Astronomers at the Palomar Observatory have discovered a distant supernova explosion, one that they believe is a type previously unknown to science.

B. that they believe it to be
C. they believe that it is of
D. they believe that is
E. they believe to be of

IMO: E. I was confused between B and E, but eliminate B because of redundant "it". But I am not clear why "that" should be omitted here.
[spoiler]OA : E[/spoiler]