i'm jake tapper and i'll turn you over to wolf blitzer who is right next door in "the situation room." -- captions by vitac -- www.vitac.com happening now, cuba turnaround. a prisoner release. a spy swap and secret talks leading to a stunning change as president obama moves to normalize relations with the communist regime. screenings canceled, amid terror threats, sony halts the release of the sony move they mocks the north korean leader. have the cyber attackers won? >> new evidence points to new isis atrocities as the united states and the allies carry out dozens of raids in iraq and syria. i'm wolf blitzer. you're in "the situation room." this is cnn breaking news. we're following two extraordinary stories this hour, the breaking news, a spy swap and a prisoner release kicking

off a stunning shift in u.s. policy with cuba, with the freeing of alan gross who had been jailed for five years. president obama has announced plans to normalize relations with the communist state. he's spoken with the cuban president raul castro. the two countries will be opening their embassies and the united states will ease an embargo that began half a century ago. that sparked a protest in miami. some republicans are accusing president obama of appeasing tyrants. also, there are stunning new developments happening right now in the sony cyber attack that sources say potentially could be traced to north korea amid threats of a 9/11-style attack and cancellations by theaters all across the united states. sony has now decided to pull. it's canceling its film release. the film mocks the north korean dictator. a sharp critic of ileana ros-lehtinen. she is standing by along with

our correspondents, our analysts and our guests. let's begin with the end to a half a century of u.s. hostility toward cuba after cuba freed a jailed american, president obama today made a major announcement and he announced that he was going to restore full diplomatic ties with the communist nation. let's go straight to our senior white house correspondent jim acosta. he's been following the story all day, jim? >> the cold war with cuba is over and a diplomatic breakthrough for the obama administration. the president announced he is normalizing relations with the island after top-secret talks with the government that went on for more than a year. nothing says a thaw in u.s.-cuban relations more than this, the historic phone call between president obama and raul castro. >> the soviet military buildup on the island of cuba. >> the first presidential level engagement the white house says since the cuban revolution more than 50 years ago. >> we will end an outdated

approach that for decades has failed to advance our interests and instead we will begin to normalize relations between our two countries. senior administration officials say the secret u.s.-cuba talks started in june 2013 with most of the decisions happening in canada and led by deputy national security adviser ben rhodes. those wheels were in motion when the president and raul castro shook hands at nelson mandela's memorial service last december, but one key sticking point remained. the imprisonment of alan gross in cuba. a major obstacle stood in our way, the wrongful imprisonment in cuba of the u.s. citizen and u.s.aid subcontractor alan gross for five years. >> last march president obama found a pivotal player to help broker a deal, pope francis. they discussed cuba at the vatican, something president obama did not disclose when asked by cnn. >> in terms of the meeting with his holiness, pope francis, we

had a wide-ranging discussion. >> earlier this year the pope kept the conversation going sending letters to president obama and raul castro. then in october, the vatican welcomed officials from the u.s. and cuba to push the talks forward. >> translator: i want to thank and recognize the support of the vatican. the president had the bipartisan support of senators patrick leahy and jeff blake and congressman chris van hollen who flew to cuba to bring gross home. they are fiercely opposed to the white house deal from the outgoing chairman bob menendez to marco rubio to backers of the u.s. embargo on cuba. >> this policy contradiction is absurd and it is disgraceful for a president who claims to treasure human rights and human freedom. this president is the single worst negotiator we've had in the white house in my lifetime. >> reporter: mr. obama has changed his position on the embargo over the years from his

days as a state senator. >> i think it's time for us to end the embargo with cuba. >> reporter: to a candidate for president. >> i will maintain the embargo. >> reporter: but in his final years in office, the president wants to turn the page. >> today we are making these changes because it is the right thing to do. >> and in a sign of the times, a senior administration official says cuba's former leader fidel castro was not involved in the negotiations for this deal, as for the presidential tripe to cuba, the white house is not ruling one out noting that mr. obama was in china last month where democracy is not exactly on the march, wolf. >> that would be pretty amazing if the president of the united states winds up in havana during the final two years of his presidency. our jim accost a thanks very much. elise labott broke this story for our viewers and around the world earlier today. elise is joining us right now. five years in a cuban prison. we're talking about alan gross. he's back in the united states. he's speaking out right now.

he's obviously a pretty happy guy. >> he's so happy, wolf. and you saw when he did this press conference today and he turned around and took a look at the american flag, the smile on his face, wolf. the toothless smile, the man so frail, his health has been failing and he had about four teeth left and it showed the toll on his body and he said, i am so glad to be home and freedom is not free and he has no grudge against the cuban people. he has a lot of respect for them. he says they're not responsible for what me and my family suffered and it's the bell ij rents policies ever both the u.s. and policy and he's calling this a landmark day and he hopes things will improve between the two countries. >> and the obama administration, if you look at the fact sheet they put out. they have a lengthy agenda of items they'll go with cuba right now including discussions to remove cuba from the state department's official list of countries that support terrorism. >> that's right, look, wolf, for

years the u.s. has said in its annual terrorism reports that cuba doesn't have links to terrorism. they've been on this list for political reasons and the whole thing now is the u.s. will start treating cuba like any country that's not mired politics, diplomatic relations between two countries. if the u.s. lz a problem it can take it up between the embassy and the foreign ministry or here with the ambassador in washington and we were talking about a presidential visit, secretary of state john kerry said he wants to be the first secretary of state to go to cuba in more than 50 years. l there will be a lot of diplomatic activity and it could be a matter of weeks before the u.s. and cuba move to start opening those embassies. >> the president wanted this to be a legacy item for him on his agenda during these final two years of his administration. elise, thanks very much. let's go to havana right now for an exclusive report. patrick ottman is the only u.s.

correspondent in havana. what has the response been in havana and elsewhere? >> reporter: it was surreal when the news broke in the united states and still hadn't been reported here by cuba's very restricted official state press. it was really us journalists who were going out telling people in the street this major decision had been taken by their government and finally at noon raul castro emerged to give a state address, a very unusual and unprecedented address where he talked about the united states using terms like respect and thanking president obama. most cuban his never heard anything like it. many celebrated and many had tears in their eyes and many are hoping this helps improve the island's dire economic situation, allows them to see their family more regularly, allows cuban exiles to return and they realize that this isn't the end of the embargo, but they fear it is the beginning of the end. >> are they gearing up for u.s.

companies and airlines to start bringing tourists in, restaurants, hotels and maybe even gambling casinos? are they gearing up for that? it's only 90 miles away from the southern tip of florida. >> reporter: of course, it would be an obvious and tremendous market, but for anybody who is thinking of coming to do business in cuba there is a major obstacle which needs to approve every business transaction and every venture that's launched here and so far they've had a very mixed record of doing that. they realized they just passed a new foreign investment law that will try to make it a more transparent way of doing business here, but for cubans that have opened small businesses, they're the ones that will take advantage of it. they're doing a better job than the cuban government providing hotels and restaurants and this will improve regular cubans' lives and if it doesn't improve regular cubans' lives, wolf,

then the question is why if there had been a loosening of restrictions why doesn't it improve regular cubans' lives because for 06-plus years the cuban government has been blaming all of the country's economic woes on the u.s. embargo and now it will really be up to the cuban government to improve the people's well-being, wolf. >> patrick, thanks. patrick oppmann the only u.s. television network correspondent in havana right now. critics have been quick to slam the president's shift on cuba. congressman, thanks very much for joining us. the president of the united states believes this will help all cubans and it will improve the relationship and the oppression that 10 or 15 million cubans now feel from their own regime will be eased as a result of what he decided to do today.

do you agree with him? >> that is ludicrous. it is pathetic. what a myopic way of looking at the misery that engulfs cuban society today. i would say that your cnn correspondent did a good job of earning the right to be the only correspondent, mixed messages? come on. there is a strong message in cuba and that is that dissidents are not allowed to express their opinions and there is only one political party that can exist and that's the communist party and no elections and no freedom of expression and no free press. everything comes with a caveat and you're saying about mixed messages about small business peps what small businesses? please. everything is owned by the cuban regime, no matter how you want to twist it. this is really appeasing a dictatorial regime. we could have done this four

years ago. we could have done the day poor alan gross was put into jail unjustly and what the president did today is insult the cuban-american community. we want freedom and democracy to come to the cuban people. this is not the way to get to it, wofrl. >> congressman, you make solid points and you make a bad point about patrick oppmann, he is an excellent journalist and he was reporting what he saw on the streets of cuba and it is unfair that he's not giving talking points for the cuban regime. he's an independent journalist and he's there, working hard and speaks the language and he's been there for a long time and he knows what's going on. i don't want to have an argument over patrick oppmann. >> okay. >> for 50 years the united states has slapped this embargo on cuba. you, yourself say it's a disaster. the policy has not worked. it keeps being rejuvenated, if you will, but it doesn't work. the president says let's try something else. what's wrong with that since for

50 years it's been a disaster. >> i will be glad to say it, and for all of those years that the united states has been the only country that has had the moral clarity of establishing that we do want to only do business with the folks who are going to respect human rights. what has happened? every other country in the world? there are 190-plus country, every other country has been wheeling and dealing with the regime. have those interactions brought the cuban people any closer to freedom and democracy, you take that argument and twist it on its head and the same argument can be had and all of this currency going back and forth, telecommunications. has that improved the plight of the cuban people? the cuban people are no freer today than they were the first day of the cuban regime. in pack, there have been more arrests lately than ever and now when the cnn cameras are not going to be covering it fidel and raul castro will still be back to its old tricks. wolf, we've been around the

block enough to know that we have seen these supposed changes come about before. we had the black spring in cuba where they jailed 75 dissidents and when the world wasn't looking they went back to jailing some more. more things change. nothing changes in cuba and you know that and these changes only appease the castro dictatorship. they don't help the human rights activists with whom i talked to all day today and they are saddened that this has happened because they say all of our sacrifices have been for not. >> clearly, you disagree with pope prancis who played a critical role who played an intermediary. he welcomed this news today that the united states and cuba were about to normalize relationship. you believe, correct me if i'm wrong, that pope francis is wrong. >> i believe that pope francis, along with all of the religious leaders of the world, have every

right to express their opinion and to work for the unjustified jailing of alan gross. they were right to say free him now and i thank the pope for what he did. i thank the jewish leaders who worked for alan gross' release. he should never have been put in place to say cuba is for sale. i think that that's wrong. i agree with pope francis. we would like to have a world where we can all hold hands and sing kumbaya, but wolf, there are some regimes where human rights violations are so extreme and there their is a regime that has killed u.s. citizens and killed u.s. residents and now to get alan gross' release we have to negotiate and give away everything that we could share with a free and democratic cuba. i think that we gave away too much and i feel bad for all of the human rights dissidents who are suffering today and will be

suffering tomorrow and still have no freedom. we did not help the cuban people get freer today by this deal. >> ileana ros-lehtinen. >> i welcome alan gross. i'm glad that he's home. >> all of us are glad he's back in the united states. >> ileana ros-lehtinen, republican from florida. >> let's get another perspective joining us in the situation room, ted cruz, republican from texas. senator cruz, your father was from cuba so you have a personal stake in what's going on. you've obviously been very much involved in the whole nature of the u.s.-cuba relationship, but i want to follow up on a question i asked her. i asked her if she would disagree with pope francis who played a critically important role in trying to ease this between the united states and cuba. i want to play a clip, this is pope francis speaking to cnn earlier today. oh, let me read it to you. pope francis, with that letter

and with the spirit got it going. pope francis is all for building bridges. it's what he calls the culture of encounter. i'm sure not everyone in the united states is happy with what's happened here. there's no doubt about that. we've already seen that and yet, he, referring to the pope, he says it's always better to be talking than not talking and that's really what this was all about. your reaction to the role that pope francis played in trying to improve u.s.-cuban relations? >> well, wolf, it's good to be with you. i very much admire respect pope francis and he's been a tremendous voice for the oppressed, but you know, his responsibility, he's not charged with protecting u.s. national security interest. the president of the united states is charged with protecting the national security of our country and this action today continues a long pattern. it is the latest manifestation

of the fail urs of the obama-clinton-kerry foreign policy. what we've seen for six years under this administration is that we've been consistently alienating and abandoning our friends and allies and at the same time appeasing and coddling our enemies. first it was russia. then it was iran and today it's cuba and that only makes america and the world more dangerous. this was a mistake. this is throwing an economic lifeline to the castros at a moment when their regime was vulnerable and it was a serious mistake. >> do you want them to sever diplomatic relations with china right now? they're qualitatively different. for one thing, anyone doing business with cuba has to do business through the government so all foreign currency has to go through the foreign government and be transferred into cuban pesos and that means that every economic transaction strengthens the regime that is oppressing and torturing and

imprisoning its citizens that allows no free speech, no free elections and critically is 90 miles off of the coast of the united states. listen, the castro regime is the avowed enemy of america. they are enemies of iran, north korea and venezuela they were caught recently doing an arms deal with north korea and the idea that we would strengthen a regime that is a state sponsor of terrorism that is exporting communism throughout latin america and is working to undermine america and -- that only undermines our national security interest. you obviously don't want the united states to sever diplomatic commercial ties with china. i just want to point points that, right? no, that's correct. it's a qualitatively different circumstance. for one thing in china, you could have direct economic relationships without going through the government. you're not required to transfer to chinese currency and the

relationship with china is far more complicated. the relationship with cuba, the castros have demonstrated, manifest hostility and antagonism to america and it was striking watching president obama's remarks today. he talked about the bay of pigs invasion and yet he utterly omitted the cuban missile crisis and one of the greatest threats to our national security in modern times that almost resulted in nuclear weapons right on our shore and watching president obama and john kerry, it was yet again blaming america first. the condition of the relationship between cuba and america is the direct result of the oppressive dictatorship that has demonstrated manifest hostility to the united states. >> here is a clip. abc news has just released that their anchor david muir sat down with president obama and they had this exchange on u.s.-cuba

relations. listen to this. >> alan gross, america watched him come home today. he looked a lot healthier than images we had seen before. i'm curious, have you talked to him yet? >> i did. i had a chance to talk to him on his flight home and the first thing he said, mr. president, for you i don't mind interrupting my corned beef sandwich. i told him he had mustard on his upper lip and we had a nice conversation. he obviously is joyful about being reunited with his family. >> will you visit cuba in your final two years as president? >> i don't have any current plans to visit cuba. >> not ruling it out? >> well, let's see how things evolve. >> so what do you think, you know? president obama not ruling out the possibility of showing up in havana. some people are suggesting he wants this to be a legacy item for him like richard nixon had when he went to china. >> well, listen, all of us

celebrate the release of alan gross. he has been wrongfully and unjustly imprisoned and mistreated and i've called repeatedly for his release. i celebrate pope francis's involvement in america and that is an unmitigated good thing, but you know, just like the obama administration's ill-advised deal concerning bowe bergdahl where they released five senior taliban terrorists and in this instance the obama administration released three cuban spies who were guilty of murdering three u.s. citizens and guilty of spying on military installations and that undermines our national security. we should be negotiating from a position of strength and the consistent failing of this administration is that it believes the way to deal with

dictators and tyrants is through appeasement. i think weakness is provocative and i believe in peace through strength that's far more effective and protecting our country. >> senator cruz, we have much more to discuss. i want you to be patient. we'll take a quick break and more with senator ted cruz on this hoisteric day. the president of the united states trying to normalize u.s.-cuban relations. we'll be right back. hiring plumbers, carpenters and even piano tuners were just as simple? thanks to angie's list, now it is. start shopping online from a list of top-rated providers. visit angieslist.com today.

the huge breaking news today. an historic moment and president obama directly opening the door to cuba. the cuban president raul castro responding saying he, too, wants to improve relations with the united states. once again joining us in the situation room, senator ted cruz, republican from texas. i want you to respond to senator jeff flake of arizona. he accompanied alan gross on the flight from havana to here in washington earlier today. listen to senator flake. >> i think our policy has done more to keep the castros in power than anything, and so i think it's high time for a change. 50 years is long enough that we ought to do this and do whatever we can so that ordinary cubans can have more control of their

destiny. >> there are a lot of other republicans who agree with him. here's the question. the republicans will have 54 majority in the new senate. will you have enough support, do you believe, to substantively, practically change any of the president's decisions, for example, opening up a u.s. embassy, naming an ambassador, easing the restrictions on trade, tourism, stuff like that? will you be able to block it? >> well, wolf, i've been encouraged that in response to the president's announcement there was bipartisan condemnation. i was encouraged to see marco rubio, the republican, and a democrat both criticized the decision in unambiguous terms. both of them like me are of cuban-american descent and both of them understand the enormous mistake this decision represents. you know, wolf, any fair and

impartial observer looking at the last six years would have to conclude that the obama foreign policy of leading from behind, it hasn't worked, you know. it began with in 2009 right when the president was elected. he was announcing that we would pull back and not install the anti-ballistic missile battery stations that were about to go to poland and the czech republic and that was an effort to appease -- >> i want to interrupt because i'm trying to get an answer. will you practically be able to change what the president is trying to do? in other words, will you have the votes to stop funding, to take measures like that to block these initiatives? >> it's not clear at this point where the votes will be, but i expect in the senate to see a far more vigorous voice defending our national security interest and i am hopeful that we will prevent a bad deal and a bad decision, and the point i was making on this, there is a reason why i expect to see

bipartisan cooperation to rein this in. in 2009 the appeasement of topun and putin invaded ukraine. when president obama went to iran. iran was -- -- >> i think we just lost that satellite connection with senator ted cruz, we apologize, but you guys got the point. he is fiercely opposed to what president obama announced today. we'll get other perspectives coming up. much more on this historic news. stay with us for that, but there is other breaking news we are following, as well. sony pictures, they have just decided to not release the controversial new comedy about north korea. is hollywood being prudent caving in to hackers and terror threats? we're following the story right after this. have a heart attack. but i did. i'm mike, and i'm very much alive. now my doctor recommends a bayer aspirin regimen to help prevent another heart attack.

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following breaking news. only minutes ago sony pictures entertainment announced it's canceling the release of the controversial new comedy about north korea at least for now. it's called the interview and the film provoked an unprecedented computer attack on sony pictures and then a threat

of 9/11-type terror attacks against the united states. our justice correspondent pamela brown is watching the breaking news for us. it is pretty significant what sony has just announced. it's truly unprecedented. sony pulling the release of the controversial comedy on december 25th after most of the largest u.s. theater chains backed out today. sony saying in a statement today that it is extremely disappointed in the outcome. ♪ sony is no longer standing by its controversial film about the north korean leader kim jong-un "the interview," this after the largest theater chains backed out from showing the film and the new york premiere of the movie cancelled. >> i cannot think of another moment like this in modern movie history. usually the deals struck between studios and movie theaters are iron clad. once they agree to put their movie on all of the screens they've got to stick by this

deal, but this is an unprecedented situation. >> today the state department confirmed an assistant secretary of state did have a conversation and they did not weigh into hollywood production. >> we are not signing off on content of movies or things along those lines. >> the film is believed to be the impetus for a devastating hack on sony's computer system and a new threat purportedly from the hackers promising a bitter fate for moviegoers of the film. u.s. officials with firsthand knowledge tells cnn north korea remains the prime suspect and so far the u.s. government hasn't publicly pointed the finger at the relosive country. the only way that we will stop them is if they are persuaded that this was a bad idea and so we have got to react in a way that deters future attacks of this kind. >> so the cyber attacks are still under investigation by the fbi. meantime, in this statement released by sony it says those who attacked us, stole our intd

elect all property, private emails and also sought to destroy our spir eight morale all apparently to stop the release of a movie they did not like. >> that movie is not going to be airing at least for now. thanks, pamela. >> sony did not plan to show the move ney south korea or in japan where the company has its main headquarters. ripley is joining us live from tokyo with a closer look at how a low-priority comedy created this potential for international incident, threat of terrorism and a whole lot more. so what's the reaction there, will? >> reporter: this is a huge disaster here at sony headquarters in tokyo, wolf, not only from a financial perspective because the company stands to lose hundreds of millions of dollars, but they have themselves now in a geopolitical mess. they've gotten heat over green lighting this production in the first place. north korea is outraged and more than that, there is now a new fear for north korea perhaps

launching more cyber attacks and this has opened up the fact that companies are vulnerable to catastrophic losses, humiliation and much more. this is a country that militarily warrant really taken seriously and now this almost levels the playing field, wolf, because if they can launch this kind of attack what many are calling cyber terrorism what else would they be capable of if indeed, north korea, is behind all of this. >> very quickly. why was this film never scheduled to be released in japan? >> reporter: well, we know from previous movies including the seth rogan comedy, this is the end, that movie doesn't translate well. they don't go see the movie. it gets lost in translation and it was more of a business decision more than a geopolitical decision, but nonetheless, it is significant that this movie causing so many problems in tokyo, the average moviegoer has never heard about the movie "the interview kwoe "here. >> while north korea is

suspected to be behind the computer attack on sony pictures, there are new indications kim jong-un's country may become even more aggressive and let's bring in brian todd working this part of the story. >> kim jong-un was supposed to be toned down in his aggression for the first three years of his leadership after his father's death. he quickly tossed that notion out the window. tonight we're coming out of that period of mourning and observers are worried that this menacing, erratic young leader will do something very dangerous. ♪ ♪ >> he's now unshackled, free to be more aggressive as he comes out of the traditional three-year period of mourning for his late father. kim jong-un was supposed to observe that period by being less aggressive and lying low, many argue he never waited. >> in addition to executing his uncle, he has purged anyone who can question his leadership or his authority. >> kim's brazenly killed his

powerful uncle, tested nuclear weapons and ballistic missiles and threatened south korea repeatedly. what could he possibly do now that's more aggressive? >> he is likely to have a fourth nuclear test. in the meantime, cyber attacks, asymmetric attacks of another nature of some military provocation across the northern limit line at sea or with assassinations or terrorism, even. >> kim's regime did make peaceful overtures, releasing three americans from north korean custody, sending top officials to visit south korea and they're seen as part of a charm offensive aimed at staving off a vote for prosecuting north korean leaders for human rights abuses. now kim could be more dangerous. >> nice tank, is that real? >> it was a gift to my grandfather by stalin. >> in my country it's pronounced stallone. >> they're furious over the new

movie "the interview," a film about an assassination attempt on kim which sony pictures has just pulled. so far north korea has not been deliberately linked to the attack on sony. they go beyond being embarrassed by it. if any copies of the film were to leak out. >> cds will be pouring in across the border from north korea from china. they will slip into the bags of elites and they will be seen of this movie. regardless of where this movie is shown and that will so with, i a potential movement, an underground movement in the elite against kim jong-un, this is the paranoia driving this regime. >> if the public sees this he is very concerned about what that will mean because in north korea kim jong-un is considered god or the son of god. his father or grandfather. there's a religious tone to this. >> now that sony has decided not

to release "the interview" at least for now, we are watching what the hackers will do next. if north korea was behind the cyber attack this might embolden them to launch more cyber campaigns. analysts say the north koreans have a growing and improving team of government hackers and they also outsource hacking to others, hiring freelance hackers to operate out of places like china and thailand. wolf, we're watching what comes n. >> we certainly are, brian. thanks very much. let's continue our special coverage of the breaking news. joining us is tom fuentes, former assistant director of the fbi and jeffrey toobin and cnn political commentator kevin biener, editor at large for the hollywood rotor. sony, as you know, the breaking news is stunning. they're pulling the release of the film "the interview" did they have any other choice? >> no. i think they had no other choice. it wasn't going to be shown by

the major theater chains in the country, so it was a de facto decision that was already done for them and to some degree they may have had it that way. they let the theater owners cancel and then they said we're not going to release it. they couldn't release it anyway. >> this is part of the statement, kim, that sony put out. we are deeply saddened that this brazen, fort to suppress the distribution of the movie and do damage to the company, our employees and the public. we stand by the filmmakers and their right to free expression and are disappointed by their outcome. the theaters, sony, they were taking seriously this threat from someone out there that if they showed the film and if people went to the theaters they could wind up in another 9/11-type situation. is that right? >> i believe there was concern on the part of the theater owners. there was a warning and therefore if something happened and even if it was some lone wolf crazy person they have liability, but a studio

executive pointed out to me earlier today that also these theaters were concerned that they would be hacked, possibly shut down around the country and not just this movie. so that leads to the question of how can you release it? would amazon stream it? would netflix stream it? who would be more vulnerable to hacking than companies like that? so i don't know how this movie ever gets released except with piracy sites. >> i want you to stand by, everyone else stand by and we'll continue our special coverage of the breaking news right after this. sheila! you see this ball control?

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this is cnn breaking news. >> a major development in the sony computer hack attack. let's get the headline from cnn justice reporter evan perez. you've been working your sources, evan, and you've now nailed it. what do you have? >> reporter: u.s. investigators determined that the attack against sony was the work of hackers working on behalf of the north korean government. the question now is, what do we do about it? we expect that there's going to be an announcement tomorrow from the u.s. government that will

assign attribution, as they describe it, for responsibility for this hack. the question will be, what the u.s. government's response will be, because obviously, you know, nothing happens in north korea without orders from the leadership of the regime. they control the internet there. so there's no way this attack could have been done by anyone other than if it was ordered by the leadership of that country. >> what you're saying is, as early as tomorrow, either the fbi or the justice department here in washington will issue a formal public statement saying the north korean government is responsible for the cyber attack on sony pictures. >> reporter: right. that's been the dispute behind the scenes among u.s. officials is whether or not to say definitively that it was north korea. the question was, whether you can say we determined that this was the work of people, we know who they are, whether you're going to say the words north korea. my sources tell me they have determined they have to do this. you see now sony has decided to

cancel the distribution of this film, the opening of this film. it's a major thing, because you're talking about u.s. freedom of speech that is under attack basically from north korea. >> tom fuentes, you're a former fbi assistant director. the other day we were talking if the u.s. signer experts were to determine it was a regime, a country like north korea, you told our viewers that the u.s. would make that official. wouldn't hedge any longer, maybe, possibly suspected, alleged or whatever, they would directly say who did it and now we're hearing they made that conclusion, north korea is responsible. so you eastern not going to be surprised that they name north korea. >> not at all. the only question is when the timing occurs whether it will interfere with tracking other hack attacks they have going on.

that's the decision you have in a case like this, do you name names now and maybe they find other things to do, or prolong the investigation long enough to prevent this from happening. >> they've been working on this for some time, the fbi and u.s. government, every agency, intelligence agency, has been on this, wolf, because this is a big deal. this is being handled by the justice department's national security division, which tells you this is a serious national security issue for the united states. because these hackers would be part of -- likely part of a group called bureau 121, a military unit that specializes in this thing. >> a military unit of north korea? >> of north korea. this is a country that doesn't have a lot of resources or money, but they're spending it on building basically signer attackers who previously had been specializing in attacks on south korea. this is the first time we see

this coming against an american country. the scary thing is, you know, that they can do this against a movie studio, imagine if they did this against a bank or major financial institution in the united states, what the repercussions would be. >> we spoke to the assistant attorney general for national security here in "the situation room" the other day. he said boldly that if, in fact, this was a regime, a country, maybe 90% of all u.s. companies out there are vulnerable to this kind of attack. >> you have a country, they test missiles, they go 500 miles and go off course. he doesn't have enough nuclear weapons to threaten the united states. but if they have grade-one hackers that can penetrate any computer network out there, it puts him on par with a country like ours. >> jeffrey toobin, if this is the north korean government,

legally speaking, would this be seen as an act of war against the united states? >> well, act of war, we don't really declare war anymore in this country. we have individual congressional authorizations of the use of military force. certainly there would be the possibility of some sort of military response if it would do any good. what if one of the problems with asymmetrical warfare, if this is somebody sitting at a computer terminal somewhere, a military response doesn't seem like it would do any good. that's what it means to have this vast asymmetry between the united states and the weak north korea, except somebody with a pewter. >> what does it say to you, peter, a top u.s. official at the state department saw a rough cut of this film, and really did not complain about it. apparently had no objections.

what does that say to you? >> i think it's good. it's not the role of the united states government to make judgments about movies. this may be a stupid movie or even offensive. when "south park" made a movie showing saddam hussein has satan's gay lover, that was in bad taste, as well. the issue is, you can't give in to monstrous regimes. this is a man that should be in front of the hague in jail of the rest of his life. you can't capitulate when they try to use the sametics that th trying to do here. >> the lesson north korea is going to learn from this experience is these sorts of threats work. so the next time they don't like a newspaper story, they'll threaten a newspaper. when they don't like a book, they'll threaten the publisher. once you start capitulating,

then it becomes very hard to stop. so i don't know if they made the right decision or not. but the bar should be very high to give in to these sorts of demands. they gave in here, and it's a dark precedent. >> i want everybody to stand by. we're staying on top of the breaking news. you heard it from evan perez, as early as tomorrow, the united states government, the justice department, the fbi is now expected to announce that north korea is directly responsible for this cyber attack on sony pictures. the ramifications are enormous. much more of the breaking news right after this. hello... i'm an idaho potato farmer and our big idaho potato truck is still missing. so my buddy here is going to help me find it. here we go. woo who, woah, woah, woah. it's out there somewhere spreading the word about americas favorite potatoes: heart healthy idaho potatoes and the american heart association's

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this is cnn breaking news. we're following major breaking news. president obama announcing plans to normalize relations with

communist cuba. also, sources telling cnn u.s. investigators have now determined that hackers working for north korea were, in fact, behind the sony hack attack. in an announcement from the u.s. government, it could come as early as tomorrow. we want to welcome our viewers in the united states and around the world. i'm wolf blitzer reporting here in "the situation room." the major breaking news involving sony. it follows after sony decided to cancel, at least for now, the release of the controversial movie that triggered the hack attack allegedly. the film called "the interview" had a plot centering on an attack of killing the north korean leader, kim jong-un. we're covering all the angles with our responds and guests. chairman ed rice is standing by. but let's begin with cnn reporter evan perez. he broke the news just moments ago. it's conclusive, the u.s. government believes north korea

was directly responsible for this cyber attack against sony pictures. >> that's right, wolf. nothing happens out of north korea without the leadership of that country knowing it. so that's one reason why u.s. investigators believe that this was ordered from up top. we expect there could be an announcement as soon as tomorrow about attribution of this hack, and one of the things they're looking at is what to do about it, what the u.s. government's response can be. because once you accuse a country of doing this, you have to have a response. one of the things that they've been looking at is a unit of the north korean military called the bureau 121 is the one that has been doing hacks against south korea and the question is, were they responsible for this one? were they working with outside hackers to do this? that we'll see tomorrow, wolf. >> the whole point is if the united states accuses north korea of doing this, they have

to take action against north korea in some way. that opens up a whole can of worms, if you will, what is the united states going to do about snit >> it really does. it's not likely we're going to see members of the north korean military brought to justice in the united states. we saw a case a few months ago against the chinese pla where there was members of the military there who were behind some hacks behind u.s. companies, wolf. no one expects those people will be in prison in the united states any time soon, unless they go on vacation in southeast asia, leave their own country. obviously they know they're wanted by the united states and that's going to happen. >> i want everyone to stand by. you're getting more information on the breaking news. the u.s. has now concluded north korea is directly responsible for the cyber attack on sony pictures. what are you learning, elise? >> reporter: that's right. officials telling me what evan broke just earlier, that the

u.s. does believe that north korea was behind this attack. they've had their suspicions from early on. as the investigation went forward, they believe they have more conclusive evidence. they're also looking into how did this happen? was the north koreans working with people in china? a lot of pims whtimes when thern north korean hacking, it's been a lot smaller. the trail often leads to hackers in china. so when we talk about what is the u.s. going to do, it's also going to talk to the chinese about trying to crack down on some of these companies helping the north koreans. sony is a japanese company and the u.s. is going to look to japan to see what it wants to do here. japan, prime minister abe in a delicate position with the north

koreans right now. he's waiting on a long-awaited report concerning abductees from decades ago. so all this geopolitics is aught up in that. it also comes amidst a period of heightened activity with north korea. you saw the release of those three americans from north korea. jeffrey fowler, matthew todd miller and kenneth bae. the u.s. was hoping this would lead to a diplomatic opening. but now that doesn't look very promising. >> a very serious development. elise, stand by. brian todd is taking a closer look right now at north korea's capabilities. you've been doing some serious reporting on what the north koreans are capable of doing. a lot of people were skeptical. did north korea have the sophisticated capability to go into sony picture computers and

steal this information and release it publicly. >> for the past few weeks in report thing story, we've been looking into the capability of north korean hackers. various experts say that the north koreans have at least one team of hackers devoted only to that purpose, and it's growing in capability. much like china has a team of hackers working for it in these situations. a lot of people thought maybe north korea didn't have the sophisticated hacking capability, the ability to launch this kind of a massive cyber attack on sony pictures. but as elise pointed out, we're told by experts that often they pay other teams of experts of lackers to do this from places like china, thailand. these are top hackers that they recruit from all over the world to do this for them if they can't do something themselves. the challenge is to get to the root of this. is this a team of north korean

hackers working for the north korean government or a team that is outsourced hackers being paid by the north korean government to do this. that's what we now have to determine. experts have told us that north korea's hacking capability has been improving. >> whether or not the north koreans outsourced or did it themselves, they's responsible, and presumably the u.s. government has determined that and presumably there will be a response. i want to bring in jeffrey toobin and peter beinart. jeffrey, there's going to have to be some serious deliberations in the u.s. government right now. what does the united states do to north korea if, in fact, they have determined, and we are reporting that they have determined north korea did this to sony pictures. >> we don't have a trade relationship with north korea. north korea is as isolated as any country in the world is right now. even more isolated than cuba was

before today. and so we don't have a lot of levers of power. i think the real question is, how are we going to respond to these events in the future? are we simply going to back down and respond to every threat from north korea now by shutting down movies and newspapers, shuts down books. or are we going to stand up? that's easy for me to say, because it's not my movie theater that's at risk. but there is a cost to backing down and we are going to have to calibrate that response very carefully. >> peter, there's lesson that hackers out there are clearly learning from what's going on. >> absolutely. can you imagine, what about m movies about al qaeda or isis? if you don't make movies about regimes and entities that could

could be -- that have a history resorting to violence, you're not going to be make movies about a lot of subjects. north korea is an undercovered subject that we need to know more about. the idea that you can't make a movie about north korea after this is tragic. >> it's not just movies. we're not just talking about movies. we're talking about any kind of coverage or mention of north korea. books, newspapers, cable news. we are all at risk from these sorts of threats. >> guying, stand by. ed royce is here with us in "the situation room." thank you very much for joining us. you've heard the news, evan reported it. the u.s. government has determined north korea did it, they're responsible. your reaction? >> bureau 121 obviously was determined in it. that is the elite bureau

dedicating to hacking. >> in north korea? >> in north korea. but we have to remember, wolf, they're also good at hacking into infrastructure. the energy grid. there is a lot of infrastructure at risk here. one of the things we did do in congress, you know, just in the last 24 hours, congress timely got out those last four cyber security pieces of legislation. now i hope we move instantly to protecting the grid. but secondarily, i hope we take a look again at what we could do to keep north korea out of the financial system bypassing the types of sanctions we once slapped on them, which almost imploded the regime. >> have you heard from u.s. officials the same thing that evan perez has heard, that north korea didn't? >> what i have heard are concerns or what have i heard from u.s. officials is that this was done by a foreign government at the behest of a foreign government. obviously, we've received

information about this particular bureau, 121. so i think we're awaiting the normal announcement by the u.s. government, but it's career that north korea did this and it's clear that north korea has used its hackers to attempt to get information about our energy grid and other targets. >> so you're worried, i just want to be precise, that north korea would have the capability of what, damaging, destroying, undermining the energy grid of the united states? >> there's two things i'm worried about. the first is north korea targeting our energy grid. and second, north korea finally managing to get that nuclear weapon, which they have, and obtain delivery capability. >> do you also believe that north korea is responsible for these threats over the past two days that if people see this movie at theaters in the united

states, they potentially could face another 9/11 terror attack? >> yes, absolutely. north korea made those threats and on top of it, maybe a year or so ago, north korea released official document or it was a vcr which they showed a missile coming in and hitting washington, d.c. and the capitol blowing up. they put that out on the net and that was done by north korea as a form of a threat. >> but these are credible threats or just propaganda? >> up until now, a lot has been propaganda. but the fact that they're issuing these threats now and the fact that they're moving forward with their weapons program to try to deliver, and an icbm nuclear warhead in the cone, takes it to a new level in terms of dealing with the kim

family of north korea. >> kim jong-un, the leader of north korea. and tomorrow we'll hear this announcement from the united states government, the justice department, the fbi, saying north korea is responsible for the signer attack, presumably about the threats of another 9/11. so what does the u.s. to about this? >> my suggestion is we do exactly what we did. when stewart leavy, undersecretary of the treasury found north korea counterfeiting $100 bills, he sanctioned banks that were doing deals with north korea. they didn't have the hard currency and a dictator needs that to stay in power. i would suggest exactly those

types of sanctions should be deployed. next year, i would hope we could work with the administration in order to have a deterrence in this kind of behavior. >> i want you to stand by, mr. chairman. we're following major breaking news. the u.s. government has determined that north korea is, in fact, responsible for the cyber attack on sony pictures. a formal announcement could come as early tomorrow. more on the breaking news right after this. they take us to worlds full of heroes and titans. for respawn, building the best interactive entertainment begins with the cloud. this is "titanfall," the first multi-player game built and run on microsoft azure. empowering gamers around the world to interact in ways they never thought possible. this cloud turns data into excitement.

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we're covering the breaking news. a sweeping change in u.s. policy, heralding one of the last chapters of the world war. president obama announcing plans to normalize relations with communist cuba after more than half a century. it includes the release of an american, alan gross, and another u.s. unidentified spy who has spent two decades in cuban prisons in exchange for three cubans here in the united states convicted of spying.

first, let's go to our cnn global affairs correspondent. she broke the story here on cnn. what's the latest you're hearing about this? >> reporter: president obama thought this was the right moment to chart a new course on cuba, both because of the beginnings of changes on the island, some modest reforms. but also the problems it was causing for the u.s. in the region with its diplomacy. and now secretary of state john kerry saying he wants to be the first john kerry to visit havana in more than 50 years. u.s. contractor alan gross on american soil. with his release, a historic opening of u.s. relations with cuba after five decades of confrontation. seeing the american flag for the first time in five years, a frail gross was overcome. his toothless smile offered the untold story of the toll his captivity took on his body.

>> what a blessing it is to be a citizen of this country, and thank you, president obama, for everything that you have done today and leading up to today. >> reporter: before dawn, a team of u.s. officials and lawmakers bordered a u.s. government plane for havana to pick up gross. >> on the airplane back, as we finally crossed into u.s. air space, you saw him give a big hoo-rah. pu put his arms up. >> reporter: some tweeted photos of gross on the joyful reunion. gross' humanitarian release was accompanied by a spy swap. on another plane, out of sight from cameras, a highly important u.s. intelligence source held by cuba for 20 years was flown to the u.s. his identity is secret for the information he provided to the u.s. on a shadowy network that spied on cuban american exiles

at u.s. military bases. three of those spice held for more than a decade were released by the u.s. today and sent back to cuba. part of the so-called cuban five. >> these 50 years have shown that isolation has not worked. it's time for a new approach. >> reporter: as part of the deal, the u.s. will restore diplomatic ties with cuba with embassies in washington and havana, increase travel, allow business between u.s. and cuban banks, including the use of credit cards by american travelers, and allow americans to import some cuban goods, including cuban alcohol and cigars. in a rare address that aired at the same time president obama spoke, raul castro welcomed then landmark deal. >> translator: this expression

by president obama deserves the respect and recognition by all people. >> reporter: wolf, officials are telling me that this is not a reward for the castro regime. this is a recognition as president obama said that the embargo was not working and if the u.s. wants further changes in cuba, it's going to have to engage 234089 just the cuban people, but the cuban government. they said they're not going to let up on human rights, and kubel cuba has agreed to release 53 cuban political prisoners and agreed to increase internet access for the cuban people and allow visits of prisoners by the international red cross and united nations. the u.s. feels these steps will help them further push reforms in cuba. >> elise, thank you very much. let's go to the white house. jim acosta has details of the talks that led to this historic

agreement. what are you finding out, jim? >> reporter: wolf, it's not a lifting of the embargo, but the cold war between the u.s. and cuba has started to thaw. talks began nearly 18 months ago in june of last year. most discussions took place in canada, led by ben rhodes, and those wheels were in motion when the president and raul castro shook hands last december at mandela's memorial service. earlier this year, the pope stepped in, he sent letters to president obama and raul castro urging both sides to resolve this issue of gross' status. and the vatican welcomed officials to rome just last october. then they hammered out the rest of this deal in a phone call yesterday. the first presidential level

contact since the cuban revolution 50 years ago. and the president talked about his call to alan gross as he was return from cuba. >> after many months of discussion with the cuban government, alan was released this morning. i spoke to him on his flight. he said he was willing to interrupt his corn beef sandwich to talk to me. [ laughter ] i told him he had mustard in his mustache. i couldn't actually see it. needless to say he was thrilled and he landed at andrews in a plane marked the united states of america. he's going to be getting the medical attention he needs. he's back where he belongs in america with his family, home for hanukkah. >> reporter: cuba's former

leader, fidel, was not involved in these negotiations. china still has its own issues with human rights and freedoms. but a lot of smiles here at the white house, feeling good about this new opening with cuba. >> jim acosta, thank you very much. let's get more now from republican congressman ed rice of california. did the president do the right thing? the price that was paid for the freedom of alan gross, was it worth it? >> the question here in the negotiation, did we get enough for the people of cuba during the noegotiation. in the past, there's been one thing we asked and only two down trips that have held out on this, one is north korea, the other is cuba. we asked that you allow your

workers to be paid and receive the check when a firm comes in or when they work in a hotel. what happens in cuba is that 100% of the check from a foreign company goes to the government, goes to raul castro's account basically, or the kim account in north korea, and 5% goes to the worker. so the reason we've opened up with vietnam and with beijing is they agreed in tough negotiations to open that system to empower their workforce. that's not been done in cuba. what you're going to hear is a humanitarian concern about the fact that we've given a lot for very little in terms of human rights. >> when president nixon opened the door to china in the '70s, the chinese government had not agreed to any of those steps. nixon wanted to have that breakthrough between the united states and china and we've seen how this relationship has developed since then. the question, did president

obama do the right thing today to say it hasn't worked for 50 years, there's still a repressive regime in cuba, let's try something else. >> the reality is, cuba is -- the government right now is on the ropes. it's on the ropes. they're very anxious to do this, because with all of the problems that follow them, their own economy, because venezuela, communist venezuela, is now with the price of oil collapsing, is unable to support cuba. in the past we have gotten something on the other side of the ledger. in beijing, step by step we got something on the other side of the ledger. i don't think what we have got at this point really is a good negotiation. we've traded, you know, three of their spies and this opportunity for them in exchange for very little. >> the u.s. did get alan gross and the u.s. spy who spent 20

years, this is a spy that told the united states about american government workers spying for cuba, who were arrested and sent to jail for espionage. this guy spent 20 years in a prison in cuba. now he's here in the united states. >> this is a foreign asset now in the united states. it's good that he's back. >> and the price the u.s. paid, though, was it worth it? >> i'm just saying, wolf, in reality, when you go into these negotiations, get something that makes the negotiation worth it. at the end of the day, what would have been worth it is to get cuba to open its system so that workers are paid directly. >> so mr. chairman, if that happens, if there's an easing of the oppression. remember, result castro, fidel

castro, they're well into their 80s right now. we don't know what the new leadership is going to do. but if in fact this step by president obama eases the repression, improves the relationship between cubans and americans, it will have been worth it? >> if we get this other step that i've just suggested where the workers are empowered to get their paychecks directly. and the money doesn't go into the account which is spent to subvert governments. i'm just back from latin and central america. i've seen the damage cuba has done by funding revolution in south kor central america. >> let me play a clip. the canadian government played a critical role. the vatican also played a

significant role behind the scenes in getting this die hog between the president of the united states and castro. a spokesman for pope francisen spoke to cnn early today and he elaborated on what was going on. >> pope francis, with that letter, and with the spirit i would say got it going. pope francis is all about building bridges. i'm sure not everybody in the u.s. is happy about this, no doubt about that. but he said it's always better to be talking than not talking and that's what this was about. >> do you disagree? >> it's good to be talking but it's about more than just the dialogue. this is also about bringing foreign exchange into cuba, which will go into the account control of raul castro.

>> for 50 years, without that dialogue, it's been brutal. >> who's going to sign off on the dialogue part without the rest of the treatment? >> you oversee the state department. the president wants full diplomatic relations. there's cuban interest section here in washington. he wants an embassy, an ambassador. are you with him on that? >> the president did negotiation this through the state department. i'm just adding another layer of complexity. >> ben rhodes was the kree yeah s for. >> what i have heard is this was not done through state but the white house. so there is that issue, as well. i'm sure we're going to take a

look at the negotiations. you know what we would like to see. we would like to see the work force in cuba empowered. >> you've suggested that cuba, the regime in cuba is no different than the regime in north korea. >> it is different, but the kim family and the castro family manage to get their hands on all of the funds running through the accounts that they control and they use it for their security apparatus. that's why you see some of the cub cuban-american saying saying do you understand the number of mitt call arrests every month. over 6,000 this year of new political prisoners. they say we're going to let 53 of them go. they arrest more than that every month. sense the emotion about trying to negotiate something here. >> your bottom line is the president made a blunder?

>> he did not negotiate tough enough today. my hope is we become tougher negotiators. huge breaking news. the u.s. government has now determined north korea is directly responsible for the cyber attack on sony pictures. and the threats against americans if they see this movie. sony pictures today i nouned that they were canceling the release of this film. movie theaters all over. were you surprised when you heard the u.s. government concluded that north korea has this capability, were you surprised that north korea could launch a sicyber attack like th? >> i was aware of some of their

other work in terms of trying to pen trade our systems. but for them to pull this after and the second surprise to me, i think it's regrettable that in the face of this, we have a major institution here in the united states, a private one. my concern is what does messages does this sound to other hackers that, you know, if you get a little leverage, you can make these demands and people see to them. >> based only what you know, did north korea have assistance from other hackers, for example in china or other countries? >> this, i have not heard. >> they had that capability independent to do it. >> i would be surprised.

i think there's some distance right now between beijing and north korea. the assassination by the uncle did not go down well in beijing. the chinese government quite shocked and upset about that. >> so you don't think any hackers from china were involved? >> i would be surprised. >> it's say the justice department form and fbi accuse north korea for being responsible. what happens next sp >> we only know one thing that really in terms in terms of leverage on north korea. that was the asiaioni sanctions. we know that half of their hard currency, half the money in the country, comes from outside the country. if we cut off that source again, if we put sanctions on the ten or 12 banks that they work with,

those banks will freeze the amounts of the north koreaens. that would give us enormous leverage to sound a loud message. >> as i keep saying, the ramifications on both stories are enormous. we're going to continue to following the breaking news. we'll be right back. [ man ] i remember when i wouldn't give a little cut a second thought.

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♪ your ticket to a better night's sleep ♪ we're covering the breaking news. u.s. investigators have now flatly determined hackers working for north korea were, in fact, behind the attack on sony pictures. our justice reporter evan perez broke the story for us. here's here in "the situation room" with more information. you told us earlier that the formal u.s. announcement could corm tomorrow. >> that's right, wolf. it's been behind the scenes, something under discussion among all the u.s. agencies.

the issue is, you've established the attribution for this hack is the formal term, the attribution for this hack. now what do you do about it? that's been the question, do you go out and name north korea without ever saying exactly what you're going to do about it. obviously, there's limited options here. we don't have much of a relationship with north korea. we can try to perhaps sanctions their bank or members of their military, but there's few things that we can do directly to affect north korea. >> they obviously have the capability. kyung lah is our correspondent who just arrived in seoul, south korea, joining us on the phone right now. we know there have been successful attempts by north korean hackers to go after various targets in south korea. what are you hearing over there? >> reporter: the lesson that american and japanese companies are learning right now, wolf, is something that happened last year for south korea. in march of 2013 and june of

2013, this was an attack on south korean companies, agencies, the government. it's referred to here in this country as dark seoul. the reason why is because some services in seoul went completely dark. there's a lot of analysis going on because they're checking to see if there are similarities. is there a pattern? is this a step up of the capability of what north korea can do. and does this turn into a global si cyber war? it was a war that was limited to north and south korea primarily, but it is a very big deal in this country, because of the capabilities of what north korea can do and the fact that they have now done this in this one. >> victor, what is your reaction

to this news that we now have officially the u.s. government has concluded that north korea is responsible for this cyber attack? >> unfortunately, it's a big win for north korea. they were able to get sony to shut down the picture. they got the u.s. government to admit that north korea was the source of this. and there's no action planned, at least publicly no action planned in response to it. so we underestimated north korea's cyber capabilities. they certainly didn't evidence this sort of capability in their previous attacks. but they're probably popping the champagne corks. >> let's see what the u.s. government decides to do about all this. pamela brown is with us. you're getting more information. what else are you picking up?

we're learning that the tools, the procedures, the software used was out of the north korean maybo play book. they say talks were accelerated over just a few weeks. you look at the case with the chinese military hackers, that took years to publicly attribute it to them. now we're learning that the u.s. government is going to come out as early as tomorrow to call out the north koreans. sources tell me that it could be outsourced, it could be criminals acting on behalf of the north koreans or the military north koreans. but don't be surprised they stopped short in saying it was a state sponsored attack. as we saw in the chinese hacker situation, they stopped short of saying that. they didn't put the onus on the chinese government. they say the hackers were acting on behalf of china. so we could see something similar tomorrow with the announcement. >> there's this elite group of

hackers in north korea that presumably will be directly blamed. we heard chairman ed royce say that this group, what is a task force -- >> it's called bureau 121, wolf. this is unprecedented for the government to work this fast. this is something that's being handled, as family has been reporting, by the justice department, which tells you they view this as a national security measure. it's not very often that they work through these cases very quickly like this. but this took a high priority because of the impact it's having on sony and other u.s. companies. >> stand by, guys, for a moment. kyung lah is in south korea. much more on north korea, the cyber attack on sony pictures, what it means, what does the u.s. do about this now? we'll be right back.

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pictures. in fact only moments ago on abc news, the president was asked in an interview taped earlier in the day before we got the official word through our evan perez, the justice reporter, that north korea was in fact responsible for the attack. and before sony pictures announced they were pulling the film, not going to be releasing it to theaters across the country on christmas day, the president was asked what about this cyber attack and he said, and i'm quoting him now, for now my recommendation is go to the movies. but that was before sony pulled the film and before we have now confirmed that north korea was in fact responsible for the cyber attack. professor katherine lot re anie is the director for the institute of law science and global secure at georgetown university here in washington. what does the u.s. do about this? what can they do, professor, about this cyber attack? >> well the u.s. can do quite a lot in terms of responding to

what could north korea be responsible for. first and foremost, the spongest tool in d.o.j. is the rule of law. so as we saw in the chinese, the pla case, it would not be surprising that we see criminal indictments against the individuals that were responsible for the hacks. aside from using your criminal law enforcement tools, you can also use your state strategies in terms of not going just to the individual members who are the hackers, but talking to the north korean government and imposing a variety of different stress points on them in terms of their responsibility. if you have the at ribusion clear. >> were you surprised that north korea has this incredible capability to hack a company like sony pictures and release all of this information? >> i think one of many, and

particularly the u.s. government, who has a general understanding of the top ten cyber powers , if will you and north korea is considered in that top ten. i think as time goes by, we'll see more particularly moving into a position where they have the power, the ability to cause this kind of damage. so for many people in the national security field, particularly in the u.s. government, they have a good sense of what states have this capability and north korea is one of them. >> professor, hold on for a moment. i want to bring in our justice correspondent pamela brown. you are getting more information. what are we learning. >> it was in early december investigators felt confident that north korea was behind this unprecedented hack because of the software used and other clues we had been discussing

here. and initially we learned that the company, sony, wanted to come out and out north korea similar to what google did when chinese hacked into its system. but in this case, we were told that the legal team, the sony legal team advised against this because in early december it was believed the hackers were still in the system. that they were still causing damage and still in the system, retrieving some of the confidential information that may have been leaked. they said we should not call out north korea and that led to more fast-action in the u.s. government with high-level officials, including president obama being briefed on the matter and we need to do something. and we are learning within weeks, which is unprecedented, that they could call out north korea. >> as early as tomorrow. stand by. we'll take one more break as we get back to this important

situation. north korea being accused by the u.s. of hacking sony pictures and threatening theater and moviegoers as a result of this film, "the interview," which has now been pulled. sea captain: there's a narratorstorm cominhe storm narrator: that whipped through the turbine which poured... surplus energy into the plant which generously lowered its price and tipped off the house which used all that energy to stay warm through the storm. chipmunk: there's a bad storm comin! narrator: the internet of everything is changing how energy works. is your network ready?"

breaking news news, u.s. government investigators have determined hackers working for north korea were behind the cyber attack on sony picturesment victor chaz joining us, a professor at georgetown university. you say they may be raising the champagne glasses in pyongyang but that could be unlived happiness. >> it could be. so they had a plan that they implemented in response to this movie and the news tonight, i'm sure they'll see as a success. but of course, i would imagine the united states now is going to have a counter plan. the united states and south korea have started a cyber cooperation dialogue with the last summit when president park of south korea came to the united states last year. i can imagine that will get up

graded significantly and one of the key objectives is to try to determine whether north korea has actually a sub-unit now that is dedicated to u.s. targets and how they would counter and defend against that. >> but the movie now for all practical purposes, professor, has been canceled. people will not be able to go on christmas day and see this film. the president earlier in the day, before we learned that north korea was specifically responsible, before we learned that sony pictures was pulling the release of the film, he was asked about it on abc news. listen to this. >> well, the cyber attack is very serious. we're investigating it and taking it seriously. we'll be vigilant. if we see something that we think is serious and credible, then we'll alert the public. but for now, my recommendation would be, that people go to the movies. >> people go to the movies. and the question is go to see this film?

they will not see this film, "the interview." it depicted in a comedic way, the assassination of kim jong-un, the leader of north korea. and the leader there, kim jong-un, he is almost like god. >> yeah. he is treated pretty much like a deity and the story line of the movie was probably quite offensive to them. north korean leadership is known with being enamored with western media. there are thousands of dvds in the leadership archives from gone to the wind with rocky series. and for this movie to come out and be a direct threat against them, i'm sure they took quite personally. i think the other thing, wolf, is that i think that the fact that the north koreans have been able to get this film to be pulled, it doesn't directly threaten the american people, but it does touch their lives in

a way that north korea has never done before. >> all right. >> and i imagine that is different when we think about north korea. >> we have to wrap it up, victor, but this story will continue. that is it for me. thanks very much for watching. i'm wolf blitzer in "the situation room." erin burnett "outfront" starts right now. "outfront," major breaking news, investigators telling cnn north korea ordered the cyber sony attack. is this an act of war. plus cuba releasing an american man as part of a landmark deal. the two countries re-establishi re-establishing deals after 50 years. and an attack in which 132 children were slaughtered in pakistan. let's go "outfront." good evening to all of you. i'm erin burnett. and we begin "outfront" with the breaking news, u.s. investigators have determined