FP’s Situation Report: State says Russia is firing on Ukraine; Did U.S. intel share all they knew before the crash?; Kerry is waiting on an answer from Hamas; New president in Iraq; and a bit more.

No longer a civil war? The State Department yesterday accused Russia of firing artillery across its border with Ukraine to target Ukrainian military positions. If true, the conflict in Ukraine is transforming from a civil war, where one side is receiving considerable support from Russia, to an open war between the two countries.

From Reuters: "State Department spokeswoman Marie Harf also said there was evidence that the Russians intended to deliver heavier and more powerful multiple rocket launchers to the separatist forces." More here.

Michael McFaul, the former U.S. ambassador to Russia, told The WSJ: "If true, this represents a serious escalation on Putin’s part. Instead of using last week’s tragedy as a pretext for ending this war, he seems to be doing the opposite, doubling down." The WSJ’s Julian E. Barnes and William Mauldin with more here.

Questions remain over what U.S. spies knew, and when, before the downing of MH17. Why didn’t the Federal Aviation Administration issue a warning for the area in eastern Ukraine where Malaysia Airlines Flight 17 was shot down? Was the U.S. intelligence community unaware that the Pro-Russian rebels had got their hands on a far more sophisticated weapon? Or did they know, but for whatever reason that intelligence wasn’t properly disseminated? A week after the shoot-down, we still don’t have a clear picture of who knew what when.

FP’s Shane Harris investigates: "In the weeks before Malaysia Airlines Flight 17 was shot down over eastern Ukraine, U.S. intelligence agencies were tracking a steady buildup of heavy weapons in the region, including tanks and rocket launchers flowing across the border from Russia and into the hands of Moscow-backed separatists. But U.S. analysts didn’t confirm that a surface-to-air missile capable of striking a commercial airplane had made its way into the fighters’ hands until after the jet was destroyed on July 17, according to senior U.S. intelligence officials, who briefed reporters earlier this week.

That assessment was at odds, though, with public statements by the rebels themselves, who claimed in late June that they’d obtained a weapon that might bring down a commercial jet. In addition, Ukrainian officials said that they had spotted an SA-11 missile launcher, known as a Buk, in rebel hands at least three days before the downing of MH17." More here.

Meanwhile, at the crash site, no one is investigating. The NYT’s Sabrina Tavernise and Thomas Erdbrink: "At the field in Ukraine where the exploded remnants landed, there are no guards and no recovery workers, no police officers and no investigators. Early Thursday evening, there were almost no people – just two curious 12-year-old girls looking at part of the tail of the Boeing 777." More here.

The few monitors who are there said they found "shrapnel-like" holes on parts of the plane: The WSJ’s Alexander Kolyandr, Matina Stevis and Robin van Daalen: "The damage to the jet’s exterior is a crucial clue to understanding what brought down Flight 17. Still, the presence of shrapnel damage may not immediately point to the SA-11 surface-to-air missile that U.S. officials have said was likely fired by pro-Russia rebels, as some air-to-air missiles also are designed to destroy an aircraft with a shrapnel-producing warhead. Finding actual shrapnel would yield more certainty over the missile type." More here.

And a week has gone by and the world is still waiting for Europe’s response. It remains to be seen whether the European Union can respond to the Ukrainian crisis with a unified voice. A new round of sanctions targeting Russian individuals and companies is expected today, but the Obama administration would like to see sector-wide sanctions against the country. Easier said than done. With different European countries dependent on various parts of the Russian economy, agreement on which sector to target is not going to be easy.

A quote to sum up the problem: "The Germans don’t want to jeopardize their energy interests, the French don’t want to risk their military sales, and the British don’t want to go too hard on Russian financial interests," Mujtaba Rahman, the Eurasia Group’s director for Europe told The NYT’s James Kanter and Alan Cowell.

They write: "More than any other recent crisis, the Russian incursion into Ukraine and all that has followed, including the downing last week of a Malaysia Airlines passenger jet over territory in eastern Ukraine controlled by pro-Russia separatists, has highlighted the glacial pace of decision making within the European Union. And it has given impatient critics, in the United States and elsewhere, additional reason to complain that the union is unwilling to take strong stands even when confronted with a clear case for action." More here.

It’s time to send Putin a much stronger message, writes Michael Weiss for FP: "Either he can continue subventing and enabling the bloodletting in eastern Ukraine, or we can expose the enormous global network of offshore bank accounts, dummy companies, and real estate holdings that belong to him and his criminal elite. A mafia state should be treated as such." More here.

Meanwhile, The New America Foundation asked "six of the best Kremlinologists we know ‘What is Putin thinking, and what are his next moves?’" FP’s Shane Harris says: "After the downing of MH17, Putin seems to be thinking, ‘How can I pin this on the Ukrainians?’ Based on the stories we’re seeing in the Russian press and Putin’s own statements, the Russian president isn’t close to accepting any portion of the blame for the shoot-down." See what the other five folks said here.

Ukraine’s prime minister resigned yesterday. Needless to say, the timing’s not great. The NYT’s David M. Herszenhorn: "Prime Minister Arseniy P. Yatsenyuk, a pro-Western technocrat who has guided the Ukrainian government through the tumultuous months since the ouster of President Viktor F. Yanukovyvch, resigned abruptly on Thursday, after the governing coalition of Parliament collapsed." More here.

In Israel, a new cease-fire proposal is on the table. Under the new plan, a temporary weeklong cease-fire would begin on Sunday. During this time, Israeli Defense Forces would be allowed to stay in Gaza to continue to locate and destroy Hamas tunnels.  Ha’aretz’s Barak Ravid and Jack Khoury with the details: "A senior Israeli official said that U.S. Secretary of State John Kerry has drafted a new cease-fire proposal and presented it to both sides. Kerry, who will leave Cairo Friday afternoon and return to Washington, is awaiting an answer from the Qatari and Turkish foreign ministers as to how Khaled Meshal, the head of Hamas’ political wing, has responded to his proposal. More here.

Will Hamas agree? Meshal has said that he would not agree to a permanent cease-fire until the economic blockade on Gaza is lifted, something that would not be addressed until after the shooting stops under Kerry’s new plan. But yesterday, the Hamas leader showed a little more flexibility.

An attack on a U.N. school killed 16 people in Gaza yesterday, but it’s unclear who’s responsible. FP’s Colum Lynch: "The deadly strike came just two days after U.N. Secretary-General Ban Ki-moon publicly warned about the prospect of Israeli strikes against U.N. installations during the confrontation between Israel and Hamas. Speaking to the U.N. Security Council via videoconference from the West Bank city of Ramallah, where he was pushing for a cease-fire, Ban urged Israel to exercise restraint, recalling that Israeli missiles had struck U.N. facilities during previous conflict.

"…But officials in New York and Jerusalem said they were not prepared to blame Israel because some of Hamas’s rockets had fallen in the same area, raising the possibility that the school might have been struck by a militant rocket. Israel has denied targeting the school but conceded that it had fired in the vicinity in response to Hamas’s fire." More here.

In an interview with SPIEGEL, Yuval Diskin, former director of Israel’s internal security service Shin Bet, speaks of the current clash between Israel and the Palestinians, what must be done to achieve peace and the lack of leadership in the Middle East, here.

Welcome to Friday’s edition of Situation Report. If you’d like to be one of our subscribers, we’d love to have you. Sign up for Situation Report by sending us a note at gordon.lubold@foreignpolicy.com and we’ll just stick you on. Like what you see? Tell a friend.  And if you have a report you want teased, a piece of news, or a good tidbit, you, send it to us early for maximum tease: kate.brannen@foreignpolicy.com And the more shovel-ready, the better. And hey! Follow us: @k8brannen, @glubold and @njsobe4.

Who’s Where When: Another full lineup today at the Aspen Security Forum, including Chief of Naval Operations Adm. Jonathan Greenert, who will talk about the challenges facing the Navy with The WaPo’s David Ignatius at 5:15 p.m. Full schedule here.

Sean Stackley, assistant secretary of the Navy for research, development & acquisition; Gen. John Paxton, assistant commandant of the Marine Corps; and Vice Adm. Joseph Aucoin, deputy chief of naval operations for warfare systems, will testify before the House Armed Services Seapower and Projection Forces Subcommittee as part of a hearing on "Amphibious Fleet Requirements" at 9 a.m.

A big congratulations to the Pentagon public affairs’ Carl Woog and his wife Lauren on their new baby! Zev Thomson Woog was born Wednesday at 5:45 p.m. In an email to colleagues and friends, Woog said, " We are so grateful for everyone’s support for the past 9 months…Zev is fired up to meet you guys!" #BabyZTW

Some big confirmations come through. Gen. John Campbell, the Army’s vice chief of staff, was confirmed by the Senate Wednesday as the next commander for NATO’s International Security Assistance Force and US Forces in Afghanistan. He’s replacing Marine Gen. Joseph Dunford, who was also confirmed Wednesday as the commandant of the Marine Corps. And Army Lt. Gen. Joseph Votel was confirmed to succeed Navy Adm. William McRaven as head of US Special Operations Command. Defense News with more.

Norway says a group of terrorists from Syria has plans to attack: The AP has the story: "The head analyst of Norway’s intelligence agency says a group of people is en route from Syria ‘to carry out an act of terror in the West," adding that Norway has been ‘concretely named’ as the target." More here.

The Islamic State is gaining in Syria. The WSJ’s Maria Abi-Habib: "Islamic State militants launched assaults on Syrian forces across three provinces on Thursday that killed key government figures, including two brigadier generals, said activists and residents, in a rare confrontation between the two sides during the war. In one assault, the jihadists besieged two military bases outside Hasakah city in Syria’s east, killing a commanding brigadier general, according to the Syrian Observatory for Human Rights, an activist group in London with a network of contacts across Syria." More here.

The Turks spent $100 million on health care for Syrian refugees from 2011 to 2013. Hurriyet’s story here.

There’s a new president in Iraq. The NYT’s Tim Arango and Suadad al-Salhy in Baghdad: "Iraq’s leaders selected Fouad Massoum, a longtime Kurdish politician and former guerrilla fighter who took up arms against Saddam Hussein’s regime, on Thursday as the country’s new president, an important step in forming a new government that the international community and Iraq’s religious authorities have called for and described as crucial to confronting a growing Sunni insurgency.

"…The next political step, the selection of a new prime minister, will be more difficult and fraught, especially as violent attacks are killing civilians on a daily basis and Sunni militants led by the extremist Islamic State in Iraq and Syria, or ISIS, are consolidating their control of large parts of the north and west of Iraq."  More here.

The lede on that same story from Asharq Al-Awsat’s Hamza Mustafa: "It was one step forward and two steps back for Iraq on Thursday as parliament successfully elected a new president, but appeared no closer to choosing a prime minister or forming a new government." Full article here.

State’s Brett McGurk says that airstrikes against Sunni militants in Iraq are still on the table. Military Times’ Jeff Schogol: "In May, the Iraqi government asked the U.S. to launch airstrikes against the Islamic State, but at the time, the U.S. did not have enough intelligence to do so, said Brett McGurk, deputy assistant secretary of state for Iraq and Iran. ‘It was very difficult for us to know specifically what was happening,’ McGurk told the House Foreign Affairs Committee on Wednesday… The U.S. now has much better intelligence on the Islamic State, which will help inform President Obama as he decides whether to take military action against the militants, McGurk said." More here.

Setting the record straight: What is and isn’t going on in Iraq, from FP’s David Kenner. "Since the Islamic State captured Mosul last month, it has burned shops selling alcohol, ordered veils placed over the faces of mannequins in store windows, and implemented discriminatory policies that forced the majority of the city’s Christians to flee. You’d think that was dramatic enough — but a number of apparently false stories about the jihadist group’s behavior in Iraq’s second-largest city are spreading like wildfire through the Western media."

For example, the Islamic State has not issued a fatwa ordering women to undergo female genital mutilation, as reported yesterday by some outlets. More here.

Two years after bombing a Bulgarian airport, Hezbollah remains as strong as ever in Europe. Matthew Levitt for the Atlantic: "…Hezbollah’s European networks are so strong, in fact, that just this month it was revealed that Hezbollah procurement agents bought parts and technologies in Europe for the surveillance drones the group deploys in Syria and Israel. And U.S. lawmakers are worried. On Tuesday, the House unanimously passed a bill that, if enacted into law, would allow the U.S. to take the unprecedented step of sanctioning European banks found to be doing business with the group." More here.

No survivors in the Air Algérie plane crash … Surface-to-air missile did not bring it down: The WSJ’s Stacy Meichtry and Inti Landauro: "French President François Hollande said there were no survivors found at the site of the Air Algérie crash in Northern Mali, adding that French troops dispatched to the scene had recovered one of the jetliner’s black boxes." More here.

Sen. John Walsh’s cheating renews questions about the military’s problems with ethics. The U.S. Army War College in Carlisle, Pennsylvania, is reeling from the news that one of its masters students — the Democratic senator from Montana — plagiarized a 14-page paper he wrote while at the school in 2007. It’s bad news for Walsh’s political career, but it’s also terrible news for the military, which is trying to distance itself from a series of ethical scandals, including the Air Force’s nuclear test cheating to the Navy’s problems with bribery.

Kurt Schlichter, a conservative author and class of 2011 War College graduate: "It’s heartbreaking because the military is in moral crisis. As army leaders, we presume to lead young Americans. We have to have the highest integrity. We don’t own our rank. We borrow it from the American people to do our job." More from The NYT’s Nick Corasiniti and Jonathan Martin here.

Quadruple Threat: Soldier, Sailor, Airman and Marine, All Rolled Into One. Time’s Mark Thompson has the story of Staff Sergeant Jesus Yanez, who since 1993, he has served in the Army, Navy, Air Force and Marines. His experience provides him important insights like: "The food in the Air Force is much better than in the Army, Navy or Marine Corps." Read more here.

What are Iraq and Afghanistan combat vets thinking? Check out IAVA’s 2014 survey here.

Quick Hits:

China and India agree to work together on reconstruction projects in Afghanistan, The Times of India reports.

Sen. Bob Menendez (D-N.J.) is threatening to block U.S. arms sales to Iraq if Congress doesn’t get an assessment of Iraqi forces and assurances the weapons won’t fall into the hands of extremist militants, AP reports.

The return of two unmanned cargo helicopters from Afghanistan raises questions about whether the technology has a role in future wars, writes Breaking Defense’s Sydney J. Freedberg Jr.

House Republicans are preparing legislation that would accuse the White House of violating the law when it exchanged five Taliban prisoners from Guantanamo Bay for Army Sgt. Bowe Bergdahl, The National Journal’s Billy House reports.