FP’s Situation Report: John Kerry is headed to Egypt for cease-fire talks; MH17 crash site in chaos; Dutch experts finally gain access; Wendy Anderson is headed to Africa; Slow going for Afghanistan’s election audit; and a bit more.

How much worse do things have to get in Israel before they get better? More then 500 Palestinians have now died in the two-week conflict and Israel says 18 of its soldiers have been killed along with two civilians. The question is how long is this going to go on before the two sides strike a cease-fire? Secretary of State John Kerry and the U.N.’s Ban Ki-Moon are in Cairo today to try to bring the two sides to the table after a weekend of terrible violence.

 Sunday was the deadliest day in Gaza, reports The NYT’s Anne Barnard and Isabel Kershner: “The mayhem began in the early hours of Sunday morning in Shejaiya, an eastern neighborhood of Gaza City, where Israeli forces battled with Hamas militants … At least 60 Palestinians and 13 Israeli soldiers and officers were killed in Shejaiya alone, and the shattered neighborhood was quickly becoming a new symbol of the long-running Israeli-Palestinian conflict, underlining the rising cost of this latest Gaza war.” More here.

 U.N. Secretary Ban Ki-Moon calls the attack on Shejaiya ‘an atrocious action’: During a press conference alongside Qatari Foreign Minister Khaled al-Attiya, Ban said, “While I was en route to Doha, dozens more civilians, including children, have been killed in Israeli military strikes in the Shejaiyah neighborhood in Gaza. I condemn this atrocious action. Israel must exercise maximum restraint and do far more to protect civilians.”

Still, the shelling continued through Sunday night and into this morning. Reuters’ Nidal al-Mughrabi and Crispian Balmer: “Israeli forces killed at least 10 Palestinian militants on Monday after they crossed the border from Gaza through two tunnels, the military said, as the death toll from the two-week conflict passed 500.With the U.N. Security Council calling for an immediate ceasefire, Israeli jets and tanks continued to pound the Gaza Strip through the night.” More here.

And Ya’alon says more reservists could be called up. The Jerusalem Post’s Lahav Harkov: “The IDF will call up reservists and continue fighting until quiet is returned, Defense Minister Moshe Ya’alon told the Knesset Foreign Affairs and Defense Committee Monday.” Ya’alon: “We are prepared to continue the operation as long as necessary, and, if necessary, to enlist more combat forces from the reserves until we bring quiet to the Gaza Strip.” More here.

 Two Americans are among the Israeli soldiers reported dead: USA Today’s William M. Welch: “Jewish websites in the United States identified them as Max Steinberg, 24, of Los Angeles and Sean Carmeli, 21, of South Padre Island, Texas. Both reportedly held U.S. and Israeli dual citizenship.” More here.

 And both were members of the Golani Brigade, an elite unit that lost 13 soldiers on Sunday. The WSJ’s Joshua Mitnick: “Golani occupies a legendary place in Israeli history. The unit retook Mount Hermon in the Golan Heights from Syrian forces that had seized the area during the 1973 Arab-Israeli war. In 2006, the last time Israel suffered such high toll, it also came at the expense of the Golani unit. Eight soldiers were killed while fighting in the southern Lebanon war at Bint Jbeil.” More here.

It’s still unclear whether Hamas captured an Israeli soldier. The AP’s Karin Laub and Tia Goldenberg: “Hamas spokesman Mushir al-Masri in Gaza claimed Sunday evening his group had captured an Israeli soldier. An announcement on Gaza TV of the soldier’s capture set off celebration in the streets of Gaza City. But the claim could not immediately be verified and the Israeli military said it was investigating the report.” More here.

With the death toll rising, Arab governments finally speak out. FP’s Jamila Trindle: “The intensity of the combat in Gaza — and the growing civilian death toll — brought the first significant criticism of Israel by Arab governments, who had surprised and angered many Palestinians because of their relative silence on the combat. On Sunday, though, the head of the Arab League blasted the Israeli offensive as a ‘war crime’ and a ‘dangerous escalation.’

Meanwhile, Secretary of State John Kerry is caught on a hot mic. As he did the rounds on the Sunday shows yesterday, Kerry indicated that Hamas “deserved the bulk of the blame for its barrages of rockets into Israel and for rejecting an Egyptian cease-fire offer to the two sides,” FP’s Trindle reports.

“But in a phone conversation, caught on tape by Fox News before an interview, Kerry seemed to criticize Israel’s operation for hitting civilians in what was supposed to be a targeted strike to close down tunnels that Hamas fighters burrowed into Israel… ‘It’s a hell of a pinpoint operation,’ Kerry said, on a cell phone call, apparently unaware that his microphone was already on. When confronted by Fox host Chris Wallace, Kerry didn’t back away from his comments.”

 Neither Israel nor Hamas can win in Gaza, but the biggest loser is the Palestinian Authority. Hussein Ibish for FP, here.

 Gaza’s residents, under a constant barrage of Israeli bombs, are being told to evacuate to stay safe. If they could escape, they would. Sharif Abdel Kouddous from Gaza City for FP, here.

 For TNR, Ben Birnbaum and Amir Tibon with a behind-the-scenes profile of Kerry’s peace process, here.

Russian President Vladimir Putin is facing further isolation this week. With the evidence mounting against Pro-Russian separatists for shooting down Malaysia Airlines Flight MH17, Putin will have to decide how to respond to the growing international pressure. Adding to the world’s anger are scenes of mayhem from the crash-site.

 Earlier today, experts finally gained access after a weekend of being blocked. The NYT’s David M. Herszenhorn, Sabrina Tavernise and Neil MacFarquhar: A pair of Dutch forensics experts finally gained access on Monday to the remains of the victims from the downed Malaysia Airlines jet in eastern Ukraine after days of standoffs over access to the site and growing pressure on President Vladimir V. Putin of Russia to clear the way for a full international investigation.” More here.

 Still, chaos at the crash site is fueling anger at Russia. FP’s Jamila Trindle: “World leaders expressed disgust at the treatment of the Malaysia Airlines crash site by pro-Russia separatists in eastern Ukraine and increased their demands that Russian President Vladimir Putin do more to rein them in.

“Anger grew over the weekend as reports surfaced that separatists had barred international inspectors from taking bodies from the site, and even looted some of the luggage strewn across a broad swath of land near the site where the plane went down. Secretary of State John Kerry summed up the frustration Sunday morning.”

Kerry sums it up CBS’s “Face the Nation”: “Here’s what’s currently bothering everybody, drunken separatists have been piling bodies into trucks and removing them from the site.” More here.

 All eyes turn to the U.N. Security Council today. Reuters’ Anton Zverev and Matt Spetalnick report it “is scheduled to vote on Monday on a resolution that would condemn the downing of the plane and demands that those responsible be held accountable and that armed groups not compromise the integrity of the crash site.

 The EU is divided over severity of sanctions. The FT’s Alex Barker in Brussels, Hugh Carnegy in Paris, Jim Pickard in London and Chris Bryant in Frankfurt: “Britain, France and Germany put Vladimir Putin on notice over possible fresh EU sanctions as soon as Tuesday, but the common front belies longstanding divisions over how to penalise Russia for its role in the Ukraine crisis. During a flurry of calls on Sunday, the leaders of the EU’s three biggest economies warned Moscow over further sanctions if it did not help establish a safe environment to recover bodies and investigate the MH17 crash.” More here.

 German Foreign Minister Frank-Walter Steinmeier says that ‘further escalation is not out of the question’ in Ukraine. Read his interview with Spiegel, here.

 Meanwhile, Russian billionaires are ‘in horror’ as Putin risks further isolation. Bloomberg’ s Henry Meyer and Irina Reznik, here.

 The New Republic’s Julia Ioffe on some of the conspiracy theories being spread in Russia about what happened to Malaysia Airlines Flight 17: “As the crisis surrounding the plane crash deepens and as calls for Vladimir Putin to act grow louder, it’s worth noting that they’re not really getting through to Putin’s subjects. The picture of the catastrophe that the Russian people are seeing on their television screens is very different from that on screens in much of the rest of the world, and the importance of this discrepancy does not bode well for a sane resolution to this stand-off.”

Some of the crackpot theories: the plane was full of corpses when it took off from Amsterdam; it veered off its standard flight plan; and it had recently been re-insured.

What’s the message behind these messages? “The pro-Russian separatists we’ve been supporting all these months couldn’t have done this,” writes Ioffe.

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 Who’s Where When today – Army Chief of Staff Gen. Ray Odierno and Marine Corps Commandant Gen. James Amos are participating in the Medal of Honor ceremony for Staff Sgt. Ryan Pitts at the White House. Stars and Stripes’ Chris Carroll has more on Pitts’ actions during an attack on an isolated outpost in Afghanistan’s Kunar province in 2008.

What influence does Vice President Joe Biden have on the White House’s foreign policy? The New Yorker’s Evan Osnos addresses that question and many more in a new piece in the July 28 issue of the magazine.

In an interview President Barack Obama tells Osnos, “On the foreign-policy front, I think Joe’s biggest in?uence was in the Afghanistan debate.” Obama continues, “You had Bob Gates, who proved to be an outstanding Secretary of Defense, but obviously was somewhat invested in continuity from the previous Administration, when it came to Afghanistan policy.” He goes on, “What Joe helped me to do was to consistently ask the question why, exactly, are we there? And what resources, exactly, can we bring to bear to achieve speci?c goals?-rather than get caught up in broader ideological debates that all too often end up leading to overreach or a lack of precision in our mission.”

And then there were two: Wendy Anderson is leaving the building and headed to Africa. Anderson, now Defense Secretary Chuck Hagel’s deputy chief of staff, was one of the three individuals widely known to be under Hagel’s consideration to become the Secretary’s right-hand man or woman. But she announced late Friday that she is leaving the Pentagon for another job inside the administration. That means there are now only two candidates left: Elissa Slotkin and Rex Ryu. Hagel’s current chief of staff, Mark Lippert, has been nominated to go to Seoul’s Habib House as the U.S. ambassador to South Korea, and is preparing to leave the building in the next couple months if the Senate gives his confirmation the nod, as it’s expected to do. The next chief of staff will be Hagel’s third in less than 18 months if you count Marcel Lettre, who served in an acting role before becoming the principal deputy under secretary of defense for intelligence last year.

In an email to friends obtained by Situation Report, Anderson said she was approached to take on “an exciting leadership and management position” inside the administration but outside the Pentagon. Anderson, in the email: “…As I move ahead, I want to take a moment to thank everyone – for your unequivocal commitment to national defense, our troops, and their families; for your tireless work ethic and discipline; for your many notable examples of how to lead inspiringly and manage effectively; for your laser focus on mission; for your decency and humility; and most importantly, for your friendship.”

Anderson thanked the principals under whom she has served, including Hagel, Bob Gates, Leon Panetta, Ashton Carter, Christine Fox, Marty Dempsey, and Sandy Winnefeld. “…Additionally, I want to recognize Mark Lippert, Jeremy Bash, Robert Rangel, Jonathan Lachman, John Kelly, Ron Lewis, Eric Smith, and Sam Said, talented pals for whom I have great respect and affection. As they have had the nation’s back, they’ve also had mine.

“But there is no group to whom I owe more profound thanks than our men and women in uniform and their families.”

Anderson said she is headed to Africa for vacation and then will return in coming weeks to share the news of where exactly she is going.

First look: A new report from CNAS on cybersecurity. Richard Danzig, who served as Navy secretary under former President Clinton and now advises the Obama administration, is out with a new report today titled, “Surviving on a Diet of Poisoned Fruit: Reducing the National Security Risks of America’s Cyber Dependencies.”

“Successful strategies must proceed from the premise that cyberspace is continuously contested territory in which we can control memory and operating capabilities some of the time  but cannot be assured of complete control all of the time or even of any control at any particular time. Policymakers must make a judgment about when to intervene and when to allow market forces to determine exposure to this risk,” Danzig writes.

The report will be released today at a 4 p.m. event hosted by the Center for a New American Security. More here.

It’s going to be slow going for Afghanistan’s election audit, reports AFP: “Four days after Afghanistan began a massive audit of millions of votes cast in the run-off presidential election, disagreements and a shortage of observers have slowed progress … The audit began last Thursday and the Independent Election Commission (IEC) said last week it planned to take around three weeks, with teams working in two shifts auditing around 1,000 ballot boxes a day. But with only 435 ballot boxes checked since Thursday, the exercise is expected to take longer than planned.” More here.

And any deal on Iran’s nuclear program is also going to take longer than planned. FP’s Yochi Dreazen: “The United States, Iran, and five other major powers said late Friday that they would extend the high-stakes talks over Iran’s nuclear program for four months while negotiators try to close what both sides acknowledge to be major divides over several issues … Obama administration officials insist that the talks have made major progress that justified giving negotiators until November to pursue a final deal. In a statement, Secretary of State John Kerry said “the very real prospect of reaching a good agreement that achieves our objectives necessitates that we seek more time.” More here.

The U.S. continues to stay the course on Iran by threatening pain and offering relief. The NYT’s David Sanger: “Behind President Obama’s decision on Friday to extend the Iran nuclear negotiations for four more months is a calculation that the administration has the mix of pressure and incentives just about right: That by keeping the most damaging sanctions, but giving Tehran a taste of what access to its overseas cash reserves might mean, a deal is possible.

“Congress, and some nuclear experts pushing for a harder line, strongly disagree. It was overwhelming sanctions, and the pressure of covert action against Iran’s nuclear program, that brought the country to the table, they argue. To get a final deal, they contend, the formula is simple: More sanctions, more pressure, and behind it all the lurking threat of military action. More here.

 Former Obama advisor Robert Einhorn, in a post for Brookings’ blog, says that the extension is better for the P5+1 than for Iran, but warns that enrichment remains the primary outstanding issue in the nuclear talks, here.

You know there’s a lot going on in the world when news from Iraq is far from the top news story. Iraqi officials said special forces secured full control of a former U.S. military base on the outskirts of Tikrit on Sunday. The WSJ’s Nour Malas and Ali Nabhan: “…Camp Speicher, the headquarters for U.S. forces in northern Iraq during the 2003 invasion and subsequent war, has become a focal point in the fight between Iraqi forces and Islamist militants in the country’s north. The battle for the former American base holds significance both because of its strategic location and in the propaganda war between the two sides. Militants from the extremist group that calls itself Islamic State seized Camp Speicher-now an Iraqi air force and military base-shortly after taking control of Tikrit on June 11. Fighting flared on and off around it until government forces pushed militants out earlier this month in a major ground and air campaign. Failing to keep full control of the camp, some 37 miles northwest of Tikrit, would deprive Iraqi forces and allied militias of a strategic staging ground, local officials and military analysts say.” More here.

More than 700 people were killed in Syria over the course of Thursday and Friday, in what activists say were the bloodiest 48 hours of fighting in the conflict to date. Al-Awsat’s Paula Astih: “…The head of the Syrian Observatory for Human Rights (SOHR), Rami Abdul Rahman, told Asharq Al-Awsat that this was the first time casualties had topped 700 in the space of two days since the conflict began in 2011. He contrasted the violence to the gas attack in the Ghouta region close to Damascus last year, which he said killed around 500 people.” More here.

 Meanwhile, a deadly battle is raging over Libya’s international airport. AP’s Maamoun Youssef: “Clashes between rival Libyan militias fighting for control of the international airport in the capital, Tripoli, have killed 47 people over the past 24 hours, Libya’s Health Ministry said … The weeklong battle over the airport is being waged by a powerful militia from the western city of Zintan, which controls the facility, and Islamist-led militias, including fighters from Misrata, east of Tripoli. The clashes resumed Sunday after cease-fire efforts failed.” More here.

The Air Force is scrutinizing SpaceX’s civilian space flights. Bloomberg’s Tony Capaccio with the scoop:  “The Air Force is examining several anomalies that occurred during Space Exploration Technologies Corp.’s three civilian space flights as part of its review of billionaire Elon Musk’s quest to launch military satellites. While none of the irregularities caused the missions to fail, the Air Force is reviewing corrective actions as it weighs certification of SpaceX. Musk’s company wants a piece of a $67.6 billion Pentagon program for satellite launches, a market held by a joint venture of Lockheed Martin Corp. and Boeing Co., the government’s top two contractors.” More here.