>> right now three developing stories we are watching this hour. president obama in a ceremony in the white house. and critics are blachting his policies concerning our southern bother. and here in the atlantic and new concerns of isis militants and requested quad share a chilling goal blowing up a us air liner. plus this. happy birthday, america. one city celebrating the nation's two 38th birthday

a little early. all because of hurricane arthur. it will be a story for the 4th of july. hurricane arthur is down graded to category. i am leland vittert in for jon scott. >> and arthur's maximum sustained winds decreasing as it moves northeast. it moved in north carolina outer banks as a category 2. and knocking out 40 for more than 42,000 people. and how is it looking now, johnathon? >> looking great. within the past ten minutes, the sun came out. and goers are coming out here and enjoying the surf. other than the surfers not many will go in the water. only the experienced swimmers.

there are rough ways and a potential for an undertow. authorities urging people to stay out unless they are experience. people said it could have been much worse. >> it was not too bad. a lot of wind and rain and minimal flooding and not a lot of damage. it is good. >> we are back to the live shot and looking at the buildings, no visible damage here. this was not so much of a wind event as it was a water event. heavy winds driving the water not so much from the ocean but from the sound on the opposite side of the can. highway 12, the main thoroughfare debrie and sand washed up and ha tterus iowa

land is cut off as authorities search for potential damage. it is very little structural damage. there is a few torn shingles and people say it could have been much worse. and many people stayed on the island for the 4th of july and expect to go through their 4th of july plans. some communities delaying until tomorrow but there will be a 4th of july weekend on the outer banks. >> keep it right here on fox news. meteorologist maria molina will let us know what to expect. >> right now, president obama marking the 4th of july holiday by presiding over a citizenship ceremony. and critics are blasting the

administration's response of the flood of children pouring cross our southern border. ed henry is live on the north lawn. >> good to so you leland. what the president is trying to do is shift the focus to the patriotism. the beauty of the ceremony are men and women who served in uniform and not yet citizens and shifted away the ugly scenes from the southern border and the humanitarian crisis pleaing out before our eyes. and the president suggest that the crisis shoes why we have comprehensive immigration reform and republican critics say it is the president's excutive actions that put us in this place. >> it shouldn't make it harder, and create jobs here and grow our economy here and we should be making it easier. and that's why i am going to keep doing. >> it is a humanitarian crisis

and perfectly preventible. the administration caused it and they can stop it. >> the president will be in tex next wednesday and thursday. he plans to do fund-raising for the democratic party. but doesn't plan to go to the southern border to it look at the crisis. white house aides said that governors demanding that the president go to the border are playing politics. >> you are truly celebrating july 4th. a tie and pocket square and lapel pin and you have cuff links, right? >> reporter: yeah, american flag and my wife bought them for me and i thought i would wear them. >> thank you, ed. >> even better that the wife bought them for him. he is a smart man.

as the immigration battle simmers, president obama is promising to act via executive order and blames congressional inaction and tired of dealing with a do- nothing congress not only on immigration but jobs and highway funding. is a do- nothing congress a bad thing? this is the congressional reporter for the washington examiner and susan, good to see you. >> hi, a rthel. >> it is important legislation that is stalled because of a devoided congress and high- stakes election year. you addressed the question of is it all bad? give us your take and how dow create jobs with a stalemate. >> democrats think the way to create job system stimulus spending and hire road workers and teacher ares and firefighters and that's the way to build jobs. republicans think that the best

way to boost the economy is get government out of the way and reducing regulations and repealing obama care and cutting taxes. you can see the ideas are different. they pitch the idea and it goes no where. >> that was your initial question. >> thort. fubelieve in lower tax ands don't want government in the way, you think it is good that the government is not pushing stimulus. both sides feel like they are losing here depepping on the side you are on. there are bills and the do- nothing congress is doing nothing. it is tax cuts for small business and transportation funding bill that will put a lot of jobs at risk and grind to the halt road and bridgework. both sides are arguing over the

details about the legislation. and it is stalled. and i believe eventually it will get done this year, both sides have to work out a compromise that takes longer in the election year. it is a do- nothing congress and depending on your philosophy and the slow peace of compromise in the election year. >> listen, the highway fund, 700,000 jobs that are jeopardy. we are in july now. it is july 4th. this is where people get frustrated. congress comes back in and they have a handful of days to get something done before they go away for a month. look at the agenda, you expect the transportation to be front and center. it is not on the agenda in the house and senate. in the senate they will vote on a bill for duck hunting permits.

>> i can't connect the dots, susan? >> do nothing congress can be a good thing if you are looking back at 2008, arthel. it was not a do nothing congress. a lot of people disagreed and they wished congress had been stopped in its tracks. if you don't want them to pass something harmful for the economy. if they need to pass a transportation funding bill and arguing over the details tis frustrating, and in a case like that, they are going to pass something in the last-minute to gets the funding bill before jobs are lost. >> what about unemployment insurance? >> that is a good topic. republicans want to find a way to pay for it and democrats don't agree with the way to pay

for it. most people would like to see unemployment insurance passed. and harry reid doesn't want to take it up because the house will reject it and he's giving up on it now. there is a case where people think it should be passed and a top issue under discussion. and republicans think after five and half years of federal unemployment insurance it is time to stop renewing it. >> for people not having jobs may have a different perspective on that. that's the bottom line. i appreciate your optimism and i hope something gets done for the sake of the people. susan, always good to see you. >> happy 4th. new violence in jerusalem. clashes erupting in the first friday of ramma dan prayers what is sparking the unrest between the israel and palestinians. it is getting more expensive to fire up the grichlt how the

higher price of food is shining a light on economic problems. >> and a wounded u.s. marine and a experimental surgery that could be life changing. >> and i am in afghanistan and i would like to wish my family in el paso, texas happy 4th of july. 2 aleve for... ...all day relief. hmm. [bell ring] "roll sound!" "action!"

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clash with protestors on the streets of jerusalem. this latest violence comes on the day of a funeral for an arab teenager whom palestinians say was killed by israeli extremist as revenge of the killing of three israeli teens abducted in the west bank. one of the three teens had a u.s. citizenship. we'll have a live report in the show. >> those of you planning to fire up the grill in the 4th. you are planning on paying more for the cook out. prices of ground beef are 16 percent higher and ice cream and lettuce. but we have seen good news in the economy with the dow hitting over 17,000. and that is a record high and the government is reporting more job growth with the unemployment rate falling.

what do you make of the mixed messages. we have steve here. i want to play the president's take and get yours. president obama now. >> we have now seen the fastest job growth in the united states in the first half of the year since 1999. (applause) all right. so. >> so the president is saying things are are pretty rosy out there. is that a fair characterization and half of the story. >> we have had three good months of job numbers. but it is still lousy and we are still 5 million jobs short of where we should be. if we had unemployment low as we want it to be. we have had a huge dropout of the people from the labor force and that's why the official headline on unemployment rate is 6.1 percent right now.

and anyone out there who believes that the unemployment rate is 6.1 percent is smoking something. the real unemployment rate is ten percent. >> and we have the real unemployment rate at 12 percent. explain what that means in the gap of economic terms and role and actual and what does that mean in the economy? >> there is two reasons why the role unemployment rate is higher than the official unemployment rate. and there is a lot of americans stuck in part- time jobs and they want to have a full- time job and they can't find one. they can't feed their family on a part- time job. and people who dropped out of the work force because they are not looking for jobs. we don't count them unemployment but they consider themselves unemployed and that is a lot

closer to reality. >> and the fact that the dow at 17,000 and is that significant in any way or just a number that makes us feel better. >> it is very significant. it is significant for two reasons. most americans and 75 percent of the americans own stock. they own it directly by purchasing it themselves or own it through the four where are one k or pension plans. and it is a bullish stock market that is good for america. and the other reason i am optimistic. is when the stock market booms, that is a good leading indicator that investors are getting more optimistic and businesses are getting optimistic. and this is a good second half of 2014 and that is a pig improvement >> and circle back to july 4th and not to get too specific in terms of prices going up. and the price was a lot of

things are going up and a lot of the inputs. and does the market rising make up for that? or does middle-class consumers get skwoezed because of the rate of the sal row and goods going up. >> it is a middle-class squeeze that is going on right now. if you look at the preess and the basic things that people buy for the bar-b-que and 4th of july. hamburger and hot dogs and buns and cupcakes, those things are rising five percent. and cording to the report. wages and sal rows are only up by two percent. you can see a grap there. and i think people get annoyed when washington say the inflation rate is only 2 or 3 percent. wait a empty, have they been to the gas pump or grocery bill or hospital bill.

they are going up more than two percent. >> we'll see what goes forward. >> i am still buying and hot dogs and eating ribs. i don't care what it cost. >> put bar-b-que sauce. it is july 4th. >> talking about spicy bar-b-que sauce or regulation. >> it is not something you have >> spices for me any time. >> more of the plain stuff for me. >> works out then. >> coming up. iraqi government forces pushing back sunni terrorist and the latest on the crisis in iraq. a shared goal twoep isis and al-qaeda leading to major security concern in airports and why the alarm bells are renninging. that would be my daughter -- hi dad. she's a dietitian. and back when i wasn't eating right, she got me drinking boost. it's got a great taste, and it helps give me the nutrition i was missing. helping me stay more like me. [ female announcer ] boost complete nutritional drink

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>> new battles in iraq erupting on two fronts. government forces resuming the counter offenses and a sunni strong hold and hometown of saddam hussein. and as the same time the fight rages on for the largest oil refinery. greg is in london live with the latest. >> reporter: hi, arthel. the battle over the co oil refinery continues. the group culling themselves a islamic state trying to get fuel control. that fight has been going on for weeks. and in the saddam hussein heart line. the village was retaken by government forces and a broader push by baghdad to get the control of the ti krit.

much of the north and west of iraq remain in the hands of the sony mill tans and baghdad is not able to get back that territory without help. the pept gone brass is assessing whether it will snout air strikes or not. there is no formation of the inclusive government that many are saying to avoid the disentigration of iraq. a new government would wide acceptance. and the talks broke down when various factions broke out. malco is sewn as authtorian. and contributing to the rise and support of sony militant that call themselves the islamic state. and there was another function kureds.

maliki said he would not step aside for a new leader. >> greg, thank you. >> and keeping in the middle east there is talk about the ratify willry of isis and al-qaeda. but my next guest said one thing unites them and that is a shared goal of blowing up an american airliner. american security is beefed up. the defense editor for the telegrap newspaper and young win store and the fight. and i will start with this where we are at. why is this double whammy between al-qaeda and isis coming back together so dangerous? >> it goes back to yemen. there is a master al-qaeda bomb maker at work. abraham a l- a siri.

they have joined fighting with isis and the big fear now is that all of the foreign jihaddist. 500 british citizens that have gone to fight with isis. ine americans have gone to fight in iraq with isis and the fear now, they will be exposed to the new bomb making technology that a lsiri developed in yemen and they will try to attack the american- bound airliners. that is the intelligence picture we are putting together in london. >> and as you look at this situation from here, do we know if the foreign fighters have come back and if so, what is the game plan for the european intelligence agencies to try to deal with this threat? >> first of all, the top

priority of the european intelligence agencies, they work closely with the american counterpart. they will track the foreign nationals going to syria and iraq and track them when they come home. here in britain, we've had several returning jihaddist arrested and some awaiting trial for basically trying to recruit people to go on jihad things like that. but also the jihaddist, are taking a lot of measures like faking their deaths and rather remarkable things like that to try to avoid detection so they can get back to britain and france and then plot terror campaigns against britain and also the united states. quickly here, is there a way

that the security establishment can trowely protect the airliners that are coming back across the atlantic or in your contact, seriously worried about the new threat. >> they are very worried. a lsiri tries to get bombs that are not detected. this is the guy who did the under pants bomber in detroit and failed bombs in cart rage bombs to chicago. and the fear is that one of those bombs will get through. >> they only have to get through once. some in washington if the enemies are fighting each other as they are in iraq just let them go on fighting each other. you indicate that that is not the policy that the united states should have toward isis

versus everyone else in iraq? >> clearly we don't want to get involved on the grouped with isis particularly after recent experiences. but what i am really saying, the security and intelligence establishment on both sides of the atlantic needs to take the threat seriously. it might be a nasty civil war going on in syria and iraq, but the possibility of it spilling over outside of the middle east and back to europe and america is strong indeed in my opinion. >> the price of that would be high. ken, live from london, thank you, ser. >> thanks, >> thank you. >> and tragedy strikes on a busy highway. a over pass collapsing just days before a big event. and wildfires flaring out west and folks who live there told to

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of july to you and everyone at home. the update on hurricane arthur. the storm made landfall in north carolina as a category 2. it is currently a category 1 and sustained winds of 90 mile per hour. and there are stronger gusts toward the center. and currently located 100 miles southeast of ocean city maryland and moving quickly at northeast at 24 means. and the center of arthur is expected to pass southeast of cape cod. and we could look at impact in terms of rainfall. and you can so on the radar picture rain in new york city and long island. ahead of the storm system. because it is moving so quickly. it is going to be out of here later saturday and sunday and expect improving weather conditions. and a lot of sunshine and

beautiful temperatures and very pleasant conditions in the northeast. that is coming up saturday and sunday. and get out and enjoy your 4th of weekend. and also good news, all hurricane warnings are lifted in north carolina because of the storm system continuing to move away and continues are improving behind. it >> it is great that people can enjoy the holiday. what are you doing in ohio? >> yeah, here in centerville, ohio, we came out yesterday and able to talk to people. you can so everybody here having fun and we are here for the 41st annual americaa festival and this is the only one of its kind. it is the largest one in the state of ohio. and we participated in the parade. this truck behind me was in the parade. and you want to send us any pictures that you have postthem on instagram and twitter.

proud american. and everybody having fun today? >> and besides the approximate raid. we look the at the autoshow and five k. and we spoke to the winners of the run. it is a lot of fun. get out and enjoy your holiday with you and your friends and holiday. >> good work out, maria. >> and here are my glasses. >> all right. chick. you are looking hot in the star spanningled shades. so you. >> it is not the hurricane but folks in california are having the 4th of july plans ruined by wildfires that are burning through julianne, california, 60 miles outside of san diego. that fire destroyed two homes and causing more than 200 to be evacuated. and the crews are getting relief from a fire in northern

california's wine country. dominique is live in los angeles where you are with more, dominique? it had all of the makings of being a big fire and now over half contained. 217 acre in size at the moment and it looks like it will get smaller with the efforts of the four fires 1700 of them wrestling it down. they had the easing of hot weather and allowed them to open up great containment lines and prevent it from spreading further. listen. >> it is a lot brush and the fume moisture are low from having no rainfall. and the firefighters have a lot of work to do to removing fuel and creating those lines. >> down in san diego, the fire

near julianne has 100 mountain cobbins under threat. and 200 homes were evacuated and only 50 percent of the fire is contained. no one is feeling comfortable about it. >> i have been through it before. it is not a good feeling to think that you are looking at your house for the last time. >> it is always a trauma when you see a wisp of smoke. >> it is not only just california, over in arizona, the fire is almost fully put out. but gusts of winds could turn the four back in the opposite direction. and so in new mexico. the deiggo four there. 30 percent of that is contained. it was sparked by lightning and it will bring in heavy rain in the storms. and the four in washington

state, firefighters not giving us an update on how much it is contained. but that will be the next big fire. >> hope there will be rain. thank you, dominique. >> the japanese government enacting one of the biggest changes in modern history and deciding to reintirpert the post war constitution to allow greater use of military force to defend other countries. what does this mean for u.s.? >> the coming collapse of china and nuclear show down north korea takes on the world. gordon, it is good to see you. what does it mean to the japanese people and what about the u.s. going forward? does this have anything to do with japan feeling that they are going to lose economic support from the u.s.? >> first and foremost, this

means japan can help the united states maintain peace and security. as china grabs territory from the philippines and indonessia and may lassia. and a lot of people are concerned about the obama administration helping the world protect themselves. >> in what way, troops on the ground there and more troops in the region or the military assistance in terms of money? >> it is really military force and especially the navy. we are talking about the islands that the chin these are grabbing. they took islands and the japanese are concerned we will not honor our treaty in japan. and that means the japanese can help the united states defense. if they detect a north korea missile they can with this change, shoot it down and under the interpretation of that

constitution they are not able to do that even though they are supposed to help. >> are you surprised that japan decided to change its constitution? or are you more surprised that the people of japan saying we'll take action? >> this was eventually going to happen because of the chinese provocative behavior in the region. but i am surprised that there is so little opposition in japan. there is more than 50 percent of the people would say let's not do this. but the opposition is very thin and weak. and that's why the japanese prime minister is able to go forward with this reinterpretation and that means, when you see more chinese beledgerance, that means japan shoes less opsugz to this. >> and now looking out for the japanese economy. and how would this affect what is going on?

>> and the japanese economy is certainly stumbling. the three- arrow program worked up to now but people worry it is not sustakenable. and if there is a conflict between china and and japanese. china wants the rest in the chain that would devastate the japanese economy. and it will have economic affects. >> how likely are we going to see military action? >> it is very likely right now. the chinese are on a path of beledgerance and the military is making decisions that are just unjustifiable. >> and america and japan are allies and there is something to break out. america has to defend japan and america has entanglements with

china. >> in world war one, there was so many entanglements between england and germany and we know what happened. >> and people in the region are concerned. up to now, because of china's integration there would not be war. we defend the freedom and democracy and now japan wants to help us. we are fortunate they do. china and russia are threatening the world. >> there you g. gored on, always good to have your perspective. >> a deadly overpass collapse in brazil. police say the unfinished bridge trapped a bus and other vehicles. two people were killed and dozen

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>> the freedom we celebrate this july is defended by people like marine sergeant john peck. he is prepared for a double arm transplant that could change his life forever. jennifer is live with his story. >> reporter: we have followed marine sergeant john peck since he left walter reed. and we were there when he moved in the first smart home and we are now documenting the next few months as he prepares for a double arm transplant.

he was serving in afghanistan when he became a rad rupleasm tee. >> we were knocking on everyone's store and saying we are the marines and turned around to my sergeant and loud sound. just couldn't hear after. that i was i was a tripleasm thee. you could feel immense amount of pain and burning and yeah, this is it. i don't want to it die here and i can't die here and two and half months later in bethesda and find out i flat lined throw times and once was pronounced dead and had over 28 surgeries. john peck had come a long way since he was first injured and before he was put on the

transplant list he wants to it get married. stacey met on match.comtwo years ago. she is an icu nurse with three nurse and john adopted them as his own. he is learning to walk on prosthetic legs. he has already done sky diving and standing still on a prosthetic is harnlest for any amputee. john wants to stand still at the alter when he puts the ring on stacey's finger. they are not asking for wedding gifts but asked gifts to donate to the wounded charity that helped them most. we'll have more with bret baier. please tune in. and it will inspire you. >> inspiring and make sure you have box of tissues. >> jennifer griffin, what a great story out of dc.

>> you got tears and i got goose bumps. >> it is. and are you planning to fire up the grill and we to a massive s outbreak. we'll tell you what you can do to keep your family safe. >> happy birthday, america! >> happy birthday, america. >> i wish you, america, a happy birthday. did someone say burn? try alka seltzer reliefchews. they work just as fast and are proven to taste better than tums smoothies assorted fruit. mmm. amazing. yeah, i get that a lot. alka seltzer heartburn reliefchews. enjoy the relief. of swedish experience in insidperfecting the rich,ars never bitter taste of gevalia. we do it all for this very experience. [woman] that's good. i know right? gevalia.

it may be july 4th but britain is throwing a party today. queen elizabeth was at the ceremony to christen the largest warship ever to be launched in the u.k. and it's named after her. it's 900 feet long and has a

capacity for 1,600 crew members. the british prime minister and scottish first minister were among those attending the ceremony in scotland. construction work is scheduled to begin on a sister ship, "the prince of whales." right now california's largest poultry producer issuing a massive recall after the usda says it found a direct link to a drug resistant form of salmonella that's already sickened hundreds of people tied to a 16-month outbreak. we have a physician and professor of public health at johns hopkins and author of "unaccountable what hospitals won't tell you and how transparency can revolutionize health care." good to see you. foster farms. this is a big company. how did this happen? due to safety and sanitary procedures? >> very big company. one of the largest producers of chicken in the country and largest in california recalling

170 different chicken products. you can find out what factories they come from with packaging and different sites on the web. many allege and i believe this to be true, when you factory farm and you have a lot of animals close together, infections mutate quicker and different strains of bacteria are more resistant and they spread quicker. by the time we catch wind of it, there are a lot of people sick. no one has died yet. i don't want anyone to get hysterical or run out to their log cabin and lock themselves up. this is not an outbreak that's lethal. there are 500 people that are sick. that's more than normal from salmonella. >> we'll pop up a map of where people have gotten sick. some of the cities in our country here. ma the west coast because foster farms is out of california and services the west coast. i can't remember how many packs of foster farms chicken i've

purchased and i bet people are cooking it today. you point out a lot has to do with close quarters that these animals are kept in. is the usda working on more strict regulations? this can't keep happening. >> there's not a lot going on on the regulatory side but there's as ton going on on consumer demand side. people want local foods. they want grass fed. they are looking for organic labels. i like to buy from more boutique supermarkets that get food locally and have those labels. >> people are going more for farm to table. i do appreciate your time on this fourth of july. we'll see you again. thank you, sir. >> good to be with you. we are just minutes away from an update from the national hurricane center as arthur barrels up the east coast. now a category 1 hurricane.

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three developing stories we're watching this hour. escalating vial eolence in isras funeral services are held for palestinian boy some believe was killed in a revenge attack. president obama says he's ready to act on the immigration crisis with or without congress. and the dow surge is on the heels of a strong jobs report but will the good times on wall street last? >> first, hurricane arthur is down to a category 1 storm. could still spoil holiday plans for millions of people on the east coast which is not good news but we're keeping our fingers crossed. >> both of them. >> hello, everyone.

welcome to a special third hour of "happening now." >> hope you're having a happy fourth. thanks for joining us. arthur is a strong storm with winds topping 90 miles per hour and picking up speed as it moves north through the atlantic skirting the east coast all of the way up toward new england. watches and warnings are in place for as far north as massachusetts at this hour. it's leaving behind heavy surf and dangerous rip currents for anyone out on the beach where it made landfall overnight on outer banks of north carolina. it looks like it is the calm after the storm now. this is always the time people go out and look for damage. how bad is it? >> reporter: exactly. as far as damage from the wind, not very much. most of the damage was actually from the water coming in and not just overlapping from the ocean but more damage coming in from water that was being blown in from the sound on the opposite

side of the islands. as you pan over here to the buildings, we're seeing very little structural damage. people came out at sunrise to inspect what damage they could find and they say this storm could have been a lot worse. >> and so all right. it looks like you are enjoying a nice beach vacation if nobody knew the difference. what affect is the storm having on the july 4th celebrations in north carolina because so many folks head there for the holiday weekend. >> reporter: so many folks had vacation plans for the fourth of july and the sun has been out for several hours now. you can see people wasted no time coming back to the beach. some of these island communities are going ahead with fourth of july plans tonight. others postponed it one day so that they hold them on saturday to allow people who left the island to come back. then again, many visitors never left. listen. were you scared? >> no. no, not at all.

it was pretty funny actually because my dad was scared. >> we were prepared. maybe not scared but we were prepared. we wanted to ride it out. this is a once in a lifetime experience here at the outer banks. >> reporter: folks wasting no time returning to the beach. if you look out there, you see most people staying very close to the shore. as you mentioned, there's a possibility of rip currents and also the surf itself is very rough today. so a good day to play it cautious unless of course you're one of those surfers way out there. they tend to be really good swimmers. >> there's always a few people out there despite the risks. jonathan, thank you. so where is arthur heading now? perhaps more importantly where is the rain headed? which areas will be most affected there coming up for the weekend? we will get up to date on that later this hour. brand new reports coming out

today that a german intel worker has been arrested for spying. a spokesperson for the chancellor reportedly saying the intelligence service employee is accused of spying for the united states. one newspaper says the man may have passed on information about a committee investigating the nsa. reports of nsa spying on chancellor merkel as well as citizens in germany have caused friction between berlin and washington. the u.s. embassy in germany has so far declined to comment on the report. meanwhile, temperatures rising in jerusalem as a palestinian boy is laid to rest. israeli police clashing with l palestinian protesters who say killing was retaliation for murder of three israeli teenagers. the holy city on edge as the boy's funeral coincides with

ramadan prayers. >> reporter: let me start with the latest information. we just received word here that there was an israeli military air strike that took place moments ago in the southern portion of gaza. israelis reportedly had three targets in their sights. this air strike or series of air strikes taking place after another day of rockets being fired from gaza into israel. today at least 12 rockets were fired. that is significantly less than 40 or so fired the day before. still it is 12 too many for many israelis. two of those rockets were intercepted by the israeli iron dome system. now, as you mentioned, today marks the third day in a row of clashes here in the city of jerusalem. what is normally a quiet neighborhood. the clashes took place before and after the funeral for the 16 year old.

the palestinians today threw rocks and burned tires in the street. the police tried to contain the demonstrato demonstrators. they used stun grenades and tear gas and the tensions further escalated when the dead boy's father accused police of trying to essentially use his son's body as a political football. he claimed that the son's body here was not released in accordance with his wishes but rather the police released the body in such a manner that it would allow for only a smaller demonstration to take place. the father says he asked for the body to be released early in the day. the police wanted it released in the evening. he said no. it was finally released today and then thousands and thousands took to the street and that led to a few hundred demonstrators taking on the police. this again the third day of clashes that have taken place. the family says as do many

palestinians not enough is being done to find who is responsible for the attack on this 16 year old. the family says more attention needs to be played to a surveillance camera video that has been released. the video shows a car in the vicinity at the time the abduction took place. also, i should quickly add, no arrests reported regarding the three israeli teenagers who were abducted and murdered last month. the region remains very volatile. >> thank you for that report. big developments in the ukraine where government troops cleared more than a dozen towns of armed pro-russian separatist. the kiev government says it controls two-thirds of the eastern region at the center of that insurgency. this comes as ukraine launches a new military effort to rid the country of separatists following a week-long cease-fire and negotiations that produced little progress. coming up, former secretary

of state hillary clinton is said to have done more than 25 hours worth of interviews on her recent book tour. but did all of the coverage help or hurt her? our political panel weighing in. plus, democrats and republicans butting heads over energy. the red hot issue that could sway some midterm elections. >> happy birthday, america! >> happy birthday, america! back. ...and a choice. take 4 advil in a day which is 2 aleve... ...for all day relief. "start your engines" that'and with truecar.com,t lookithere's no buyer's remorse. a good deal or not. "okay, this the is the price," overand you're like. save time, save money, and never overpay. visit truecar.com nineteen years ago, we thought,

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the dust has finally settled on hillary clinton's cross-country book tour. it's showed the former secretary of state butting head with journalists leaving analysts to won wonder if it hurt or helped her chances for 2016. let's talk to chris. good to see you. >> happy fourth of july. >> happy fourth. let's start here. if hillary's book tour is a litmus test, what do you think hillary is discovering about who is 100% in camp hillary and for which group or demo she's going to have to work hardest to gain their support? >> i think when it came to the book tour, going around the country seeing when she was doing these events, there was good turnout. people were excited to see her. that was a good sign if she decides to run. what i think they learned which is the most telling part, the

media is going to be a lot tougher on her candidacy than they were with some candidates in the past. >> anybody who is going to run for president is going to get some close scrutiny, don't you think? >> yeah. i thought to be honest i thought the president didn't get the same kind of tough questions when he was running that we're now seeing hillary clinton getting in a book tour but that's probably another debate. i think that was a good sign for her and her advisers to realize, okay, you know, when we go out there and if we decide to do this and we really execute a campaign, the media is going to be very tough. very critical. that is a good thing for a potential campaign to learn now than to learn later. >> what about in terms of her support? as i asked you, i'm sure former secretary of state found out who is definitely in camp hillary and who perhaps she needs to win over. >> i would say amongst the left or democratic party, it's

overwhelmingly clear that they are behind her. you see a lot of folks coming out before she declared or suggested she's going to run already endorse her. there are rumblings on the far left that you hear about people talking about elizabeth warren. that's not going to happen. at the end of the day, there may be other challengers. she's going to be pretty -- >> i was talking about people. let's move on. voters. let's talk about this. you know gop has to be closely watching. do you think hillary exposed any weaknesses they could use to countercampaign and do you think this could help the gop tailer their lineup to take on hillary should she run for president? >> i heard a little bit about this whole notion they're going to use some of the statements she made about wealth against her. that's not going to work. the reality is when you look at secretary clinton both when senator and first lady, her path and what she's done to fight for middle class working class is

strong. that's not going to be a strong who the best k. republican to go against her, it really depends on who makes it through the field. what i see right now is potential republican field not doing very well whether it's governor walker having serious problems in his state, whether governor christie having serious problems in his state, i don't see a lot of formidable candidates coming out of the woodwork. the one i think who will be interesting if he runs and seems he's going to is senator paul because i think he presents a much more complicating candidacy than most democrats have faced in the past. >> and then maybe he's sitting back watching thinking let me tailer my campaign should he run. let's talk about this. the gaffes that we've been hearing about. do you think the media cares more about those than the voters do or will what we learn from hillary's verbal missteps stick

in the minds of voters all of the way through to 2016? >> one, media definitely cares more about it because it's something that they can hook up on and focus on. i think that's a given. in terms of having any kind of lasting damage, this is not something anyone is going to remember a couple years from now. are republicans and others going to tray y to exploit it? they will. it's a given. at the end of the day, if she runs it's going to be a competition between competing visions for the country and if you're secretary clinton you're going out saying here's my middle class vision. i want to make sure everyone has a chance to succeed and republicans don't have anything that is substantively valuable in terms of alternative. they're not going to make any kind of inroads. i don't see any kind of lasting damage at all. >> i appreciate your time. just for the record i want to let our audience know we had the other side booked. got caught in holiday traffic and couldn't make it to the studio. there we go. >> i like it much better without

the other view. >> of course you do. all right. happy fourth. talk to you soon. >> thank you. president obama vowing to bypass congress and take action on immigration reform. what will that mean for thousands of illegal immigrants crossing our borders? we'll have more analysis coming up. plus, wall street traders celebrating more than just our independence today. the dow hit the holiday at an all-time high closing above 17,000 friday. they brought out fireworks so can the bulls keep running or will this long rally soon run out of gas? and speaking of gas, democrats pushing climate change, a midterm election strategy with rising energy prices, is that a smart move?

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president obama is pitching his own plan for solving the crisis in our southern border and immigration reform as a whole. the president is vowing to make changes with or without congress. chris is back with us. the person who is supposed to play the other side is still not around so it's just you once again, chris. a former chief of staff to democratic senator joe manchin. i want to start with this. is the immigration issue starting to become a problem politically for the democrats? >> listen, i think it's a problem for the country. i don't see the immigration issue -- this will be strange coming from a democrat, a democrat/republican issue. this is something we have to work together to solve. we're not going to we're not going to self-deport 13 million or whatever the number of

undocumented aliens that are here. we've got to figure out a way to solve it. unfortunately what we're seeing the last few weeks and months from the crisis specifically the border with all of these young children and young families coming over, is something that is now front and center and is exposing that we have a broken system. both at the border and in terms of the legal process in terms of how to address it. >> folks have been saying there was a broken system on immigration for a very long time. the question is why now and republicans will say that this is not a crisis that we knew about or was a looming crisis but this is a created crisis so the president can act unilaterally. is that what's going on here? >> well, listen, if this is a created crisis, it has to be one of the dumbest created crisis i've ever seen because these images don't help the president. they don't help his arguments in terms of we need immigration reform. in fact, as a consequence, it

actually feeds into unfortunately the argument by a lot of republicans that the border needs to be more secure. so if the administration is doing this, which i do not believe, it is actually probably backfiring. i think the bigger problem here is you have a republican congress that for political reasons i would argue is trying not to deal with this issue before the midterm elections and a president and democrats that want to deal before the midterm elections and that's where you have this political deadlock. both parties will lose. you can argue about how and when if they don't come together to figure out how to solve this in a way that's best for the country. >> to your point in the way this is playing out on television, president obama has said he's willing to go it alone as far as he possibly can with executive action. are we at the point where there's a law of unintended consequences in the sense that you had the idea that we're going to stop deportations for minors and these things and now all of a sudden the border is flooded. is the administration having to

scramble here to try and keep this from becoming a really bad political hot potato? >> well, in terms of the president using executive authority to deal with this, i think there's some things he can do. i don't know how far he can go in terms of -- because you're talking about laws that are in place and changing those laws will require an act of congress. i think there are some limitations to say the least. i think what you're seeing is frustration by the president and by the administration. in fact, republicans have not been willing to come to the table to try to address it. we can play the partisan political game about who is at fault and who is to blame. i would obviously say republicans are. that doesn't solve the problem. telephon at the end of the day we have a major problem at the border and millions of undocumented immigrants. we've got to figure out a way to solve it. if we don't, one thing i can guarantee you. it will get worse. >> it seems to be getting worse

by the day by the hour. thanks for joining us from d.c. we appreciate you sticking around and you say you liked it more when the other side wasn't here. double-header. we appreciate you joining us. chris wilson was booked but miscommunication for the fair and balanced debate we had planned. >> i thought it was fair and balanced. >> he was trying to get the last word in. >> he did too. okay. energy policy could play a big role in the 2014 mid terms. democrats hoping to run on issues like climate change but in some states it may be the issue they end up running from. chief political correspondent carl cameron is live in washington with more. >> mid terms are coming. so are rising summer temperatures and that means probably rising summer gasoline prices as everyone goes on their summer vacations and it's an opportunity and some say a must for them to start buzzing about

energy and environmental policy. in louisiana, senator mary landrieu to chairs the senate's energy committee, is one of the most vulnerable democrats in the country in this mid terms and sponsored legislation to approve the pipeline and she got it passed in her committee over objections of democrats in her committee. it's a big opportunity for the man you see on the screen. he has inched ahead of landrieu in the polls. if she can't get democrats to consider keystone and it will raise questions about her clout and whether she deserves to be reelected. you go to colorado, there's a vulnerable incumbent there. he opposes keystone. he also proposed a ban on fracking. the republican senate candidate in colorado backed keystone and backs fracking. he's now neck and neck with his

democratic opponent and you have to go to alaska. the senate democrat really vulnerable trying to push for energy policy in his home state. president obama's green agenda in his way and he said he doesn't have any interest whatsoever in campaigning with president obama. the bottom line is democrats find themselves really particularly in red and energy states fighting people in their own party. democrats are divided. they are up against their own the and this cause election seats in the senate and if they lose six, republicans have the majority next year. >> thanks, carl. they are cleaning up on the outer banks of north carolina after hurricane arthur hit as a category 2 storm. these are the first aerials we're getting in from there and you can see the flooding problem that jonathan was talking about. wind damage but the water seems to be the real issue there. and the storm is not over yet. we're going to tell you where

it's heading coming up. plus, the countdown to macy's fourth of july fireworks spectacular. we go live to battery park in new york city. >> reporter: there are over 15,000 fireworks shows around the country but few do it better than new york city offering backdrops of the brooklyn bridge, statue of liberty and ellis island. with we go behind the scenes of one of the biggest shows next. try alka seltzer reliefchews. they work just as fast and are proven to taste better than tums smoothies assorted fruit. mmm. amazing. yeah, i get that a lot. alka seltzer heartburn reliefchews. enjoy the relief. captain obvious: this is a creepy room. man: oh hey, captain obvious. captain obvious: you should have used hotels.com. their genuine guest reviews are written by guests who have genuinely stayed there. instead of people who lie on the internet. captain: here's a review, it's worse in person. [ laughing ]

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hurricane arthur made landfall overnight and now it's threatening a fourth of july washout for much of the east coast. the first hurricane of the atlantic season is now been downgraded to a category 1 storm after making landfall on north carolina's outer banks. conditions are improving there but arthur is not done yet. we go live to centreville where we think she was live but she's not. the track there of the satellite as arthur is moving up and away from the east coast of the united states. there are hurricane watches and warnings. other kinds of warnings for severe weather all up and down the east coast. obviously you need to check and figure out if your fireworks display is going on tonight. in that time, we mixed maria's microphone and she's now with us from ohio. who gets rained on going up tonight if they are out watching

fireworks? >> good to see you. just a little audio issue here. we were able to correct it. looks like as we head into tonight some areas of the cape in parts of new england could look at areas of rain from this storm system. the latest update from thenatio that hurricane arthur is still a hurricane with maximum sustained winds at 90 miles an hour. it's been able to hold onto its strength. you can see it on the satellite image moving toward the northeast quickly at 25 miles per hour. it's well enough off the coast that we're expecting minimal impacts across parts of the mid-atlantic across new jersey, parts of delaware and into maryland. as a matter of fact, all hurricane warnings have been lifted in north carolina and also tropical storm warnings have been lifted across most of virginia and also eastern north carolina. we are seeing improving conditions out there. and center of arthur will pass southeast of cape cod early

tonight and we could look at impacts there across parts of the cape. tropical storm conditions are possible and eventually the storm system will weaken and it's expected to transition from a tropical system to a post-tropical storm before hitting portions of canada as we head into saturday and behind that storm by the way, saturday and sunday look like a beautiful day in the northeast. a lot of sunshine. very pleasant temperatures with highs in the 80s. get out and enjoy it. you still have time to salvage your fourth of july weekend saturday and sunday. >> the storm could have been a lot worse. you're in ohio where it looks like it's beautiful there. what are you doing? >> it's a beautiful day here in centerville, ohio. temperatures in the 70s. abundant sunshine and good crowd out today. they've been out since early this morning. we're here for the 41st annual americana festival. this is one of the largest festivals in the state of ohio. fox news participated in the parade.

you can see our truck there. that truck was in the parade. we had a 5k, auto show and a street fair. the crowd very good early this morning and also through the afternoon hours right now. get out and enjoy. have fun with your families. a wonderful weekend. >> a fabulous place to celebrate. thanks, maria. >> in case you haven't noticed, wall street has been busy making history. the dow closed at another record high yesterday. 17,068 capping a dramatic comeback from the lows of the financial crisis. does the bull market have legs to keep on running? joining me now is ceo of quantum networks llc. will bulls keep running and if so would it cause double digits to continue through the second quarter? >> i think we're in very, very scary territory right now. >> why? >> the country is still -- that

hasn't changed. we're $16 trillion in debt right now. people aren't talking about that. it's scary. so the debt factor is really no indication as to what's happening in the markets so there's this huge discrepancy so i think we're headed toward some very serious rough waters. >> how is wall street getting it wrong right now? >> i don't know. i think that's really scary. there's a lot of optimistic analysts that hope things will catch up but at the end of the day i think that the balloon is going to bust. >> if the analysts are optimistic, which is good, but they can't control the market just by wishing that it will be good. something has to be -- there has to be proof in the pudding. >> i don't think they are looking at the broader picture. for whatever reason, they're not looking at a lot of the economic indicators right now and they're really just focused on wall street numbers and stock numbers right now. looking at a macro level, the country is borrowing enormous amount of money from the

chinese. that is a very, very serious problem. i think people should be focusing on that. >> what will it take to get the american economy on a stable footing? >> i think it's employment. i think the country has to continue to focus on hiring. i think that's the undercurrent. >> you know that's the catch 22, right? businesses are concerned about various or lack of tax incentives. they are concerned about what's going to happen when some of their insurance mandates kick in. they are concerned about a lot of things. they are not hiring because they're not sure how their money is going to be allocated. >> you're 100% right. that's why government and business have to work very, very closely in sync. that's the only way it's going to work. >> how are you going to get government and businesses to work together when lawmakers can't work together? >> that's a very big problem. i think that's one of the reasons why we're in this situation now. >> so what's it going to take to change it? >> it's going to be time. i think that the country unfortunately will go through some sort of recession in the

short-term. that will flush things out. it's unfortunate but i think the country needs to go through that in order to start an uptick. >> right now with the bulls running, if you will, that's good for people with portfolios but not so good for people without jobs. >> right. again, the market is not an indicator of the rest of the economy, which is a very, very big problem. again, we know wall street most of it is based upon expectations. expectations went pay the bills in the long run. >> can you be at all optimistic in hoping all parties that be to make the economy move forward can get together and make that happen? >> probably after the new president comes into play. that's my only comment on that. >> i like your glasses by the way. >> thank you. i'm going to tell my wife. thank you. >> i complimented him on his glasses. be sure to tell my wife.

she hates them. i like them. >> there's a silver lining. >> there you go. millions of people right now are enjoying fourth of july festivities across the country. what's the fourth of july without fireworks? some of the most impressive fireworks can be seen right here in new york city. we got a behind the scenes look at what it takes to put on a very big show. we go live to lower manhattan for that story. bryan? >> reporter: it doesn't get much bigger than the macy's fireworks spectacular that happens here in the big apple in new york city. we're talking about 1,600 fireworks shells per mimt. that's three times the number of shells used in an average local show. all together 25-minute spectacular show with the manhattan skyline set behind it. it will be 54,000 fireworks. insane numbers. right next to it down the water, there's actually a second show

that's being hosted by the most famous fireworks family in america. they're known as america's first fireworks family. that will be set with the statue of liberty behind it. we're talking about 11,000 shells. about a 22-minute show. it took 360 man hours to set this thing up. three days. they're talking also eight-inch cannons blasting rockets into the air 600 feet. we're talking fireworks that will be in the span of two football fields. a very big show. just some of the most iconic things you can talk about. statue of liberty, ellis island, brooklyn bridge. the show is important for the six generations of family members that have been running the family company and they say it's just all about family. take a listen. >> it's amazing when you look at the audience. you can have a 5 year old standing next to a 75 year old and they react and clap and smile the same way. it's amazing when you watch that. >> reporter: it is amazing.

weather has been a concern. we talked about that. some cities here in connecticut and new hampshire and new jersey have postponed shows. this one is set to continue rain or shine unless it's hurricane type winds or lightning you can expect macy's show and the big show here with statue of liberty behind me set to go. >> guess what they say when they mean the show must go on great look behind the scenes. >> when we come back, authorities releasing the 911 call from a terrifying accident. >> i'm underneath the ground. >> you are underneath the ground at this time? >> uh-huh. >> how a mother and her son survived that ordeal plus why one popular political website says america is a time bomb. >> i want to wish everyone back in washington a happy fourth of july. i hope you're able to celebrate america's birthday in style this

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let's check in with john scott in for shepard smith reporting live from the fox news deck. what's coming up? >> as americans celebrate everything that makes our nation great, we'll introduce you to one of the heroes that sacrificed so much to defend our freedoms. he's marine sergeant john peck, one of the few afghan war veterans to survive losing all of his limbs in battle. both arms. both legs gone. but now he's getting ready for an incredible surgery. a very rare double arm transplant. we'll tell you how it works and how he's tackling another challenge. walkinging his bride to be down the aisle at their upcoming weekend. that's coming up from the fox news deck. >> we're looking forward to it. thank you. a 911 call released on a mother's nightmare driving with her teenage son along a dark

road in illinois when they plunged right into a sinkhole caused by heavy rain. the mother was able to call for help but the situation suddenly became much worse. >> i'm underneath the ground. >> you are underneath the ground at this time? >> uh-huh. another car. >> what just happened? >> i don't know. another car just went. >> another car got there and hit you? >> no. >> a pickup truck ran over the car with the mother and her son trapped inside. emergency crews were able to free them both are hospitalized but they're expected to be okay. thank goodness. a new piece in politico on this july 4th is calling america a time bomb saying the country is in denial on issues like income and equality and climate change and that politics as usual won't solve anything. is that really a fair

assessment? let's talk about it with allison barber. she joins us from d.c. is it fair? is america a time bomb? >> the title which is an editorial decision is dramatic. that wouldn't be the phrasing of the title i would pick. it's an opinion piece not written by one of their reporters. it's a commentary piece and what he's arguing is that climate change and income inequality is important an issue and they need to talk about them in a particular way more often. that really is just going to be an opinion and you'll agree with that if you're on the left and probably won't if you're on the right. >> when you look at this from perspective of president obama who has often times used executive action over the course of his administration in a way to try and home run around a congress that has not brought a lot of things through that he would have liked, is there a fair point that politics as

usual doesn't work or is it the opposite and this is what founder devised that you have a check and balance system. >> he made an interesting point in regards of saying the way that perhaps we talk about politics and not necessarily to say it doesn't work but he talked about how sometimes partisanship is a tactical tool. that's right. i would point to people to large anti-establishment wave on the left and right and congress' approval of 13% to say a lot of people are frustrated with what they see as empty processes. he talks about how confrontational politics are a good thing so you have that for a substantive debate. when you take that idea broadly, that is a good idea and probably something most people would agree with. that's why you have congress as a low approval rating. if people feel like congressional leaders are not having substantive discussion, they're frustrated with that. i think you can say there's some truth in the way that people are

perhaps talking about things that maybe needs to change and maybe the public would perhaps like to see be more substantive. >> some will tell you the fact that there is an american gridlock system in washington is an american success and not an american problem. is there a difference in america now that it used to be that back in the 1950s and 1960s even that everyone was in it together. there was a different idea about how to get there but there was a common goal. when you're in washington and from your reporting, do you get a sense that members of congress and perhaps the american people now have divided goals and that's part of the problem? >> i don't think that's a problem. i think what you said in your last point is accurate. that's the way the system was set up. i think people like that. you don't want something to easily be shoved through. there is something to say and people feel that some politicians and what i have seen from a lot of people when i covered -- i spent last year covering tea party rallies. what i saw and heard from a lot of tea party members is they are frustrated with what they say is

politicians posturing and not meaning what they say. that's something that people are frustrated with in terms of just the way that we talk and sort of what you see coming out of congress. i don't think they're frustrated necessarily with the system or saying the system should be easier to get things through, i don't think that's what most of the average people think but i think there's a frustration with politics and with just the general way of how congress is working and i don't think that necessarily has to do with not getting things through. it's just kind of more -- it's just a more general frustration if that makes a little bit of sense than necessarily a particular thing saying we want to process sped up. they see a lot of inaction from their congressmen on both sides of the aisle and that's why you have occupy wall street movement on the left and tea party on the right pushing back against the old way of -- >> you make a good point. anger is coming from both sides. ellison barber, thanks for joining us. >> hurricane arthur heading up the east coast affecting travel plans for millions of americans. next, what people across the

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so why wouldn't i choose the fastest wifi? i would. switch to comcast business internet and get the fastest wifi included. comcast business. built for business. hurricane arthur has been downgraded to a category 1 storm. helping millions in the northeast breathe just a little easier, but still rain coming as a brand new survey says more americans are traveling this year than last july 4th, most of them by car even though gas prices have seen a major jump. we have a travel expect to talk about the fourth of july travel and how the hurricane might affect you. you know a thing or two about travel. you have been to every country in the entire world. seemed like even with the hurricane being downgraded, still the rain, wind, that can cause a big problem. >> especially if you're driving.

it you have to give yourself extra time and be more careful because more people on the road. >> you become that to the airlines, philadelphia, new york, la guardia. in the line of storms so i've i'm flying out of o'hare could still affect me. >> out one out of three delay is is caused by la guardia. and it's never a great idea to fly on holidays unless you have to. >> seems as though, especially on this holiday and as we have seen air fares going up, the capacity the airlines have is going down, to prices go up and when thing goes wrong they have less able to rebook you on the next flight because that is full, too. >> air travel in the last couple years has become a bigger and bigger hassle. you can't win with them and you're at their mercy.

it's really unfortunate, especially with change fees. sometimes they cooperate and help you but a lot of times they don't, and if there's a real problem, weather, you have angry people at the airport. >> that definitely happens around the holiday weekends, even if people don't get angry, it's a busy time. how long of a drive does it have to be for you before you go, i'd rather drive it than risk the hassle of flying. >> i'm going to d.c. from here in new york and no way i'm going to fly. either drive or take the train to avoid the hassle. it's juan-hour flight and a three-hour drive, and i'll take the drive anytime. >> ly my grandfather used to say if you have time to spare, go by air. thank you for joining us. >> time to spare go by air? i like it. your family has lots of good sayings. he has been sharing them with me. more to come. today, also marking the

99th annual nathan's international hot-dog eating contest. next, the winners and a shocking surprise ending. >> ability birthday, america. >> happy birthday, america! starts with back pain... ...and a choice. take 4 advil in a day which is 2 aleve... ...for all day relief. "start your engines"

we're going to try to get through this, okay? here we go. every year, on this day, the spotlight shines on major league eating in coney island, new york. three-time hotdog eating champion, the black widow, losing to sudo. he scarfed downed 34 franks and the buns. the winner of the men's championship is josey chestnut, downing 61 dogs and buns, and winning wasn't his only victory. getting down on one knee. proposing to his long-time girlfriend who is also a competitive eater.

>> well, the best part of the contest is the engagement. we can all agree. >> no doubt. hands down. see you tomorrow? >> see you tomorrow. >> and see you tomorrow as well. john scott in for shepard smith. >> i'm john scott in for shepard today. the damage after the storm. hurricane arthur made its mark on the north carolina coast. roads damaged and thousands without power this fourth of july. we'll take you there. the father accused of letting his child cook in a car while he texted half a dozen women, we look at what is ahead in his trial. a marine sergeant who lost all of his limbs in afghan now preparing for a rare and experimental double arm transplant. how he found love while he recovered coming up on fox news deck. >> first, from the fox news deck this independence day, hurricane arthur making the holiday