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American Morning

Update on the Mumbai Massacre; Oberoi Hotel Now in Government Control; Indian Commandos Storm Jewish Center

Aired November 28, 2008 - 06:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(BEGIN VIDEO CLIP)
JOE JOHNS, CNN ANCHOR (voice-over): Breaking news. Commandos move in to take out terrorists and end the massacre in Mumbai. This morning, more explosions, more drama. And more hostages.

UNIDENTIFIED FEMALE: Everything shook.

JOHNS: And the foreclosure angel.

UNIDENTIFIED FEMALE: I'm happy for her that she actually has a place to go now.

JOHNS: How one woman's random act of kindness saved another from living on the street.

UNIDENTIFIED FEMALE: Just keep your faith and don't give up.

JOHNS: On this AMERICAN MORNING.

(END VIDEO CLIP)

CAROL COSTELLO, CNN CO-ANCHOR: Happy day after Thanksgiving everyone. I'm Carol Costello in for Kiran Chetry.

JOHNS: And I'm Joe Johns, and we are 42 hours into the siege in India. It's just hard to believe this is the second straight program that we began with breaking news.

Major developments unfolding in Mumbai at this very moment. Police say the Oberoi Hotel is now under their control, cleared of any terrorist but the nightmare is not over yet.

Heavy gunfire continues hours after commandos entered a Jewish center to rescue hostages and flush out terrorists still on a bloody rampage. India's national guard also engaging terrorists for a third straight day in the Taj Mahal Hotel and the death toll is now topping at least 146 people.

Separately, the FBI is sending a small team of investigators to Mumbai. In a moment, we'll take you there live for the very latest.

And another attack on the high seas by Somali pirates. Diplomatic sources say the pirates hijacked a Liberian-flagged chemical tanker in the Gulf of Aden today. There were two British security guards and dozens of Indian crew members on board the ship. And gas prices dropping for the 72nd straight day, down more than a penny overnight to $1.83 a gallon. Right now, just seven states have gas prices of $2 or higher. And the last time we've seen prices this cheap was January of 2005.

COSTELLO: But back to our top story now. A dramatic progress as we speak in the effort to end three tense standoffs in Mumbai. In the past few hours, commandos descending from helicopters stormed a Jewish center where terrorists are holed up. There are still reports of heavy gunfire and explosions at the Oberoi Hotel. Police say the standoff is over, and they're now going room to room to rescue hostages.

And in the past few hours, more gunshots and explosions have rocked the charred Taj Mahal Hotel. Some of those shots coming from commandos who earlier this morning spoke about the moment they came under fire.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We diluted (ph), fired back at the terrorists. The moment they saw us with weapons they hurled grenades at us. Fortunately, we could take cover and were unhurt.

(END VIDEO CLIP)

COSTELLO: Pretty frightening stuff. CNN's Sara Sidner is live in Mumbai. Sara, bring us up to date.

SARA SIDNER, CNN CORRESPONDENT: Let me set the scene for you now. We are a little bit closer. A lot of the journalists are down on the ground, very low and that is because there have been gun battles throughout the past few hours. Just a few moments ago, just before it aired, there was a loud bang and about three or four minutes before that, there were several fired shots that went off in succession what sounded like automatic weapon fire.

We should mention that as I've been here over the last hour or so that we noticed another round of commandos crouching low and going very quickly towards the Taj Hotel. And so at this point, the situation is still very active.

And as you mentioned, it has been about 42 hours since all this started. This has been a very, very trying time for the families of those people who are still inside and, of course, for those who are still holed up inside their rooms and any possible hostages that may still be in a situation where they're not sure how this is all going to be resolved.

I can assure you, we've been here for quite sometime, that this is by no means over. And we should mention, you know, we were talking yesterday morning that some of these things started happening. There are loud bangs. There are shots going off and then for part of the evening, because I was here about 10 hours ago, part of the evening it was quiet. I could walk almost all the way to the front door. I actually tried to see how far I could get, and it seemed as though authorities were sort of ratcheting down this whole thing and suddenly this.

This morning and for the past several hours, there have been gunshots, there have been loud blasts, and commandos running in. So very odd situation here how from hour to hour it is literally changing dramatically. So, it's hard to tell exactly what is going on and why they would have let us get so close a few hours ago and then suddenly you have these commandos running in.

As we understand it, there has been one suspected terrorist still inside and that is what the commandos are trying to flush out at this hour. And there are still hotel guests inside. Some of them are holed up in their rooms. They've been there again for 42 hours.

I was able to get some information out for them. Someone who is inside who basically said that they are running out of water, they don't have much food and they're really concerned. People are extremely worried now. They don't feel like they can sleep because they don't want to miss their chance to get out safely -- Carol and Joe.

COSTELLO: And plus, it's so confusing as to what's going on and you touched on that. We've been getting word from Indian authorities. In fact, we've got three times within the past, what, 24 hours? They were saying that this thing is all over. Everyone is safe. And then we hear an explosion coming from one of the hotels.

Why are Indian authorities coming out and saying everything is all right when it's not? Are they confused?

SIDNER: Carol, that is infuriating, especially for the family members. And like I told you a few hours ago when I was out here and it was dark, it was about 4:00 in the morning, there were family members standing around saying it's not over. I'm talking to my family members inside. They are terrified. They are actually throwing up, sick with worry.

So, there's definitely some confusion of getting mixed messages from authorities and, of course, for the families. And for those who are inside, that is not good news. Really people want to know. They want to be given it to them straight what is happening exactly in there. You don't have to give us all the details about what your commandos are doing, but at least let people know that it's still a very active scene.

And I know they have, I think, been in contact with some of the people inside the hotel telling them not to come out until it's safe until they give them a certain signal. But this is such an active scene. It's gone on for 42 hours now. A lot of concern for those who are still inside -- Carol and Joe.

COSTELLO: You bet. Sara Sidner, we'll get back to you. Thank you.

JOHNS: And right now, commandos say they're in control of the Oberoi and are conducting a sweep of the hotel's 333 rooms and suites, escorting guests out of the hotel. CNN's Phil O'Sullivan is live outside at the hotel in Mumbai.

Phil, as you heard over there at the Taj, a couple of times we've been told everything was over then it wasn't. What's the situation with you?

ON THE PHONE: PHIL O'SULLIVAN, CNN PRODUCER: Well, it's a different sort of thing than what Sara is citing over there at the Taj. What's happening here is that we're actually seeing two bus loads of guests that have actually left the hotel this morning. And as I'm standing here now, we're seeing another. Here they come now.

There's another group (INAUDIBLE) emerging from the hotel now. The real media melee here at the moment is everybody wants to try and get close to these people, the folks (ph).

Well, I managed to speak to a couple of the guests this morning. They said they were sitting in their rooms pretty much in the dark with the curtains closed and the chair up against the doorknob for the last two days. And then eventually this morning they got a call from the manager telling them to be prepared, that somebody would be coming to knock on their door. It would be the police. Don't open it unless it was the police.

This man, he opened the door. He was taken out and was able to get out of the hotel safely. Then I saw several air crews from the Northwest Airlines. Air crews came out this morning. The Lufthansa air crew came out this morning totaling 50, around 50 guests this morning and a lot more look like they're coming out now.

Also, I heard from the police this morning saying that some of the guests in this hotel had been fatally -- had been killed in the action that took place, and two terrorists were killed.

I asked the commissioner of police if there were any terrorists who might have escaped. He said definitely not. I said, does that mean there were only either two terrorists in the Oberoi Hotel?

This is an 800-room hotel, Joe, and he said, "It is very likely there was only two terrorists in that hotel the whole time."

JOHNS: Got it. Phil, thank you so much for that. Two terrorists killed. Some guests killed in the Oberoi and a lot of people moving out.

We'll get back to you. Carol has some breaking news.

COSTELLO: That's right. We're going to go to -- we're going to go to Mumbai, to a Jewish center there where terrorists have taken control of that and actually took control of that from the get-go 42 hours ago.

Nic Robertson is there now. I understand the terrorists, are they still inside that Jewish center, Nic?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: They're still inside the Jewish center. If you look just over my shoulder here, Carol, we'll zoom in. Scottie (ph) will zoom in and you can see commandos on the roof of the building. That is the roof that the -- that the terrorists took control of.

They took hostage a rabbi, his wife and two children. At least one of the children may have been released, we understand. It's not clear how many terrorists remain in the building, how many people are being held hostage. But early this morning, commandos landed a helicopter, dropped commandos on the roof of the building. They're trying to work their way down that building.

We understand the main focus of activity is on the third floor. In the last few minutes, we've heard a lot of loud explosions, exchanges of gunfire. That's been going on in the past few hours as well.

And about 15 minutes ago, another military helicopter came in just behind that building, landed. Not clear who or what it was dropping off but the siege of the Jewish center just over my shoulder here continues, and that continues to be a focus of exchange of gunfire and those explosions, Carol.

COSTELLO: Is there any sort of communication between the commandos and the terrorists inside the Jewish center?

ROBERTSON: From our vantage point, it's not clear and it's not clear if that's what happened at the hotels. There's been discussions but from the little we do know, and the few reports we do get from the police when they get close to the attackers, then the gun battle ensues. And it's not clear that there's any useful dialogue going on. However, there was a report that at least one child had been released, that somebody had come out possibly to get food earlier in the day.

So perhaps, a degree of dialogue. We just have breaking details at the moment, Carol, of what's happening in that building. Other than what we know, the commandos have landed on the roof. The activity is on the third floor of this five-story building, and it goes on with intensity sporadically.

COSTELLO: It's just confusing that the terrorists would remain holed up in that Jewish center for 42 hours with hostages making no demands and just lobbing grenades out the window. I mean, it's difficult to know what their intent is, Nic.

ROBERTSON: We've seen photographs of them. They had backpacks on. They were well prepared. It was clear that they were expecting to perhaps hold out for a period of time. And perhaps there never was an intention for demands. We don't know.

Perhaps those were communicated to the police, but we haven't heard them. That's just part of the police's negotiation, negotiating tactics. So perhaps the strategy here was quite simply to create a disturbance over a period of time that would draw international local attention and by extending it over a period of time rather than having a few bomb blasts on one evening killing a lot of people, this has sort of extended the activity, extended the attention they're getting and extending the issue. We've really yet to hear exactly what they're holed up in there, Carol.

COSTELLO: Nic Robertson live in Mumbai. We'll get back to you. Thank you.

JOHNS: Chaotic situation there. Again, just hard to believe it's been more than 42 hours since terrorists fired their first shots in Mumbai. Just a quick recap to tell you what we know and how it happened in an "AM Extra."

It was just before noon Eastern time on Wednesday when at least 12 armed gunmen arrived in the city of Mumbai on small boats. They split into groups using guns and grenades and then they attacked people inside a major train station. Then moved on to a popular tourist cafe and then a women and children's hospital.

The terrorists stormed a Jewish center and the Taj and Oberoi hotels. Inside they shot countless people while taking others hostage. Again, the latest word from police at least 143 people killed in all and 327 wounded.

Meantime, al-Qaeda's second in command blasting the U.S. and Afghanistan's leaders in a new video message. Ayman al-Zawahiri (ph) claiming any gains by the U.S. and Iraq will be temporary, and he calls recent efforts by Afghan President Hamid Karzai to negotiate with Taliban insurgents a sign of his government's weakness. A message from Zawahiri (ph) last week accused Barack Obama of betraying his black heritage to become president.

COSTELLO: Barack Obama confronts an international crisis in his pre-presidency. The best political team on television looks at Obama's response to the Mumbai attack and the make-up of his national security team

It's 12 minutes after.

(COMMERCIAL BREAK)

COSTELLO: Christine is looking at the glass half full this morning.

(LAUGHTER)

She's here "Minding Your Business." She just gave us a pep talk.

JOHNS: Yes.

COSTELLO: Don't you feel better?

JOHNS: I really do. I'm all excited about the bargains.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, listen, it's not more -- it's not just about the bargains. For millions of people, despite what you hear about how horrible the economy is, for millions of people they're going to be just fine. Millions more are not. But millions of people are going to be fine. And if you find yourself in that category or you are trying very hard to put yourself in that category, this is going to be a pretty great way to end the year. Because if you don't have a lot of debt, you don't have a crazy mortgage. If you have a job, you have a 30- year fixed mortgage, you don't have a whole bunch of financial responsibility, a lot of tuition or something, you're going to be just great.

COSTELLO: Then life is great. That's a lot of ifs.

ROMANS: Well, no.

JOHNS: Yes. Sure.

ROMANS: But seriously, if you've been playing by the rules you might be all right here. The consumer spending for October was down about one percent. That's a sign that people are pulling back because they're worried, because they're not in a good position because they're worried about where the economy is going.

November is expected to be weak as well. Christmas is probably going to be rough. A lot of these consumer surveys are showing adults are saying we're not going to give each other as many gifts, but we want to make sure our kids still have the same kind of Christmas they did last year. So we know that it's going to be rough. And we know that the retailers know that.

JOHNS: Yes, that's the thing. The retailers are going to take it on the chin.

ROMANS: And they're going to take it on the chin and they're going to have huge discounts. They're going to have more discounts than just today. They're going to have discounts that are going to ramp up throughout the end of the year.

If you're buying online, we're talking about free shipping. There's really no reason not to pay any shipping if you're buying online because just keep waiting and watching.

There are retailers who have filed for bankruptcy. Circuit City, don't forget. Linens and Things is actually already going out of business, so there's still some liquidation sales there. Steve & Barry's is another one that filed for bankruptcy.

So some of these then have filed for bankruptcy already. They're really going to be luring in people. They're still operating. They want to have the discount so that you can come in there.

Here's what the National Foundation for Credit Counseling says you should do to take advantage of this tough environment. Hunt for bargains. They are out there. Sometimes you have to hunt. There's going to find you, I'm not kidding.

Spread out your purchases, November and December. Don't go today and buy everything today. Don't go on one Saturday and buy everything on that one Saturday. Buy only what you need. Don't fall into, you know, the trap of buying the stuff that you don't need. Don't pile on debt and avoid gift cards.

For some of these retailers that are in trouble, you know, it might not be a great time to be using the gift cards. Plus, some gift cards have high fees. A quarter of them aren't even redeemed any way. So folks, when you're giving somebody a gift card, 25 percent of the time your gift receiver is not even using that. So what kind of a gift is that?

So, this is the last thing I want to say about this.

COSTELLO: Sounds like a lecture.

ROMANS: Christmas, I know. Christmas is on a Thursday. So you have the Saturday, the Sunday, the Monday, the Tuesday, the Wednesday before Christmas. Every single retail analyst I talked to said that is when it's really going to be the big, big discounts. So, you know, today is the mobs and the crowds and maybe it's a post-thanksgiving tradition to go shopping. But be frugal, be smart over the next few weeks and there's going to be some good stuff out there for people.

JOHNS: And be flexible, obviously.

ROMANS: And be flexible. And if you can't afford it, don't buy it.

JOHNS: You bet.

ROMANS: It's not the end of the world.

JOHNS: Good advice, Christine Romans. Thanks.

New reports now of more gunfire in Mumbai. We'll have the very latest from India in just a minute.

This is AMERICAN MORNING.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SIDNER: Well, you guys, let's go. Just start rolling.

(END VIDEO CLIP)

COSTELLO: That's our brave Sara Sidner in Mumbai. As you heard another explosion coming from the Taj Hotel, kind of a common occurrence over the past 42 hours. The situation still very intense in India this morning.

We're continuing to follow that breaking news out of Mumbai. Right now, heavily armed commandos hitting back at terrorists holed up in the Taj Mahal Hotel and in a Jewish center. The sounds of gunfire and explosions you heard there are rocking the luxury hotel. Again, commandos who've been inside the building say their men have been trained to kill and are shooting at anything that moves. There are also sounds of gunshots at the Jewish center. Right now, the death toll stands at 146.

Let's go live to Mumbai and Sara Sidner. Sara, another explosion coming from the Taj just a few moments ago. Tell us about it.

SIDNER: Two very large explosions just blasted. We all ducked and we have now then decided to move back a bit. I mean, this situation just seems to be getting more and more out of control.

Now there are -- you'll see journalists suddenly crowding around. And I'm not sure what they're crowding around at this point in time. But not sure. I think they were calling possibly an ambulance over to that area. So we're not going to get into that.

We're not going to get ourselves sort of tangled up in that. But I do want to take a look at the Taj. We have just gotten some word. I just got a text message from family members who have been speaking to their family members who are inside, and they say they believe that they have been pulled out safely. They just don't know exactly where they've been taken.

So apparently, an American, four people have been sort of pulled out to safety who were inside of that hotel. But we definitely have a serious situation here. I mean, it's constantly going. Lots of loud bangs, lots of gunfire. And someone has been wounded.

It is official. Our bureau chief in Delhi, Phil Turner, has just told me that those crowds of cameras we're seeing, those crowds that are following, this person has been wounded. We are not sure if that person, I think they were sitting, maybe a journalist who was sitting outside the Taj just where we were two minutes ago. We backed off about 100 feet from that situation. But it is definitely a very liquid and dangerous situation right now.

COSTELLO: Sara, just a word about the people still holed up inside that hotel. You said they've been communicating with their family members, some of the hostages inside that hotel and they are now free?

Do you have any idea how that happened? Did they go out on their own? Did Indian security forces rescue them? Did the hostage takers let them go?

SIDNER: These people were not hostages. They were simply holed up in their room. And I say simply not to make it like it's anything less than being a hostage. Certainly, they felt like hostages inside their rooms locked up. But they were locked in their rooms and as we understand it, their family has gotten word.

We don't know how. They were asking us maybe for some information. So we don't know exactly how it all went down, but we understand that they may well be out safe. Though they were very concerned because they saw us live and they heard the bangs and they heard the gunfire that's been going off over these past few hours.

And so now there, someone has definitely been wounded. It appears to be someone who was sitting among the journalists, a journalist possibly. We do not yet know. But certainly a dangerous situation here and we're going to back off just a little so that you can see it and we're still safe at the same time -- Carol and Joe.

COSTELLO: Yes. Stay a safe distance away, for sure, Sara. Just a final question. Do security forces -- are you OK? Do you need to break away?

SIDNER: Yes. There are -- there are gunshots. I'm OK. There are gunshots now going off. And this is sort of been the sequence of events. A loud bang followed by several gunshots.

Now, it sounds like there's gunshots sort of back and forth so it may be a shoot out situation. Again, we are told by authorities that there was one suspected terrorist still inside, they believe, who may have been wounded overnight at some point in time. And they figure he would get tired and finally come down off of this. But this has been going on now for about 43 hours now. And still, there is quite an active scene inside the Taj Hotel.

COSTELLO: You know, we've been getting a sense of, you know, just, I guess, a portrait of who these men are. Young men. And they were heavily armed with AK-47s and also grenades and a lot of them had bags of almonds so they could keep their energy up through this long process. So you can see that this attack, Sara, has been planned for a very long time.

SIDNER: Correct. Cleverly executed is probably the best way to put it. And also, they obviously planned this out. They obviously thought this through all the way down to the food they might need to keep themselves able to sustain long hours. And dealing with --

(Explosion and gunshots)

OK. All right. Another loud bang you heard there. Now, if you listen, probably in the next few minutes there will be a succession of gunshots.

All right. The journalists are now moving back. This is getting really serious and it's getting too close for comfort.

Let me just mention this to you, Carol and Joe. We have been allowed to get so incredibly close to this building something you would never see in the United States or the UK, for example, or anywhere in Europe. You would never see people this close. In fact, in most instances, authorities would pull you back so far that you wouldn't even be able to see the hotel itself. But for some reason, authorities have let us creep up closer.

And now, we have to do what is right and what makes sense to keep everybody safe. But it is an odd situation because for a while there, I even last night walked almost into the front lobby of the hotel with no one stopping me. They obviously saw I was a journalist. They obviously saw I've been standing here for 24 hours.

So it is a very strange situation one that we have to be careful not to put ourselves in danger. But certainly, look, the people that may still be inside our hearts go out to them. They are suffering through this for 43 hours now.

COSTELLO: You sort of get the sense there that Indian officials even on the scene don't quite know what's going on, because as I said a little bit ago, that authorities keep coming out and telling us the situation is over when clearly it's not.

SIDNER: Clearly. And that has been so excruciatingly frustrating for the family members, especially. But listen, listen up. Remember I told you there would be some reaction to those loud bangs. Now, we're hearing a couple what sounds like a softer more muted bangs, not as loud as the last one that are going off inside. And typically then, that is followed by gunfire.

Now that may indicate, but we don't know that there is still some sort of back and forth with possible terrorists with police looking and searching and maybe they've been able to find him. So at this hour right now, still large blasts followed by muted blasts followed by gunshots, and also followed by journalists just running to get out of the way.

And right now, we're the only ones here. There used to be large crowds of people. They've gotten out of here. They don't feel safe.

COSTELLO: Joe wants to ask you a question, Sara.

JOHNS: Sara, while I'm watching this, I'm getting the impression there are at least three possible different threats that you're facing where you're standing.

One, there's the issue of perhaps people shooting out of a window. Second, there's the possibility of a stray round coming from somewhere. And third, there's a possibility of shrapnel from an explosion. So that's a pretty dangerous situation for you and the other people on the ground there, correct?

SIDNER: That is absolutely true, Joe. And we're all cognizant of it. But again, you know, sometimes in our jobs we want to be able to see what's going on because authorities are really not giving us information that is credible, frankly. They're not giving us information that comes to be true. They say, OK, it's pretty much all over. And then you get these loud bursts and you get these commandos suddenly running in.

You get a scene that completely changes. So very frustrating. So we're trying to see and assess to see what's going on for the families, for the people who are inside. They're all asking us and e- mailing us and sending us messages saying can you tell us anything. We're not getting word on what to do at this point in time -- Carol and Joe.

JOHNS: And that person -- and that person who was injured out there on the plaza, have you been able either by just looking or hearing from someone what may have happened to that person?

SIDNER: Let me back up a little bit just to see if I can see whether or not they've taken that person out.

JOHNS: Stay safe. Don't do anything crazy.

SIDNER: Yes. I think they've taken that person away. No, no, we're fine right here, I hope.

JOHNS: Yes.

SIDNER: But I think they have taken that person away. But wait a minute, now we've got another crowd of people -- journalists, who are standing around and seem to be following someone else. I don't know if that's an injury. But this was the same scene a few minutes ago, as to whether this person -- there's an injured person here.

Let me see if we can take a closer look because they are bringing that person towards us. Hold on. One of our producers, Bartie Nike (ph) is here.

Can you see what is going on inside of there?

UNIDENTIFIED CNN PRODUCER: Nothing happen here.

SIDNER: OK, OK. The journalists are getting a little overzealous there. And apparently there's nothing -- no injuries, but --

JOHNS: All right, Sara, Sara, OK. Let's cut this off. Get out of there. Get out of there, and we'll come back to you when you're safe, all right? Just clear the area.

All right, just recapping one more time. As you can see, a very dangerous situation there at the Mumbai Hotel. Overall, the death toll we're told stands right now at 146 people including six foreigners, 14 police officers. Total wounded we're told 327 people.

This was a coordinated attack. At least seven sites across the area. The seizures you can see continue there at the Taj Hotel. We're also told that there are more hostages now being released at the Oberoi. More than 42 hours into this crisis approaching 5:00 p.m. there on the ground in Mumbai. We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SIDNER: They plan this out. They obviously thought this through all the way down to the food they might need to keep themselves able to sustain long hours and -- OK. All right. Another loud bang you heard there. Now, if you listen, probably in the next few minutes there will be a succession.

(END VIDEO CLIP) COSTELLO: The explosions keep on coming from the Taj Mahal Hotel in Mumbai, India. Loud explosions. At least two event this morning and then gunfire followed. At the Oberoi, there are sounds of gunshots from that hotel as well. And over at the Jewish Center in Mumbai, India, commandos are now on the roof, but inside, those terrorists are still holding hostage, a rabbi, his wife, maybe a child. We don't know. But the situation in Mumbai very tense and always changing this morning. Again, 42 hours later.

JOHNS: And we are going to try to go to Phil now. He's over at the Oberoi Hotel, our producer on the ground. That's correct, is it not -- do we have Phil on the phone?

VOICE OF PHIL O'SULLIVAN, CNN PRODUCER: Yes we do, Joe. I can hear you.

JOHNS: What's the situation there? As I understand it, you were seeing some more people being released from the hotel just a little while ago.

O'SULLIVAN: I'm still seeing people being released, Joe. More and more people are now coming out. In an adjacent building to the hotel (INAUDIBLE), almost sort of a sorting area where people are being brought out, sort of one by one or in small groups, being put on to a waiting bus. The bus is probably half full at the moment.

I manage to speak to one Australian man who was inside the hotel and asked him what actually happened. He said, basically, he was in his room on Wednesday night around 10:00. He started hearing shooting, he heard explosions and he basically just shut the door, locked the door, put a chair under. He was in his room the entire time with the windows closed. So, you know, it must have been a terrifying situation for you.

He said the worst part was when the hotel went on fire. That was last night. Mumbai time. The hotel -- one part of the hotel, actually, (INAUDIBLE), a large fire started on one side of the Oberoi Hotel. He said that was the most terrifying time. He got very, very concern at that point. But he said he was very happy now. He just wanted to get back to Australia as quickly as possible.

And we got a situation where the military say that the operation to clean up the terrorists at the hotel is now over. They say two terrorists were killed. They don't believe any escaped. But they do believe that there were only either two terrorists at the Oberoi Hotel. This is an 800 room hotel. So, for those two men -- and they keep this place completely locked down for the last 42 hours.

Joe?

JOHNS: And just what have you been doing? Give us a sense, will you, of what you have been doing across all these hours and how you have been observing and keeping track of this?

O'SULLIVAN: Well, I was actually staying in the Taj Hotel and was going back to this hotel on Wednesday night and managed to escape just as the gunman entered and was able to get away.

I didn't really -- I didn't really (INAUDIBLE)-- didn't actually manage to get any sleep until late last night, then up again early this morning to start reporting again. So in a very long time, also (INAUDIBLE) when we just got away from the hotel. It's been a really frightening situation, Joe, because the situation is still not under control and these terrorists are managing to keep on.

I mean, even the Oberoi had told me they are taking the hostages out and they say the operation is over. They say there are still two floors to be completely sanitized is the expression they use.

You know, as Sara Sidner has been reporting, a lot of the information we're receiving is just not credible or very confused. So, I mean, it's still really difficult to tell if this is completely over, even at the Oberoi Hotel where we're seeing. Now, the things -- the real jubilation is the (INAUDIBLE) greeting their nationals as they come out and family members meet up with other family members. But also, the very sort of points of sight of a man holding up a photo of his uncle who he says is still in the hotel and is wondering if anybody had seen him.

It's been a sad and frightening and is somewhat (INAUDIBLE).

COSTELLO: Phil, this is Carol. You know, I just wondered, authorities told you there were only two terrorists inside that hotel, you know...

O'SULLIVAN: That's right.

COSTELLO: ...laying siege for 42 hours. Do they know that for sure? And how could just two terrorists manage to do this?

O'SULLIVAN: Carol, this is exactly the question I put to the senior police officer. I said, surely, are you sure there was only two terrorist? And he said at this stage that is very likely. I said are you sure some didn't escape? And he said, it is very unlikely. So, I mean, to me, the amazing thing is that these guys were able to keep going for so long.

I mean, it's very difficult. Take it from me. I was up for something like 38 hours after it happened. And people all around in the -- here in the media fighting very badly. These guys able to stay up all this time. But the talking, that is just talk, that these people were very, very well-prepared and had press laid in supplies just in preparation just for these events.

COSTELLO: Yes, we understand, they had --

O'SULLIVAN: But it has been very, very orchestrated and very, very carefully planned.

COSTELLO: All right. Phil O'Sullivan, we're going to have to break away. We have another place to go.

Thanks, Phil. We'll get back to you. JOHNS: Nic Robertson is over at the Chabad Center. He's been there for quite a while. And we're being told there are new developments there.

Nic Robertson are you with us?

UNIDENTIFIED MALE: Did you hear what Nic said?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Essentially, getting CNN on-called on Channel 3. He needs to reconnect.

JOHNS: Nic Robertson, it's Joe Johns in New York. Are you hearing me? All right. No. We're going to have to vamp on that for just a couple of minutes until Nic gets establish. There's some type of audio communications.

The Mumbai terror attacks are a reminder of the kind of national security test America's new president will face. So, should Barack Obama take a more active role in all of this? Joining us right now from Washington, Republican analyst and CNN contributor Leslie Sanchez and from Palm Beach, Florida, Democratic analyst and CNN contributor Hillary Rosen.

So, the both of you have been watching all of this. And I think the obvious question and the first question is with a new president who is just weeks away from taking control of the United States government, you're watching this on TV, what you're seeing is, perhaps, militants, terrorists, if you will, opening what appears to be a whole new chapter in the way of doing things. Laying siege to an entire city over the course of two days, virtually two days and just a few hours.

How does Barack Obama view this and how does he deal with it as he prepares to move into the White House?

HILLARY ROSEN, CNN CONTRIBUTOR: It is a pretty amazing scene, Joe, and God, the CNN reporters and producers are being so fantastic. But this is a really important moment for people around the world to really only see one president.

And I think that Barack Obama understands that. The president- elect has been getting regular briefings from the secretary of state. There has been a special India transition team focused with the national security team, meeting with the U.S. director of intelligence and national security advisors. So, there is a lot of behind-the- scenes discussion and briefing going on. But the rest of the world really needs to just understand that as far as the U.S. is concerned, we have one president and that's President Bush.

JOHNS: Right. Leslie Sanchez, here's the other question. With Barack Obama in Chicago or in Washington preparing to move into the White House, we have leaders of at least two countries in a very delicate situation.

One we have India, the prime minister there dealing with a very difficult situation. Then we have Pakistan. There really -- we haven't flushed out whatever possible involvement has been speculated on. Nonetheless, the question of Pakistan has been raised.

LESLIE SANCHEZ, REPUBLICAN STRATEGIST: Right.

JOHNS: And there's a very uneasy peace there. Should Barack Obama even though he's not president of the United States have some access or some channel to world leaders through himself or his staff so that he can start laying the groundwork for dealing with these folks in that region come the day he's, you know, sworn in?

SANCHEZ: Right. You know, I think many experts, and I don't know where Hillary is going to fall on this would agree that it's imperative that there looks like there is a singular message. You know, Hillary alluded to that. But there's going to be back channel conversations, but in terms of a public statement other than what President-elect Obama has already put forward, I think that would go beyond the scope of what is safe and secure for America's interest right now.

I think you're exactly right with respect to whether or not Pakistan is involvement in this. It's going to take a lot of time to pull all this out and sort this out. But with respect to transition teams, I think there's a tremendous amount going on even today in terms of briefing, understanding that, and I think to be fair, there's a lot on the transition team, the Treasury, in terms of the economic crisis and now on the national security team. They are looking at the depth of what they are about to be handed. And it's imperative that we give this president enough time to understand all of the nuances of this before we expect any great movement.

JOHNS: And then there's a --

ROSEN: We do know some things, though, Joe, about where President-elect Obama stands on some of this. He's been quite articulate over the course of the last couple of years on the need to bring Indian and Pakistan together, to have them stop fighting each other and start to focus on the Islamic fundamentalists and al Qaeda that are, you know, causing a lot of the dissent within -- among both of those countries.

So, you know, I think that he sees South Asia as a really important place for U.S. focus, and an area that maybe hasn't gotten enough focus over the last several years.

SANCHEZ: And interesting part of this, too, if you look at the transition team. I mean, the people are giving president-elect Obama the benefit of the doubt, but it is very much tilted to the right and more hawkish, not only with the continued appointment of Secretary Gates, but also when you're looking at General Jones. Probably via big part of the national security team, Hillary Clinton and Joe Biden just in a sense of where they were on the Iraq war.

These are folks that definitely have some consistency pulling to the right as opposed to maybe what some on the left had hoped to see right away. So, that does give some a sense of comfort to a lot of individuals.

JOHNS: So, right. You have two countries in this region. They're both nuclear powers, of course. Barack Obama has to deal with the economic situation here in the United States, as well as potential tension there. It's really a possibility of coming into office with more than one crisis on the plate that he and his national security team and his economic team are going to have to deal with all at the same time.

ROSEN: It's a huge set of challenges, and I think in many ways, the president-elect has anticipated that by choosing a national security team in particular that's really experienced.

I mean, first of all, leaving the secretary of defense in place for now, by all accounts, is pretty smart but also assures a lot of continuity in U.S. capability and activity.

Senator Clinton, obviously, being experienced as secretary of state, Admiral Jones at national security. He is pulling together a team that really can act and move not independently of Barack Obama's views, but move on their own with a level of stature around the world to address some of the key issues while he does focus on what he has continued to say is his priority and should be -- the economic crisis at home.

JOHNS: Thank you both so much for coming in this morning, and we'll keep up with you.

Carol, back to you.

ROSEN: Take care, Joe.

COSTELLO: Situation still very fluid in Mumbai, India. We understand hostages have been released from the Oberoi Hotel. But there are explosions and gunfire coming again from the Taj Mahal, also at the Jewish Center. Commandos on the roof, hostages inside. Nic Robertson on the scene. We'll get to him right after this break.

(COMMERCIAL BREAK)

COSTELLO: And we are continuing to follow breaking news out of Mumbai, where the situation is getting serious once again. Right now, the death toll stands at 146. Throughout the past hour, we've heard explosions followed by gunfire as heavily armed commandos hit back at terrorists still holed up in that Taj Mahal Hotel. The dramatic events unfolding live right here on AMERICAN MORNING. Here's just some of that video.

(BEGIN VIDEO CLIP)

(EXPLOSIONS)

SIDNER: Well, you guys, let's go. Just start rolling for crying out loud.

(END VIDEO CLIP) COSTELLO: And right now, there are also new reports of gunfire and explosions at a Jewish center. And that's where CNN's Nic Robertson is live right now.

At last check, Nic, there were commandos were on the roof. What's happening now?

ROBERTSON: Carol, if you look over my shoulder again, you can see the commandos on the roof. We've seen up to five at a time. We've seen them pointing their weapons at the rooms down below. There have been a lot of loud explosions in the past hour. Some intense exchanges of gunfire. We can't see exactly what's being shot at or where those explosions are coming from.

But there is an Israeli search and rescue team on stand by here right around the corner from the building. There's another loud explosion coming from the Jewish center just over my shoulder there. The Israeli search and rescue teams have told us that they don't have permission yet to go to the building. But whenever they hear an explosion like that one, they say they cringe because they don't know what's going on inside. They want to get into that building. They want to give their assistance, but they're standing back until the Indian authorities give them permission to go in.

Carol?

COSTELLO: And this is really frightening because inside that Jewish center, a rabbi, his wife and one or two children?

ROBERTSON: That's right. There isn't a clear picture of exactly how many terrorists are in the building. It is understood that before the attack took place, a rabbi, his wife and two young children and possibly a maid as well were inside the building. There was a report earlier in the day that one of the children may have been released. There was a report that perhaps the maid had escaped during the initial gun battle. But it's very unclear.

The Jewish search and rescue team who are here and have sent by their government to help. They don't have details. They don't know what's happening inside the building. But it's believed that the activity is centered on the third floor of this five-story building.

Early in the morning, commandos landed on the roof. We saw a helicopter come in about an hour or so ago that landed on the ground nearby possibly putting a team of commandos or troops to go in by the lower floor entrances.

But at the moment, as we've seen in these buildings, the government forces here in Mumbai have been forced to sort of stand back and back away out at a slow pace with these terrorists. The attack is inside the hotels. And it's exactly the same scenario here inside the Jewish center right now -- Carol.

COSTELLO: And just -- and a sight for our audience, that rabbi inside is an American. He's originally from Brooklyn, but he's been living in Mumbai for quite some time. I was just wondering about the commandos, Nic. Who are they? Are they part of the Indian army? Are they part of some security force of Mumbai?

ROBERTSON: As best we know, they're an elite government force. They're the troops who had trained and have the equipment to deal with this type of hostage standoff situation. They have the ability to maneuver more tactically, if you will, coming in by air than a lot of the regular army troops.

That's another loud explosion going off there. That is just typical of what's happening here at the moment. We don't see any smoke coming out of the building. We don't know if these are perhaps stun grenades. We haven't seen any fire ensuing from the building so far following these explosions.

But we don't know if they're perhaps trying to penetrate through walls of the building to get the gunmen holed up in one specific location. It's just not clear from this vantage point. But this is typical of what's going on. And for the rabbi and his family, who are still believed to be in there, it must be a very terrifying situation, as you say.

JOHNS: Nic, it's Joe Johns. A lot of our viewers have seen so much coverage about the two hotels, the Taj and the Oberoi. Can you sort of recap for us how we got here with the Jewish center there? Was this one of the first places that was hit by the terrorists? Or did that come along later? And, how long has the siege been going on?

ROBERTSON: Joe, the sequence of events on that first Wednesday evening about 10:00 p.m., when the Oberoi and Taj Mahal hotels were attacked by terrorists, was about the same time that they struck the Jewish center, the Nariman House. It's the Chabad Jewish Center.

And from where I'm standing now, just about half a mile from me, I can see that big domed roof of the Taj Mahal Hotel that was on fire just the other evening and a little in the other direction, I can see the Oberoi Hotel. So, it's all in the same vicinity. So, the standoff in this Jewish center that's going on behind me now has been going on for almost exactly the same length of time as the standoff around the Taj Mahal and the Oberoi hotels -- Joe.

JOHNS: Nic Robertson, thanks so much. Stay safe -- Carol.

COSTELLO: Absolutely. As you're seeing here for the second straight day very dramatic events unfolding right here live on AMERICAN MORNING. While Nic was reporting, our crews at the Taj Hotel captured this. Take a look.

Of course, we don't know what's causing that blast, but those kinds of explosions have been happening now for about an hour now at the Taj Mahal Hotel. We understand there are still people inside. There are a few terrorists, although authorities really aren't sure how many. And frankly, we haven't been able to depend on the information coming from Indian authorities. So, we're going to try to find out what we can for you and we'll be right back. (COMMERCIAL BREAK)