockade of Gaza, this after a day of intense talks, Secretary of State John Kerry meeting with the Israeli prime minister and also meeting with the president of the Palestinian Authority, Mahmoud Abbas.

Joining us now once again is the chief Palestinian negotiator, Saeb Erekat. He's joining us on the phone from Jericho on the West Bank.

When we spoke 24 hours ago, you were sort of hopeful that by there could be a deal, a cease-fire. How close are we?

SAEB EREKAT, CHIEF PALESTINIAN NEGOTIATOR: I'm still hopeful, Wolf. I'm still hopeful, especially after we had this meeting with Secretary Kerry today.

I think, as I said to you last night, the balance is between having a cease-fire, a timed cease-fire and then lifting the siege in Gaza. That's the balance. So we are still waiting to hear an official answer. Secretary Kerry, as he told us today and he explained to us, he's doing -- exerting every possible effort. He met the Israeli prime minister, Ban Ki-Moon, President Abbas. Now he's back in Cairo again to meet President Sisi, the foreign minister.

He's in touch with Turkey, Qatar and many Arab countries. Secretary Ban Ki-Moon was in Jordan and Saudi Arabia today. Tomorrow, President Abbas will be meeting with his majesty King Abdullah of Jordan. So we're still waiting and we're still working so hard in order to achieve the balance required to have the cease-fire and lifting the siege at the same time.

Yes, in this particular moment, things are difficult. There are complicities. Things need to be ironed out. But I think I'm still hopeful that this can be managed, this can be achieved, because the price of the continuation of this conflict, as Ben just told you now, is 710 people killed, mostly civilians, mostly women and children. And things are -- if this is going to go on, it's going to be much, much worse than that.

BLITZER: What's the biggest stumbling block to a cease-fire right now?

EREKAT: The biggest stumbling block is that a cease-fire must be matched, and these are the demands of the people who have suffered a great deal, is that the siege against them will be left.

For the last seven years, they have been restricted to move, they have been restricted to travel. Israeli -- six passages have been virtually closed, except for days, when they open it for supplies and so on. And the balance, as I said to you, must be created between a cease-fire and at the same time a commitment to lift the siege, the passages to allow the fishermen to go to fish in the waters, territorial waters, to have people of Gaza be able to receive their salaries.

They haven't been able to receive their salaries for the last four months. And also, as far as the prisoners who were released (INAUDIBLE) so the balance here is, how do we, instead of saying sequential, one, two, three, one, and then two, and then three, how can we do one, two, three in parallel?

How can we say one, one, one? How can say a cease-fire matched with a commitment to lift the closure, to open the passage to allow the fishermen, to have a reconstruction of Gaza begin? This is going to happen through the national consensus government of President Abbas.

That's what we have discussed with Secretary Kerry. I think every effort now is being done and exerted in order to achieve this balance. And I hope in the next 24 hours, when I speak to you next time, I hope that we can speak of the details of what happened.

BLITZER: Let's continue this conversation in 24 hours exactly. Saeb Erekat joining us from the West Bank, and let's hope there's some good news within the next 24 hours. We appreciate your joining us.

Let's get some more inside reaction from a top U.S. official. The deputy national security adviser to the president, Tony Blinken, is joining us from Washington right now.

You have been getting reports from Secretary Kerry, I'm sure, Tony. How close are the parties to a cease-fire, if at all?

TONY BLINKEN, U.S. DEPUTY NATIONAL SECURITY ADVISER: Wolf, you're right.

The secretary is working this very intensely. He's in Cairo now. He's been engaged with everyone in the region. And we're hopeful that we can make project toward a cease-fire. We don't have it yet, but this is something that he's working 24/7.

BLITZER: And what is, from your perspective, the biggest stumbling block?

BLINKEN: Well, look, right now, there's an Egyptian initiative that's been on the table. The Israelis have accepted the idea of a humanitarian cease-fire, and then work some of the longer-term issues.

Hamas has not. And so right now we're waiting to hear to see if Hamas accepts. And if they do, then we can get into a cease-fire. The violence can stop and the various parties can try to work the issues that can lead to some kind of longer-term settlement.

But the main thing is this. Anything that happens has to result in an end to rockets raining down on Israel and terrorists tunneling underground to try and kill Israelis and take them hostage. And at the same time, we need to see some real improvements in the lives of people, Palestinian people who are living in Gaza and who are living under very, very difficult conditions.

BLITZER: Would it be acceptable, do you think it is within the realm of possibility to get a cease-fire that would at the same time ease some of the restrictions, ease some of what the Hamas leaders call the siege of Gaza, opening up a little bit of the borders from Israel and from Egypt?

BLINKEN: I think that's certainly possible, but first things first. Let's get the cease-fire.

Let's stop the violence that is first and foremost victimizing many civilians and stop the rockets raining down on Israel and the terrorists tunneling underground into Israel. And then from there, we can work these other issues and hopefully get to a better and more durable place.

BLITZER: And I know the United States has already announced an initial decision to grant $47 million in emergency humanitarian assistance to the Palestinians in Gaza.

BLINKEN: That's right.

BLITZER: I assume more money is on the way.

I'm going to ask you, Tony, to stand by. I have got a lot more questions.

We're following the breaking news not only on a cease-fire, also on the decision for a second day now for the U.S. to stop flying aircraft into Ben Gurion Airport outside of Tel Aviv. Much more of my interview with the president's deputy national security adviser right after this. (COMMERCIAL BREAK)

BLITZER: We're back with the president's deputy national security adviser. Tony Blinken is joining us from Washington.

Tony, the FAA, as you know, has now extended for a second day that ban on U.S. airlines flying into -- in and out of Ben Gurion Airport outside of Tel Aviv. And now some Republicans are criticizing you, including Senator Ted Cruz of Texas. He issued a statement saying this: "President Obama has just used a federal regulatory agency to launch an economic boycott on Israel in order to try to force our ally to comply with his foreign-policy demands."

Your reaction to Senator Cruz?

TONY BLINKEN, OBAMA'S DEPUTY NATIONAL SECURITY ADVISOR: The answer is simple: He's wrong. We didn't use the FAA to do anything. The FAA makes independent judgments going to the safety and security for our airline passengers and for our airlines. They made a judgment, and we're not in the business of second guessing the FAA or overturning what they do.

The FAA is now working very closely with Israel to address the concerns that have been raised over the last 24 hours. And I'm confident, hopefully, they'll get to -- get to yes on that.

But the bottom line is the only people who are playing politics with this are the people who accuse us of playing politics with it. It's simply wrong.

I might add, second from that, that just a day ago, the administration strongly endorsed a request from Israel to increase funding for Iron Dome, the missile defense system that's done an extraordinary job that we're very proud of, saving lives in Israel. More than a quarter of a billion dollars in additional funding that we have gone to Congress to request on behalf of Israel.

BLITZER: I'm sure the people of Israel will be grateful for that. That Iron Dome, I must say, has been amazing in what it's done. A couple thousand rockets and missiles have come into Israel. That Iron Dome has worked about 85 to 90 percent of the time. Extremely effective.

Let's talk about Ukraine. Two Ukrainian war planes shot down once again today. There's some Ukrainian officials are accusing the missiles that shot down those two planes of actually having been launched not from Eastern Ukraine but from Russia itself. What can you tell us about this?

BLINKEN: So Wolf, we do know the two planes were shot down. We don't know who shot them down. It could have been separatists or whether the fire could have actually come from the Russian side of the border.

But what's clear is this. We've now seen multiple shoot-downs of planes. This only strengthens the case that the MH-17 flight was taken down by separatists. And once again, this is an action that is escalating a crisis in Ukraine, and it needs to -- needs to stop.

We put out a very strong and compelling case about the evidence demonstrating that the sectors responsible for shooting down the Malaysian Airlines plane, and this is getting increasingly dangerous. And unfortunately, the Russians continue to add fuel to this fire by supplying the separatists with heavy weapons. That has to stop.

BLITZER: I assume the U.S. intelligence community is trying to figure out where those rockets, those missiles were launched from that brought down these two war planes. I don't know if you've received any intelligence reports, but I assume you're trying to figure that out. Right?

BLINKEN: We are. We're looking into all of that, and we're trying to figure out exactly that: who shot the planes down. But again, we've seen -- unfortunately, over the last several weeks, multiple shoot-downs of planes by the separatists, taking down Ukrainian transport planes, taking down jets and tragically taking down the Malaysian Airlines flight.

BLITZER: Do you anticipate President Obama extending the -- expanding the sanctions against Russia and businesses and associates close to the Russian president, Putin?

BLINKEN: Wolf, we're looking at all that. Here's what we've done and what we've seen.

As a result of the president's leadership over these many months, in particular in bringing many of the Europeans along with them, we have exerted extraordinary pressure on Russia through these sanctions, and we're seeing a dramatic impact on the Russian economy. We're seeing capital flight that in the first half of this year exceed all of last year. We're seeing foreign direct investment drying up. We're seeing broke projections for the Russian economy go to jail. We're seeing their bond rating go down to practically junk status. And the result is significant. It's dramatic, and the pressure is increasing on President Putin to stop escalating this crisis and start deescalating it.

BLITZER: Tony Blinken's the president's deputy national security adviser. Thanks very much for joining us.

BLINKEN: Thanks, Wolf. Appreciate it.

BLITZER: Just ahead, did the FAA make the right decision in banning flights to Israel? You heard what Michael Bloomberg had to say. He said the FAA made a major mistake. Our aviation and law enforcement analysts, they're standing by to weigh in, as well.

(COMMERCIAL BREAK)

BLITZER: We're back live here in Jerusalem with the breaking news. The U.S. extending a ban on flights to and from Israel for another 24 hours.

Let's bring in our aviation analyst Peter Goelz and our law enforcement analyst Tom Fuentes.

Peter, what do you make of the FAA decision of another 24-hour ban on U.S. carriers flying in and out of Israel? You heard Michael Bloomberg, the former New York City mayor, say that's a mistake.

PETER GOELZ, CNN AVIATION ANALYST: Well, it's not a mistake. It's the right call. And it's the right call for a couple reasons.

One, there are clearly safety issues concerned in flying in and out of a combat zone like this.

Secondly, there are liability issues. If you're one of the owners of the air carriers, and you knowingly allow your plane to go into danger and it's shot down, the repercussions are enormous.

The reason we have the safest aviation system in the world is because the FAA makes tough decisions. They made it; it was the right one.

BLITZER: Tom, you know the Israelis, though. You know that they're very, very strict on security. You know their record at Ben Gurion Airport. You know their record as far as El Al is concerned. No one worries about security more than the Israelis do. If they say it's safe and secure, why shouldn't the U.S. believe them?

TOM FUENTES, CNN LAW ENFORCEMENT ANALYST: Because they're not correct in all aspects of that security. It's simple.

You know, they can have the best metal detectors and best interrogation process for all passengers entering the airport, getting ready to board flights. All of that's right, but it's internal airport security.

And knock that rocket that landed a mile from the perimeter of the airport. How can they guarantee that a future rocket won't land on top of an airplane with 300 people on it?

So having the best security, getting through is not the same as blocking rockets landing on an airport.

BLITZER: So let's ask Peter if you think El Al passengers should be worried that El Al is flying in and out of Israel, as normal?

GOELZ: Well, El Al has, you know, additional security on their planes. They -- but they are facing the same challenges that U.S. passengers face.

But there are political decisions that the Israelis have made, and they are continuing to make them. We're not obligated to make those political decisions. We make the decisions based on the safety of the passengers.

BLITZER: Peter, you're familiar with the FAA. You know what it's all about. You worked at the NTSB, the National Transportation Safety Board, for many years. When you hear Senator Ted Cruz of Texas suggest that the FAA is being manipulated by the president for political purposes in going ahead and issuing this ban on flights to and from Israel, you say...?

GOELZ: It's preposterous, and he doesn't know what he's talking about. Simply, we have safe aviation, because the FAA makes the call based on data, based on facts, not based on politics.

BLITZER: And Tom, do you agree or disagree?

FUENTES: I could not agree more. I think that statement was ridiculous, and he ought to be ashamed of himself for saying something that ridiculous.

BLITZER: Let's talk a little bit about what's going on in Ukraine right now. Peter, let me get to you first. The Malaysia Flight 17, do we now know for sure based on everything you have investigated, everything you heard how that plane was -- was destroyed, if you will?

GOELZ: I think we're pretty clear that a Russian-made missile took that plane down. And no matter what the Russians and their surrogates, the separatists are doing to the debris field, they will not be able to cover up all of the physical evidence in the wreckage. It will be there. The investigators will find it, and they'll make the call. The Dutch are very serious about this.

BLITZER: What do you think, Tom?

FUENTES: Well, I think the problem here is that this is similar to a drive-by shooting in a major city; only in this case a fly-by shooting. That airplane gets hit. We pretty well know that it was a missile and all of the details of that, but we don't have the ability to have investigators on the ground, interrogating the people that might have been involved, their associates, developing informants, doing a full investigation. Therefore, we're not going to know who pulled the trigger or, in this case, pushed the button to launch that missile.

BLITZER: And Peter -- Peter, we're told that cockpit voice recorder is in very good condition. So how important is that going to be in this investigation?

GOELZ: Well, it will be important because at the very least, it will pick up a fraction of a second of sound and we'll be able to analyze where the sound was originating and give us some indication of where this tragic event started.

But it's not the critical information. The critical information is the radar data that we've got already and what's on the ground that they will not be able to hide from us.

BLITZER: Here's the problem that I have and a lot of people have and, Tom, you're a former assistant director of the FBI. That crash site, it's been a week or so. It's not even secure. It's a mess. It's awful. It's heartbreaking to see it.

What do you make of that? FUENTES: Wolf, if the missile went, as we think it did and as

the reports indicate, there will be shrapnel embedded in the side of that aircraft, in the wings, almost the whole side, whichever side that missile hit will just spray like a shotgun blast. They will be unable to hide all that. We have had crash sites where planes have been underwater or buried in the ground even for a couple years before really true forensic work was done.

So, frankly, I don't think they will be able to hide the fact that that plane was hit by the missile, that that caused the catastrophic failure and caused it to fall out of the sky. But again, that's not the same as knowing who pushed the button.

BLITZER: Two hundred ninety-eight people aboard that Flight 17.

Peter, what's the major lesson all of us, the flying public, the aviation authorities, the airlines, everyone else should learn from what happened last week?

GOELZ: Well, I think the most important thing is that we need to have better risk analysis when missile launchers that have the ability to strike airplanes, commercial airplanes at altitude, fall into irresponsible hands, we have to avoid that spot. And the world air carriers and the world aviation organizations need to act promptly on that.

BLITZER: Peter Goelz, Tom Fuentes, guys, thanks very much. Always good to have both of your insight.

Just ahead, the Russian President Vladimir Putin in the spotlight once again because of Flight 17. Why some say the leader's tough shell is beginning to crack a bit. Brian Todd has that and more when we come back.

(COMMERCIAL BREAK)

BLITZER: The pressure is mounting for the Russian president, Vladimir Putin. While he continues to deny involvement in bringing down MH17, some analysts say Putin isn't necessarily guilty of political posturing. Rather, he and his cabinet appear to be panicking.

CNN's Brian Todd is joining us now from Washington with more.

What are you learning, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, those observers believe Putin and his close circle are simply up to their necks in this and are grasping. They say in the aftermath of the shoot down, things in Ukraine have gotten beyond Putin's control and he knows it.

(BEGIN VIDEOTAPE)

TODD (voice-over): Bursts of white smoke. Observers on the ground clearly agitated. At the scene of burning wreckage, armed men in fatigues pick up fragments of what's purportedly a Ukrainian fighter jet, shot down in eastern Ukraine.

Not yet confirmed, whether this was the work of pro-Russian rebels inside Ukraine or Russian forces themselves, and whether Russian President Vladimir Putin knew about or approved the operation. If Putin's behind the attack, just days after the downing of Malaysia Airlines Flight 17, the question, what's driving his aggression?

JOHN HERBST, FORMER U.S. AMBASSADOR TO UKRAINE: His objectives are, preferably, to take control, at least informally, of a large swath of Ukrainian territory, but he's failed with that. If he can't do that, his lesser objective is to destabilize portions of Ukraine's east.

TODD: But some observers say Putin and his cabinet are in panic mode. With intelligence pointing to Russian involvement in the Malaysia Air shoot down and with crippling sanctions possibly imminent, they say Putin is deflecting blame towards Ukraine and NATO, accusing the alliance of building its forces in Eastern Europe to threaten Russia. A NATO official scoffs at that, but Putin does seem to be using NATO's actions as a rationale for his military posture.

PRES. VLADIMIR PUTIN, RUSSIA (through translator): A scale of the training and preparedness is also increasing. It is important to prepare our defenses on schedule.

TODD (on camera): Body language of a guy who's panicking?

JILL DOUGHERTY, RUSSIA ANALYST: I don't think, again, he's panicking, but he is in really a hard place. He has enormous pressure coming from the international community right now, and domestically, he's under pressure.

TODD: Pressure from Russia's business elites, to avoid more sanctions. Pressure from Russian nationalists, to get tougher on Ukraine. So, if he's not panicking, analysts say, Putin's at least in his judo stance.

DOUGHERTY: You can almost see it, his balancing. He does this when he talks. He is a judo expert, and he is prepared, he's ready to parry, thrust, and protect Russia from what he expects are going to be the threats.

(END VIDEOTAPE)

TODD: But what about his top security cabinet? The people in that room with Vladimir Putin in that video. Some of them in those images look visibly uncomfortable as he spoke. There you see their faces. The analysts we spoke to say they're not likely panicking, but they are worried, plenty, about the pressures on Russia's military and economy. As one analyst said, they simply don't have the gambler's gene that Vladimir Putin has -- Wolf.

BLITZER: Brian, Putin may have some other headaches, as well, due to a personal connection he has to the Netherlands, right?

TODD: It's pretty extraordinary, Wolf. According to various reports, one of Putin's daughters lives in the Netherlands. Of course, most of the victims of the Malaysia Air shoot down were from the Netherlands. At least one political leader there wants Putin's daughter deported, and there are reportedly calls for a protest to be held outside her home.

Vladimir Putin tonight, Wolf, taking it from all sides.

BLITZER: Brian Todd reporting for us -- thanks very much.

TODD: Stand by, we've got more breaking news.

We're just getting a statement from the White House. The president has just spoken with John Kerry, the secretary of state, about the efforts to achieve a cease-fire. We'll update you, right after this.

(COMMERCIAL BREAK)

BLITZER: And there's more breaking news in the crisis here in the Middle East. Aboard Air Force One, just a little while ago, President Obama got an update from John Kerry on the cease-fire efforts.

The statement that the White House released says -- let me read it -- "Aboard Air Force One, the president spoke with Secretary Kerry on the latest developments in his effort to achieve an immediate cessation of hostilities between Israel and Hamas. Over the last few days, Secretary Kerry has been engaged with the Israelis, Palestinians, Egyptians, Europeans, the U.N., the Arab League, Qatar, Jordan, Turkey, and UAE to determine how to achieve an end to the current violence and build a process that can create a sustainable path forward."

Let's see if any of that succeeds.

That's it for me. Thanks very much for watching.

I'm Wolf Blitzer in THE SITUATION ROOM.

"ERIN BURNETT OUTFRONT" starts right now.

WOLF BLITZER, CNN ANCHOR: Happening now, a SITUATION ROOM special report, breaking news tonight. Urgent new moves towards a cease-fire here in the Middle East. Are Hamas militants giving any new ground? I will ask an insider in the talks.

Plus, a new show of support for Israel, the former New York City Michael Bloomberg flying to Tel Aviv even as the U.S. extends a ban on flights to Ben Gurion Airport. Stand by for my interview with Michael Bloomberg. He has some very tough words for the FAA.

And a sign of -- a grim procession, I should say. The remains of Malaysia Flight 17 victims arrive in the Netherlands as two more jets are shot down in Ukraine.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer in Jerusalem. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Tonight, Hamas leaders are declaring a victory over Israel. Now that the United States is extending the ban on flights to Tel Aviv for at least another day, Israeli officials fear terrorists are getting what they want as the battle with Hamas rages on with deadly results.

We're following all the breaking news here in the Middle East.

And in Europe, we're learning more about the investigation into the downing of Malaysia Flight 17, as the first remains of victims are returned to the Netherlands.

We have our correspondents, our analysts, our newsmakers standing by to keep up-to-the-minute developments for you on all of these major stories.

First, new details on the fighting in Gaza and the devastating fallout.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): It's a massive blow to Israel, traffic at Ben Gurion International Airport dramatically cut back during the busy summer tourist season. The FAA is extending its bans on U.S. flights to Tel Aviv for another 24 hours.

ANTHONY FOXX, U.S. SECRETARY OF TRANSPORTATION: Safety is the very first priority for the U.S. DOT, for FAA.

BLITZER: Many European countries are following the United States' lead, and now Hamas is declaring a great victory. This was the frantic scene inside the airport a day earlier, when a rocket landed about a mile away.

UNIDENTIFIED MALE: The whole airport rushed into the bomb shelters and it was terrifying.

BLITZER: Israeli Prime Minister Benjamin Netanyahu went to Ben Gurion International today to welcome Michael Bloomberg. The former New York mayor flew to Tel Aviv from New York on El-Al Airlines in a show of support for Israel and its insistence that the main airport is safe.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: We protect this airport. There's no reason whatsoever for the mistaken FAA decision to instruct American planes not to come here.

BLITZER: Another American who landed in Tel Aviv, Secretary of State John Kerry. He flew on a U.S. government plane from Cairo to press ahead with the cease-fire talks and hold separate meetings with Prime Minister Netanyahu in Israel and Palestinian Authority President Mahmoud Abbas in the West Bank.

JOHN KERRY, U.S. SECRETARY OF STATE: We will continue to push for this cease-fire. And I can tell you that we have in the last 24 hours made some progress in moving towards that goal.

BLITZER: On the ground and from the air, Israeli forces pounded more Hamas targets in Gaza, including tunnels. Hamas released this video showing masked fighters on the move underground. Israel now says it has killed at least 230 militants, but civilians are dying too.

The U.N. says one child was killed in Gaza every hour over the two-day period. A third civilian was killed in Israel, a foreign worker who was in Ashkelon when a Hamas border shell hit. Now a second Israeli-American soldier was buried, a California native who was killed on the bloodiest day of the conflict so far during an intense ground attack in Gaza over the weekend.

(END VIDEOTAPE)

BLITZER: And right now, Israel is facing the first major disruption of air traffic -- air travel to Israel since the Persian Gulf war of 1991, when Saddam Hussein launched Scud missiles at Tel Aviv.

I spoke a while ago with the former New York City Mayor Michael Bloomberg and the mayor of Jerusalem, Nir Barkat.

I began by asking Bloomberg why he decided to fly to Israel right now in defiance of the ban on U.S. flights to Tel Aviv.

(BEGIN VIDEO CLIP) MICHAEL BLOOMBERG (I), FORMER MAYOR OF NEW YORK: Well, I just

wanted to do something personally to show my support for standing up for what's right.

I think Israel is doing that. Hamas is trying to kill the Palestinians and kill the Israelis, and somebody has got to say that they have got to stop this. And then along comes the FAA, which I think made a mistake. I hope they will rectify it soon, but they said they didn't want American planes flying into the world's most secure airport.

And so I decided I would take a trip over here on the world's most secure airline going to the world's most secure airport. It's a good lesson for all of us how to run security. Unfortunately, in America, too many times we find people walking across runways, people carrying guns and getting through security onto planes, baggage not being claimed afterwards.

And so it's a good lesson for us how to run an airline and how to run an airport and I think the FAA should try to make sure that American airports and American Airlines follow what is done here. And we certainly don't want to stop flights into airports in America. It would be devastating for America. It's devastating for Israel when you stop flights in.

BLITZER: Well, what do you mean, I just want to clarify -- when you say Hamas is trying to kill Palestinians?

BLOOMBERG: Well, Hamas is hiding among Palestinians and firing rockets at the Israelis, knowing full well the Israelis have no choice but to do anything they can to stop the carnage of the rockets falling on Israeli citizens and knowing full well that if Israel does come in and do that, civilians, sadly, are going to also suffer.

BLITZER: The whole notion of coming here, the FAA has extended another 24 hours this ban on United, U.S. Airways, Delta, the major U.S. carriers.

BLOOMBERG: All registered -- planes registered to the United States, including private ones.

BLITZER: But don't you think they're primarily concerned -- their job, these experts at the FAA, is to protect American passengers. And they saw this rocket come into -- near Ben Gurion Airport yesterday, land about a mile away. And they say they want to err on the side of caution, especially after what happened in Ukraine with the Malaysia airliner.

BLOOMBERG: I'm sure they do, but if you have a standard, you would close every airport in the United States. You would close down every airline.

Unfortunately, our security isn't very good then. The real world is that there are things going near airports all over the world. Ben Gurion Airport, because Israel has been threatened since it was formed in 1948, is the most secure air airport. El-Al, because it is the national airlines of Israel, is the most secure airline.

And so we have got to do is say, you have to take reasonable precautions, but you cannot shut down everything just because one terrorist some place on the other side of the world says, I'm going to be a threat.

BLITZER: Here's what folks are going to say. You're a pilot. We know you're a pilot.

BLOOMBERG: Yes.

BLITZER: But these are experts at the FAA. Are you suggesting that the FAA is being politicized, if you will?

BLOOMBERG: I have no idea. You will have to call the FAA.

(CROSSTALK)

BLITZER: But the FAA in their statement, they're...

BLOOMBERG: No, I didn't write the statement. I don't know what they said. You can't put words in my mouth, Wolf.

BLITZER: I'm going to tell you what they said.

BLOOMBERG: I'm just telling you what I think about the FAA.

They are well-meaning. It's a great organization. They make airlines and airports safe in America, but not as safe as Ben Gurion and El-Al are. And the fact that one rocket falls far away from this airport, a mile away, doesn't mean you should shut down air traffic into a country and paralyze the country.

BLITZER: Let me ask the mayor of Jerusalem, Mayor Barkat

Here's what the FAA said today: "The agency is working closely with the government of Israel to review the significant new information they have provided and determine whether potential risks to U.S. civil aviation are mitigated, so the agency can resolve concerns as quickly as possible."

Here's the question. Do you trust the FAA that it is providing accurate information to pilots, airlines and the American traveling public that maybe it's not a wise time to fly in and out of Israel?

NIR BARKAT, MAYOR OF JERUSALEM, ISRAEL: Well, the Israeli government and the Israeli air force and Israeli security forces care about Americans and Israelis the same, about anybody.

So I anticipate that we're talking about rockets that are fired indiscriminately. This is not a missile, not a guided missile like the one that took down the plane in Russia. And if we would have thought that there is a risk for anybody, I would call Michael and say don't come.

On the contrary, this is an indiscriminate rocket. We know how to protect it. Follow our strategy. Follow the Iron Dome. If it would have been a problematic missile, rocket, we would have taken it down.

So the security in Ben Gurion and in Israel is as good as it gets, and I want to repeat and thank Michael for his leadership in coming here. The reality is that the risks coming to Israel is minimal. And if it would be larger, we would take the initiative and tell everyone not to come here.

BLITZER: You know that as soon as the FAA announced that it didn't want U.S. carriers to fly to Israel, the Europeans basically did the same thing.

BLOOMBERG: That's not true. British Airways had the courage to fly.

(CROSSTALK)

BLITZER: I was going to say, Air France, Lufthansa, KLM, most of the major European airlines aren't flying in and out of Israel right now either.

BLOOMBERG: British Airways is. El-Al is. There are other airlines that are.

And they have got to make their own decisions. But we have got to stand up and do what's right. You can't just get cowed when somebody says something and everybody goes on the side of ultimate caution. That's how terrorists win, Wolf. Can't do that.

BLITZER: Here's the statement from Hamas today. And I want both of you to react to this. This is a statement from Fawzi Barhoum, the Hamas spokesman.

"The resistance success in stopping the air traffic and isolating Israel from the world is a great victory for the resistance."

They're pleased.

(CROSSTALK)

BLOOMBERG: I probably don't agree with very many things Hamas says, but that is clearly true.

Somebody who didn't come close to doing any damage at Ben Gurion Airport, didn't come close to doing any damage at any airline has paralyzed air traffic, which is the only way we get around this day and age, in and out of another country. If they were to say that about JFK, what would you expect us to do?

BLITZER: Mr. Mayor, what do you say when Hamas boasts that this is a great victory for them, the decision by the FAA to stop U.S. carriers from flying in and out of Israel?

BARKAT: If somebody scares you and goes boo and you get scared, then it's your problem. We're not scared. We think it's a non-issue. If we thought it's an issue, we would

probably guide all, including and maybe first of all El-Al, to maybe do something else than the normal. But, right now, residents of Israel, Americans, Europeans fly all airlines. They're all the same for us

And the reality is that if Hamas goes boo and you get scared, you're helping Hamas get its goals.

BLITZER: You spent most of the day here in Israel.

BARKAT: Yes.

BLITZER: As you know, a couple of days ago, the State Department issued a travel advisory saying Americans shouldn't come for nonessential visits to Israel or the West Bank.

BLOOMBERG: Couldn't disagree with them more.

(CROSSTALK)

BLITZER: What has it been like? What have you seen that -- you have been here several times.

BLOOMBERG: Everybody seems comfortable. Everybody thinks they're well protected by an army and an air force that knows how to fight and is out there trying to protect them.

And when they walk down the streets, when they send their kids to school, when they go to the parks, when they get to a concert, they feel safe. If you're not -- if you don't feel safe here, I don't know where you would feel safe. And I think the State Department is just overreacting in typical bureaucratic fashion.

BLITZER: Political reasons for that?

BLOOMBERG: That's -- why would you think that, Wolf?

BLITZER: Do you think it -- I'm asking you.

BLOOMBERG: Don't be ridiculous. Why would you think that?

It's an outrage for you to accuse one of our agencies...

BLITZER: I'm not accusing any -- I'm just asking.

BLOOMBERG: By asking the question, you're implying that our government does things for political reasons. And maybe every once in a while, they do. But it's your job to prove it.

Just the allegation against our government, I personally take as an offense.

(CROSSTALK)

BLITZER: No, I'm just asking you if you thought that there was some political motive behind the travel advisory or the FAA decision.

BLOOMBERG: Number one, I wouldn't know.

BLITZER: Because a lot of people in Israel do, you know.

BLOOMBERG: I don't know. You don't know. And the other people don't know.

But just the -- the tone of the question of trying to create dissension, it is insulting to America.

BLITZER: What do you think?

BARKAT: Well, when terrorists try to terrorize us, the reality is that their ability is minimal, especially what the Israeli government and the army does in protection and security, and in offense, by the way, same.

You walk the streets of the city of Jerusalem, speak to people. We just met a group of American teachers that came in for a week. And we asked them, how safe do you feel? They feel safer than they do at home, at least as good, if not safer.

And so you walk the streets, you go to the restaurants, you go to every -- all around the country, practically, and people are very cautious, but running their life as usual. And we don't get scared from terrorists. As a matter of fact, we will haunt them and hit them.

BLITZER: You know, so much of Israel's economy is based on tourism. It's a huge export.

BLOOMBERG: It absolutely is.

BLITZER: But the tourists are not coming right now, because they're worried about what's going on.

BLOOMBERG: Well, tourists -- why do you think that?

BLITZER: Because there is a war with Hamas going on. Sirens are going off.

BLOOMBERG: All I know, if the airplanes can't fly, the tourists can't come.

(CROSSTALK)

BLITZER: Even before that, but now especially.

BLOOMBERG: I have never seen statistics that say tourism slowed down.

Now you're going to see an outflow of people from the around the world who want to come here to demonstrate that they value their freedoms. And if you take away the freedoms of the people here, you will be taking away their freedoms, no matter what country they come from.

BLITZER: Tourism is down, though, right?

BARKAT: Well, one new tourist that just came here tonight, and I want to thank Michael for his leadership.

And the reality is that it's not real. And that's what terrorists try to do. They try to terrorize you. They try to fear you. And the best way to fight terrorism is exactly go on with your normal life. Do the right things.

BLOOMBERG: And that's what we did in New York City. We didn't let the journalists scare everybody away.

More people live in downtown New York than before 9/11. More businesses are down there. Today, it's become a thriving community. And all of those people, the talking heads who kept saying it was the end of the world for New York, they couldn't have been more wrong, because New Yorkers and Americans pulled together. And you see the same thing happening over here of Israelis and people in Jerusalem.

BLITZER: Mr. Mayor, thanks very much for joining us.

BLOOMBERG: Wolf, all the best. Thank you.

BLITZER: Mr. Mayor, thanks to you as well.

BARKAT: Thank you as well, Wolf. You are also...

BLITZER: I have been here for almost two weeks.

BARKAT: How secure do you feel?

BLITZER: I feel very secure.

BLOOMBERG: But you want to make sure that's on television?

BLITZER: It's on television. People are watching you right now back in the United States.

BLOOMBERG: Way to go.

BLITZER: They will be watching you around the world on CNN International.

(CROSSTALK)

BLOOMBERG: Everybody watches CNN.

BLITZER: Gentlemen, thanks very much for joining us.

BARKAT: Pleasure.

(END VIDEO CLIP)

BLITZER: And the allegation that politics may at least partially have been involved, Senator Ted Cruz, the Republican senator from Texas, issued a statement just a little while ago.

And I will read it for our viewers: "President Obama has just used a federal regulatory agency to launch an economic boycott on Israel in order to try to force our ally to comply with his foreign policy demands" -- a strong statement from Senator Cruz. We will get reaction to that from Tony Blinken, the deputy national security adviser to the president.

You heard he got really angry, the former mayor of New York, Michael Bloomberg, when I asked him if he thought politics were involved. How could I raise that question? A lot of people here in Israel are raising that question. And you just heard Senator Ted Cruz of Texas raise that question as well.

Another grim set of numbers today, Gaza officials now say 695 Palestinians have been killed since the Israeli assault began 16 days ago. Israel says its death toll is now up to 35, all but three of them soldiers.

Let's go live to Gaza. Our senior international correspondent, Ben Wedeman, is standing by with the the very latest from there -- Ben.

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, Wolf, it's a fairly loud evening in Gaza today.

We have had a series of large explosions around Gaza City. And just to update you, the death toll, according to the Palestinian Ministry of Health, has now topped 700. And according to the United Nations, around 77 percent of them are civilians.

Now, there were clashes -- we have been hearing clashes to the north of here near the town of Beit Lahia, which is not far from the border with Israel. In several places, however, in Gaza today, there were brief -- they were not even cease-fires. Basically, the Red Cross and the Palestinian Red Crescent went into three separate areas, including Shaja'ia, where you had those intense clashes in recent days.

They went in coordinating between Hamas and the Israeli army to go in, find wounded, care, retrieve the dead, perhaps rescue those still stuck inside. But as we were in with the Red Cross, they came under fire. And the head of that mission, one Larry Maybee was his name was trying to coordinate between the two sides. Listen to this.

(BEGIN VIDEO CLIP)

LARRY MAYBEE, RED CROSS: the fire is increasing in intensity and directed at us. I think the problem is there are too many people here. Too many civilians. If it was just us, it might be different. So we're coming back. There are two people trapped in rubble, wounded. I want to try to go in on foot to get those two before we go back.

(END VIDEO CLIP) WEDEMAN: Of course, Wolf, what happened was that as they were

trying to go down one of these rubble-strewn alleyways, there was small-arms fire and suddenly a very large explosion just up the road and they had to leave -- Wolf.

BLITZER: Ben, the Israeli military says about 200 of the deaths in Gaza are actually Hamas militants. Based on what you're seeing there, what you're hearing, is that number fairly accurate, not so accurate? What's your sense from experts in Gaza?

WEDEMAN: It's really hard to say, because, of course, the U.N. has fairly good statistics. They are saying 77 percent.

So, therefore, 23 percent are fighters. Now, I was in a hospital to the south of Gaza City in Deir al-Balah yesterday and we did see two ambulance -- actually cars ride up. One had a wounded fighter in it. He still had a pistol holster on his belt and then a dead fighter. So what the numbers are, we really don't know.

It's this sort of thing you find out after the conflict is over. But there's no question that Hamas fighters are taking casualties -- Wolf.

BLITZER: All right, Ben, thanks very much, Ben Wedeman in Gaza for us.

The leader of Hamas is rejecting a full cease-fire unless Israel lifts its blockade of Gaza, this after a day of intense talks, Secretary of State John Kerry meeting with the Israeli prime minister and also meeting with the president of the Palestinian Authority, Mahmoud Abbas.

Joining us now once again is the chief Palestinian negotiator, Saeb Erekat. He's joining us on the phone from Jericho on the West Bank.

When we spoke 24 hours ago, you were sort of hopeful that by there could be a deal, a cease-fire. How close are we?

SAEB EREKAT, CHIEF PALESTINIAN NEGOTIATOR: I'm still hopeful, Wolf. I'm still hopeful, especially after we had this meeting with Secretary Kerry today.

I think, as I said to you last night, the balance is between having a cease-fire, a timed cease-fire and then lifting the siege in Gaza. That's the balance. So we are still waiting to hear an official answer. Secretary Kerry, as he told us today and he explained to us, he's doing -- exerting every possible effort. He met the Israeli prime minister, Ban Ki-Moon, President Abbas. Now he's back in Cairo again to meet President Sisi, the foreign minister.

He's in touch with Turkey, Qatar and many Arab countries. Secretary Ban Ki-Moon was in Jordan and Saudi Arabia today. Tomorrow, President Abbas will be meeting with his majesty King Abdullah of Jordan. So we're still waiting and we're still working so hard in order to achieve the balance required to have the cease-fire and lifting the siege at the same time.

Yes, in this particular moment, things are difficult. There are complicities. Things need to be ironed out. But I think I'm still hopeful that this can be managed, this can be achieved, because the price of the continuation of this conflict, as Ben just told you now, is 710 people killed, mostly civilians, mostly women and children. And things are -- if this is going to go on, it's going to be much, much worse than that.

BLITZER: What's the biggest stumbling block to a cease-fire right now?

EREKAT: The biggest stumbling block is that a cease-fire must be matched, and these are the demands of the people who have suffered a great deal, is that the siege against them will be left.

For the last seven years, they have been restricted to move, they have been restricted to travel. Israeli -- six passages have been virtually closed, except for days, when they open it for supplies and so on. And the balance, as I said to you, must be created between a cease-fire and at the same time a commitment to lift the siege, the passages to allow the fishermen to go to fish in the waters, territorial waters, to have people of Gaza be able to receive their salaries.

They haven't been able to receive their salaries for the last four months. And also, as far as the prisoners who were released (INAUDIBLE) so the balance here is, how do we, instead of saying sequential, one, two, three, one, and then two, and then three, how can we do one, two, three in parallel?

How can we say one, one, one? How can say a cease-fire matched with a commitment to lift the closure, to open the passage to allow the fishermen, to have a reconstruction of Gaza begin? This is going to happen through the national consensus government of President Abbas.

That's what we have discussed with Secretary Kerry. I think every effort now is being done and exerted in order to achieve this balance. And I hope in the next 24 hours, when I speak to you next time, I hope that we can speak of the details of what happened.

BLITZER: Let's continue this conversation in 24 hours exactly. Saeb Erekat joining us from the West Bank, and let's hope there's some good news within the next 24 hours. We appreciate your joining us.

Let's get some more inside reaction from a top U.S. official. The deputy national security adviser to the president, Tony Blinken, is joining us from Washington right now.

You have been getting reports from Secretary Kerry, I'm sure, Tony. How close are the parties to a cease-fire, if at all?

TONY BLINKEN, U.S. DEPUTY NATIONAL SECURITY ADVISER: Wolf, you're right. The secretary is working this very intensely. He's in Cairo now.

He's been engaged with everyone in the region. And we're hopeful that we can make project toward a cease-fire. We don't have it yet, but this is something that he's working 24/7.

BLITZER: And what is, from your perspective, the biggest stumbling block?

BLINKEN: Well, look, right now, there's an Egyptian initiative that's been on the table. The Israelis have accepted the idea of a humanitarian cease-fire, and then work some of the longer-term issues.

Hamas has not. And so right now we're waiting to hear to see if Hamas accepts. And if they do, then we can get into a cease-fire. The violence can stop and the various parties can try to work the issues that can lead to some kind of longer-term settlement.

But the main thing is this. Anything that happens has to result in an end to rockets raining down on Israel and terrorists tunneling underground to try and kill Israelis and take them hostage. And at the same time, we need to see some real improvements in the lives of people, Palestinian people who are living in Gaza and who are living under very, very difficult conditions.

BLITZER: Would it be acceptable, do you think it is within the realm of possibility to get a cease-fire that would at the same time ease some of the restrictions, ease some of what the Hamas leaders call the siege of Gaza, opening up a little bit of the borders from Israel and from Egypt?

BLINKEN: I think that's certainly possible, but first things first. Let's get the cease-fire.

Let's stop the violence that is first and foremost victimizing many civilians and stop the rockets raining down on Israel and the terrorists tunneling underground into Israel. And then from there, we can work these other issues and hopefully get to a better and more durable place.

BLITZER: And I know the United States has already announced an initial decision to grant $47 million in emergency humanitarian assistance to the Palestinians in Gaza.

BLINKEN: That's right.

BLITZER: I assume more money is on the way.

I'm going to ask you, Tony, to stand by. I have got a lot more questions.

We're following the breaking news not only on a cease-fire, also on the decision for a second day now for the U.S. to stop flying aircraft into Ben Gurion Airport outside of Tel Aviv. Much more of my interview with the president's deputy national security adviser right after this.

(COMMERCIAL BREAK)

BLITZER: We're back with the president's deputy national security adviser. Tony Blinken is joining us from Washington.

Tony, the FAA, as you know, has now extended for a second day that ban on U.S. airlines flying into -- in and out of Ben Gurion Airport outside of Tel Aviv. And now some Republicans are criticizing you, including Senator Ted Cruz of Texas. He issued a statement saying this: "President Obama has just used a federal regulatory agency to launch an economic boycott on Israel in order to try to force our ally to comply with his foreign-policy demands."

Your reaction to Senator Cruz?

TONY BLINKEN, OBAMA'S DEPUTY NATIONAL SECURITY ADVISOR: The answer is simple: He's wrong. We didn't use the FAA to do anything. The FAA makes independent judgments going to the safety and security for our airline passengers and for our airlines. They made a judgment, and we're not in the business of second guessing the FAA or overturning what they do.

The FAA is now working very closely with Israel to address the concerns that have been raised over the last 24 hours. And I'm confident, hopefully, they'll get to -- get to yes on that.

But the bottom line is the only people who are playing politics with this are the people who accuse us of playing politics with it. It's simply wrong.

I might add, second from that, that just a day ago, the administration strongly endorsed a request from Israel to increase funding for Iron Dome, the missile defense system that's done an extraordinary job that we're very proud of, saving lives in Israel. More than a quarter of a billion dollars in additional funding that we have gone to Congress to request on behalf of Israel.

BLITZER: I'm sure the people of Israel will be grateful for that. That Iron Dome, I must say, has been amazing in what it's done. A couple thousand rockets and missiles have come into Israel. That Iron Dome has worked about 85 to 90 percent of the time. Extremely effective.

Let's talk about Ukraine. Two Ukrainian war planes shot down once again today. There's some Ukrainian officials are accusing the missiles that shot down those two planes of actually having been launched not from Eastern Ukraine but from Russia itself. What can you tell us about this?

BLINKEN: So Wolf, we do know the two planes were shot down. We don't know who shot them down. It could have been separatists or whether the fire could have actually come from the Russian side of the border.

But what's clear is this. We've now seen multiple shoot-downs of planes. This only strengthens the case that the MH-17 flight was taken down by separatists. And once again, this is an action that is escalating a crisis in Ukraine, and it needs to -- needs to stop.

We put out a very strong and compelling case about the evidence demonstrating that the sectors responsible for shooting down the Malaysian Airlines plane, and this is getting increasingly dangerous. And unfortunately, the Russians continue to add fuel to this fire by supplying the separatists with heavy weapons. That has to stop.

BLITZER: I assume the U.S. intelligence community is trying to figure out where those rockets, those missiles were launched from that brought down these two war planes. I don't know if you've received any intelligence reports, but I assume you're trying to figure that out. Right?

BLINKEN: We are. We're looking into all of that, and we're trying to figure out exactly that: who shot the planes down. But again, we've seen -- unfortunately, over the last several weeks, multiple shoot-downs of planes by the separatists, taking down Ukrainian transport planes, taking down jets and tragically taking down the Malaysian Airlines flight.

BLITZER: Do you anticipate President Obama extending the -- expanding the sanctions against Russia and businesses and associates close to the Russian president, Putin?

BLINKEN: Wolf, we're looking at all that. Here's what we've done and what we've seen.

As a result of the president's leadership over these many months, in particular in bringing many of the Europeans along with them, we have exerted extraordinary pressure on Russia through these sanctions, and we're seeing a dramatic impact on the Russian economy. We're seeing capital flight that in the first half of this year exceed all of last year. We're seeing foreign direct investment drying up. We're seeing broke projections for the Russian economy go to jail. We're seeing their bond rating go down to practically junk status. And the result is significant. It's dramatic, and the pressure is increasing on President Putin to stop escalating this crisis and start deescalating it.

BLITZER: Tony Blinken's the president's deputy national security adviser. Thanks very much for joining us.

BLINKEN: Thanks, Wolf. Appreciate it.

BLITZER: Just ahead, did the FAA make the right decision in banning flights to Israel? You heard what Michael Bloomberg had to say. He said the FAA made a major mistake. Our aviation and law enforcement analysts, they're standing by to weigh in, as well.

(COMMERCIAL BREAK)

BLITZER: We're back live here in Jerusalem with the breaking news. The U.S. extending a ban on flights to and from Israel for another 24 hours.

Let's bring in our aviation analyst Peter Goelz and our law enforcement analyst Tom Fuentes.

Peter, what do you make of the FAA decision of another 24-hour ban on U.S. carriers flying in and out of Israel? You heard Michael Bloomberg, the former New York City mayor, say that's a mistake.

PETER GOELZ, CNN AVIATION ANALYST: Well, it's not a mistake. It's the right call. And it's the right call for a couple reasons.

One, there are clearly safety issues concerned in flying in and out of a combat zone like this.

Secondly, there are liability issues. If you're one of the owners of the air carriers, and you knowingly allow your plane to go into danger and it's shot down, the repercussions are enormous.

The reason we have the safest aviation system in the world is because the FAA makes tough decisions. They made it; it was the right one.

BLITZER: Tom, you know the Israelis, though. You know that they're very, very strict on security. You know their record at Ben Gurion Airport. You know their record as far as El Al is concerned. No one worries about security more than the Israelis do. If they say it's safe and secure, why shouldn't the U.S. believe them?

TOM FUENTES, CNN LAW ENFORCEMENT ANALYST: Because they're not correct in all aspects of that security. It's simple.

You know, they can have the best metal detectors and best interrogation process for all passengers entering the airport, getting ready to board flights. All of that's right, but it's internal airport security.

And knock that rocket that landed a mile from the perimeter of the airport. How can they guarantee that a future rocket won't land on top of an airplane with 300 people on it?

So having the best security, getting through is not the same as blocking rockets landing on an airport.

BLITZER: So let's ask Peter if you think El Al passengers should be worried that El Al is flying in and out of Israel, as normal?

GOELZ: Well, El Al has, you know, additional security on their planes. They -- but they are facing the same challenges that U.S. passengers face.

But there are political decisions that the Israelis have made, and they are continuing to make them. We're not obligated to make those political decisions. We make the decisions based on the safety of the passengers.

BLITZER: Peter, you're familiar with the FAA. You know what it's all about. You worked at the NTSB, the National Transportation Safety Board, for many years. When you hear Senator Ted Cruz of Texas suggest that the FAA is being manipulated by the president for political purposes in going ahead and issuing this ban on flights to and from Israel, you say...?

GOELZ: It's preposterous, and he doesn't know what he's talking about. Simply, we have safe aviation, because the FAA makes the call based on data, based on facts, not based on politics.

BLITZER: And Tom, do you agree or disagree?

FUENTES: I could not agree more. I think that statement was ridiculous, and he ought to be ashamed of himself for saying something that ridiculous.

BLITZER: Let's talk a little bit about what's going on in Ukraine right now. Peter, let me get to you first. The Malaysia Flight 17, do we now know for sure based on everything you have investigated, everything you heard how that plane was -- was destroyed, if you will?

GOELZ: I think we're pretty clear that a Russian-made missile took that plane down. And no matter what the Russians and their surrogates, the separatists are doing to the debris field, they will not be able to cover up all of the physical evidence in the wreckage. It will be there. The investigators will find it, and they'll make the call. The Dutch are very serious about this.

BLITZER: What do you think, Tom?

FUENTES: Well, I think the problem here is that this is similar to a drive-by shooting in a major city; only in this case a fly-by shooting. That airplane gets hit. We pretty well know that it was a missile and all of the details of that, but we don't have the ability to have investigators on the ground, interrogating the people that might have been involved, their associates, developing informants, doing a full investigation. Therefore, we're not going to know who pulled the trigger or, in this case, pushed the button to launch that missile.

BLITZER: And Peter -- Peter, we're told that cockpit voice recorder is in very good condition. So how important is that going to be in this investigation?

GOELZ: Well, it will be important because at the very least, it will pick up a fraction of a second of sound and we'll be able to analyze where the sound was originating and give us some indication of where this tragic event started.

But it's not the critical information. The critical information is the radar data that we've got already and what's on the ground that they will not be able to hide from us.

BLITZER: Here's the problem that I have and a lot of people have and, Tom, you're a former assistant director of the FBI. That crash site, it's been a week or so. It's not even secure. It's a mess. It's awful. It's heartbreaking to see it.

What do you make of that? FUENTES: Wolf, if the missile went, as we think it did and as

the reports indicate, there will be shrapnel embedded in the side of that aircraft, in the wings, almost the whole side, whichever side that missile hit will just spray like a shotgun blast. They will be unable to hide all that. We have had crash sites where planes have been underwater or buried in the ground even for a couple years before really true forensic work was done.

So, frankly, I don't think they will be able to hide the fact that that plane was hit by the missile, that that caused the catastrophic failure and caused it to fall out of the sky. But again, that's not the same as knowing who pushed the button.

BLITZER: Two hundred ninety-eight people aboard that Flight 17.

Peter, what's the major lesson all of us, the flying public, the aviation authorities, the airlines, everyone else should learn from what happened last week?

GOELZ: Well, I think the most important thing is that we need to have better risk analysis when missile launchers that have the ability to strike airplanes, commercial airplanes at altitude, fall into irresponsible hands, we have to avoid that spot. And the world air carriers and the world aviation organizations need to act promptly on that.

BLITZER: Peter Goelz, Tom Fuentes, guys, thanks very much. Always good to have both of your insight.

Just ahead, the Russian President Vladimir Putin in the spotlight once again because of Flight 17. Why some say the leader's tough shell is beginning to crack a bit. Brian Todd has that and more when we come back.

(COMMERCIAL BREAK)

BLITZER: The pressure is mounting for the Russian president, Vladimir Putin. While he continues to deny involvement in bringing down MH17, some analysts say Putin isn't necessarily guilty of political posturing. Rather, he and his cabinet appear to be panicking.

CNN's Brian Todd is joining us now from Washington with more.

What are you learning, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, those observers believe Putin and his close circle are simply up to their necks in this and are grasping. They say in the aftermath of the shoot down, things in Ukraine have gotten beyond Putin's control and he knows it.

(BEGIN VIDEOTAPE)

TODD (voice-over): Bursts of white smoke. Observers on the ground clearly agitated. At the scene of burning wreckage, armed men in fatigues pick up fragments of what's purportedly a Ukrainian fighter jet, shot down in eastern Ukraine.

Not yet confirmed, whether this was the work of pro-Russian rebels inside Ukraine or Russian forces themselves, and whether Russian President Vladimir Putin knew about or approved the operation. If Putin's behind the attack, just days after the downing of Malaysia Airlines Flight 17, the question, what's driving his aggression?

JOHN HERBST, FORMER U.S. AMBASSADOR TO UKRAINE: His objectives are, preferably, to take control, at least informally, of a large swath of Ukrainian territory, but he's failed with that. If he can't do that, his lesser objective is to destabilize portions of Ukraine's east.

TODD: But some observers say Putin and his cabinet are in panic mode. With intelligence pointing to Russian involvement in the Malaysia Air shoot down and with crippling sanctions possibly imminent, they say Putin is deflecting blame towards Ukraine and NATO, accusing the alliance of building its forces in Eastern Europe to threaten Russia. A NATO official scoffs at that, but Putin does seem to be using NATO's actions as a rationale for his military posture.

PRES. VLADIMIR PUTIN, RUSSIA (through translator): A scale of the training and preparedness is also increasing. It is important to prepare our defenses on schedule.

TODD (on camera): Body language of a guy who's panicking?

JILL DOUGHERTY, RUSSIA ANALYST: I don't think, again, he's panicking, but he is in really a hard place. He has enormous pressure coming from the international community right now, and domestically, he's under pressure.

TODD: Pressure from Russia's business elites, to avoid more sanctions. Pressure from Russian nationalists, to get tougher on Ukraine. So, if he's not panicking, analysts say, Putin's at least in his judo stance.

DOUGHERTY: You can almost see it, his balancing. He does this when he talks. He is a judo expert, and he is prepared, he's ready to parry, thrust, and protect Russia from what he expects are going to be the threats.

(END VIDEOTAPE)

TODD: But what about his top security cabinet? The people in that room with Vladimir Putin in that video. Some of them in those images look visibly uncomfortable as he spoke. There you see their faces. The analysts we spoke to say they're not likely panicking, but they are worried, plenty, about the pressures on Russia's military and economy. As one analyst said, they simply don't have the gambler's gene that Vladimir Putin has -- Wolf.

BLITZER: Brian, Putin may have some other headaches, as well, due to a personal connection he has to the Netherlands, right?

TODD: It's pretty extraordinary, Wolf. According to various reports, one of Putin's daughters lives in the Netherlands. Of course, most of the victims of the Malaysia Air shoot down were from the Netherlands. At least one political leader there wants Putin's daughter deported, and there are reportedly calls for a protest to be held outside her home.

Vladimir Putin tonight, Wolf, taking it from all sides.

BLITZER: Brian Todd reporting for us -- thanks very much.

TODD: Stand by, we've got more breaking news.

We're just getting a statement from the White House. The president has just spoken with John Kerry, the secretary of state, about the efforts to achieve a cease-fire. We'll update you, right after this.

(COMMERCIAL BREAK)

BLITZER: And there's more breaking news in the crisis here in the Middle East. Aboard Air Force One, just a little while ago, President Obama got an update from John Kerry on the cease-fire efforts.

The statement that the White House released says -- let me read it -- "Aboard Air Force One, the president spoke with Secretary Kerry on the latest developments in his effort to achieve an immediate cessation of hostilities between Israel and Hamas. Over the last few days, Secretary Kerry has been engaged with the Israelis, Palestinians, Egyptians, Europeans, the U.N., the Arab League, Qatar, Jordan, Turkey, and UAE to determine how to achieve an end to the current violence and build a process that can create a sustainable path forward."

Let's see if any of that succeeds.

That's it for me. Thanks very much for watching.

I'm Wolf Blitzer in THE SITUATION ROOM.

"ERIN BURNETT OUTFRONT" starts right now.