Slice 1 cup strawberries; set aside. Halve the remaining strawberries; set aside. In a large bowl, stir boiling water into gelatin powder for 2 minutes or until dissolved. Add enough ice to cold water to measure 2 cups. Add to gelatin; stir until ice is completely melted. Refrigerate 5 minutes or until gelatin is slightly thickened or the consistency of unbeaten egg whites.
Meanwhile, line the bottom of a 13-in. x 9-in. dish with cake slices. Add sliced strawberries and 1 cup blueberries to thickened gelatin; stir gently. Spoon over cake slices. Cover and refrigerate 4 hours or until set.
In a large bowl, beat cream cheese and sugar until well blended; gently fold in whipped topping. Spread over gelatin. Arrange strawberry halves on cream cheese mixture to resemble the strips of a flag. Arrange remaining 1/3 cup blueberries on cream cheese mixture for the stars. Refrigerate leftovers.