BLITZER: It has all the elements of an international showdown. Iran now says its Red Crescent Society will try to break Israel's blockade of Gaza with a shipment of humanitarian relief. If it does, Israel will have to make a major decision.

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And joining us now, Israel's ambassador to the United States, Michael Oren. Mr. Ambassador, thanks very much for coming in.

MICHAEL OREN, ISRAELI AMBASSADOR TO THE U.S.: Pleasure to be here, Wolf.

BLITZER: Iran says it's going to send some ships from the Iranian Red Crescent to Gaza to participate in this effort to break Israel's blockade. If they do that, will you send Israeli commandos to stop those Iranian Red Crescent ships?

OREN: Israel will take any step it needs to take to defend itself. The naval blockade is in place to prevent massive amounts of rockets and other missions from reaching Hamas and Gaza. Any ship that comes tried to break that blockade we're going to stop. If they come with humanitarian relief, we'll take the humanitarian relief and we'll give it to the people of Gaza, but if they come and try to block the blockade, this, we'll have to defend ourselves.

BLITZER: Do you have independent confirmation that Iran is about to do this?

OREN: No, only the declarations just you heard.

BLITZER: Do you take that seriously?

OREN: Can't estimate it right now. Iran makes a lot of declarations and doesn't follow through the great number of them.

BLITZER: Does Iran have the ability to get its ships into the Mediterranean?

OREN: Oh, it would have to go around outside of the -- outside of the --

BLITZER: Can they go through the Suez Canal?

OREN: I don't know if the Egyptians would let them. These are complex, diplomatic questions or it can swing around and go halfway around the world. I think the issue here is the need for Israel to defend itself, and Egypt has the exact same policy. Egypt is afraid of Hamas. The Palestinian authority knows that if Hamas gets rockets, it's the end of the peace process. It's the end of Palestinian authority. Many countries are invested in this blockade. It's not just Israel.

BLITZER: A lot of people understand that and appreciate it. What they don't understand, there are some of the lists of prohibited items that Israel won't allow into Gaza. I'll give you an example. The economist reported things like ginger, nutmeg, canned fridge, dried fruit, fresh meats, seeds, and nuts and they go on, musical instruments, newspapers, wood for construction. Is that true that Israel won't allow these kinds of materials into Gaza?

OREN: The important thing here is that Gaza is getting all these materials through other means, through tunnels under the Egyptian border. We assure that there is no shortage of food or medicine in Gaza. We have 100 trucks a day, at least, going over our border, carrying food and medicine. There's no shortage of either of these things.

BLITZER: But are these things prohibited from going through?

OREN: You know, Wolf, I don't have a list in front of me. I hear also things from Hamas and Gaza, from the free Gaza movement. The fact of the matter is our commitment is to assuring this food and humanitarian aid, you know -- Gaza strip is a hostile entity to us, and I don't see where the United States during World War II felt a great need to supply, you know, chocolate to the German people, either. BLITZER: What do you think of this European Union proposal that they would take over inspecting these ships going into Gaza. They would make sure there's no security threat to Israel. No weapons or missiles or rockets or missions (ph) or anything like that. They would do the job, and Israel would no longer have to deal with these ships coming, and the EU would check the ships?

OREN: Wolf, we're open to suggestions that would help facilitate the blockade better. We had some bad experience with international supervision of rocket shipments to Hezbollah and Lebanon.

BLITZER: United Nations operation, but this would be an EU operation. Are you more comfortable with the EU taking charge?

OREN: Again, we'll be open to suggestions. Our past experience has been that in Lebanon in 2006, Hezbollah had 12,000 rockets. Now, it has 42,000 rockets. There were European observers along the Gaza border when Gaza border crossings were open. Hamas shot at them, and the Europeans ran away. Keep in mind, this is Hamas that fired 10,000 rockets into the state of Israel. It's the Hamas that has sworn to destroy the state of Israel.

BLITZER: What I hear you saying you're more open to EU inspection of ships than you would be in the United Nations.

OREN: All I can say is we are open to suggestions. Our experience in the past has not been particularly so list to us (ph).

BLITZER: Israel is going to have its own independent investigation of what happened with the flotilla the other day. Will you allow international observers to participate in your investigation?

OREN: The investigation will be an Israeli investigation. Israel is a democracy. It has the right and the duty to investigation itself, just as the United States investigates incidents that happened with American forces in Afghanistan and Iraq. But the Israeli government is considering some type of international component in that investigation.

BLITZER: You rejected a United Nations investigation. You won't cooperate with the United Nations as far as an investigation of the flotilla?

OREN: We're not going to have an international panel of journalists sitting in judgment on Israel's action that cannot possibly be a balanced panel. And, again, as a democracy, it's part of our sovereign right and duty to investigate ourselves.