Slice 1 cup of the strawberries; set aside. Halve remaining strawberries; set aside.
Stir boiling water into dry gelatin mix in large bowl 2 minutes until completely dissolved. Add enough ice to cold water to measure 2 cups. Add to gelatin; stir until ice is melted. Refrigerate 5 minutes or until slightly thickened (consistency of unbeaten egg whites). Meanwhile, line bottom of 13x9-inch dish with cake slices. Add sliced strawberries and 1 cup of the blueberries to thickened gelatin; stir gently. Spoon over cake slices.
Refrigerate 4 hours or until firm. Spread whipped topping over gelatin. Arrange strawberry halves on whipped topping for "stripes" of "flag." Arrange remaining 1/3 cup blueberries on whipped topping for "stars." Store leftover cake in refrigerator.