The video DEBUNKED: CNN Blue Screen/Green Screen Hoaxes by AluminumTheory directly debunks this.
However, as an anonymous Youtube video is hardly a credible source, I have cross-checked a couple of its claims below, and directly source them, if possible.
AluminumTheory argues it is not a blue-screen stage (as claimed by the conspiracy theorists), but just blue-coloured walls from the Dhahran International Hotel. He compares number of photos and references a newspaper article to support this.
To confirm this claim, let's start of with the nice newspaper article from The Free Lance-Star, a newspaper based in Fredericksburg, Virginia who had sent a couple of reporters to cover the war.
(The entire article is worth the read, but copy pasting isn't possible, so I retyped most of it)
A long frustrating trip to the middle east
But we owe an explanation here. It's an explanation being shared by many of the 700 journalists who joined the safari to Saudi Arabia, only to be upstaged by CNN and its uninterrupted coverage.
No doubt television has made you familiar with the Dhahran International Hotel--or at least the back side of it, where the television networks broadcast, where the Scud missiles are sighted and where the shelters are located.
Maybe you've wondered about those blue balloonlike structures forming the background of Charles Jaco's nightly CNN telecasts. Most thought they were radar domes or complex satellite communications equipment.
They are the tops of the sun-screen shelters and cabanas surrounding the hotel swimming pool. They have that lofty look about them only because the networks have constructed tree-houselike broadcast platforms from plywood and 2-by-4s--each successive one built higher than the first--and they sit atop a miniature golf course initially designed for the enjoyment of the guests.
"I had more freedom reporting from East Berlin before the wall came down,"
Source: Google News Archive: The Free Lance-Star - Feb 16, 1991
Additionally it's possible to find photos of the location in Great Britain's Imperial War Museums archive:
Satellite dishes erected by the international press corps at the International Hotel, Dhahran, Saudi Arabia.
What it boils down to is that all news agencies were forced to report from the same location (as actually mentioned by Jaco himself at one point in the video). The video is consistent with that location, and is not a blue-screen stage.
AluminumTheory shows that two parts of the video, labeled "Take Two" and "Take Three" were not separate takes, but actually the exact same footage that had been duplicated to make it seem more sinister.
He shows this by laying the two sections of the video next to each other, and showing they are identical. Proving this in text and images here is a bit hard, but in the YouTube video they are overlaid pretty nicely. As this would prove a deliberate intent to falsify the information I deemed it worthwhile to reproduce this result ('peer review it', if you will):
Zooming in the waveforms overlapped to within reason of the MP3 encoding.
This is strong support to reinforce AluminumTheory's evidence that that these are not two separate takes, but the same footage manipulated.
This video is a deliberate attempt to falsify information to attract visitors for patriotportal.yolasite.com. The AluminumTheory video mentioned in the first paragraph continues with more photographic evidence, but the above three pieces of evidence were to me the most central ones, and are now properly attributed.
Another worthwhile thing about the video is that it puts into perspective the behaviour of Jaco to some extend and explain why they weren't allowed to make wide angle shots (they were right next to an airfield used by the military). Not to say that he didn't overreact in that segment, but it was a war zone after all.