This is cnn breaking news. We begin this morning with breaking news. A new crisis in the middle east, israeli and Palestinian Militants exchanging deadly fire near the israel gaza border. They say its in retaliation for ongoing rocket attacks into southern israel. Triggered by an air strike that killed the top hamas military commander. Sayre sara sidner is following the story. Reporter you can see gaza behind me. There has been air strike after air strike after air strike. We ourselves witnessed three air strikes, major hit. We could see fire and then three plumes of smoke. Since then weve been also seeing and hearing rockets coming over into southern israel. We now know there are three people who have died in israel in an Apartment Building very near, within a 7 kilometer radius of gaza in israel. We also know that at least seven people have been killed here in gaza and the air strikes are continuing. Right now we do and we are watching the funeral happen, of ha the leader of hamas military wing, that is going on as we speak. Thousands of people attending that funeral. A very important figure, someone who people see as one of the founders of hamas, a symbolic member of hamas as well. We are expecting this to continue for quite some time. We really have no idea, we have no guidance from either side as to when the fighting between israel and gaza might stop. So far it has been a constant barrage of air strikes here in gaza and rockets coming in to southern israel. Sara, theres a report on the Israeli Defense website suggesting that reserve units, infantry units are preparing for the possibility of a grounded asalt. Wondering if youre hearing anything about that. Reporter absolutely. Last night we confirmed that. I sat and tacked with the Israeli Military spokeswoman leibovich who told me directly yes, indeed, the military is preparing but they have not called for a ground war. They are bringing in reservists, preparing those reservists for the possibility of coming in on the ground but they have not made that determination yet. They certainly have been striking from the air, they have been striking also from the sea. We know that israeli ships have been striking. Just now i heard another blast sounding like another air strike. Youre hearing return fire as well. Just behind me here in gaza. This is a situation where civilians are extremely frightened on both sides of the border here in gaza as we drove through the streets, it was quiet. Most of the shops were closed in the areas and neighborhoods we went through. Theres a sense of extreme tension here. When we got to the other side of the crossing, we were hearing more from the taxi drivers. Youre hearing more of what sounds like gunfire from inside gaza. You can hear a znkt sound one the air strikes hit, you can hear a large blast followed by fire and huge plumes of smoke. There have been over 100 strikes since last night, sense the killing of the leader of hamas military ring. Thank you very much for the update. A defiant president obama making it clear he is ready to rumble with the republicans. The president drawing two big lines in the sand in his first News Conference since winning reelection. First on taxes and the fiscal cliff. But what im not going to do is to extend bush tax cuts for the wealthiest 2 that we cant afford and, according to economists, will have the least positive impact on our economy. The president also coming to the defense of susan rice, the u. S. Ambassador to the United Nations, who just a few days after the attack as you recall said violence on the u. S. Consulate in benghazi began as a spontaneous protest against an antiislam film. Two topranking republicans are vowing to block rices nomination if she is picked to be the next secretary of state. The president firing back with a rare flash of anger. Senator mccain and senator graham and others want to go after somebody, they should go after me. White house correspondent dan lothian, live from washington this morning. Its really nice to see you, dan. Good to see you. Lets first talk about the fiscal cliff. The president said we could see a deal by next week. That may hinge on this issue with taxes. How are republicans responding to the president s remarks . Well, you know, first of all, there does seem a willingness by republicans to find areas of agreement, to reach a compromise. But they are pushing back on the president s plan because they dont believe that a solution should lie in tax hikes for any americans, including the wealthiest of americans, despite the fact that theres this looming fiscal cliff and the president has said, as you heard just a short time ago, that only middle class americans should get some ease here and not those wealthy americans from those taxes. And despite that, john boehner believes that a solution is possible. Take a listen. Ive outlined a framework for how both parties can Work Together to avert the fiscal cliff without raising tax rates. If youve look closely at what the president had to say and look closely at what ive had to say, there are no barriers here to sitting down and beginning to work through this process. When it comes to those tax hikes, though, the president saying that 98 of americans would not see their taxes go up, that 97 of Small Businesses would not be impacted at all. He does see some room there to close loopholes for some tax reforms but he doesnt believe that thats enough to make up that trillion dollars, and that the math simply doesnt add up. So what the president wants is a comprehensive plan so that middleclass americans are not hurt. Zoraida . Lets move on to the heated back and forth over u. N. Ambassador susan rice. Republican senators john mccain and Lindsey Graham say they would actually try to block rice from being promoted to secretary of state should she be nominated. They are criticizing her over the statement that she read days after the deadly benghazi attack saying they were spontaneous and s stemmed from a protest over an antiislamic film. So why is the gop going after rice . Well, because, you know, they feel she was the face of the administration at the time and the narrative that she laid out at the time simply did not turn out to be the case. So they dont believe, john mccain and other republicans, dont believe that the information thats been put out there has been very accurate and they dont believe that it adds up. Take a listen. Well, first of all talking points came from the white house, not from the dni. Second of all, it was obvious within 24 hours that the station chief from the cia had said that this was a terrorist attack. And she continued to tell the world through all the talk shows, that it was a, quote, spontaneous demonstration sparked by a video. Thats not competence in my view. And the president is the one who is ultimately responsible. That is not an acceptable person, inmy view, to be secretary of state. President obama says it is important to find out exactly what happened there but its outrageous for senator mccain or other republicans to go after miss rice, that its the president whos responsible, that he should be the one if they want to point fingers or go after anyone. Zoraida . Dan lothian live in washington for us. Thank you. Okay. New developments this morning in the apprentice sex scandal leading back to square one. We know the identity of the fbi agent who helped start the investigation that eventually led to the former cia directors resignation. His name is Frederick Humphries ii, 47 years old and a veteran investigator. Also two Paula Broadwells security clearance is now suspended pending the outcome of the investigation. Barbara starr is following developments for us from the pentagon. Were hearing so far there have been no official findings that broadwell broke any laws or engaged in criminal activity. Why suspend her security clearance . Well, you know, Fran Townsend is reporting just that, john, that all the indications are, from the laumt forces shes spoken to, not egregious violation. Broadwell is a reservist in military intelligence with the army. And inside the military, a violation, even if its socalled minor, of handling classified information, especially when youre a military Intelligence Analyst is quite serious. Yes, the army has suspended her security clearance. I want to read to you the statement that the army put out. The army said, quote, the army has been cooperating with federal Law Enforcement authorities in this matter and those actions are ongoing. Appropriate actions with regard to this officers clearance and access have been taken. So now what we know is the military is also involved in this. Analyzing what is going on, pulling broadwells security clearance, at least for now. She is in the position of having to demonstrate that she can get that clearance back and continue her career as an army reservist, john. There are so many facets to this. Tomorrow, David Petraeus is going to testify or talk to leaders of the senate and house intelligence committees about the attacks in benghazi. This is a closeddoor session, though, barbara. Do you have any idea whats going to be discussed . Well, we are told indeed closed door petraeus wanted to voluntarily come and talk to them about what he knew, you know, nobody is saying what it is that hes actually going to say. But weve talked to some people close to petraeus and the indications are hes going to try and explain this whole issue that dan was talking about. When they thought it was a terrorist attack, what they knew about it, who they thought might be responsible and whether or not that whole situation . Cairo at the time about the demonstration over an antiislamic film may have played a role. You had a very murky situation, john. Barbara starr at the pentagon this morning. Thanks very much. 11 minutes past the hour. Coming up, how the president will pay personal attention to the victims of sandy. Thats scheduled to happen just hours from now. Nt is hard, try running four. Fortunately weve got ink. It gives us 5x the rewards on our internet, phone charges and cable, plus at Office Supply stores. Rewards we put right back into our business. This is the only thing weve ever wanted to do and ink helps us do it. Make your mark with ink from chase. On gasoline. I am probably going to the gas station about once a month. Last time i was at a gas station was about. I would say. Two months ago. I very rarely put gas in my chevy volt. 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Mayor bloomberg turned down the offer he made to assess the storm damage then. Victor bloomberg is live in Staten Island. Good morning to you. What is the president hoping to accomplish there today . Good morning, zoraida. The mission is twofold, to come and speak with the people who have lost someone or something in this storm. Remember, of the 43 deaths across the city of new york, more than half of them on Staten Island. If they have not lost someone, theyve likely lost something. Much like the store behind me, completely decimated by the storm. Hell speak sw local officials about recovery and believe me, theres a lot of work to do. It seems like this sporadically across Staten Island. Zoraida. I know youve spent a lot of time with the residents there, Staten Island. How are they reacting to the president s visit . Not one person ive spoken with have said that the president should not come. They are also requesting mr. President , if you come, dont come with hugs and good words, come with something we can use. I spoke with a man, mike hoffman, yesterday. Hes dispatching teams of volunteers. He says he wants specific things from the president. Bittersweet. Its going to create a lot of traffic and impede a lot of the work were trying to do here. He wants to address the issue. He can do it fine in a helicopter. If youre going to come here, come here with a couple truck loads of volunteers. Come with guys that are willing to get their hands dirty and help the people of the area. Mike hoffmans message was please do not forget us. He says it will take six months to a year for this community to recover. He and everyone ive spoken with all believe Staten Island will recover but it will take some time. Zoraida. Thank you for that. Appreciate it. It is 17 minutes after the hour. A lot going on this morning. Christine romans here with the headlines. Tensions threatening to erupt into an allout war. Israel targeting what it calls hamas terror sites in gaza. At least three people have been killed by rocket fire. The new hostility escalated by an israel air strike. Jon bon jovis 19yearold daughter is recovering at a hospital this morning after overdosing on heroin. Authorities say stephanie was found unresponsive yesterday at her hotel room im sorry, her dorm in Hamilton College in upstate new york. She and fellow students were and a fellow tune were charged with drug possession. Stephanie is the oldest of Jon Bon Jovis four daughters. Its the beginning of the end for the twilight franchise. Breaking dawn premieres tonight. Critics say this is the fifth, maybe the best of all the twilight zones. Its been described as a love letter to all those twihards who apparently are everywhere. Speaking of vampires, later on starting point, Elizabeth Reaser pl plays the die hard of the twihard clan. Do you like the series. Not for me. 18 minutes after the hour right now. 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Theres a lot on my plate this morning. U. S. Stock futures are up. The european markets are down and we just learned that the euro area, 17 countries that use the euro, has slipped into a double dip recession. Thats something that certainly well be talking about here in this country today. Markets were lower yesterday, 185 points down on the dow. Did you know since election, the market, the dow is down almost 700 points since the election. Look at that chart. A variety are things happened here. Fourmonth lows for stocks, euro weakness. The eurozone weakness, concerns about whats happening there. Its our biggest trading partner. You have the fiscal cliff talk, companies concerned about the fiscal clif and a slowing american consumer. All of these things working together here to be a problem for markets. Speaking of the fiscal cliff. Ceos that met with the president yesterday are saying theyre optimistic about their 90minute meeting and what they heard there. The honeywell ceo said this will get solved one way or another. You want to get it solve one way or another the best way possible for the american people, of course, and for consumers. Walmart in a statement said theyre concerned about their consumer. Our customers they say are working hard to adapt to the new normal but their confidence is fraj. Theyre shopping for christmas now and they dont need uncertainty over tax increase. There was a great piece yesterday in usa today that i think shows what this cliff looks like. Youre hearing a lot from insiders, beltway insiders that its more like a slope, not a cliff. This is why its called a cliff. These are the tax increases for