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CONNECT THE WORLD

Crisis in Greece; Kabul Hotel Under Attack; Sony and Cyber Security

Aired June 28, 2011 - 16:00:00   ET

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


MONITA RAJPAL, HOST: Countdown to a showdown -- violence breaks out as a critical austerity vote looms over Greece.

Origins of a crisis -- how mistakes, timing and even the Olympic Games crippled the country.

Adding insult to injury, why the aftermath of the Sony hacking crisis infuriated its customers even more than the security breach itself.

And holding court -- the allure of social media for the world's top tennis players.

These stories and more tonight, as we connect the world.

We will have the very latest on that Kabul firefight in just a moment.

But first, its economy is in crisis, its people are in despair and as Greece enters a crucial 24 hours, its streets are in flames. These were the scenes after a rally turned violent in the Greek capital, Athens. Thousands of protesters, furious over a new set of austerity measures due to be voted on tomorrow.

But while the anger among the people grows, so does the dilemma facing its politicians. Without a yes vote, Greece could run out of money by the middle of next month, sending markets into turmoil and possibly bringing down other Eurozone countries with it.

The protests coincide what sort of a 48 hour general strike, crippling transport networks and leaving offices and schools empty.

Diana Magnay is in Athens tonight -- Diana, people there clearly making their feelings known.

DIANA MAGNAY, CNN CORRESPONDENT: Clearly. And they're still making their feelings heard. You'll probably hear some tear gas canisters going off during this live shot, because they've been going on a constant cycle, really, for the last hour or so.

And earlier on in the day, we went down to cover the riot and became targets ourselves by some of the demonstrators, the guys dressed in black, who have really been on the front line of this rioting, facing off against police, hurling missiles and stones at them, getting tear gassed in return.

So let's just play what happened to us a bit earlier.

(BEGIN VIDEO CLIP)

MAGNAY: As you can see, there is quite a lot of fighting now going on between protesters and police. We're being pushed out of the way. The (INAUDIBLE) a fire burning in the building.

And there you see, Monita, was the moment when Joe, my cameraman, got kicked to the ground and they tried to kick his camera, as well.

Luckily, they weren't successful and both were OK. Joe has a bandage on his leg.

But it is interesting to see the kind of targeting that journalists are experiencing here. And some people tried to explain it to me. When you go and try and ask them on the streets what they think, they don't want to talk to you. They said, look, you've given us bad press over the last year on the international stage. Greece has a bad name. We don't see why we should talk to journalists.

Anyway, these protests continue. We have this very controversial and very unpopular vote which will be voted on tomorrow in the parliament, Wednesday afternoon, we're expecting.

I asked some of the protesters what they expected to do or what they would do if that vote goes through as it's expected to.

Here's what one of them said.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The country is about to collapse, you know, to -- and I don't know, if they yes, I promise that the -- you know, the -- all the Greeks will go out on -- onto the streets and I don't know. It will be chaos.

(END VIDEO CLIP)

MAGNAY: It is a very explosive situation, Monita. That vote, as I said, is expected to scrape through, really, because so many lawmakers understand what is at stake. Either they get that installment of funds or there is the possibility, if the European Union don't have a Plan B, which they say they don't, that Greece could go bankrupt as early as July -- Monita.

RAJPAL: Well, but that's the thing, isn't it, Diana?

Or is there a sense, from what you've been hearing, additionally, adding to what that gentleman that you spoke to has been saying, is there a sense that the Greeks would actually rather see their country go bankrupt than actually face those very harsh austerity measures that the country, that politicians are proposing?

MAGNAY: Well, many of them say that they are bankrupt already, that the austerity of the last year has forced them into a poverty that they are not used to. They've had their wages cut. They've had taxes hiked. They've had pensions cut. Many of them -- tens of thousands of them have lost their jobs and they're expecting more of that to come.

So they do say that they will continue to strike, irrespective of whether this vote goes through or not. If their needs are not cared for by politicians who they now no longer trust.

So even if this legislation does go through the parliament, the implementation of it is going to be incredibly difficult, because you have labor unions who insist that they are going to continue fighting. And you have people who insist that they are going to continue fighting. And if there are regular protests with this kind of violence on a weekly basis in this country when that -- those messages go through, then that is really unsustainable as a political leader, to manage -- Monita.

RAJPAL: OK.

Diana Magnay there for us in Athens.

Thank you so much for that.

We will continue our focus on Greece in just a moment.

But first, we want to pause and take you to our breaking story that's taking place in Afghanistan right now, particularly its capital, Kabul, where a firefight between militants and security forces is underway right now at the Intercontinental Hotel there in the capital. The Taliban have already claimed responsibility for the attack.

Journalist Aaron Cunningham is on the scene of the attack.

She joins us now with the latest on what's actually happening right now, there, at the Intercontinental -- Erin?

ERIN CUNNINGHAM, JOURNALIST: Well, right now, things have calmed down just a little bit. In the last 15 minutes, there were three very laugh explosions. Right now, we are unclear what those explosions were, whether they were suicide bombers detonating or RPGs being fired by the militants, which they did in the previous hour.

So at the moment, there's still small -- small arms fire. However, the explosions have stopped. The Afghan security forces remain extremely tense at the roadblock search set up in front of the hotel.

RAJPAL: This is a massive security breach, is it not?

At the end of the day, these hotels in -- in Kabul are supposed to be among the safer places that you could be in Afghanistan?

CUNNINGHAM: Absolutely. It is a major coup for the Taliban in terms of being able to penetrate the center of the city and attack a major hotel, where, at the moment, a conference is being held on the security transition. So it has symbol -- the symbolism, as well.

RAJPAL: Do we know how deeply embedded into the hotel these militants were able to get?

CUNNINGHAM: I did get an initial report that one of the suicide bombers detonated his -- his explosives on the second floor of the hotel. I cannot confirm that at the moment. There were also reports that there were Taliban snipers on the roof. There were also RPGs being fired from the hotel into the city.

So it looks like they were pretty entrenched and -- and were able to get pretty deep inside to the hotel.

RAJPAL: The symbolism of this, of course, is quite stark, in the sense that these are hotels that are frequently stayed in by dignitaries, diplomats and even journalists, is it not?

CUNNINGHAM: Right. Absolutely. Yes. Both -- both Afghans and internationals, the wealthy, the dignitaries, etc. Yet, they frequent this hotel.

RAJPAL: In terms of how, I guess, on a -- on a normal day, how tight security would be around this hotel?

CUNNINGHAM: Normally, security in these types of places are extremely tight, including a number of checkpoints as you reach the hotel. I'm sorry, right now they're -- they are searching someone who they -- who they thought had explosives on him, but it's -- it's calmed down.

So, yes, no, there would be a number of -- of security checkpoints in addition to searches. I've -- I've come to a number of these hotels quite frequently and seen how the process works. And it is -- it is very tight. So I'm unsure how this type of attack was able to take place.

RAJPAL: OK, bring you up to date again for us, Erin, if you will, of the causality count at this point and we understand that the Taliban have claimed responsibility.

We just want to go to our Nic Robertson, who joins us now on the phone -- Nic, you've stayed at this hotel before, the Intercontinental Hotel in -- in Kabul.

I guess the question everyone is asking, how could this have happened?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it could happen quite easily. The Taliban have shown a propensity for launching this for -- this type of target. They've targeted the Serena Hotel in Kabul on two occasions before using suicide bombers to breach the external security and sending gunmen into the hotel. A -- a Scandinavian diplomat was one of the casualties in those attacks.

The Taliban have used people to go into hotels, to go into locations they want to target, scout them out.

(INAUDIBLE) the Intercontinental, it is a standalone building on the ridge of a hill. There is a road about 100 meters long with security at the top and bottom of it that they'd have to breach to get to the building. However, there are other ways to get into that building other than going through the front door. Then you don't have to go up that road. You can come up the hillside (INAUDIBLE) the side of it. You could, perhaps, go in by the service entrance. And it's not beyond the bounds of expectations to think that the Taliban had had people reconnoiter this and send them in in a carefully coordinated and planned attack.

The fact that this has gone on, the -- the explosions and the gunfight went on for some time, the Taliban was able to claim responsibility, even as it was on certainly shows a level of preparation and awareness that this was going to happen. It's exactly the sort of high profile international (INAUDIBLE) with international visitors that they would like to target. And this is the second time in just the past couple of weeks that they've launched complex suicide attacks inside Kabul. And this is a (INAUDIBLE) that has security (INAUDIBLE) one ring of security on the perimeter of this city, others deeper into the city that are supposed to stop exactly this type of attack.

But the Taliban are showing that they can penetrate the levels of security. This is their type of message, if you will, that the international community is drawing down its military commitment there, they're telling them that they're still on the offensive and can attack right in the heart of the capital.

It is supposed to be one of the safest parts of the country -- Monita.

RAJPAL: All right, Nic Robertson there for us.

Thank you so much for that.

We want to go back to Erin Cunningham there in -- in Kabul.

And, Erin, just adding on to what Nic Robertson was saying, this is, I guess, in terms of the kind of message that the Taliban is sending, especially now, when we know that the Americans are down siding -- downsizing their troop numbers in Afghanistan, handing over security control to the Afghans themselves.

It begs the question, how prepared and capable are the Afghan security forces to take care of their own security?

CUNNINGHAM: Right. And I think this -- this attack will add to that, as people are continuing to question what kind of capability the Afghan security forces have to keep places like Kabul and other cities in Afghanistan safe. I think this shows that there are major problems with the security services and how they are defending against attacks and also preventing them.

RAJPAL: All right. Erin Cunningham there in Kabul.

Thank you so much for that.

Of course, we will continue to monitor the events there in Kabul and bring you the very latest as we get it.

For now, though, we're taking a short break here on CONNECT THE WORLD.

When we come back, more on the crisis in Greece.

(COMMERCIAL BREAK)

RAJPAL: We want to return now to our top story, as Greek politicians prepare for a crucial vote tomorrow on a new set of austerity measures.

These are live pictures of the capital, Athens, there. They've already sparked, as we can see, anger on the streets of Athens, where a rally of thousands of protesters turned violent early today. And they are still out there this -- this night, on Tuesday.

So why is Greece such a mess?

Well, the origins of this crisis can be traced back to when the country adopted the euro currency in 2001. Deficit figures used to gain entry to the common currency were later found to be higher than Greece had first claimed.

After joining, the country went on a spending spree, with high profile projects such as the 2004 Olympic Games, pushing its economy deeper into the red.

When the global downturn hit in 2008, Greece's national debt was one of highest in Europe. The recession caused tax revenues to fall, while spending on benefits went up.

Well, lenders panicked as interest rates on Greece's loans rose to record levels. In the end, Greece's prime minister had no other option but to accept a bailout.

But if its people thought that would signal a change in the country's fortunes, they were sadly mistaken. More than a year later, Greece's economy has reached a critical point. Failure to pass the latest set of austerity measures could see the country facing a damaging default and an exit from the Eurozone.

Well, to discuss what that would mean for the country and the rest of Europe, I'm joined by Kevin Featherstone, a professor of contemporary Greek studies at the London School of Economics.

Sir, thank you very much for being with us.

So we have here default versus austerity.

Knowing what we know about the way the Greeks have handled their business, so to say, so to speak, and dealt with their economy, which would be the -- the best option?

KEVIN FEATHERSTONE, PROFESSOR OF CONTEMPORARY GREEK STUDIES: Well, I think staying with the Eurozone. It is in...

RAJPAL: Really?

FEATHERSTONE: Yes. It's in the interests of the Eurozone and of Greece to stay with the single currency. I'd just take issue with the implication of the lead-in, if I may.

RAJPAL: Well, sure.

CUNNINGHAM: Well, yes, it looks -- at the moment, the causality figures that I'm getting are up to 10. I cannot confirm that at the moment. I've seen ambulances go into the grounds of the hotel. However, I have not seen them come out. I also don't know whether the dead are Afghans or internationals. And -- and what the security forces are saying, as well, is that this -- this is a Taliban attack. Whether or not they -- they had taken responsibility, that it was very clear the way it was executed that it was a Taliban attack.

RAJPAL: All right, Erin, if you could, stand by for us.

FEATHERSTONE: The protesters you were talking to in Athens would have to realize that if there's a default, it isn't some kind of panacea return to some golden age of the past. An uncontrolled default would cause panic. It would be the collapse of the state. These people in the public sector, for example, would not be able to get paid. Those people on benefits, those people needing investment from the government. All of that would not be forthcoming so...

RAJPAL: Wouldn't an austerity or a bailout, I should say...

FEATHERSTONE: Yes.

RAJPAL: -- wouldn't that be considered a bad solution to what is intrinsically the problem in Greece, the failure to understand how to handle its business, how to deal with its economy and how to actually pay its people the -- the going rate?

The public sector workers are paid so much more than what the private sector workers are being paid.

FEATHERSTONE: Yes. But they need the pay, though, in order to -- to have time to restructure the -- the state and to undertake various reforms. You're absolutely right. It's not rocket science. The kind of reforms which are being discussed at the moment have been around for years, if not decades. Successive governments have tried to address these kinds of problems. Now it's time to do them in a more critical, crisis fashion.

But I repeat, the alternative is not some kind of easy default where everyone has a -- a more comfortable time. The alternative is panic and a collapse of the state.

RAJPAL: Well, we're still seeing these live pictures there...

FEATHERSTONE: Yes.

RAJPAL: -- of the capital of Greece. And the anger is obviously paramount. It's -- it's just -- you can feel it even coming through the screens right now.

But when we look at one of the other options that -- that -- that Greece is looking at right now, is selling some of their public assets, trying to raise...

FEATHERSTONE: Yes.

RAJPAL: -- some $70 billion to help -- help repay their loans, who would want to invest in Greece?

FEATHERSTONE: Well, the sale during a crisis can actually give bargains. I've just been at the conference today which has emphasized that this is actually a very good time to buy assets in Greece. The prices, of course, are very competitive.

But you're right that it is a big task to be able to sell $70 billion in a relatively short period of time under questions and fears as to whether that can be delivered.

But, again, more that is sold by privatization means fewer tax increases.

RAJPAL: What about the China factor?

Tell us about a little bit the -- the kind of influence and perhaps the saving grace that the Chinese are -- are posing to be?

FEATHERSTONE: Yes, well, Greece cert -- sorry. Greece certainly does need foreign direct investment, whether that's from China or previously it was thought from Dubai or other countries.

So, yes, whether it's China or any other source, FDI is absolutely critical at this point, because you're right with the implication that the point is to try to create the conditions for -- for growth to get out of this crisis.

RAJPAL: All right. Mr. Featherstone, thank you very much for your time.

FEATHERSTONE: You're welcome.

RAJPAL: We appreciate that.

And do stay with CONNECT THE WORLD for full coverage of tomorrow's vote. It is a crucial day not just for Greece, but for the entire Eurozone, if not the world.

We'll be live from the heart of Athens, exploring what austerity really means for the Greek people and why they're taking to the streets en masse. We'll show you how their anger is being reflected across Europe, hearing from young people struggling to find work in Italy. We'll head to Spain, where demonstrations have been taking place for weeks. And hear why people in Germany are fed up with paying the price for other countries' problems. We'll ask the French whether the euro has lost its charm and hear why the U.K. is facing its biggest strike since 1926. That's a CONNECT THE WORLD special, tomorrow, at 9:00 p.m. London time, 10:00 p.m. In Central Europe.

A few simple precautions could save you some major headaches if computer hackers happen to strike. Coming up, we'll share some tips from the experts on staying safe in cyberspace.

And later, may the best school win -- how one country is taking a cue from the free market, requiring its schools to compete to attract students.

(COMMERCIAL BREAK)

RAJPAL: You're watching CONNECT THE WORLD on CNN.

We are following a breaking news story out of Afghanistan. An ongoing firefight between militants and police at a hotel in Kabul. The Taliban are claiming responsibility for the assault on the Intercontinental Hotel.

Just minutes ago, a journalist on the scene told us gunshots continue to be heard. She also said there are unconfirmed reports that up to 10 people have been killed and that a -- a suicide bomber detonated inside the hotel.

She says the international forces are on the scene. We, of course, will be returning to Erin Cunningham in just a few minutes for the very latest out of Kabul.

Google, Sony, Epsilon, Citibank and the list goes on and on -- this seems the season for blockbuster cyber-attacks on big business.

But customers also suffer when their sensitive information is exposed. Now, the U.S. government is trying to help make cyberspace safer. It has released a list of the 25 most dangerous programming errors that make computer software vulnerable to attack. The number one threat, a security hole called SQL Injection. And that allowed hackers to worm into Sony's PlayStation network, among others.

Well, months after that cyber-attack on Sony, millions of PlayStation users are still living with the possibility that their identity may end up being stolen.

Could Sony have done more to inform its customers and done it sooner?

Well, as CNN's Kyung Lah reports, a document suggests the gaming company knew about the breach of private data, but sat on that information before revealing it to the public.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT (voice-over): Consumer rage against Sony was swift and vocal. Sony says hackers may have compromised 77 million customer user names, passwords and, most importantly, the credit card numbers of its customers.

What infuriated CNN iReporter Omekongo Dibinga the most -- a perceived delay by Sony to publicly explain the hack had even happened.

OMEKONGO DIBINGA, IREPORTER: We who are using PlayStation 3, we are furious and we are going to bring you nothing but more drama.

LAH: And now a Sony document filed with Japan's government and obtained by CNN shows Sony was aware of the scope of the breach days before revealing it to the public. April 19th -- a government document shows Sony discovered that unplanned operations were running on the network. The next day, Sony shut down its network. Users could not log on, but did not know why.

April 23rd, Sony was able to, quote, "confirm an intruder obtained illegal access and for the first time realize the intruder was a hacker."

It wasn't until two days later that Sony says it was able to, quote, "confirm stolen personal information, including names, addresses, e-mail addresses, dates of birth, passwords and network IDs."

Sony wasn't sure if credit card information was breached and it couldn't identify exactly who's information was stolen.

April 26th, the first time Sony reported the security breach to Japan's government.

April 27th, two days after they knew a lot of information was taken, Sony began e-mailing customers and posted on its Web site that accounts had been compromised.

On May 1st, Sony held its first news conference. Sony executive, Kazuo Hirai, downplayed the attack, only calling it, quote, "a possibility."

"As for the personal information that might have been taken, we are still talking about a possibility. We are still investigating exactly what data and to what extent it was taken."

(on camera): Now, eight weeks later, Sony will still not speak to CNN on camera. But in a statement e-mailed to CNN, Sony says, "We believe we have notified the public promptly after reporting it to the government." Sony says in the government document that it was concerned that releasing information before it was fully analyzed would confuse the consumer.

MOHAN KOO, DYTEX SYSTEMS: The right people and people who could possibly be affected by those threats, need to be notified immediately so that they can take steps to protect their -- their own identities.

LAH (voice-over): Internet security expert Mohan Koo has no direct knowledge of Sony's internal breach, but he believes Sony's public delay should concern consumers.

KOO: We're not just talking about the importance of financial data. Anybody's personal data and any small amount of personal data is valuable on the black market.

LAH: Security experts say increasingly, it's a game of cat and mouse -- your information versus the hackers and companies standing in the middle. No organization can protect itself 100 percent, but consumers are not helpless. Before sharing your information, consider the stakes -- what would happen if a thief could read what you're typing.

Kyung Lah, CNN, Tokyo.

(END VIDEO TAPE)

RAJPAL: So what are the best ways to say -- to stay safe in cyberspace?

Security experts have these simple guidelines.

Don't use the same passwords for multiple accounts, especially a personal e-mail account.

When shopping online, use a credit card, do not use a debit card, because that's directly linked to your bank account.

And ask yourself before typing, what would I lose if a hacker got this information?

Well, security experts say just considering these three steps will go a long way to protecting your identity online.

You're watching CONNECT THE WORLD.

Still to come, the look says it all for Rafael Nadal.

Will the tennis star's ankle hold up at Wimbledon?

That's -- that diagnosis is in just six minutes.

Also, a cruise it may seem, but in 26 minutes, we'll see getting luxury liners into ports takes some major choreography.

And it pays to have brains in Georgia. Stay with us. In the next half hour, we'll bring you details of a radical education plan which favors the smart.

Plus, coming up next, a live update from Kabul on the fire fight at the Intercontinental Hotel.

(COMMERCIAL BREAK)

RAJPAL: You're watching CONNECT THE WORLD here.

We want to bring you the very latest now from Kabul where a fire fight between militants and security forces is underway right now at the Intercontinental Hotel. The Taliban is already claiming responsibility for the attack.

Let's go to journalist Erin Cunningham as she's on the scene of the attack. She joins us now with the latest.

Erin, bring us up to date. What's going on?

ERIN CUNNINGHAM, JOURNALIST (ON THE PHONE): Well, right now, about eight armoured personnel carriers from the Afghan National Army have arrived in addition to a medical vehicle. Dozens of Afghan army soldiers have now stormed the gates of the hotel. It's unclear if the siege is continuing and if there are militants still alive inside in the hotel but gunfire has seemed to have subsided. However, with this new development, of Afghan army soldiers storming the hotel, things are still extremely tense.

RAJPAL: Was this a suicide attack?

CUNNINGHAM: As far as I know, it as a coordinated attack that included suicide bombers as well as snipers. They were also armed with RPG launchers, some of which they used to fire grenades into the city. There were also several very large explosions about a half an hour ago that sounded to me like artillery shells although I'm unclear - I can't confirm that that was the case.

RAJPAL: What about the guests in the hotel, Erin? Do we know - are they still within the hotel itself? Have people been made - have managed to escape?

CUNNINGHAM: As far as I know, there were several people that did escape, that did have to jump from their balconies from the second floor where at least one of the suicide bombers detonated. I'm hearing small arms' fire again now so it looks like the battle continues as the ANA soldiers storm the hotel. I don't know about the rest of the guests. I have not seen any guests evacuate from this - from this exit from the hotel. The gunfire is now getting extremely intense. I see red tracers of RPGs. Things are escalating certainly.

RAJPAL: So we understand that the Afghan security forces - the Afghan soldiers - are on the scene right now. The latest accounts, the last time we spoke, you had mentioned that there are unconfirmed reports that there's 10 casualties. At this point, the casualty number is at 10. Is that still correct?

CUNNINGHAM: As far as I know, it's still correct. The security forces that I'm in contact with at the base of the hotel have been giving varying figures. They say that they do not know themselves. Unfortunately, I don't have an internet connection so I'm coordinating with a number of people to get proper figures. As far as I know, there were at least 10 people who were killed - some of whom are internationals.

RAJPAL: Sure. Erin, what we're showing our viewers right now is a 3D image of the hotel itself. If you could just give us an idea of where you are but also, I guess, describe for us where you're seeing the security forces are heading into and just give us an idea of the scene as you see it.

CUNNINGHAM: Right. Now I'm on the main road that leads up to the hills where the Intercontinental is on top of that hill. So I'm at the base of that hill. It's a couple hundred meters from the gate. It's the main entry way into the hotel. Now I'm to the east of the hotel at the foot of that hill.

RAJPAL: Okay. And what about in terms of the security forces that you see or the armoured personnel that have now made their way to the hotel. Are they at the front of the hotel from what you understand?

CUNNINGHAM: From what I understand, yes, they are at the front of the hotel. There were two columns that flanked either side of the entrance so as far as I know, they are more or less in the same place which is - which is the front of the hotel.

RAJPAL: On a normal day, in terms of the security cordon, where would we see that be? Would that be at the base of the hill or would that be actually at the entrance to the hotel?

CUNNINGHAM: It would be closer to the entrance of the hotel. Once in a while, if there is a serious threat out, there will be an extra security (INAUDIBLE) at the base of the hill. But it would not be a daily occurrence, as far as I know.

RAJPAL: I'm just - I'm just updating our viewers there, Erin, that the hotel - we understand - runs from north to south and with - as we've been talking before, there would - there would definitely be a very - a heavy security presence and a checking - I guess - system to enter this hotel. Were they not?

CUNNINGHAM: I'm sorry. Could you repeat that question?

RAJPAL: There would be a very heavy security presence at the hotel on any given day?

CUNNINGHAM: Right. Yes, on any given day, there would definitely be a very heavy security presence - maybe several checks as you approach the hotel. I do not believe, however, that there - on a daily basis - would be a police checkpoint at the base of the hill before you reach the hotel. It would be much closer to the hotel. However, there still is very tight security here.

RAJPAL: Erin, as we understand, there's a gunfight that still continues right now. If you could, if you will please, just give us just a recap of what happened this evening at the Intercontinental Hotel.

CUNNINGHAM: Right. Okay. So based on the reports that I've been getting, it started around 10 o'clock in the evening where between three and six insurgents penetrated the Intercontinental. One is reported to have detonated his explosives on the second floor of the hotel, killing a number of guests. I know that there was another one that was killed in action according to the security forces that I'm speaking to now. However, there were also reports that there is Taliban snipers on the roof who were firing at the security forces - the Afghan security forces - who were trying to approach the hotel in order to stop the attack.

After that, after - I would say - probably around 11 o'clock, there were RPGs being fired from the roof of the hotel into the city near to the first vice-president of Afghanistan. His house is in the neighbourhood.

After that, there was a sustained gun battle and several large explosions. Now, we are seeing the Afghan National Army storm the grounds of the hotel.

RAJPAL: All right. Erin, we thank you very much for that.

Erin Cunningham reporting to us there from Kabul at the base of the hotel - the Intercontinental Hotel - where an ongoing fire fight is taking place right now. We understand that the Afghan security forces and the army have made their way to the hotel. There is an unknown number of guests that are still remaining within this hotel. We have unconfirmed reports of casualty numbers going up to 10 people but again, that is unconfirmed. Again, details are still quite sketchy in terms of what is actually happening inside the hotel and how many gunmen have been able to penetrate the security cordon - security within the hotel in itself. We are continuing to keep our eye on the situation there. We'll bring you the very latest as we get it here on CNN.

Switching gears right now in CONNECT THE WORLD.

In the world of sports, after battling the heat of Wimbledon on Monday, today, players were hampered by heavy rain at the championships.

But it was a bright day for Maria Sharapova. The world number 6 storms into the semifinals in a straight set victory over Dominika Cibulkova. It is the first time since 2006 that the Russian star has advanced this far at Wimbledon and at the age of 24, she is the oldest woman left on the court.

Well, there's also been plenty of focus on Rafael Nadal. The two-time Wimbledon champion had an injury scare during Monday's match against Juan Martin Del Potro. After winning a four-set, he headed to a hospital for a scan on his ankle but was back in action today - at least on the practice courts.

Well, for more now, we're joined by Pedro Pinto. He joins us here now.

(INAUDIBLE), a bit of a scare for Rafael Nadal but whoa! What a great match! To be able to play four sets - a demanding four sets - with that injury.

PEDRO PINTO, CNNi SPORTS ANCHOR: Monita, Rafa's a gladiator and he shows this week-in, week-out on the (INAUDIBLE) tour. We see it when he wins the French Open which he's done now six times that he just outlasts his opponents. He just does not give up.

And this was actually quite a big scare, as you mentioned, for Rafa. You could tell that during the match. He was grimacing in pain. Fortunately for him, an MRI scan on Monday night revealed that there was no serious damage to any ligaments, no serious damage to any bones because he actually felt he could have suffered a fracture in his left foot but fortunately, that's been cleared, and he's all good to go for his quarterfinal match against Mardy Fish - that's a surprising American in the men's draw - and he's still the favourite to win. Rafael Nadal has won the last 18 matches in a row at the all-England club and the men will take center stage on Wednesday.

RAJPAL: I'm still gunning for a Nadal-Federer final.

PINTO: I think a lot of people are.

RAJPAL: That we want to watch. I did watch that Nadal match yesterday with Del Potro. Wow! That was pretty amazing.

Pedro, thank you very much.

Up next, a precision maneuver involving the world's biggest ocean liner and there's no room for error. We'll show you how it's done when our Gateway series continues right after the short break.

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RAJPAL: Much of what he had touched, driven or eaten today has probably come from another country. Trains, trucks, boats, and planes all play a part in bringing goods from around the globe into our homes. Well, here at CNN, we are taking a look at the cogs of this vital supply chain, taking you inside some of the world's major transportation hubs.

Well, among them what is known as Germany's "Gateway to the World" - the port of Hamburg. It is home to Maschen, Europe's largest rail marshalling yard. From here, cargo from around the globe is delivered to every corner of the continent. Consumer goods have been entering Europe through this gateway for centuries.

But now, as Becky Anderson explains, the port is also increasingly bringing in consumers.

(BEGIN VIDEOTAPE)

BECKY ANDERSON, CNN CORRESPONDENT (voice-over): Hamburg is celebrating. Filling the banks of the harbour and their beer glasses, the 820nd anniversary of the port.

It is a weekend filled at the world's greatest of ports festival.

(on camera): The port is the backbone of Hamburg's wealth - the dominant economic port in this region. It supports some 150,000 jobs so it's no real surprise that when it comes to birthdays, they like to celebrate in some style.

(voice-over): On the water, the harbour's features tugboats perform a ballet. As darkness descends over the river Elbe, Saturday moves into Sunday.

At a control tower, staff on the night shift are preparing to welcome the world's largest and most famous ocean liner. Only radars and radios reveal the approach of Queen Mary II or the QM2.

KLAUS VORWERK, HAMBURG HARBOUR PILOTS' ASSOCIATION: We're now at the pilot station on the port of Hamburg and this is the working place of the pilot of the watch. He's monitoring the traffic and will tell us in a moment when Queen Mary II is due to be arriving at the port entrance which is over there to the west.

ANDERSON: Klaus Vorwerk is one of two harbour pilots who will board the QM2 this morning to help guide the ship safely into dock.

VORWERK: So we will enter the port by following the river - the main river - going around this bend and we'll turn around in this turning basin and then go stern first into the berth. The Queen Mary II is 345 meters long. (INAUDIBLE) will be with our bow here. Stern here, bow there. Then we will start swinging clear of this corner, taking it backwards into the berth. There's not really room for error.

ANDERSON: As day breaks, Klaus is on his way to intercept the QM2. The harbour port referred him (INAUDIBLE) 75 harbour pilots and with 12,000 sea-going vessels arriving each year, they play a vital role in maintaining safety in the river Elbe.

Expert both in ship navigation and the specific demands of these idle waters, Klaus has been piloting here for 24 years.

VORWERK: We have twenty-four hour stand-by for pilots, seven days a week. Anytime we can supply more than 30 pilots or one at the same moment.

ANDERSON: Six miles from the crew's terminal, QM2 looms into view.

The equivalent of four football fields in length, 45 meters longer than the Eiffel tower is tall. A ship this size can only enter port three hours before and three hours after high water.

And when Klaus boards, she's still moving.

Even at this early hour, the crowd's out in force to welcome Hamburg's guest of honor. On board, 2500 passengers and 400 crew members.

(on camera): I'm in the old Elbe tunnel, 24 meters below the heart of Hamburg's harbour. In 1911, when this tunnel was opened, it was an engineering sensation and a hundred years on, it still is. I'm told the QM2 clears the roof by just less than 1 1/2 meters.

(voice-over): The QM2 first came to Hamburg in 2004. It was a major event in the evolution of this city as a cruise and passenger destination.

On her final approach, QM2 begins to spin around 180 degrees. So close to the harbour walls, it's quite a sight to the untrained eye.

MALE (via subtitles): Cruise terminal, this is Queen Mary. Approximately how far do we need to go?

ANDERSON: Moving backwards inch-by-inch, the QM2 nestles against the dock.

UNIDENTIFIED MALE (through translator): I'm trying to confirm, but it must be at least another 80 meters.

ANDERSON: Klaus has been onboard for two hours.

VORWERK: Everything was nice. I have to establish a feeling of trust as a captain in both directions and from that moment on, that's absolute teamwork.

He is a professional guy who knows his job. I am too. And we have done this together so many times in our lives before that there is no question about what to do.

UNIDENTIFIED MALE: I believe it's the 820nd anniversary of the port, isn't it? So what (INAUDIBLE)? I don't know if we planned that or...

CAPTAIN PAUL WRIGHT, QUEEN MARY II, CUNARD: Where we rely on the pilot's a lot. There's a lot of local knowledge, communications , obviously the currents that may be not only in the pilot books or charts. There' s all sorts of little idiosyncrasies to each port so that's where we rely on the pilot.

I don't think when people built these ports that anybody envisaged ships this size even being around. But it's very tight but we take it steady and these ships are very maneuverable nowadays.

ANDERSON: In just 12 hours, the QM2 will leave Hamburg for New York. At the cruise terminal, new passengers are already checking in.

UNIDENTIFIED FEMALE: It's really quite an experience. We came across from New York into South Hampton and it was just wonderful. It really was. And they have a kennel for our dogs so that was the biggest reason why we chose to come across on the Queen Mary.

ANDERSON (on camera): 110 kilometres or 80 miles from the North Sea, Hamburg might seem like an odd place to have a cruise ship like that but such is the demand. They just opened a new cruise center here.

(voice-over): As the QM2 sails out of Hamburg towards the North Sea, she draws an official close to Hamburg's port festival in 2011.

Next year, a record 150 cruise ships are scheduled to visit Hamburg. But only the QM2 gets a send-off like this.

Becky Anderson, CNN, Hamburg.

(END VIDEOTAPE)

RAJPAL: The port of Hamburg, one of the world's major gateways.

Next Tuesday, we go from directing traffic on the water to choreographing the skies. Becky Anderson takes us into the tower at Amsterdam's Schiphol Airport.

Going to school and getting good grades? Pretty stressful at the (INAUDIBLE) of times. Well, in Georgia, it can be highly competitive.

Now, educational reforms have linked brains to money. All will be explained up next as our "EYE ON GEORGIA" series continues.

(COMMERCIAL BREAK)

RAJPAL: We want to bring you the latest out of Afghanistan, a breaking story that we are following - an ongoing fire fight between militants and police at a hotel in Kabul.

The Taliban are claiming responsibility for the assault on the Intercontinental Hotel. Just minutes ago, a journalist on the scene told us gunshots continue to be heard and that Afghan security forces have moved into the hotel. She also said that there are unconfirmed reports that up to 10 people have been killed. We'll have more details as they become available.

CNN's "Eye on" series travels to a different country each month exploring business, culture, and a way of life. So far, we've visited Ukraine, Germany, and India, and now, we've got our eye on Georgia - located on the Caucasus region east of the Black Sea and south of Russia.

The Georgian government is focusing heavily on education. A number of radical reforms have taken place over the last few years as CNN's Paula Newton found out.

(BEGIN VIDEOTAPE)

PAULA NEWTON, CORRESPONDENT (voice-over): Listen for a moment to the reflective, soothing taste of Katie Shkheidze's piano. And now, take in what goes on at her Georgian high school every day.

Katie is the first to say this is a class in a hurry, anxious to succeed after so many years of lost time.

KATIE SHKHEIDZE, HIGH SCHOOL STUDENT (via translator): There is more competition and you have to study hard. When there is good competition in the class, you're forced to study hard to succeed.

NEWTON: Studying hard was not the norm in Georgia. Many are blunt about the old system and its legacy - even the education minister.

DIMITRI SHASHKINI, GEORGIAN EDUCATION MINISTER: It was bribed, it was corrupted.

NEWTON: To get good grades, you bribed teachers to get into the few good schools on offer you bribed officials.

But to reform the system, Georgia is executing an ambitious plan that many countries have dismissed as too radical. Called "a voucher system" by some, education funds follow students to their school of choice. Schools must compete to attract them.

SHASHKINI: Competition always brings good results. Where there is no competition of this field, we will never be developed. Of course, in the competition, somebody wins, somebody loses. But we are talking about the future of our children and we are talking about the future of our country.

NEWTON: We set out to see how the system was working in a central high school in the capital.

It was a busy, phonetic day for students but also teachers who are being scrutinized and tested like never before. The principal admits if it looks stressful that's because it is. He tells us they're seeing results.

NEWTON: It's a good idea (INAUDIBLE) absolutely. You think it makes for a better education?

AMIRAN JAMAGIDZE, HIGH SCHOOL PRINCIPAL: Yeah. It helps us to improve the system, to improve our possibilities.

NEWTON: That's echoed by parents like Katie's mother, who says the government is finally taking education seriously by giving choice to parents and students.

LIKA SHKHEIDZE, MOTHER (via translator): The government looks after my daughter's education the way I would because they invest money in my child's education every month through the voucher system. And this voucher gives me the freedom to take my child to a private or public school.

NEWTON: In fact, choice trumps all in this system. Even private schools get their share of public funds. This approach to reform bends to the demands of competition at all costs.

Risky reforms that critics say could leave some students behind, especially those who need more nurturing.

NEWTON (on camera): What if you get it wrong?

SHASHKINI: We even don't think about such an option.

NEWTON: Why?

SHASHKINI: We don't have the right to make a mistake. That's why we are moving forward. That's why we are moving forward so quickly.

NEWTON (voice-over): Make no mistake, this is a grand project and a big gamble - more than most students and countries would agree to take on.

Paula Newton, CNN, Tblisi, Georgia.

(END VIDEOTAPE)

RAJPAL: Our "Eye On Georgia" series continues all week right here on CONNECT THE WORLD.

I'm Monita Rajpal, in for Becky Anderson. Thanks for watching.

The world headlines and "Back Story" will follow this short break.

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