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Terror in India: City Under Siege; Are U.S. Ports Vulnerable?; Nuclear Rivals, New Tension

Aired November 28, 2008 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM.
Happening now, breaking news -- the terror in India -- a city under siege. The number of dead and injured climbing right now. One terrorist standoff still unfolding, as well.

Also, new details of the American victims are emerging as survivors recount the nightmare that's been unfolding now for days.

And Indian officials are implicating Pakistan in the attacks and it's heating up tension between these two nuclear rivals with a long history of warfare.

We want to welcome our viewers in the United States and around the world.

They're watching CNN and CNN International.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

We're following the breaking news in Mumbai -- India under siege by terrorists for the last two days. One standoff believed to be continuing right now at a luxury hotel, where a gunman is still believed to be holed up.

Among the latest developments we're following, the death toll has now reach at least 160. That's a number expected to rise, as searchers comb multiple -- multiple attack sites.

Five Americans are among the dead, including a father and daughter from Virginia, and three people tied to a Jewish community center in New York. More than 320 people have been injured. Eleven terrorists have been killed.

As you can see, the attacks took place across Mumbai, with two luxury hotels the most prominent of the targets.

Let's begin our coverage with the city's iconic Taj Mahal Hotel. Police believe at least one gunman is still on the loose inside.

Our senior international correspondent, Matthew Chance, is in Mumbai.

He's joining us on the phone with more.

What's the latest -- Matthew?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Wolf, throughout the course of the past several hours here, we've been hearing sporadic gunshots and explosions still ripping through that Taj Mahal Intercontinental Hotel, right in the middle of India's financial hub.

The siege there is still very much underway, with pressure now building on the authorities to bring it to an end. Special forces and army personnel from the Indian armed forces are very much inside the hotel, working room to room, to try and clear it of hostages, of any militants, as well.

There's suspected -- as you mentioned -- to be only one person there. But that figure could be wrong. There could be more than one militant holing up inside that hotel.

We simply don't know. And the impression we get from the Indian authorities at this stage is that they're not absolutely confident there's only one person, either. They certainly haven't given us any absolute figures of how many people are still inside that hotel.

It's into the night now. We're still waiting for this siege situation to be brought to a close by the Indian authorities.

BLITZER: And I guess their big fear, Matthew -- their big fear is that if they go in en masse and if there are still hostages inside, those hostages will be killed. So they're trying to walk this delicate line between being careful and not using too much force.

Is that theory?

CHANCE: That seems to be the reason, although people here in Mumbai are saying that in other countries, perhaps, it wouldn't have gone on so long -- the authorities won't have allowed the siege to have gone on for so long.

But I think one of the things that has kind of wrong-footed the Indian security services is that these attacks are coordinated. There were up to nine locations at any one time brought into play. And that really wrong-footed the authorities here. It's kind of meant that they've been a -- it's been a kind of delayed response.

But they seem to have been picking up the pace. This is the only...

(EXPLOSION IN BACKGROUND)

CHANCE: Oh, a big explosion there that took place as I was talking to you. I don't know if you could pick that up on the cell phone.

But as I say, throughout the course of this evening, there have been sporadic explosions and gunfire taking place inside that Taj Mahal Intercontinental Hotel. The state -- the standoff there still very much underway.

BLITZER: All right. Stand by, Matthew. We're going to be staying in constant touch with you and all of our correspondents on scene in Mumbai.

We're also learning right now more about the Americans killed in these terror attacks. Bentzion Chroman had dual American and Israeli citizenship, along with Rabbi Gavriel Holtzberg. They and Leibish Teitlebaum from Brooklyn were all killed at the Chabad House in Mumbai.

Alan Scherr of Virginia and his 13-year-old daughter Naomi Scherr were among the victims at the Oberoi Hotel.

This is a horrible, horrible story as we get to learn more about these victims. More than 160 people have now been reported killed.

Let's get some more on the victims and the survivors of this attacks.

We'll go back to Isha Sesay for more on what we're finding out.

What are we learning about these victims -- Isha?

SESAY: Well, Wolf, we have been hearing some horrifying tales from victims who got caught up in this ordeal. We want to share some of these now with our viewers. And, Wolf, you're about to hear from one man who told his tale just hours before losing his life.

(BEGIN VIDEOTAPE)

ANDREAS LIVERAS, MUMBAI TERROR VICTIM: We heard the machine gunfire outside in the corridors everywhere. We -- we hidden ourselves under the table. Then we threw -- switched all the lights off. The machine guns kept going and all the fighting.

SESAY (voice-over): A heart-stopping account of events as they unfolded inside the Taj Mahal Hotel, where Andreas Liveras and hundreds of others were trapped by rampaging gunmen.

Just hours after giving this phone interview to media, Liveras would lose his life -- one of two Britons confirm dead in the Mumbai attacks.

For the survivors, their faces say it all -- tired and terrified they struggle to make sense of their ordeal. For Mahdu Kapoor, it was an evening meal at the Oberoi Hotel overwhelmed by terror.

MAHDU KAPOOR, MUMBAI TERROR VICTIM: It was a very harrowing experience. We got there for dinner with our friends. And we'd just barely finished dinner and we heard the firing. And then the grenades were being thrown around. So we thought, you know, it was the terrorist attack. So we -- so we were told to vacate.

SESAY: Kapoor was able to escape the terrorists, to flee from the hotel uninjured. But Briton Alex Chamberlain was not as lucky. He was one of a number of people taken hostage in the Oberoi.

ALEX CHAMBERLIN, MUMBAI TERROR VICTIM: So we were walking up each flight of stairs and then he stopped us after two or three flights and told everyone to put their hands up and said, where are you from, you know, are there British or Americans here? Show us your I.D. and...

SESAY: Chamberlain says that was the moment he realized he was in serious trouble. He managed to sneak out a fire escape.

For Australian David Jacobs, who was also staying at the Oberoi Hotel, a series of loud explosions were his first clue something was wrong.

DAVID JACOBS, MUMBAI TERROR VICTIM: I thought it might have been construction to start with. I then started to think it wasn't. I then had a look over the atrium. It was clear to me that this was a terrorist attack. I went back inside my room and barricaded the door.

(END VIDEOTAPE)

SESAY: And, Wolf, tales of chaos and survival there. These stories emerging from a gruesome nightmare that has gripped Mumbai and really has just shocked the watching world -- Wolf.

BLITZER: It seems the whole world is watching right now.

Isha, stand by.

I want to go back to Matthew Chance in Mumbai -- Matthew, I take it you're hearing more gunfire over at Taj Mahal Intercontinental Hotel?

CHANCE: Yes. Literally, as I stopped speaking to you a few moments ago -- a few minutes ago, there was a huge upsurge in the activity here outside the Taj Mahal Hotel.

I don't know what you can hear on my cell phone -- you probably can't because of the microphone on these cell phones. But there's a lot of gunfire taking place, a lot of explosions, as well. It seems that there is some move being made by the Indian security forces to try and, you know, again...

(EXPLOSION IN BACKGROUND)

CHANCE: Ooh, a big boom there, as well -- again, to try and bring this long-running siege -- now more than two days it's been going on -- to an end as soon as possible.

A number of explosions are taking place. We understand that commandos from the National Security Guard, some of India's most elite security forces, have made a move now into the Taj Mahal Intercontinental Hotel to try and, again, as I say, try and bring this siege to an end.

But it's a difficult job. The hotel is so big -- more than 400 rooms. They have to go room to room to try and make sure there aren't any booby-traps, there aren't any militants holed up inside -- Wolf.

BLITZER: We are hearing the gunfire on your cell phone there, Matthew. Our viewers in the United States and around the world can hear what's going on.

Does it seem -- do you get the sense that this is a major new assault that's going on right now by these Indian authorities?

CHANCE: Well, it seems to be ebbing and flowing. And throughout the course of the day, the Indian authorities have been giving the impression this siege was in its final stage, that they were moving to bring it to an end.

But it just didn't happen. And it's the middle of the night now. It's nearly 4:00 in the morning here local time and it's still underway.

But there does seem to be a new emphasis now -- perhaps they've found something inside that they've had to react to. Perhaps this is the start of a -- of a kind of -- an offensive to try and retake control of the hotel.

It's just impossible for us to say with any degree of certainty standing outside, as we are now, about 100 meters from this hotel where this activity is now taking place.

(EXPLOSION IN BACKGROUND) CHANCE: Oh, a big, big explosion there. I don't know whether you heard that. It sort of surprised me a little bit.

BLITZER: This is a huge hotel. We could hear that shot that you just heard. It's obviously very startling.

I want to make sure, Matthew, you're in a safe location, not too close.

But give us a sense of the enormity of this Taj Mahal Intercontinental Hotel, one of the real -- one of the real landmarks of Mumbai.

CHANCE: Yes, I mean it's a huge -- it's a huge building in so many ways. And physically it's huge. I mean hundreds and hundreds of rooms in this hotel, built in the 19th century. It's a true landmark of this city -- I mean, one of the most kind of iconic buildings in the country, almost, I'd say. You know, a real -- a real kind of, you know, luxury prestige hotel.

And so striking at this hotel was really a strike at one of the symbols of Indian financial power -- Indian economic power. And they've done that very successfully, obviously.

And the people of Mumbai are deeply concerned, very angry, very sad, as well, that this attack has taken place on their city. It's a city that's well used to terrorist attacks. But the nature of these attacks, the nature and -- of religious, inter-religious attacks, as well. But the nature of these particular coordinated attacks on so many important, crucial landmarks in the city, have really kind of brought sadness and anger to many people in this Indian financial hub.

BLITZER: Matthew, I'm going to have you stand by.

You're outside the Taj Mahal Intercontinental Hotel.

We've been hearing the gunfire that's going on. We don't know what's going and inside. But we'll get back to you.

These Mumbai attacks, they were launched, actually, by sea -- the terrorists coming ashore in small boats.

Could that happen elsewhere?

Could that happen in the United States?

We're checking out the security in place.

Is it enough?

Also, survivors tell of little or no security at the hotels where so many people were killed. We're investigating what happened.

And it's India's financial capital. Now Mumbai is paralyzed with major implications for that country's economy and shock waves that could go global.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: All right. We're hearing gunfire outside the Taj Mahal Intercontinental Hotel. You just heard it yourself. Matthew Chance is out there.

We're watching what's going on. We don't know what this means. But you heard the shots being fired just moments ago, live, in Matthew's report. We'll go back there to the Taj Mahal Intercontinental Hotel momentarily.

We're getting new information -- this crisis in Mumbai by no means -- repeat -- no means over. We're watching what's going on.

We're also learning much more about the father and daughter from Virginia who were killed over at the Oberoi Hotel.

CNN's Jill Dougherty is standing by live -- Jill, what do we know about this father and daughter?

JILL DOUGHERTY, CNN CORRESPONDENT: Well, Wolf, in spite of all this violence, when many Americans think of India, they think of spiritual meditation. And that is what drew the victims, a father and his daughter, to Mumbai.

(BEGIN VIDEOTAPE) DOUGHERTY (voice-over): Alan Scherr's spiritual life was tied to India. He visited many times. And that is where he died, along with his 13-year-old daughter, Naomi, in the terrorist attack on Mumbai's Oberoi Hotel.

Scherr, 58, shown here with his daughter and his wife, Kia, was a former college professor who became vice president of the Synchronicity Foundation, a meditation group in Faber, Virginia based on the teachings of an Indian spiritual teacher.

Twenty-five members of the group were on a meditation pilgrimage to Mumbai. The Foundation says the rest are now safe.

The Foundation's spokeswoman said some of the group went to a cafe at the Oberoi for a snack when the terrorists walked in and opened fire.

BOBBIE GARVEY, SYNCHRONICITY SPOKESWOMAN: The three people that were injured and went to the hospital told us that they saw Alan take a bullet to the head and go down. They also told us that Naomi was also on the ground, although they didn't know whether she was shot or not. They didn't actually see that.

DOUGHERTY: The group's other members spent 45 hours barricaded in their rooms.

GARVEY: The grenades were going off. There was constant, you know, gunfire. They didn't know at any time if that door was going to open and it was going to be someone to save them or it was going to be someone to take them out.

DOUGHERTY: Garvey describes Alan Scherr as "brilliant and passionate."

"Naomi," he says, "wanted to see the world."

The Synchronicity Foundation set up a Web site for the Scherrs. It's already filled with tributes from the U.S. Canada and countries around the world.

Alan Scherr once wrote he was "living a simple life."

"For me," he said, "real freedom means living life in each moment as it unfolds without concepts or conditions."

(END VIDEOTAPE)

DOUGHERTY: Other members of the group were wounded, but they're recovering and the Foundation is planning a memorial for Mr. Scherr and Naomi -- Wolf.

BLITZER: Jill, our hearts go out to this family and all of the families of the victims of this brutal terror assault.

The terrorists targeted Westerners. They knew where to find them -- these large luxury hotels, with apparently little or very little security.

CNN's Samantha Hayes has been looking into this part of the story.

What are you finding out -- Sam?

SAMANTHA HAYES, CNN CORRESPONDENT: Well, Wolf, it makes sense when traveling abroad to find a hotel that offers the comforts of home. And these hotels in Mumbai were known for their hospitality and their service. But now security is a top concern.

(BEGIN VIDEOTAPE)

HAYES (voice-over): When bombs started going off inside the Taj Mahal Hotel, Jonathan Ehrlich ran from his room looking for help.

JONATHAN EHRLICH, TAJ HOTEL SURVIVOR: I felt completely like a sitting duck. There wasn't a security guard, a hotel staff member, no policeman, no anything. And so I decided to actually go into the lobby. And I took a couple steps into the lobby and knew quite -- quite quickly that that was not the place to be. It was dead quiet. There was broken glass everywhere. There was blood on the floor.

HAYES: Ehrlich escaped. Scores of other guests did not.

Robert Grenier, head of a global security consulting firm, says when it comes to security, consistency is key.

ROBERT GRENIER, KROLL GLOBAL SECURITY: What's difficult is to maintain a high security posture. And I think under the best of circumstances and with the best intentions, security tends to erode over time, as the memory of the last attack begins to fade.

HAYES: Screening guests and checking vehicles may be one way to increase security. But Grenier also says, regardless of what may have happened in this latest attack, hotels need to check within their own ranks.

GRENIER: And you're looking at potential threats. You need to look not just outside, but also inside. And often the most potent enemy is the enemy within. And so it just -- it points up the need for very careful screening of employees.

HAYES: Several hotels known to cater to Westerners have been targets of recent attacks. In September, at the Marriott in Islamabad; November 2005 -- coordinated attacks in Amman at the Hyatt, Raddison and Day's Inn; March 2006 -- a suicide car bomb outside the Marriott in Karachi.

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: Any five star hotel is going to be a problem. It may turn out that you'd be better to stay at a very anonymous, you know, three star hotel if you want to avoid being attacked by a terrorist group.

(END VIDEOTAPE) HAYES: The State Department is advising Americans in India to vary their routes and times in carrying out daily activities and consider the level of security in public places like hotels, religious sites, restaurants and entertainment venues -- Wolf.

BLITZER: Good advice, no doubt, especially right now.

Samantha Hayes, thank you.

The gunmen who terrorized India's largest city apparently arrived there by boat.

Could terrorists breach security at America's own ports?

Let's go to CNN's Sean Callebs.

He's been looking into this and has some very interesting information -- and, Sean, could this happen here?

SEAN CALLEBS, CNN CORRESPONDENT: Well, think about it. The Atlantic Ocean to the east, the Pacific out West and the Gulf of Mexico right where we are -- a pretty attractive target for would-be terrorists.

But plain and simple, how difficult would it be for an internationally flagged ship to make its way into a U.S. port undetected?

Very difficult.

There's actually something called the Maritime Domain Awareness. How, this was started in 1994, but the U.S. gave it more teeth after 9/11.

Here you're seeing some video of the worst case scenario -- how the Coast Guard would go in heavily-armed and storm a vessel that they thought was suspect.

Now, under this Maritime Domain Awareness, any international ship must give four days -- 96 hours notice -- before coming into a U.S. port. If they don't, then they're simply kept out at sea. And a lot of big ships, when they come in, the pilot has access to, in essence, a panic button -- a similar kind of button you might find at a bank -- that a bank teller would have access to under a robbery.

(BEGIN VIDEO CLIP)

CDMR. KEVIN LOPES, U.S. COAST GUARD: The master of the vessel, if it was some sort of an uprising on board, has the ability to hit a button -- an emergency button that's mandated by the international community and by international policy. That they can hit this button and let people know something's wrong on board their vessel and we can go to the rescue. And we have 100 miles to do this before we reach the heavily populated area of New Orleans.

(END VIDEO CLIP) CALLEBS: Now that's 100 miles from the town of Venice and the port down there up to New Orleans, where we are now. And, basically, the Coast Guard is responsible for every nook and cranny in that area -- really, all the waterways.

So how difficult is it?

Very difficult. Say, a zodiac or a speedboat, something like that, was unleashed on the United States. Wolf, in many cases, the Coast Guard actually asks people -- the people who live or work or vacation in Maritime areas, if you see something abnormal, call us. And there is actually something called americaswaterwaywatch.org and people can find out why it's important that they get involved -- Wolf.

BLITZER: Sean, I know you've got more information on this story, so stand by. We're going to get back to you in the next hour.

A Jewish community center right in the heart of Mumbai becomes a death trap -- five hostages killed, including three Americans, and a young child is now left orphaned.

Plus, a global financial capital brought to its knees -- will shock waves from Mumbai mean fresh turmoil for the global economic crisis?

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

We're following the breaking news from Mumbai and there are lots of developments unfolding right now -- unfortunately, not very positive developments.

The death toll -- the death toll in Mumbai right now stands at about 160 people killed, but, unfortunately, that number is expected to rise. And that includes at least five Americans that CNN has now confirmed dead.

The crisis is ongoing at the city's famous Taj Mahal Intercontinental Hotel. At least one terrorist believed to be still inside. There's been fresh gunfire only within the past few moments. Our Matthew Chance has been reporting from the scene. We're going to be getting back there shortly.

And British officials are now investigating two of the attackers who were carrying what's being described as British identification documents. We're watching this part of the story, as well.

Indian officials are hinting -- hinting at Pakistan's involvement in these attacks. And that's certainly heating up long-simmering tensions between these two nuclear rivals. Our Pentagon correspondent, Barbara Starr, is standing by live -- Barbara, what are you picking up from your sources there and elsewhere?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Wolf, as you say, both India and Pakistan have nuclear arsenals and the U.S. wants to make sure that in the wake of the Mumbai attacks, they don't decide to go after each other.

(BEGIN VIDEOTAPE)

STARR (voice-over): India's prime minister never said the word Pakistan, but the implication was clear.

MANMOHAN SINGH, INDIAN PRIME MINISTER: It is evident that the group which carried out these attacks, based outside the country, had come with single-minded determination to create havoc in the commercial capital of the country.

STARR: Pakistan is sending a representative from its intelligence services to India to help investigators. The Pakistani prime minister vehemently denies any involvement in the Mumbai attacks.

YOUSUF RAZA GILANI, PAKISTANI PRIME MINISTER: I think this is a hideous crime and we condemn it. And I think this terrorism is a menace for the whole world.

STARR: So far, there's no evidence that the Pakistan government was involved. But tensions are high.

BERGEN: Just a few months ago, we had an attack on the Indian embassy in Afghanistan, where both the CIA and the Indian government said that elements of Pakistan's military intelligence agency was involved.

STARR: The two countries fought three wars and came close numerous other times. This time, suspect number one, Lashkar-e-Taiba -- a Pakistani-based group of Islamic militants that opposes Indian control in Kashmir. India blames the group for a 2001 assault on the Indian parliament and the 2006 bombing of this Mumbai train that killed more than 180 people.

With both countries having nuclear weapons, the top priority for the U.S. -- to ratchet down tensions. The U.S. has been focused on trying to get Pakistan to worry less about India and more about Al Qaeda. Now, that may be a tough sell.

BERGEN: President-Elect Obama is going to walk into a situation where India and Pakistan relations are more tense.

(END VIDEOTAPE)

STARR: And, you know, India -- the U.S. exports more than $15 billion a year in goods and services to India. So in these tough economic times, India is both a strategic and economic partner that the U.S. administration wants to keep as a close ally -- Wolf.

BLITZER: Barbara Starr is at the Pentagon.

Let's go to London right now.

Joining us live is Husain Haqqani.

He's the Pakistani ambassador to the United States.

Mr. Ambassador, thanks very much for joining us under these rather difficult circumstances.

What do you say about these suspicions -- suspicions that elements from outside of India -- maybe in Pakistan -- were responsible for these horrible attacks in Mumbai?

HUSAIN HAQQANI, PAKISTANI AMBASSADOR TO U.S.: Wolf, let me begin by saying that we in Pakistan know how it feels to be a victim of terrorism. Our president himself knows the feeling having lost his life to terrorism last year. I can say without any equivocation that no element of Pakistan's state or government was involved in these attacks. These are the actions of nonstate actors and I think India and Pakistan should not go at each other verbally or in any other way. It's time for us to unite in the war against terror. We are both victims. Our heart goes out to our neighbors.

BLITZER: The complaint you get from Indians, as you know Mr. Ambassador, is that your government has not done enough to clamp down on these terror elements who are based in Pakistan and go after Indian targets. What do you say in response to that charge from these Indian authorities?

HAQQANI: Wolf, Pakistan has a new democratic government and from history we know that democracies do not fight each other. What we do not need right now is an argument about Pakistan and India's troubled relationship of the past. What we do know is that Pakistan has been working very hard at normalizing relations with India and our foreign minister was in India the very day in this terrorist incident started as part after effort to normalize relations. So without going into the history of our relationship, it is important to that you understand Pakistan wants nothing but good relations with India and we will work together in fighting the menace of terrorism just as we have started working with our other neighbor Afghanistan. And we all know that that has borne very good fruit in the recent past.

BLITZER: Give us the background why the ahead of the Pakistani intelligence service, the ISI, is now going to India? What's that all about?

HAQQANI: Well, the important thing is that Pakistan's intelligence service wants to show and Pakistan's government wants to show that we are willing to work together with India. In the past, the name of our intelligence service has been used and a lot of blame has been laid at its doorstep. We have a new leadership. Our military, intelligence services and elected government all want a transparent relationship with the world. We do not want anyone to feel that we are withholding anything that we know about anybody.

And so India and Pakistan will work together, a high level official will travel to India so that we can find out what India knows about these terrorists and share with them anything that they want to know about any groups or individuals about which India seeks information in this particular act be.

BLITZER: The Pakistanis have a good intelligence service, Mr. Ambassador. Who do you expect is responsible for these ten separate attacks highly coordinated, highly efficient in Mumbai?

HAQQANI: Wolf, let me say one thing. The world changed after 9/11. We should have all realized that there are nonstate actors like al Qaeda who do not have a state but to have the means to coordinate and organize and who are very patient. We haven't paid enough to the ideology of terrorism. Pakistan's president Asif ali Zardari has repeatedly said the terrorist menace can only be fought when we start fighting back on the ideas front with the terrorists.

These are nonstate actors. Where they may have been trained or been based is something we will find when we pool our resources, the international community and India and Pakistan work together for an investigation.

Let me just say that there is an election coming up in India and there may be a temptation there for some people to try and look for warts by bashing Pakistan. That would not be statesman-like. I think the statesman-like thing for India to do and for Pakistan to do is to work together, make sure we find that who is responsible for this, and work together to eliminate terrorism all the way from Kabul to Calcutta.

BLITZER: All right. We're out of time. Quickly, al Qaeda, do you see al Qaeda at least indirectly or directly involved?

HAQQANI: Wolf, having said that it's not appropriate to speculate, it would not be appropriate for me to say that it was al Qaeda without knowing who it was. It was either somebody hosts inspired by al Qaeda or related to al Qaeda because this is definitely al Qaeda's modus operandi. Creating terror, attacking innocent people and basically we must remember that terrorists are nobody's friend, they are not Pakistan's friends or India friends and certainly not the international community's friends.

BLITZER: Hussein Haqqani is Pakistan's ambassador to the United States. Mr. Ambassador, thank you very much for coming in under these rather difficult circumstances.

We're covering the terrorist attacks in Mumbai from every angle as only CNN and CNN International can do; events beyond certainly any president's control. We're looking at the implications of these attacks for the U.S. President-Elect Barack Obama.

And Americans among the people killed at a Jewish community center in Mumbai. We're going to get a live report on the Chabad house that was stormed by gunmen intent on slaughter. And the survivors all eventual incredible stories to tell. We'll go inside a hospital and talk to victims who escaped death by a hair.

Stay with us. The breaking news continues right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A New York rabbi and his wife were among those killed in the India terror attacks. They were held hostage at Jewish center they ran in Mumbai called the Chabad house. Our senior international correspondent Nic Robertson is in Mumbai. He's joining us on the phone.

Nic, what are you learning specifically about this tragedy at this Jewish center in Mumbai?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Wolf, I think perhaps some of the best clues came yesterday when the housekeeper at the center was able to escape with the one of the rabbi's young children and said when she left it, appeared as if the rabbi's wife and some guests, visitors were unconscious on the floor. And certainly when the Indian commandos went onto the roof of their five-story building early in the morning, they didn't know what was going on for sure inside the building.

Later in the afternoon, they blasted their way through a hole in the wall in the building, scaled down the outside of the building in through that hole. It was after that when they got in and were able to confront the situation that they could see and found the rabbi, his wife, and these visitors dead in the building there. The gun battle ensued with the gunmen, at least two killed in that shootout. Police also injured.

But the news has been very slow to get out. The information about what was happening in the building very slow to get out. We were talking to the team that had come from Israel that were there to try and help, a certainly and rescue team were there to try and help and they were incredibly frustrated. They said every time they heard an explosion or exchange of gunfire they were shaking because they knew they wanted to help but had to let the Indian authorities pursue it as they wanted to and wait till the situation permitted and to go in. Unfortunately, by the time that happened, the results are clear, the rabbi, his wife and some friends were dead -- Wolf?

BLITZER: And right now, the scene inside that Jewish center, the Chabad house in Mumbai, I take it secured the entire assault there has been completed. It's over with, at least at that one location. Is that right?

ROBERTSON: Wolf, that's correct. Some of the local television channels were taken to that building. Our sister network IBN got into that building and were able to take some video. But it's very, very horrific. It's a very graphic record of what the situation was like when the commandos pulled out and for this reason. We haven't been broadcasting the vast content that have material. But it has been secured by the commandos. TV networks were able to get in and take pictures and record the scene of what had happened there the aftermath of what had happened and the area is still cordoned off by police and army, Wolf.

BLITZER: Nic, we'll get back to you. Stand by. These terror attacks in India struck at the heart of the country's economy.

CNN's Christine Romans takes a closer look at the toll the blood shed could take on one of the most vital commercial centers in the world.

CHRISTINE ROMANS, CNN CORRESPONDENT: Wolf, India's economy has boomed in recent years making Mumbai an international finance capital and a hub of commerce for south Asia. It is India's undisputed capital of tourism and film and finance. It is home to India ace largest port and a manufacturing powerhouse with more than 6500 factories. India's financial services industry here includes four major stock exchanges plus bond, currency and commodity exchanges. Mumbai is Bollywood, the world's largest film industry turning out 120 films a year. Mumbai, a starting point for international tourists in the country. The luxury hotels at the heart of this terrorist siege are world famous. India's most well-known companies are there, Reliance, Tata, and State Bank of India and American and European companies have large operations here as well and employ thousands of workers.

An attack on Mumbai is an attack on a city open to international business and tourism and comes at a time when India so entwined in the global economy is hurting from world financial crisis. Before the attacks, Mumbai's benchmark stock index had lost 66 percent this year. These attacks will no doubt be another wound to India's current financial climate -- Wolf?

BLITZER: And as you say could have global implications, as well. Christine, thank you.

We're going to get back to the breaking news in India in just a moment. First, Isha Sesay is standing by. She is monitoring some other important stories incoming right now.

Isha, what's the latest?

ISHA SESAY, CNN CORRESPONDENT: Well Wolf, before paying a visit to Fidel Castro, Russian President Dimitri Medvedev laid a wreath at a monument to Soviet soldiers in Havana. Medvedev spent hours talking and sight seeing with Cuban president Raul Castro before meeting privately with Castro's ailing 82-year-old brother. Cuba is the last stop on the Russian president's four nation tour of Latin America.

Three security guards jumped overboard as Somali pirates hijacked a chemical tanker in the Gulf of Aden. A German helicopter rescued the guards, all veterans of the British military. They were transferred to warships from a multinational naval force patrolling the area. The company that says they employ the guards says they did all they could to protect the tanker. The problem of piracy doesn't look like it's going away anytime soon. BLITZER: Another story we're following. Isha, stand by.

Let's get back to the breaking news in a moment. We want to go in-depth right now to the methods used by the terrorists in Mumbai and elsewhere. Malcolm Nance is the author of the "Terrorist Recognition Handbook." He's joining us now live from Albany, New York.

Malcolm, thanks very much for coming in. You look at what we've seen over the past couple days in Mumbai. What's your immediate reaction as a terror expert?

MALCOLM NANCE, AUTHOR, "TERRORIST RECOGNITION HANDBOOK": Well, of course, this is a horrific attack. It's terrible. But with the execution of many, many hostages and many people who have been killed here. However, it's a fundamentally simple attack. It had broad coordination, went around to many, many different targets. They did a light infantry weapons attack. They brought out machine guns, launched from a mother ship and their job was to create as much mayhem as possible.

BLITZER: So were these just suicide killers, if you will? Because they didn't seem to make many demands when they were holding hostages or anything along those lines. They went in and started killing people.

NANCE: As a matter of fact, the technique once they've arrived on station once they arrived to all of their targets was what we call a suicide hostage barricade. Many venues where the terrorists went to, they holed up and fought to the death. A few of them were captured because they were wounded. They locked themselves in and fought to the death. That exactly was their objective. They were out to make a point. Their point is that they were going to demonstrate their capability of turning Mumbai into a complete city of chaos.

BLITZER: So how do you protect against suicide killers like this in a huge commercial center like Mumbai?

NANCE: Well, to a certain extent, you have to have very good anti-terrorism and counter-terrorism intelligence. That's what Peter Bergen and the Pakistani ambassador were saying a little earlier. Nonstate players will play within the field of that region, certainly south Asia, and they will carry out the operations they are prepared to do no matter what the cost is to the victim population. The most that you can do is you have to have your intelligence forward and forces ready for the eventuality that these types of attacks could occur and you have to be able to respond to them quickly.

BLITZER: From what you've seen and heard, Malcolm, what is your assessment of how the Indian authorities have dealt with this horrible attack?

NANCE: Well, we can see early on there was an initial response from the nearby anti-terrorism police whose head quarries was near the Taj hotel. They responded with a very small force. And then for those of you who have been to India, their forces in that immediate area are more local police forces armed with batons and simple weapons. This required a very sophisticated counter-terrorism operation. As you saw with the ten venues, with two or three terrorists occupying each one of the venues and carrying out a massacre up until they were killed, the counter-terrorism forces were stretched until they decided to focus on the Oberoi, the Taj hotel and even now haven't managed to clear the terrorists out. One man can keep this operation going for some time.

BLITZER: We just heard the gunfire at the Taj Mahal Intercontinental Hotel where Matthew Chance has been reporting. Malcolm, thanks very much for helping us understand what's going on. Malcolm Nance is the author of "Terrorist Recognition Handbook."

The president-elect of the United States Barack Obama is clearly keeping a very close eye on this developing situation in India. We're going to be taking a closer look at challenges he'll be facing from world events like this clearly beyond anyone's control. Incredible stories of survival amid horrifying violence. We'll go inside a hospital where some victims narrowly escaped death. Stay with us for the breaking news right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The president-elect of the United States, Barack Obama, is strongly condemning these attacks and says his thoughts and prayers are with the victims. There may be a lesson in all of this for him. Our senior political analyst, Bill Schneider is standing by live.

Bill, what message do these attacks in India carry for the president-elect?

WILLIAM SCHNEIDER, CNN CORRESPONDENT: That the president may be the most powerful person in the world, but he will still have to deal with events that are beyond his control.

(BEGIN VIDEOTAPE)

SCHNEIDER: Barack Obama's campaign was a model of control and discipline. The candidate was famous -- set backs like Hillary Clinton's upset victory in New Hampshire.

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: We have been told that we cannot do this by a course of sentence.

SCHNEIDER: Any president is, to some extent, hostage to world events that are beyond the president's control. The first President Bush found that out in 1990.

PRES. GEORGE BUSH, UNITED STATES: This will not stand this aggression against Kuwait.

SCHNEIDER: The second President Bush found that out in 2001.

PRES. GEORGE HW BUSH, UNITED STATES: The people who knocked these buildings down will hear all of us soon.

SCHNEIDER: And now, a wave of horrifying terrorist attacks in Mumbai. Terrorism was not the issue that got Obama elected. Voters who shade their top concern was terrorism voted overwhelmingly for John McCain. But they were fewer than 10% of all voters but Obama had to establish his credibility on fighting terror.

OBAMA: My job will be to keep you safe, that's my number one job.

SCHNEIDER: And he did establish credibility. Two-thirds now believe Obama will make the United States safer. What's needed now is skillful diplomacy.

OBAMA: We need to rediscover a sense of the power of diplomacy.

SCHNEIDER: Tensions are likely to increase between India and Pakistan. The United States need to maintain good relations and work towards reconciliation between them.

OBAMA: I understand what John F. Kennedy said when he said we can never negotiate out of fear but we can never fear to negotiate. That's what strong presidents and strong countries do.

(END VIDEOTAPE)

SCHNEIDER: If there is one thing that people admire about the president-elect, Wolf, it's the way he keeps his cool.

BLITZER: There's going to be a lot of need for that in the coming months and years, no doubt about that. Bill Schneider, thank you.

All right. Ed Henry is in Chicago getting information about what the president-elect is up to. And Ed, you're covering the transition for us. What are you learning?

ED HENRY, CNN CORRESPONDENT: Well, Wolf, the president-elect just put out a written statement, the first one in a couple of days. Remember, he put one out when the attacks first happened. This time it's in the president-elect's word, a written same where he says, basically, "Michelle and I send our deepest condolences to the loved ones who lost their lives in the outrageous attacks in Mumbai. Our thoughts and prayers are with them and all touched by the tragedy."

He adds, "These terrorists who targeted innocent civilians will not shake the will of a global coalition to defeat them. The United States must stand with Indian all nations of people who are committed to destroying terrorist networks and defeats their hate-filled ideology. There is one president at a time. I will continue to closely monitor the situation on the ground in Mumbai and am grateful for the cooperation of the Bush administration in keeping me and my staff updated. We fully support the Bush administration's efforts and assist the government of India during this tragic time."

That's the statement from President-Elect Obama here in Chicago. As you know, he's keeping a low profile during the thanksgiving holiday but has been getting constant updates from his own staff about the situation. He's been on the phone with Condoleezza Rice as well. BLITZER: It's a nightmare. We'll continue to watch it. Ed, stand by in Chicago. He's covering the transition.

All the latest development, coming into THE SITUATION ROOM right now from every angle of the Mumbai terror attacks. The big question. who were these attackers? Where did they come from? People were dying all around them. CNN getting exclusive access to a hospital where survivors are talking about the hell they lived through.

Stay with us. Here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Amid the horrifying massacres in Mumbai, there are some rate are rather incredible stories of survival to report. In a CNN exclusive, our senior international correspondent Matthew Chance talked to victims who lived through this hell.

(BEGIN VIDEOTAPE)

CHANCE: There's a survivors of Mumbai's appalling attacks. Scarred by gunshots and shrapnel wounds in the violence that's gripped India's financial heart. Some only escaped death by little bit. This 40-year-old man who showed me the bullet hole in his shoulder, inflicted when the gunmen burst into the hotel restaurant where he was eating with his boss.

UNIDENTIFIED MALE: You are sitting there and I saw this person coming. He was using the blackberry and I wanted to -- I put the blackberry like this and I cover him like this so I'm like this here and -- not here.

CHANCE: You got shot in the shoulder?

UNIDENTIFIED MALE: Yes. And he asked me, are you all right? The second shot came to him and the third it came and just went like this.

CHANCE: We were granted exclusive access to Mumbai's Sir JJ Hospital where most of the injuries from the past are being treated.

UNIDENTIFIED MALE: This is the belt of one of the policeman who --

CHANCE: One doctor shows me a twisted belt buckle that stopped a terrorist bullet saving the life of the policeman who was wearing it. All of these injured have incredible stories of survival to tell. Many have lost friends and loved ones in the Mumbai attacks. And they may not even be if last casualties to come out of this mess. This city's nightmare is far from over. For some, like this 13-year-old boy, the nightmare may never end. He's nursing wounds from a grenade blast that ripped through one of Mumbai's residential zones and he wants to leave the hospital soon, he told me, and go home. But the doctors say they don't have the heart to tell him that most of his family, his mom, his dad, his uncle and cousins were killed in the attack. It is another shattered life in a city now filled with tragedy. Matthew Chance, CNN, Mumbai.

(END VIDEOTAPE)

BLITZER: And to our viewers, you're in THE SITUATION ROOM.