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Lou Dobbs Tonight

Terrorist Attack in India; Obama's Economic Plan

Aired November 26, 2008 - 19:00   ET

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

KITTY PILGRIM, CNN GUEST ANCHOR: Thanks, Miles. Tonight terrorists launched coordinated attacks against one of India's biggest cities killing dozens of people. There are reports that terrorists singled out Americans and British citizens. We'll go live to Mumbai for the very latest.
We'll also have the reaction from some of the best terrorist analysts in the world, all that and much more straight ahead.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Wednesday, November 26th. Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening, everybody. Terrorists today launched coordinated attacks against the Indian city of Mumbai. It's the commercial capital of India. Government sources say the terrorists killed at least 78 people and took hostages in two hotels.

There are reports that terrorists deliberately targeted Westerners, among them, Americans. Now police say the terrorists used grenades and automatic weapons. Joining us now on the phone from Mumbai is CNN correspondent Andrew Stevens. Andrew, tell us what happened and what is going on now.

ANDREW STEVENS, CNN CORRESPONDENT: Yes, this was an unprecedented attack. This is a city, Mumbai, which has been victim of several terror outrages in recent years, but nothing like we have seen over the past six hours. And that is a coordinated attack on up to -- and I say up to because it's still not exactly clear how many targets were picked by terrorists, but the latest count is 10.

The real focus, though, was on two five-star hotels in South Mumbai. South Mumbai is the commercial heart of this city, which is the commercial capital of Mumbai. The Oberoi hotel and the Taj Mahal Palace hotel, they would be very familiar names with many, many business travelers right around the world.

Now, we know the gunmen stormed both hotels about six hours ago now. Hostages have been taken in the Taj hotel. We understand at this stage, there are perhaps between seven and 16 foreign nationals being held by the hostage takers. When the gunmen stormed the Taj, they rounded up (INAUDIBLE) and demanded to see passports.

They demanded to know who was carrying a U.S. or a British passport. An eyewitness report said that he saw about 15 people being taken away. He didn't know how many of those were British or U.S. passport holders. Now right now at this moment we understand the military is in the Taj hotel building. Most have been evacuated, most of the guests, we believe.

We can't confirm that at the moment. There are still gunmen in there. There are still hostages in there. On top of that, this building is on fire. Thick, black smoke coming from the roof of this historic building, it's more than 100 years old and obviously a significant fire taking place there. I just need to tell you what is happening about five minutes away from this hotel at the Oberoi hotel.

Also, we understand, a hostage taking situation. (INAUDIBLE) we've got to be very careful here because the communication is difficult here at the moment. The city has been very much cordoned off. They're trying to lock it down. It's very difficult to get from A to B. It's difficult to get information from government sources at this stage, but what we understand is there's also a hostage situation going on right now in the Oberoi hotel. There are also military forces inside the hotel. There have been reports of explosions from both hotels over the past hour or so.

PILGRIM: Andrew, so you're describing a very active situation still at this moment. As you point out, there were multiple targets, maybe as many as 10. Are any of those in an active situation at this time that we know of?

STEVENS: It's a little hard to confirm. We're getting reports that there may also be a hostage -- a live hostage situation in a hospital called the Cama (ph) Hospital. We know that there was gunfire. We heard gunfire. We heard it live on local television.

A reporter was there. We could clearly here gunfire coming from this hospital. As far as the other areas, the other big target was the Central Railway Station. This is the terminal that handles the majority of something like 2.5 million people who commute on the trains here in Mumbai every day.

We understand that it's being reported by the police officials that several gunmen stormed into the railway station. There is minimal security there, I would have to say. I was down there yesterday and opened fire with AK-47s and also threw hand grenades. We don't know what the death toll or the injury toll is there. What we know at this stage is the official death toll for all of the attacks on all the targets stands currently at 78 with perhaps up to 350 people injured.

PILGRIM: All right. Andrew Stevens, we'll come back to you a little bit later. Andrew, thank you for that report.

For more on what's happening now in Mumbai, we're joined by Manuela Testolini, who was caught up in the attacks. Manuela, thanks for talking with us. Tell us what happened to you, what you saw, and you were right in the middle of this. How did you escape?

VOICE OF MANUELA TESTOLINI, EYEWITNESS: Well, we have been caught in the midst of it because we're staying at the Taj and actually left around 8:30 in the evening to go to the Oberoi for dinner. And just maybe 30 minutes after we sat down, we heard gunfire, which at the time we didn't realize was gunfire, and my colleague actually saw someone running towards the glass door (INAUDIBLE) restaurant and he shot a gentleman just outside the doors.

And at which time, we proceeded to run. The entire restaurant ran through the kitchen. People left their purses and phones, obviously so a lot of us are without some tools to communicate. We ran through the kitchen. We've all been -- and the gunmen followed and a couple of the staff there apparently tried to stop and -- tried to stop those people, and were apparently shot as well, according to one of the other staff members that we talked to.

And from then, we walked to -- we were led to a ballroom in the hotel where one side of the room was all windows looking into the street, so they had us sitting in the dark for almost a couple of hours as we tried to assess the situation and figure out what was happening. Sooner or later, they had us led maybe 10 at a time, going out to the street, away from the hotel because that was thought to be safe at the time.

But again, we heard -- we could hear grenades and gunfire and had to keep running and we moved several times. Now -- we're now at a place where we feel safe and where there is about 15 people. And we're still within earshot of what's happening at the Oberoi. We can still hear the activity there...

PILGRIM: What have you heard lately, Manuela?

TESTOLINI: In the last hour, we have heard gunshots. A couple of hours ago, we heard grenades again going off. And the Army is out there, but we're unable to leave. No one is allowed to come into the area. Obviously I'm safe.

PILGRIM: All right, Manuela, you've been through a horrific experience. Were you able to communicate at any point with the outside world while you were basically hiding in that ballroom?

TESTOLINI: In the ballroom, we had one woman who was gracious enough to let us use her BlackBerry and we sent out e-mails to family and friends and colleagues, let them know we were OK. Another young lady later on let us use her cell phone. And as we were using it to call family, there was some gunfire and everyone ran and we actually lost the girl, but we still have her phone, so we hope to reunite with her at some point, but we have been able to at least communicate now with the cell phone.

PILGRIM: So Manuela, you believe that you're in a secure location now and you will just stay there at this moment?

TESTOLINI: Yes, we're just waiting it out now.

PILGRIM: We are with you on that and thank you very much for taking us through your experiences and talking to us. Manuela Testolini, thank you.

Joining us now with more on the U.S. reaction to what's going on in Mumbai is State Department correspondent Zain Verjee. And Zain, what are your sources telling us about the attacks? ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well hi, Kitty. The U.S. has really condemned these attacks. They say they're monitoring the situation. The U.S. is also saying that they are unaware of any American casualties because this really appears to have been targeted toward foreigners and we're hearing that there are a substantial amount of foreigners that have been killed or injured, it's quite possible, but we don't know right now.

Secretary of State Rice has been in touch with U.S. diplomats on the ground in India and is being briefed. She's aware of the situation and is trying to reach Indian officials to see what they may need, but you know the situation is fluid. It's just difficult to get in touch, and she's going to offer any kind of assistance that the U.S. can give, and of course India though has to request and accept that.

State Department officials are telling us, too, that what they're doing is they're getting all their information about the situation at these hotels from the Indians on the ground. American officials can't get to any of these sites simply because of the lock-down situation. They can't get to the hotels. U.S. Consulate staff are combing all the hotels, looking for Americans, trying to figure out what's going on and relay the information back. As of now, we also don't have any reports that any Americans are being held hostage. Consular officials in Mumbai though, Kitty, have all been accounted for.

PILGRIM: You know this, we have to point out to our viewers, this has been occurring overnight in India...

VERJEE: Right.

PILGRIM: ... so this is a very difficult situation to try to get contact.

VERJEE: It is. It's a really difficult situation. What the State Department has done is that they have set up a crisis center so anyone who is panicking and doesn't know how to get a hold of someone if their families or their friends you know were staying at the Taj or the Oberoi, if it was business or pleasure, what they've done is set up a hotline. And this is the number. It's 1-888-407-4747, 1-888- 407-4747.

PILGRIM: All right. Thank you very much, Zain. We'll come back to you.

Let's turn to one of the world's leading authorities on global terrorism, Rohan Gunaratna. And he's at the International Center for Political Violence and Terrorism Research in Singapore. He joins us on the phone. Rohan, thanks for joining us. First give us your impression of this terrorist attack and who do you think might be behind it? What are the signature marks of this attack?

ROHAN GUNARATNA, INTERNATIONAL TERRORISM EXPERT (on phone): It's an al Qaeda-type attack but conducted by the India, Mujahedeen (ph). The Indian Mujahedeen (ph) has been responsible for mounting a very significant number of attacks in the past five, six years. That originates back to the early 1990s when they first emerged at the Student Islamic Movement (ph) of India.

But more recently, they have been (INAUDIBLE) by the ideology of al Qaeda where they seek not only to attack Indian targets, but also Western icons and Western symbols. So in many ways, this is a complex attack, and it is this type of attacks that Indian Mujahedeen (ph) will continue to stage unless this group is dismantled.

PILGRIM: Rohan, given the complexity of this attack multiple targets, it looks like many participants. Does this suggest to you a well financed, well planned, well based attack from a terrorist group?

GUNARATNA: Absolutely. This kind of operation, it could have taken several months of careful planning. It also demonstrates that the group has been able to operate this type extensive effort by the Indian government to penetrate the group and to target the group. It shows that the group has a very significant expertise in the ability to attack so many targets in this instance.

PILGRIM: All right, Rohan, in fact, are there any groups that you are seeing a signature on in this attack or is it really beyond the ability to tell at this point?

GUNARATNA: The only group that has the intention and the capability to mount attacks is the Indian Mujahedeen (ph) that has now claimed this attack under the name of Deccan Mujahedeen (ph). There's no other group in India with this intention and this capability. And certainly, this is a group that has been threatening in the past year to carry out this kind of attack, especially in Bombay. Their main area of operation has been in Bombay.

PILGRIM: All right, thank you very much, Rohan Gunaratna on the very latest in Mumbai. We'll have more on the terrorist attacks in India a little bit later.

Here the Department of Homeland Security today said it has received a plausible but unsubstantiated report of a terrorist threat to the New York mass transit system. Federal authorities say this reported threat to subway trains and commuter trains is uncoordinated.

They say this threat involved the possible use of suicide bombers or explosives, but again, authorities have no specific information to indication this plot has developed beyond quote, "aspirational planning." Now sources tell CNN there is no connection with the attack in India and this warning.

Coming up next, we'll have the very latest on the terrorist attacks in Mumbai, what's happening to Americans in the city.

Also President-elect Obama says this country is facing an economic crisis of historic proportions. What's he going to do about that? We'll have more on the economy, more on Mumbai, all of that next. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Terrorists tonight attacked multiple locations in the Indian city of Mumbai. This is India's financial center. At least 78 people were killed. Another 200 wounded. Now, the terrorists reportedly targeted Westerners. President Bush strongly condemned those attacks. Kathleen Koch reports from the White House -- Kathleen.

KATHLEEN KOCH, CNN WHITE HOUSE CORRESPONDENT: There is a new report, a new statement that is out from the press secretary, Dana Perino, the White House, the Bush administration has been responding throughout the afternoon to the crisis, and Perino says quote, "President Bush offers his condolences to the Indian people and the families of the innocent civilians killed and injured in the attacks in Mumbai, India. The United States condemns this terrorist attack and we will continue to stand with the people of India at this time of tragedy."

Now Perino goes on in the statement to point out that both the White House, the National Security Council convened officials from -- with the counterterrorism and intelligence agencies, as well as the State and Defense Departments this afternoon to meet about the violence that has erupted in Mumbai today.

She says quote, "The U.S. government continues to monitor the situation, including the safety and security of our citizens and stands ready to assist and support the Indian government." Now as to the president himself, Deputy Press Secretary Tony Fratto (ph) tells me that after the president left the White House this afternoon and then arrived at Camp David at the presidential retreat, he was informed of what was happening in Mumbai and he's being kept regularly updated.

The president obviously will be updated throughout the next several days on the situation. He's going to be spending the next three days at Camp David with friends and family, celebrating Thanksgiving -- back to you, Kitty.

PILGRIM: Thanks very much, Kathleen Koch. We will have much more on the terrorist attacks momentarily.

Turning now to the political developments in this country, President-elect Obama today declared help is on the way for our battered economy, but he again refused to give any specifics on how he will help working men and women and their families. Ed Henry reports from Chicago.

(BEGIN VIDEOTAPE)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): Pledging to offer fresh ideas to deal with the financial crisis, President- elect Barack Obama unveiled 81-year-old Paul Volcker as the head of a new economic rescue board and bristled at a question about whether the makeup of his team runs counter to the central message of his campaign.

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: What we are going to do is combine experience with fresh thinking. But understand where the vision for change comes from, first and foremost. It comes from me. That's my job, is to provide a vision in terms of where we are going and to make sure then that my team is implementing.

HENRY: So far, Mr. Obama is surrounding himself with a lot of Washington insiders from Hillary Clinton as secretary of state to President Bush's Defense Secretary Robert Gates staying on at the Pentagon.

UNIDENTIFIED REPORTER: You've got Tom Daschle, Hillary Clinton.

OBAMA: Wait -- -- wait --. Hold on -- hold on...

UNIDENTIFIED REPORTER: We hear anyway.

OBAMA: Wait -- wait -- hold...

(CROSSTALK)

OBAMA: You hear that, so first of all, that's not the topic. We're not talking about my cabinet.

HENRY: And Volcker, who served as chairman of the Federal Reserve in the Carter and Reagan years will be a key economic adviser joining Clinton veterans Tim Geithner and Larry Summers in top roles.

OBAMA: I know this has been sort of conventional wisdom floating around Washington. That well you know there's a recycling of -- of people who were in the Clinton administration. I suspect that you would be troubled and the American people would be troubled if I selected a Treasury secretary or a chairman of the National Economic Council at one of the most critical economic times in our history who had no experience in government whatsoever.

HENRY: The markets, meanwhile, rallied slightly as Mr. Obama pledged again to hit the ground running next year with a plan to fix the financial crisis.

OBAMA: People should -- should understand that help is on the way.

(END VIDEOTAPE)

HENRY: Now, the president-elect who assailed John McCain's Washington experience on the campaign clearly faces a balancing act now. He realizes he's going to need some Washington insiders on board as he navigates this financial crisis at home and various national security crises overseas, including the one in Indiana -- in India in fact.

And right now I can tell you a statement came out in the last hour or so from the transition team here in Chicago, Brooke Anderson (ph), a chief national security spokesperson for Barack Obama saying quote, "President-elect Obama strongly condemns today's terrorist attacks in Mumbai and his thoughts and prayers are with their victims, the families and the people of India. These coordinated attacks on innocent civilians demonstrate the grave and urgent threat of terrorism." Obviously what is interesting is this week has been dominated by economic security for the president-elect. But next week, he was already planning to unveil his national security team. Obviously, this is a fresh reminder of the challenges ahead, Kitty.

PILGRIM: It certainly is. Thank you very much, Ed Henry.

Coming up, we have new casualty figures on the terrorist attacks in India. We'll have the very, very latest from Mumbai.

Also new pressure on the FDA, traces of melamine found in baby formula here in the United States. We'll have a special report on that. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: More now on the terrorist attacks in the Indian city of Mumbai. One of the city's most prestigious hotels, it's the Taj Mahal, is on fire after a wave of terrorist attacks. Now officials now say 87 people were killed. Another 185 wounded and reports say the terrorists deliberately targeted Americans and other Westerners.

Joining us on the phone for his assessment is Tom Sanderson. He's deputy director and senior fellow of Transnational Threats at the Center for Strategic and International Studies and Tom, thanks for joining us this evening. With your considerable expertise, what can you tell us about the style of this attack and the number of attacks? What does this suggest to you, Tom?

VOICE OF TOM SANDERSON, CTR. FOR STRAT. & INTL. STUDIES: Well, just an awfully sophisticated approach, no doubt about it. For these individuals to attack up to what seems to be nine targets indicates tremendous planning capability, intelligence, potentially some inside information. This was not a first-time attack for the individuals -- or at least behind the planning element of this.

PILGRIM: You know you have pointed out in some of your writings that al Qaeda's first message to President-elect Obama was an insult on the Internet. Could this be related to an al Qaeda-type situation? How do you relate these two things? Or is this independent? Is this related to other things?

SANDERSON: Well, I don't think it's necessarily a message to President-elect Obama. Back to their insults, I think that was clearly done because having someone come in with great admiration of the world, you saw the response to his election, undermines the mission and goals and status of al Qaeda. I don't know if this is something that they would do to try and gain -- regain that position they had. I think this is something that while it may have al Qaeda connections, is not aimed specifically at President-elect Obama.

PILGRIM: Anything -- anything U.S. related. Would you -- we do have -- seem to have a hostage situation. We're in a fluid situation right now. It's very dangerous. What is your assessment of that? What might we see going forward in your estimation? SANDERSON: Well, unfortunately, I don't think the type of attack bodes very well for what might happen. And that is these are individuals who brought grenades and machine guns to very close indirect action with hotel security guards, potentially with police, and I think the point of that there is they didn't intend to get out of this alive.

It's not like they left bombs in a park, as happened in New Delhi in September, for remote detonation where they could get away. These are individuals who went directly into hotels, took hostages, understanding that there would be a response by special forces, interior ministry, police, and what have you.

So I don't think these individuals intend to give up. I think they're counting on the publicity. I think they're counting on a number of high profile deaths. So unfortunately, I think a negative outcome.

PILGRIM: You know, Tom, you were actually at the Marriott in Islamabad when it was bombed and you were also at the Taj Mahal on September 15th when a series of bombings occurred in the area. Tell us a little bit from your real experience what is the situation that you think is on the ground now.

SANDERSON: Well, as far as what's on the ground, this is slightly different as there were no hostages in either of those two incidents that I was close to in New Delhi. The bombing was not at the hotel and we were staying at the Taj Mahal up in New Delhi.

In Islamabad, the attack there was a truck-borne bomb, and resulted in 53 dead, and I had just left the hotel for interviews so I was not there for the actual explosion. The scene on the ground is incredibly chaotic, no about it. This is one step above that because of course you have hostages. This is going to be one of the most difficult things that Indian security forces are going to face.

PILGRIM: We understand that the Indian military is active at this point. This situation has been going on for several hours now. Give us your assessment of the potential for response. We understand, also, that the chief of the terrorism in India was killed in this attack. Would that put the troops in disarray in any way?

SANDERSON: No, they would certainly have other competent officials who could come in and take command from the gentleman who died. I think it will be difficult to get anything out of the hostage-takers. We'll certainly have a number of individuals on scene who are able to deal with this to the degree that they can, but much of it depends on the intentions of the individuals inside. We also don't know how many are left, what condition they're in. They could be wounded themselves. So that could be an advantage for the government forces, but it is a very sticky situation.

PILGRIM: One quick question, because of your experience in the area, this was a complete surprise, or was this, because of the minor bombings, something that was an ongoing, underlying concern all along, and if so, does it not seem that the security was weak? SANDERSON: Well, they are certainly aware of bombings. A number have taken place just in the last couple months. This is not a surprise for Indian security forces. What I think they're surprised about is the number of attacks and the synchronized attacks we saw this evening and also surprised at how bold and direct the action is, that these individuals came into the hotels with machine guns, asked for the passports, asked to identify Americans and British. Very much a tactically oriented operation that brought them into direct contact with security forces as opposed to the remote-controlled bombings. So this is a much higher level attack.

PILGRIM: In your experience, is this one of the boldest attacks we have seen so far?

SANDERSON: No doubt, and it's so bold because these individuals did not do it from a standoff distance. Again, they were directly in the attack and clearly understood they would likely lose their lives and that's what makes it so dangerous.

PILGRIM: Thank you very much, Tom Sanderson. Tom Sanderson with CSIS. Thank you, Tom.

Well, joining us is Pentagon correspondent Barbara Starr. And Barbara, what are your sources telling you about the attack and who might be responsible?

BARBARA STARR, CNN CORRESPONDENT: Well, Kitty, at this hour, intelligence services are meeting on this. They have now -- U.S. services have communicating with their counterparts in India and as well as in the U.K. What they're looking at is what your previous guest was talking about, the sophistication, the coordination of this attack. This certainly took -- pardon me, this took planning, money, communications, recruiting, training and really highly executed timing.

One of the things we have been talking about throughout the evening by all accounts, some of the security around the hotels had been lowered in recent days and weeks. Did the people planning the attacks what, did they know that was about to happen? That is going to be a key question.

Now, there is this group that claimed public responsibility for it, but I have to tell you again, behind the scenes, the U.S. is looking at a very different prospect. They're looking, no confirmation, at a possibility this was a group actually called the LAT, Lashkar al Taiba (ph), a very radical Islamic group in South Asia. They have staged attacks in India before. They are active throughout Pakistan and India.

And the level of sophistication they have possibly engaged in here does cause some renewed concern about their potential ties -- their potential ties to al Qaeda or al Qaeda-affiliated groups. So as the U.S. begins to look at what happened here, they're going to be going back, looking at all the clues. How could some group be so organized as to pull this off and nobody knew it was coming? Did they have inside information? Did it have a level of sophistication and planning that the U.S. did not understand?

PILGRIM: Well, that is actually the next question, Barbara, that I have. Was there any indication in intelligence or are your sources saying there was any indication we might get an attack of this magnitude anywhere in the world?

STARR: At this point, no. At least publicly, that is the answer. I asked a counterterrorism official about that earlier this evening. And he said, look, if we had the slightest indication, we would have informed the Indians absolutely immediately. No indication of that.

But these hotels around the world are now these so-called soft targets. They don't have the type of military protection, the type of security protection that embassies around the world have or military bases. These are places where people come and go. Some of them have security at the door that checks bags and packages and that sort of thing.

You see this, tragically, we have seen this in Pakistan. We have seen this at hotels in Jordan a couple years ago. These countries try and ratchet up their security around hotels.

But again, just in terms of the attacks that have been seen in India in the past, they have been what you would think of as internal. Groups in India or Pakistan launching attacks against Indian targets, against tragically, the people of India.

This, very different. This clearly calculated as an attack against Americans and British citizens, as we understand it at this hour. That is going to cause considerable concern -- Kitty?

PILGRIM: Thanks very much. Barbara Starr. And as Barbara points out, we're just only beginning to understand the magnitude of this attack. Large numbers of Indian troops tonight are spreading out across the City of Mumbai. They're searching for terrorists, and this after the terrorists launched a wave of attacks across the city, killing at least 87 people.

Andrew Stevens joins us on the phone from Mumbai now. Andrew, we spoke to you earlier. What are you hearing now?

STEVENS: Well, certainly the city remains in lockdown. It's just turned 6:00 a.m., it's still pitch black here in Mumbai, but the city is in lockdown. One of my colleagues managed to get down to near the hotel to pick up someone who had actually been in the Taj Hotel at the time and managed to flee. And he said that they went through three checkpoints on the way down. They were stopped at one stage by a soldier standing, pointing a loaded weapon at the car. They were forced to get out. That's the level of security in this city at the moment.

It's a city absolutely shaken by what has happened. As we have been hearing from our previous correspondents and guests, this is an unprecedented attack. This is a level of sophistication that hasn't been seen in Mumbai, and indicates a grave new threat to security in this city, indeed, across the whole country. Just in the last 15 minutes or so while I have been listening to, I guess there was a big explosion from the direction of South Mumbai, the hotels there. I'm about 10 minutes away. This reverberated around the bay where we are at the moment. We haven't been able to get down there.

The operations are ongoing. There is still a live hostage situation in two hotels here. There are reports, confused reports that state there may also be a live hostage situation at a hospital. A hospital we know was a target. We had heard gunfire coming from the hospital. But it seems to be that there may be a hostage situation there.

This is the Kam Hospital (ph). It's in the same region as the other targets in South Mumbai. It's a women's and children's hospital. Reports we're hearing is that the patients has been moved into one area of the hospital. I can't confirm if indeed there are hostages that have been taken there, but certainly, that was a target, one of what we now understand are 10 targets, most of them here in South Mumbai -- Kitty?

PILGRIM: Andrew, from what you're saying, are you getting a sense that there is a sort of control in the streets? Has the military stepped in enough that you feel there's a controlled situation in the streets or do you still think that around and in Mumbai there's an uncontrolled situation?

STEVENS: No, I think there is control in the streets around the area. I have to say they have closed off a lot of streets near the target areas. Around the rest - you have to remember, this is a city of 19 million people. It is an enormous city. But there is no indication of any unrest or anything on the streets of Mumbai.

I couldn't say the same -- obviously, the hostage situation in both of those hotels have been talking about the chief minister, who is like the governor in the U.S., the chief minister of the state in which Mumbai is, has gone on local television to say that the situation in both these Taj Hotel and the Oberoi Hotel are clearly not under control at this hour. That coming to us about 15 minutes ago.

So very much the focus of the military activity is focused on those hotels. And perhaps this hospital as well, Kitty.

PILGRIM: What is your sense of the degree of military activity at this point, Andrew?

STEVENS: It's quite intense. There are numbers of soldiers, heavily armed soldiers now on the streets. Particularly and obviously around the effected areas. Commandos have been called in. The Navy is on alert. This is a big naval base, Mumbai, and South Mumbai is the headquarters of the naval operations here. So that is quite close to where these attacks took place. Obviously, high, high alert for both the Navy and Army.

There are commandos out there, are heavily armed soldiers around the streets, mainly around the areas where the targets had been identified. Throughout the rest of the streets, you don't see - certainly from what I have seen where I am, you don't see an obvious presence, although you do notice there are more than the average number of police on the street. All police have been mobilized. We have been hearing just to keep this city calm.

And certainly, you could not say that the city is out of control here, but as I said, it's just those flashpoints which are still very much live situations.

PILGRIM: And you are hearing occasional disturbances, are you not?

STEVENS: Well, we're hearing occasional explosions. What sounds like explosions. And we were getting tips about two hours ago saying there was gunfire coming from a street which is not too far away from the Taj. It's one of the central streets that runs through Mumbai, and there are reports of random gunfire coming from there. Again, they haven't been confirmed. The incidents, what we're actually hearing, does appear to be centered on the two hot spots, if you like. Not actually on the streets themselves.

PILGRIM: All right. Thank you very much, Andrew Stevens keeping us abreast of what's happening in Mumbai all through the evening.

Coming up, new details on the terrorist attacks in the Indian city of Mumbai. We'll have the very latest in just a moment. Stay with us. We'll be right back.

(COMMERCIAL BREAK)

PILGRIM: More now on the wave of terrorist attacks in Mumbai apparently targeting Americans and other westerners. Here's what we know right now, 87 people were killed.

Zain Verjee joins me now. And Zain, what's the very latest on the attacks?

VERJEE: Well, the State Department has condemned these attacks. They're saying, though, that they have been able to account for all consulate employees. They don't know if any Americans have been killed or injured. They're looking through the hotels looking to see if there are any casualties.

PILGRIM: Zain, because American nationals are involved, this puts the U.S. response on a very critical footing. What are we hearing from the administration? What might we see going forward as the attack occurred overnight, that sort of catches everyone off base on the eve of a very important American holiday?

VERJEE: Well, on the top level Condoleezza Rice has been in touch with diplomats on the ground. She's briefed of the situation. She's also briefed President Bush on what's going on. In so far as on the ground, the U.S. says it's ready to help, whatever India needs, it will help. The State Department has also set up an operations center. This is critical if anyone has family or friends and you're really panicking about what's going on, you can call this number, 1-888-407- 4747. And we'll continue to put that up. But that's essentially what they're doing.

PILGRIM: India is a major American ally. It's a financial center. Given we're in the global world of a financial crisis, having a financial center targeted, there are a lot of layers to this attack. Some thoughts on that, or what are we hearing from the State Department on this?

VERJEE: There are so many layers to this attack. India is a very important, very strategic ally on the United States. There are many people in India that don't like that. They think the U.S.-led war on terror is a war on Islam, and there are a lot of young, disaffected Muslim men that feel angry, that the Indian anti-terrorism squads have chased them down, beaten them up, treated them unfairly, hauled them in, and that's ample fodder for terrorist recruitment.

PILGRIM: And Zain, in fact we have had documented cases of minor incidents, minor bombing all the way through the years here, and a series of attacks just recently in the last year. Are we seeing a situation where there is a sort of undercurrent of unrest here on the part of the Islamic militants?

VERJEE: It could be any number of things. It could be connected to the situation in Kashmir. A lot of these militants have some sort of affiliation directly to Kashmir or to a group known as Lakshar al Toiba (ph) that operates in the Kashmir reason.

PILGRIM: Which is the most militant group in the area.

VERJEE: Right.

PILGRIM: Zain, in terms of what goes forward, what kind of activity might we see in terms of U.S. officials going to India or are we likely to stay at a distance at this point?

VERJEE: Well, the U.S. as an ally of India, is more than likely going to say we can help, we can send in rescue teams, we can forensic scientists, we can international hostage units that the U.S. has that may go down there and say if you need us to come, we'll come and help you. But they can't do any of that unless India says, we want your help. And so Secretary Rice has been working the phones, trying to speak to top Indian officials. Because it's such a difficult situation on the ground, I'm not clear whether they have had conversations and offers have been made.

PILGRIM: Thank you very much. Zain Verjee, thanks Zain.

For more expert analysis on these attacks, let's go to our London bureau and Sajjan Gohel, he joins us. He is the director of international security at the Asia Pacific Foundation. Sajjan, thank you very much for being here this evening. Your quick initial assessment of what you have heard of these attacks tonight. SAJJAN GOHEL, ASIA PACIFIC FOUNDATION: Well, this is a very uniquely disturbing event. In fact, I have close family and friends who were in the Taj Hotel when the incident happened. They phoned me literally minutes afterwards to say that gunmen had come into the building. They were screaming out loudly that they wanted Americans and Britons. Fortunately, my family and friends were escorted safely to a safe part of the hotel, and it just escalated quickly. We have seen multiple attacks on a number of different locations.

This was designed to create chaos, political and economic and social consequences. Terrorists went after the transportation system and they have gone after also the tourist industry because, of course, so many foreigners now frequent India, especially Mumbai, which is the important economic hub and also the entertainment center of the country.

PILGRIM: Sajjan, in your experience, is this an unprecedented level of coordination in recent years?

GOHEL: This year, in 2008, India has faced more terrorist attacks in more parts of the country than any other previous period. What has happened up till now were rudimentary bomb devices attached to motorcycles or bicycles that would go off at specific times. This time, this was different. You had what we call a fedayeen mission where these individuals were not necessarily suicide bombers, but they were hoping to die in the process while shooting bullets at security forces and tourists themselves.

Unfortunately this is the type of hallmark we see with groups like al Qaeda. I don't think this was necessarily directed by al Qaeda central, but certainly it was inspired by the ideology of bin Laden.

Let's not forget that Ayman al Zawahiri, the number two of the organization only very recently issued an audiotape message criticizing the new Obama administration, and of course India is a strategic ally of the U.S., a major nuclear deal has been signed between the two countries and they have been identified by terrorist groups as a potential target for these type of incidents.

And as India becomes more successful, as it develops closer relations with the United States, unfortunately, the more susceptible might be to these type of terrorist attacks.

PILGRIM: Does any one group suggest itself to you at this point, Sajjan?

GOHEL: Well, I have heard the name being bandied around today of the Deccan Mujahedin. I would dismiss that quite quickly. Deccan is a subregion in southern India.

This is a group is just something that has just suddenly materialized, a bit like the other group that was claiming responsibility for attacks previously, the Indian Mujahedin. Let's look at the type of modus operandi. This was multiple, coordinated, designed to target the tourists, designed to create maximum social impact. A similar incident happened many years ago, just after 9/11, in fact, in December 2001, terrorists attacked the Indian Parliament. And that draws similarity to this type of attack although this time, unlike previous attacks which were designed to stoke up communal contact between Hindus and Muslims, this is to go after westerners and tourists in particular.

That is of course a very unnerving, very worrying development. And as we have seen in the past, the terrorists do want to strike at a specific time, designed to exploit the security weaknesses that exist. And unfortunately they did their planning well. They looked at the hotels, did their reconnaissance, looked where the security was weak or minimal, and they planned it very successfully. And tragically, this may not be the only attack that India may face in the next coming months.

PILGRIM: In fact, Sajjan, we do not have the luxury of being overly analytical at this point because it's an active situation. We may have a potential hostage situation.

What are you thoughts about the ongoing activities that may take place over the next 10, 12 hours, in your expertise as a terrorism expert?

GOHEN: Well, India has a number of different intelligence agencies that are going to be playing an important roll now in ascertaining firstly who was behind this and how they can insure this doesn't happen again. And the fact is that they did arrest two of the terrorists tonight. That's going to be very important specifically in obtaining intelligence. India's domestic intelligence agency, the Intelligence Bureau is tasked ultimately in obtaining information that could result in potential terrorist plots and activities.

India's external intelligence agency, the Research and Analysis Wing is also designed to garner information from abroad, from countries like Pakistan, where there's a belief it could be a connection to terrorism, because as we've seen, Pakistan has become the epicenter of terrorism.

But security is going to be on high alert, because within the next few weeks, there are going to be major state elections taking place, which could ultimately decide what happens in the general election, which is scheduled to take place at the start of next year.

And just now there is supposed to be a major cricket tournament taking place. Of course, for most Americans cricket is about as interesting as watching paint dry, but for India, it's almost a religion for 1 billion people.

Now that cricket tournament could be at stake, which could have huge economic consequences. So these terrorists chose their time well. And also of course there's a major U.S. holiday tomorrow. I don't think any of these things were coincidental. This was designed specifically at this time to have maximal impact not just in India, but internationally.

PILGRIM: Thank you very much, Sajjan Gohel of Asia Pacific Foundation. Thank you very much, Sajjan.

Now, Tom Foreman will have much more of this at the top of the hour, Tom, what are you doing?

TOM FOREMAN, CNN ANCHOR: Thanks, Kitty.

Tonight, we continue CNN Breaking News coverage of these terror attacks in India. We should be getting our first daylight pictures of the scene shortly. Two luxury hotels where Westerners stay and where witnesses say Americans were targeted. Police apparently are still in a standoff with some of the attackers. We'll have the very latest on that from our correspondents on the scene.

We'll also hear from eyewitnesses, some of their accounts are absolutely terrifying. And we're in close touch with U.S. sources who are trying to figure out precisely who is responsible for this and how they might track them down -- Kitty?

PILGRIM: All right. Thanks very much, Tom.

Still ahead, we have more expert analysis on today's deadly terror attacks in Mumbai. Who launched the attacks, why? We'll be right back.

(COMMERCIAL BREAK)

PILGRIM: Indian security forces tonight are hunting surviving terrorists after a wave of coordinated attacks on the city of Mumbai. Now, those attacks killed at least 87 people. Indian people say at least nine terrorists were killed. Malika Kapoor joins us on the phone from Mumbia.

Malika, you were right in the middle of this. Tell us what happened and what is the latest that you're hearing?

MALIKA KAPOOR, CNN CORRESPONDENT (on phone): We're hearing it's still very much a live situation, a fluid situation. And that gunmen are still holding people hostage in three locations, which is the Taj Hotel, the Oberoi Hotel, and the Cama Hospital. Gunmen have struck in at least nine locations across Mumbai over the last six to seven hours. We now have reported that more than 80 people have been killed. Almost 200 people have been injured, and the situation still continues to be very fluid.

Some people have managed to escape, to leave the hotels and come away to safety, but quite a few people do remain trapped inside. Just at the Taj Hotel, we're hearing reports of seven to 15 people being held hostage. We haven't been able to confirm the nationality of the people, but some eyewitnesses are reporting that the people being held are foreigners, that gunmen went through the hotel, the lobby asking people what passports they had, asking for people with U.S. and British passports to step aside.

PILGRIM: What is the scene like at the Taj Hotel or the Oberoi Hotel now that the Indian military has apparently moved in? KAPOOR: That's right, the Indian military has moved in. The situation at the Taj is particularly difficult because of the fire that's there. If you see pictures of the hotel, you will know it's known for its dome. It's a very grand looking building with a large dome on top, and the dome is pretty much engulfed in flames.

Fire had broken out at that location, and of course, officials are trying to control that, but the fact that the area around the dome is on fire is very symbolic for Mumbai because the Taj is one of the most well-known buildings in Mumbai. Is really is a very popular tourist site and is just one of the first buildings you think about when you think about Mumbai. Seeing that building up in flames is really hitting at the heart, the very nerves of Mumbai.

PILGRIM: Malika Kapoor, thank you very much for your report this evening. Best of luck this evening.

Joining us also now, one of the world's leading authorities on global terrorism. Rohan Gunaratna joins us again. He's on the phone again from Singapore. Rohan, do you believe the work was a radical Islamist terrorist attack at this point? You have had time to assess this information.

GUNARATNA (on phone): The only group that has intention and the ability to mount a complex attack of this nature is the Indian Mujahedin. The Indian Mujahedin formerly operated as the Student Islamic Movement of India. And it is responsible for about 250 deaths in the more recent past. And the group itself has threatened to conduct these types of attacks more recently.

PILGRIM: Rohan, we understand that the situation is still fluid. Tell us how dangerous you think this is for anyone being held hostage here and what their situation might be given the type of people that you believe are involved in this.

GUNARATNA: Certainly, many members of the Indian Mujahedin able to conduct suicide operations, they are willing to die, they are willing to kill and die so the Indian government is currently facing a very difficult situation because the Indians have very capable intervention or tactical units that can deal with this type of situation. But once again, they will be very cautious because the lives of foreign nationals will be involved.

PILGRIM: Thank you very much. Rohan, we have to cut it there. Thank you very much for your analysis this evening. Rohan Gunaratna.

" NO BIAS, NO BULL" starts right now. Tom Foreman