IWarp

The IWarp tool is pretty similar to photoshop's liquify tool.



How to use it:
Filters->Distort->IWarp

Now you have the IWarp dialog box open. The default settings really don't make a change in the image so I suggest you increase the "Deform Radius" and the "Deform Amount". Now click on the image in the box to alter it. The tools are pretty self-explanatory and will actually do something now that you have increased the strength.