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CNN LIVE EVENT/SPECIAL

Crisis in the Middle East; Flight 17 Investigation; Ebola Outbreak; Netanyahu: No Cease-Fire Until Tunnels Destroyed; Can ISIS Be Stopped?; Dow Jones Drops Heavily In Trading

Aired July 31, 2014 - 15:00   ET

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


HALA GORANI, CNN ANCHOR: The state of THE WORLD RIGHT NOW: It is the epicenter of the latest crisis in the Middle East. We ask, when will the carnage end?

Ukraine and the downing of Flight 17. A Russian ambassador tells me, don't implicate Moscow without proof.

And if you are planning a trip to one of these West African countries, why the U.S. says think again.

I'm Hala Gorani live from London. And this is a special edition THE WORLD RIGHT NOW.

A special welcome to our viewers in United States this hour and of course, as always, to our viewers around the world. We are going to take a look this hour at the turmoil erupting in so many parts of our globe, and I want to start with Gaza.

If you thought it couldn't get any worse, you would probably be wrong. Israel's prime minister warned his forces will finish destroying Hamas tunnels in Gaza whether or not there is a cease-fire. The operation doesn't appear to have an end in sight.

Israel says its fight is about protecting itself from militant attacks, despite the hundreds of civilian deaths in Gaza. For its part, the militant group Hamas will not agree to stop launching those rockets unless the Gaza blockade is lifted, it says. Israel has lost 59 lives, most of them soldiers. Nearly 1,400 Palestinians have been killed.

To add to all this misery, yet another U.N. school used for shelter by Palestinian civilians was struck in Gaza. And the United Nations is saying it just cannot cope anymore and it is at -- quote -- "breaking point."

Karl Penhaul, one of our team on the ground in Gaza City, with more.

Tell us about the latest, what's going on in Gaza this evening, Karl.

KARL PENHAUL, CNN CORRESPONDENT: Well, Hala, there certainly is no sign that either side is backing down. As you say, Israel telling its citizens to prepare for a protracted campaign.

This isn't over yet. And Hamas for its part saying there can be no middle ground. It looks like both sides are set for a showdown. In between the two sides, of course, the civilian population. Tonight, they're without power. The Gaza power plant has been hit on multiple occasions over multiple days. People are getting by with just what little power they can generate from home generators and that also means there's a water problem as well, because the water can't be pumped in and the sewage can't be pumped out. Things are going from bad to worse.

GORANI: All right. We are showing what I believe is video of the aftermath of that strike on that U.N. shelter.

Our correspondent John Vause I understand went to that area or at least drove around the Gaza Strip. What can you tell us about what we know happened at that school where so many people died, Karl?

PENHAUL: Well, we went down there and checked out and, of course, we know U.N. investigators had their own teams there doing crater analysis, looking at shrapnel samples as well.

They say that they have hard evidence to conclude that Israel hit that school three times with artillery. It has really enraged U.N. officials here because they say they told the Israelis 17 times what the coordinates of that school were. And what is also frustrating them greatly is they say they can do nothing more.

Bear in mind that 220,000 Palestinians are sleeping in United Nations shelters tonight. They have fled their homes precisely because their homes were in the middle of a battlefield. And now those shelters are in the middle of a combat zone.

The U.N. officials say there's nothing they can do. There is no safe place in Gaza, according to the United Nations, Hala.

GORANI: All right, Karl Penhaul doing some great work along with our team on the ground in very dangerous circumstances. Thanks very much, Karl.

Israel says it never targets civilians, but in densely populated Gaza, civilians are paying the price of this war. I want to show you video now that gives you a sense of the panic and shear terror during yesterday's attack on a market in Gaza. We warn you it is very hard to watch.

The Al-Manar media agency told CNN one of its photographers began shooting this video, but was seriously wounded by shrapnel in a second strike. An assistant picked up the camera and kept rolling.

And today, some unusually strong words from the White House. Listen to Press Secretary Josh Earnest with official reaction to the strike on that U.N. shelter in Gaza.

(BEGIN VIDEO CLIP)

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: It does not appear there's a lot of doubt about whose artillery was involved in this incident, but the shelling of a U.N. facility that is housing innocent civilians who are fleeing violence is totally unacceptable and totally indefensible.

(END VIDEO CLIP)

GORANI: The Gaza operation has been going on now for three-and-a-half weeks. But Israel's prime minister says this is only the first phase of demilitarization.

Today, Israel, in fact, called up another 16,000 reservists.

Wolf Blitzer is following developments from Jerusalem.

Let's talk a little bit about what Benjamin Netanyahu, Wolf, is saying as well about this being the first phase. We're three-and-a-half weeks in. It's already longer than the previous two Gaza operations. So, are we getting ready for something much, much longer here?

WOLF BLITZER, CNN ANCHOR: Well, that 16,000 reservists who have been mobilized, that now brings the total to 86,000 reservists who have been called up over the past month or so. That sounds like a huge number as far as ground troops and other troops are involved. The Israelis are certainly getting ready for something bigger if there's no cease-fire.

They say they are getting close to finishing off those Hamas tunnels that go from Gaza into Israel. The commander of the Israeli military Southern Command says that's almost done with. That's what he says. Other Israeli officials are saying the same thing. But as long as those rockets and those missiles keep coming into Israel, the prime minister of Israel says Israel will respond and Israel will take action.

I do know, Hala, there's a lot of activity still going on behind the scenes for some sort of cease-fire, although I got to say it doesn't look very optimistic right now.

GORANI: All right. So still at least some talk ongoing, which is better than no talk at all. I suppose we will take what we can get in these situations.

You spoke to the president of Israel, outgoing, Shimon Peres, about all of this. What did he have to say?

BLITZER: Well, he said that Israel's best friend in the Palestinian community is the president of the Palestinian Authority, Mahmoud Abbas. He says he trusts him. He believe Mahmoud Abbas is a real partner for peace.

Shimon Peres says he still supports very much the two-state solution, Israel and Palestine. He was effusive, by the way, also in his support, in his praise for Secretary of State John Kerry and President Obama in their role in trying to achieve a cease-fire, despite, as you know, Hala, some serious criticism of the U.S. administration over the past few days because of what they thought was Kerry's inappropriate cease-fire effort.

There's one -- I want to play one clip from the interview. Much more will be coming up later in "THE SITUATION ROOM." I got into a very sensitive subject with the outgoing president of Israel, the 90-year- old Nobel Peace Prize winner, Shimon Peres. We spoke about a very disturbing element that is under way in Israel right now. Listen to this exchange.

(BEGIN VIDEO CLIP)

BLITZER: I have been now for three weeks. Almost every day, I look at the papers. This is "Haaretz." There's a story on the front page, three Jews arrested in mob beating of Palestinians.

How worried are you, Mr. President, about apparently some growing intolerance, extremism, revenge among Israeli Jews towards Arabs in this country?

SHIMON PERES, ISRAELI PRESIDENT: It's terrible. No excuse.

The only thing I can say, it's three Jews, not 300,000 Jews, that are going and shouting, and many Arabs are shouting about -- or Iranians say bring an end to Israel. Nothing like it.

I don't like and we shouldn't forgive the three boys. They were put in prison. No way of excuses about this, not only because of them, because of us. It's not us. It's not Israel. It's not Israel I want to or my friends want to.

We're not going to submit to emotions or evil emotions. It's not the reason and the purpose for which Israel was built. And there is the way of compromise. And whoever doesn't understand that the Israeli politics cannot be divorced from a moral position doesn't understand the strength and the depth of Israel.

(END VIDEO CLIP)

BLITZER: And, Hala, as you know, they're very worried, a lot of Israelis, about this growing trend of extremism here. They're dealing with it. They say they have a lot of work to do, especially the outgoing president, Shimon Peres.

He says he wants to do whatever he can to try to deal with this issue. We're going to have much more of the interview of course coming up later in "THE SITUATION ROOM." I think our viewers in the United States and around the world will be interested in what Shimon Peres has to say on a wide range of issues.

GORANI: All right, we will see you in a couple hours, Wolf, on CNN.

And next on THE WORLD RIGHT NOW, our special edition, two weeks on from the downing of Flight 17 and there is a breakthrough for investigators. Also, I put it to a top Russian diplomat accusations Moscow played a role in the disaster. You will hear his response.

And how safe are flights from West Africa after the deadly outbreak of Ebola?

Much more -- that and much more when THE WORLD RIGHT NOW continues. Stay with us.

(COMMERCIAL BREAK)

GORANI: This is your WORLD RIGHT NOW. Welcome to our viewers everywhere around the world, including the United States this hour, for our special edition.

It is the crisis that has kept investigators away from the wreckage of Flight 17 to do their job and try to figure out exactly what happened. And I'm talking about the ongoing fighting between pro-Russian rebels and Ukraine's military in the east of the country.

Now, two weeks on from the crash, well, we have some bittersweet progress, if you want to call it that. That's at least how a spokesman for the investigators put it. After several unsuccessful attempts like this one on Monday, monitors finally reached the scene today, along with experts from Australia and the Netherlands.

It's after Ukraine's military announced a one-day cease-fire. If the truce holds, and that's a big if, more experts will be brought in on Friday.

Australia's foreign minister tells CNN that as many as 80 bodies could still be at the crash site. And just imagine the scene and the anguish of the families, human remains lying along with the wreckage in temperatures of almost 90 degrees Fahrenheit, 30 degrees Celsius. And don't forget this is a highly sensitive crime scene we're talking about.

David Mattingly has more.

(BEGIN VIDEOTAPE)

DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): A fireball caught on camera and a devastating loss of life. But to those trained to investigate air crashes, the tragedy of MH17 doesn't stop there. Accusations of looting and possibly contaminating important evidence is disturbing.

(on camera): When you first saw that, what was your reaction?

WILLIAM WALDOCK, CRASH INVESTIGATOR: Well, the first thing I said was unrepeatable on TV. But after, that I was horrified.

MATTINGLY (voice-over): William Waldock is a crash investigator and director of the accident investigation lab at Embry-Riddle Aeronautical University. He says while U.S. intelligence points to a missile strike the crash of MH17, investigators still need unaltered physical evidence to find the smoking gun, evidence you can't get from the black boxes.

(on camera): You still need the crash site to give you 100 percent.

WALDOCK: I'm firm believer that you follow the physical evidence.

MATTINGLY (voice-over): That's exactly what investigators did in 1996 in the case of TWA 800, when it was suspected that a missile may have brought the plane down. It wasn't until the wreckage was recovered and examined that it was determined there was no such evidence of an attack.

Waldock says a physical examination is needed on MH17 wreckage to confirm what many suspect is evidence of a missile strike in these photos.

WALDOCK: You ever seen a stop sign that somebody fired a shotgun at? That's what you see. You see the large number of penetration holes that are going from the outside in.

MATTINGLY (on camera): Would it be possible to cover up that kind of evidence?

WALDOCK: Hard, but if you have got enough effort and manpower...

MATTINGLY: And enough time.

WALDOCK: And enough time.

MATTINGLY (voice-over): Protecting the crash site is even more critical when a plane is crashed deliberately. At Shanksville, Pennsylvania, on 9/11, the FBI meticulously noted the location of the smallest pieces of debris. More than 10 days after the crash of MH17, there's no guarantee even large pieces will be left untouched.

(on camera): And let's say someone came here with a forklift and was just able to take this away. Would you ever get to the bottom of this?

WALDOCK: (INAUDIBLE) not, because that's how easy it breaks.

MATTINGLY (voice-over): It demonstrates how fragile the evidence can be when every crack, every dent, every fragment could be a clue.

(on camera): Even under the best of circumstances in an investigation like this, if there was a missile strike, it can't tell us who pulled the trigger, and there are even greater concerns of what other questions might go unanswered if critical pieces of evidence disappear.

(voice-over): Waldock now worries what the latest rebel clashes might do if the crash site is caught in the crossfire.

WALDOCK: Depending on the size of the bomb, you may destroy everything we have got.

MATTINGLY: And with it any chance of definitively directing blame for the deaths of 298 people.

David Mattingly, CNN, Prescott, Arizona.

(END VIDEOTAPE)

GORANI: As you heard in David's report, there's still no definitive evidence as to who fired the missile that brought down flight MH17, but there is a growing international consensus pointing the finger of blame at Russia for supplying some of the weaponry to pro-Russian rebels.

U.S. intelligence has determined that the missile was fired from the ground and that it originated from a rebel-held area near the Russian border. But a smoking gun remains illusive. The investigation takes a lot longer than that. It's a lot longer than two weeks in the best of cases.

Despite that, the American President Barack Obama announced new sanctions and accused Russia of hampering the investigation. Listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Russia and its proxies in Ukraine have failed to cooperate with the investigation and to take the opportunity to pursue a diplomatic solution to the conflict in Ukraine. These Russian-backed separatists have continued to interfere in the crash investigation and to tamper with the evidence.

(END VIDEO CLIP)

GORANI: That was the day, by the way, that the president was announcing new tougher sanctions on Russia by the United States, and the European Union joined the U.S. in announcing those new sanctions on Moscow. They target some of President Vladimir Putin's top associates, as well as Russia's two biggest banks.

That's where it might hurt, by the way.

Earlier, I spoke to Russia's ambassador to the E.U. I began by asking him to respond to those allegations that the Kremlin is funding, arming and training those rebels.

(BEGIN VIDEOTAPE)

VLADIMIR CHIZHOV, RUSSIAN AMBASSADOR TO THE E.U.: Well, these are very serious allegations. None of them, none of those allegations has been supported by any piece of hard evidence. Until they are, these are only empty words.

GORANI: Well, the U.S. released satellite images showing that Russia fired from inside the country artillery. President Obama is saying that -- and John Kerry as well, the U.S. secretary of state, both saying that there has been movement of heavy weaponry from Russia to Ukraine. Is none of that true?

CHIZHOV: Well, those satellite pictures, I saw them.

One can ask oneself, why were they published in Twitter in a very hazy mode and not presented officially? Satellite images taken God knows where and God knows when, they are not impressive.

(CROSSTALK) GORANI: These are statements coming from the president of the United

States, his secretary of state as well, saying that they believe convoys of weapons are crossing the border from Russia into Ukraine. So, you think they're basing this on Twitter pictures?

CHIZHOV: Well, what Secretary Kerry has been saying, yes, this has to be corroborated by hard evidence. I have a different picture from the information that I am in a position to possess.

GORANI: So where are these rebels who are believed to have shot down a Malaysian commercial jetliner, killing almost 300 people? Where are these rebels getting these anti-aircraft missiles that are systems that the Russian army possesses? Where are they getting them then?

CHIZHOV: Well, your question sounds very hypothetical.

We don't know who shot down the airliner. The investigation has just started. And, as we speak, the Ukrainian army has launched an offensive in the immediate vicinity of the crash site, thus preventing the international investigators from reaching the site and creating a real danger of destroying the evidence.

Until the international investigation comes with a conclusion, I think it's totally premature to put responsibility onto anyone.

GORANI: Right. We know where the plane went down, and it went down in rebel-held territory, and it was shot down over rebel-held territory. But we will get off of that subject.

I wanted to ask you again about these sanctions. How much will they hurt the Russian economy?

CHIZHOV: Well, I wouldn't claim that there will be no impact. Of course there will, particularly on the financial sphere. But Russian economy will survive, and the Russian nation as a whole has quite an impressive record of surviving hardships.

(END VIDEOTAPE)

GORANI: The Russian ambassador to the European Union, Ambassador Chizhov.

You're watching a special edition of THE WORLD RIGHT NOW.

Coming up, could air travel risk spreading the Ebola virus beyond West Africa? If you are a world traveler, you're going to want to listen in after this. Stay with us.

(COMMERCIAL BREAK)

GORANI: We're looking at the world in turmoil. You see the globe behind me. If we spin it just a little bit, we will hit another world crisis.

And one of them, of course, is the Ebola outbreak in Western Africa, those three countries highlighted behind me, Sierra Leone, Guinea and Liberia, putting the rest of the world on red alert. A state of emergency has been declared in fact in Sierra Leone. And Liberia, as one of the world's deadliest viruses runs rampant, is having major issues containing this.

In a move to halt infections, schools and businesses in Liberia have closed. The government is attempting to disinfect public areas. The U.S. is now issuing a travel alert against all nonessential travel to the nations coping with the outbreak, those three I listed for you there.

All in all, 721 lives have been lost in what is the worst outbreak in human history of Ebola. There are concerns that the virus could spread through infected air passengers. We're all more mobile now than we have ever been. Take a look at the map. The countries in red, as I mentioned, are those -- I should say the ones in red there are those fighting the Ebola outbreak.

But, importantly, those in yellow receive weekly direct flights from the affected countries. To date, the World Health Organization is not recommending that any travel restrictions be put in place in the region. Now, before the Ebola death of an American citizen in a Nigerian hospital, the victim, John Sawyer, had taken two connecting flights through the nations of Togo and Ghana.

What risk is there of further infection along his travel?

Let's bring in our aviation specialist, Richard Quest, who joins me from New York.

This is a big question especially our viewers have, because so many of them travel around the world, including parts of Africa. So is it safe if you're going to that part of the world, those countries in yellow and red?

RICHARD QUEST, CNN AVIATION CORRESPONDENT: Yes, it is safe. That's not my advice. That's the advice from IATA, the airline association.

They say that the risk of contracting it is, in their words, extremely low. They also say that it is highly unlikely that anyone suffering from such symptoms of Ebola to be at the point of which they are contagious would feel well enough to travel, because my understanding from Dr. Sanjay Gupta is that you don't really become contagious for this until you're in the latter stages of the disease.

At that point, you're really in no position to be getting on and off planes. Also, although it is spread through contact with bodily fluids, it's not sort of as casual as that. In the early stages, it's not that simple just to catch it. Now, all said and done, is it sort of still a concern? Yes. There will be worry as a result.

GORANI: But so how are countries handling this? Because the IATA, the airline industry association, is saying it's fine. But then when the Centers for Disease Control come out and say just make sure you think twice about traveling to those areas, what precautions are countries taking? QUEST: That's the interesting part about it, because what sort of

restrictions. Some like Liberia are closing down certain areas. Borders are remaining much more difficult in those areas.

Fundamentally, good housekeeping is the initial way to go forward. That's why, of course, in Liberia they're having this mass disinfecting of public areas. But for airlines, of course, really the crucial point is passengers shouldn't travel if they have symptoms and airlines will have to reject passengers if they have symptoms.

But ultimately is there the possibility, Hala, of somebody in the early stages of Ebola boarding an international flight, going to a major aviation hub? The answer must be, yes, there is that possibility.

(CROSSTALK)

GORANI: I was going to say there is that possibility. I don't know if you saw this report, but a passenger in France showing symptoms was hospitalized because he had gone through Casablanca and some other airport I can't remember from one of those countries that was affected.

So people are worried. They're worried, because you start showing just even the slightest bit of symptoms, a few symptoms, you could infect someone else.

QUEST: Absolutely. Well, no, you couldn't. It's further down the road. I come back to this point again. The experts say the time at which you are most infectious or contagious is towards the end, if you like, of the virus in you.

So in this situation, is it likely that somebody will turn up in a European country or in the United States with the virus? Sanjay Gupta says yes. But here is where it's different, because the moment it becomes clear that this person has now reached a high stage of being infectious, that's when, of course, the CDC and all the other authorities -- at the moment, it's a case for caution, concern, but certainly not panic or worry in terms of flights.

GORANI: All right, Richard Quest, thanks very much. And on CNN International, we will see you on "QUEST MEANS BUSINESS" next hour.

QUEST: You will.

GORANI: Thank you for that.

The elusive leader of Hamas, Khaled Meshaal, has reportedly once -- only once visited Gaza. But he does command loyalty from afar. We will explore that story coming up.

(COMMERCIAL BREAK)

GORANI: Welcome back to our viewers in the United States and around the world. The phrase 'Hamas militants' conjures up images of mask men smuggling weapons through a maze of tunnels. But Khaled Meshaal, the political leader of Hamas has apparently only entered Gaza once, but he still commands some great loyalty there. Here is Brian Todd with a profile.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): September 1997, Khaled Meshaal was hours, perhaps minutes away from dying. He had been walking on the streets of Amman, Jordan, when two men, later reported to be agents of Israel's intelligency agency, the Mosad (ph) injected or sprayed him with poison.

KHALED MESHAAL, HAMAS POLITICAL LEADER (through translator): I heard a loud noise in my ear. It felt like an electric shock.

TODD: The Israeli agents were captured. Jordan's king reportedly threatened to put them on trial if the Israeli government didn't provide an antidote.

(on camera): The White House even intervened, President Bill Clinton trying to keep peace between Jordan and Israel, pressured Israeli Prime Minister Benjamin Netanyahu to provide the antidote.

(voice-over): Netanyahu widely reported to have ordered the hit on Meshaal in retaliation for suicide attacks in Israel. Meshaal was revived.

MATTHEW LEWIT, WASHINGTON INSTITUTE FOR NEAR END POLICY: Once he survived this attack, this leader who is previously relatively unknown became very popular. His stature goes straight to the top. He's the living martyr.

TODD: Meshaal is now the leader of the Hamas movement. He recently spoke to CBS News.

MESHAAL (through translator): We are not fanatics. We are not fundamentalists.

TODD: But one Israeli official calls the 58-year-old former teacher the Osama Bin Laden of Hamas. Analysts say he's an inspirational commander for attacks and a deal maker, securing status and money for Hamas from his home in Qatar.

JONATHAN SCHAMZER, FOUNDATION FOR DEFENSE AND DEMOCRACIES: That is the ATM for Hamas and Khaled Meshaal is the point man for that. In a recent interview with CNN's Becky Anderson, the Qataris foreign minister denied that.

UNIDENTIFIED MALE: Qatar does not support Hamas.

TODD: It's not clear how much control Meshaal has over the military wing of Hamas, which launches the attacks on Israel. And street cred is an issue for Khaled Meshaal. He's reportedly been to Gaza only once and the Israelis themselves may be trying to undermine Meshaal's standing within Hamas, painting him as an insulated pampered Jihadist.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: This guy is roaming around five-star hotel suites while he's deliberately putting his people as fodder for this horrible terrorist war they're conducting against us.

TODD: Analysts say Meshaal wants to eventually become leader of all the Palestinians. But will he? The U.S. has designated Meshaal a terrorist. The Americans and Europeans would have a tough time recognizing his legitimacy and his survivability is in question.

There are a lot of rivalries within Hamas. When I asked if the Israelis might target Khaled Meshaal again, an Israeli official said no comment. Brian Todd, CNN, Washington.

(END VIDEOTAPE)

GORANI: Let's talk more about what's going on in Gaza. I'm joined from Providence, Rhode Island by Nicholas Burns, a professor at the Harvard Kennedy School of Government, who writes a column for "The Boston Globe" and Burns spent nearly 30 years in the U.S. Foreign Service. Thanks for being with us.

Nicholas Burns, you saw those images, I'm sure, of the aftermath of that attack on a U.N. school. Even the White House is calling it totally indefensible, some of the strongest words I've heard the U.S. use to describe Israeli actions. What is the end game do you think for Benjamin Netanyahu here?

NICHOLAS BURNS, FORMER U.S. AMBASSADOR TO NATO: I think the Israeli government has an obligation to its own people to try to achieve an end game where this doesn't happen again, that Hamas has built such an extensive tunnel network that it can actually reach right into those Israeli villages on the Israel-Gaza border.

So Israel is clearly interested at some point in the cease-fire, but once a cease-fire where that tunnel network will be obliterated for its impact on Israeli villages. I think they also want to see more international pressure on Hamas because of its indiscriminate firing of rockets into Israeli cities.

The setup piece from your correspondent was illustrative of the bigger problem here and the real tragedy of the Palestinian people in Gaza, excruciatingly poor leadership. That leadership has now engulfed them in this terrible, terrible fighting.

You saw the statement by the White House today very harsh criticism of the Israelis for the artillery strike on the U.N. school yesterday. It seems to me, Hala, that Secretary of State John Kerry is right to try to stop this war, neither side can win a military victory.

GORANI: But do you think Israel is serving its people well here by continuing an operation that twice before has failed, that is resulting in the deaths -- frankly the carnage in Gaza of hundreds of civilians that, is sowing the seeds of hate in feature generations and in the end, really there is almost a general consensus, will not eliminate Hamas. They'll dig more tunnels and rearm. So what's the point? BURNS: What makes the diplomacy so very difficult is the competing narratives and competing interests on both sides. For the Israelis, I think there is an understanding internationally in most of the world, including in some Arab states that you can't have rockets raining down on your major cities or tunnel networks penetrating the borders of your country.

On the other hand, Hala, and you're right to raise it, Gaza is one of the most densely populated parts of the world -- cities in the world, and the Palestinian people have suffered enormously, now nearly 1,500 people dead. Neither side can win.

Hamas is unfortunately likely to survive this as a political entity. The Israelis I think are not going to do what they could do in order to invade Gaza. That would be a tremendous mistake. I do think learning the lessons of previous rocket wars and of the Lebanon war in the summer of 2006.

The United States is right to try to impose its will here for a cease- fire, but hopefully one that will weaken Hamas and strengthen the Palestinian Authority in the West Bank.

GORANI: The 2006 cease-fire eventually did not weaken Hezbollah. Quite the contrary, they got incredible amounts of street cred from that one. Let me ask you about these complex alliances in the Middle East, because the United States, of course, is a big supporter of Israel, also very opposed to Qatar. Qatar is said to be funding Hamas.

Qatar denies that, of course. Here you have this very complex, but also interesting situation regionally where you have the United States close to Qatar dependent on it for military presence in the Middle East. Qatar close to Hamas, but also allied with Israel. How does this web sort of explain where we go from here?

BURNS: Well, there was an interesting "New York Times" story this morning here in the United States, Hala, where the "Times" reporter said, in effect, that Hamas is almost completely isolated in the Arab world with the exception of Qatar, with the exception of Turkey, another Muslim country, most of these governments are not speaking up for Hamas because of its rejectionist policies, because of its flirtations with radical Islam.

So that is a big difference this time than in previous wars where there's tremendous pressure from the Arab states on the United States to stop the fighting. You're not seeing that this time. The problem that the United States has is that Egypt does not have the type of relationship as an intermediary with Hamas that it previously did in the past.

So Qatar and Turkey are really the only intermediaries that have some maybe marginal influence on this shadowy and I think quite irresponsible Hamas leadership.

GORANI: Well, Egypt certainly doesn't have much influence on Gaza after it overthrew the Muslim Brotherhood president so close to Hamas, which is understandable. Nicholas Burns, thanks so much for joining us and thanks for your analysis on this.

BURNS: Thank you very much.

GORANI: All right, some breaking news now from Wall Street. The Dow Jones is taking a big plunge everyone. We are down almost 300 points at 16,606, a drop of 1 and 2/3 of a percent, and the reason for that is we're having some concern regarding what's happening in Argentina.

There is also some economic indicator number coming out of the U.S. that has not been interpreted positively, a jump in U.S. labor costs, signs of inflation, putting stocks under pressure as well. We'll keep our eye on the Dow for you. If it becomes much worse, we'll come back and keep that number up for you on the screen so you can keep an eye on it as well.

This is THE WORLD RIGHT NOW as we were saying from crisis to crisis. Coming up, the new face of terrorism in Iraq and Syria as ISIS continues its march across the Middle East. Can this radical group be stopped?

(COMMERCIAL BREAK)

GORANI: Well, let's bring you that breaking news from Wall Street and what's happening with the Dow Jones, about a 300-point loss. The S&P 500 and Nasdaq are also falling sharply. There are some concerns out there about Argentina's latest debt default. That's driving the selling of stocks especially in the banking sector, and some concerns about Portugal as well, in s.

This is offsetting some positive labor data from the United States. Investors overlooking that and shedding some stocks. In percentage terms, though, not a big catastrophe, but in terms of nominal numbers, almost 300 points. There you have it at 16,588.

The military group ISIS is currently on a murderous march across the war torn nations of Iraq and Syria. The group, by their own objectives, are determined to establish a new order in the region. Almost unspeakable violence with an attempt to redraw the Middle East along sectarian lines.

(BEGIN VIDEOTAPE)

GORANI (voice-over): Beheadings, crucifixes, mass executions and strict Sharia Law. This is the reality thousands of Syrians and Iraqis are facing under the heavy hand of the militant group, ISIS, which now calls itself the Islamic State. In Syria, IS has consolidated its control over several towns along the Euphrates River in the east, at times through brute force, often through the capitulation of local leaders, sometimes forced to embrace the order the group provides.

In Iraq, ISIS has pushed its ways into cities along the Tigress River. It captured the northern city of Mosul executing large numbers of Iraqi troops and demonstrating how little control the government actually has in maintaining order. BRETT MCGURK, STATE DEPARTMENT: ISIL is no longer simply a terrorist organization, it is now a full-blown army seeking to establish a self- governing state through the Tigress and Euphrates Valleys in what is now Syria and Iraq. It now controls much of Eastern Syria in January in Iraq and moved into Anbar Province taking control of Fallujah and on June 10th, it moved on Mosul.

GORANI: At the end of June, the Islamic State declared much of that territory a caliphate. From Aleppo Province in Syria to Diyala Province in Iraq. They also declared a calif or a head of state. The ones illusive Abubakar Al-Baghdadi. Very few photos had ever surfaced of Baghdadi.

But then in early July he emerged in a slickly produced video at a mosque in Mosul. On the battlefield not much has changed in recent weeks, but the Islamic State made headlines when it started destroying ancient historic sites like the shrine of Jonah in Mosul. The move outraged many, but the Islamic state made it clear they intend to have a long-term impact.

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GORANI: So the question is can ISIS be stopped, who can stop them? I'm joined by Fawaz Gerges of the London School of Economics here in the studio. Here you have these militants, these fanatics that come from Syria, take over what, 30 percent of Iraq and the Central Iraqi government can't do a thing about it?

FAWAZ GERGES, LONDON SCHOOL OF ECONOMICS: Correct.

GORANI: What's going on?

GERGES: Well, what's the most dangerous thing about the so-called ISIS or the Islamic State are not the numbers, are not the 10,000 or 15,000 fighters. We estimate they have about between 10,000 and 15,000 fighters. The most dangerous thing about ISIS is that it has been able to embed itself within local communities.

That is basically it has exploited sectarian tensions and portrayed itself as the vanguard defender and persecute the Sunni communities. So in this particular sense what I'm saying, the Islamic State has found a refuge and a base and a social base, and that's why the question is how do you drive a wedge between local communities and the --

GORANI: But Fawaz the local communities see the beheadings and the crucifixions, they can't possibly think this is a good idea regardless of how much sectarian tension there is. I mean, I know those part of those countries. I've traveled there. I can imagine it is fear keeping them under their thumb.

GERGES: Perhaps contract. The question is, I would argue in the final analysis, the Islamic State should not be deceived by what Baghdadi would like us to believe that remember it has the genes at its own destruction. It has mastered the art of making enemies. Not only the regimes of Bashar Al-Assad and Nuri Maliki, but even some of the Sunni communities. We already have reports in the last two weeks major fights in Mosul and Fallujah. Even the tribal communities inside Syria. What I'm trying to say is that in the same way that the al Qaeda and Iraq between 2006 and 2010, it was defeated by Iraqi tribes.

GORANI: In the end, that's what you need. You need that kind of uprising. Let's talk about the United States, let's talk about Europe, very disengaged in all of this. Let's be honest. Are they going to regret not getting slightly more involved with this type of threat in Iraq and Syria.

GERGES: The United States is not disengaged in Iraq. The United States knows very well how insidious and dangerous the Islamic state. But United States believes, you and I believe only, the most effective means to defeat the Islamic state is to do what? To create a national unity government to empower local communities. That's why first a national unity government made up of all communities and begin.

GORANI: That's a tall order. It hasn't happened with much efficiency yet. Fawaz Gerges, always a pleasure. Thanks very much for being with us. Quickly let's get to Richard Quest with more on what's going on. The Dow down almost 300 points, Richard. What's happening?

QUEST: We can't really pin it to any one particular can reason, whether it's the earnings or the Argentina debt default or the sanctions against Russia, whether it's simply worries about deflation in Europe. Europe had a very sharply lower day. All these worries are feeding into New York. You can see this, Hala, very clearly.

The market opens down quite sharply. As the day progresses, those losses accelerate. We've been down now as you can see on this number, we are down more than 300 points. It's a loss of 1.8 percent. In other words, we're almost the worst point of the day.

Hala, with just 10 minutes left to trade, in many ways this is the sort of most risky part because this is when the program trading, this is when the hedge funds, this is when the fast supercomputers do their last-second trades before close. We'll have it in "Quest Business" top of the hour.

GORANI: All right, Richard Quest in New York. Up next, is your Facebook feed taken over by propaganda? We'll explore whether social media is becoming the new battleground in modern warfare. We'll be right back.

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GORANI: Quick look at Wall Street before we move on. Here's the Dow Jones for you. We were down 301 points a minute ago and we are down 310. Losses are accelerating there it appears, 16,572 for the Dow. There are some concerns with economic indicators out there, Argentina, Portugal and other things.

The conflict between Israel and Hamas is dominating social media. So many people especially young people, use Facebook to get news updates. Does your Facebook feed have a bias on the Middle East?

Tech correspondent, Samuel Burke joins me now. What does this mean? I know many people, by the way, when I ask them how they get their news, they will say Facebook and Twitter. So what does this mean, a bias?

SAMUEL BURKE, TECH CORRESPONDENT: Hala, I was working on a story about that hashtag, Jews and Muslims refuse to be enemies. The Jewish men and the Muslim woman behind this campaign were talking about how their Facebook feeds were so different from each other. The narrative was so different one very pro-Israel, one very pro-Palestinian.

I found that many Jews and Muslims noticed the same thing in their feed. In digging into this, I realized that the Facebook feed, the way that it's programmed, the algorithm might be playing into this type of bias, let's say, inadvertently.

Because what it's doing is it's trying to show you the stories that the majority of your friends are liking and sharing. Even if you have a group of friends and maybe a small portion of them are putting up stories that maybe are different from the viewpoint of the rest of your friends, they may never show up in your feed the way that this Facebook algorithm is programmed -- Hala.

GORANI: All right, so it's basically reinforcing perhaps to you what the majority of your friends on Facebook -- I was speaking of people in their teens and 20s and how they get most of their news. We're not just talking about Facebook and Twitter here.

We are also talking about how sides in physical, tangibles wars are fighting it out on social media web sites. How is this having an impact? Because I remember when we covered the revolution in Egypt in 2011, it was already being called the Twitter revolution, but the number of users has increased exponentially.

BURKE: Well, yes, in Egypt, for example, during the uprising in 2011, there were less than 100 million Twitter users then. Now you have over 300 million. It's become much more important now than then. You have a whole unit of the IDF dedicated to putting out messages, YouTube videos and tweets and Facebook messages and then you have the militant wing of Hamas.

You have that military group also putting out messages so that's become very, very important. Even the sophistication of ISIS. You look at the media savvy of Israel and Hamas, maybe, but ISIS, the engineering that they've done is incredible to try and amplify going in and tampering with algorithms.

For example, the app that you're seeing right now on your television screen was an app run by ISIS called the dawn of glad tidings. They were using this app to go into other people's Twitter accounts to magnify their message across Iraq and Syria. It has since come down. It shows you how sophisticated some of these groups are, in particular ISIS.

GORANI: All right, it is unbelievable especially when you saw that Baghdadi video as well so slickly edited. There are former professionals in that field working on those videos. Let's talk a little bit about Gaza and the terrible situation there. We're not hearing a lot from Gazans, mainly I presume it's because they don't have power over the last several days.

BURKE: That's right, Hala. We were seeing the #gazaunderfire. That was being used a lot out of Gaza. With the lack of power, they don't have internet connection so they aren't able to take to social media as much. As people can't charge their phones, that type of internet access goes so slowly, we're seeing decline in the amount of social media use as the internet goes inside of Gaza.

GORANI: All right, there's big internet and mobile phone penetration in Gaza, as well, kind of a way to communicate there. Thanks very much. Samuel Burke, our tech correspondent in New York with this very interesting angle. So what is the end game in Gaza for Israel?

On our website, we explore that question with two Israeli columnist, a separate article looks at the goals for Hamas. If you want to help civilians caught in the conflict, we have links to organizations working on the ground that you could have an impact there. That's on cnn.com.

You can always join the conversation online. I've been hearing a lot from you this hour, which is always good. Regardless of what you'd like to send us, @halagorani is how you can communicate with us.

This is the state of the world right now for many people, death and destruction has become the new norm from Gaza and Israel to ISIS gaining ground in Iraq and Syria. We will continue to keep our eye on Africa as well as attack the worst Ebola outbreak in human history and the search continues for the victims of MH-17, pressure mounting on the west to take further action against Russia.

Join me again at the same time tomorrow as our closer look, the state of the world right now, continues. For viewers in North America, "THE LEAD" with Jake Tapper starts right now.