For the rest of the world, it happened on television, like a disaster movie you had seen before. The picture showed the Manhattan skyline with a sooty trail of smoke twisting out of the top of the World Trade Center. It looked like a beautiful day, one of those bright blue-sky mornings which made you wish you were in New York.

There was just a moment for a jumble of thoughts to flit across the mind: A bomb? A fire? Hasn't this happened before? Then, there was a plane, a silhouette flying low with the sun behind it. It came across from the right hand side of the screen and disappeared behind the second tower. An orange fireball leapt out the other side, a burst of flame and glass and then black smoke.

"Unbelievable," people muttered in every language across the globe.

In the top left corner of the picture, there was the little red box which said this is "Live". Each part of the screen seemed to be telling you the same thing: this is not just TV, this is really happening. There was the time - a digital clock showing 8.48EDT, three minutes after the first plane had ripped into the top of the North Tower. Then, 9.03, the picture of the second plane banking into the South Tower. There was the line along the bottom of the screen, a tickertape offering little information: Two planes had been hijacked and crashed into the World Trade Center.

The picture of the United Airlines Boeing 767 dipping its left wing and curving into the skyscraper was being shown again and again. Each time, it got a little less spectacular, a little less "unbelievable".

The reporters on screen seemed to know so little and they told you as much. There was a statement from President George W. Bush: "We have had a national tragedy in an apparent terrorist attack on our country." The president, wherever he was, seemed to know as little as the rest of us.

Then, a newsflash across the bottom of the screen: A plane had crash-landed into the Pentagon. Suddenly, this was a war.

Whoever had hijacked the American Airlines flight from Dulles Airport in Virginia had now made a direct attack on the US military. As the pictures of a smoking black gash in the side of the Pentagon now streamed on to the screens, the questions were coming in waves: Who is doing this? How did they do this? Are they coming here? When will it end?

Disbelief had given way to fear. The rumours were now circling that eight planes had been hijacked. The Federal Aviation Administration grounded all aircraft over American airspace. There were pictures of people running, streaming out of buildings everywhere.

The cloud of smoke drifted across Manhattan, blackening the sky. In offices and homes around the world people remained huddled around the TV. If they were at work they watched for a little while and then went back to their desks. They tried to get on with their work, but there was no point. They headed back to the TV. Another plane had come down in Pennsylvania.

The Twin Towers were smoking. Standing there, leaking soot across the city. And, then, the one to the left crumbled from the top down. It did not topple or break apart, but imploded. When towerblocks have outlived their usefulness, the local news sometimes shows a demolition job and it is as shockingly neat as that - the skyscraper is swallowed into the ground, instantly billowing into an urban sandstorm. A giant cumulus of rock and steel and glass shards appeared, crawling through the streets and over the buildings of New York.

Just over half an hour later at 10.35, the North Tower collapsed too. It seemed inconceivable that the Twin Towers could fall. But, what did you think, that they were invincible? That they could sustain the weight and heat of two exploding aircraft?

The first helicopter shots had begun to show lower Manhattan engulfed in dust and smoke. At the bottom of the screen, the Statue of Liberty was to be seen, small and green, far away but unscathed.

The last time the world - the whole world - gathered around television, it was when America was putting a man on the moon, when people across the globe rejoiced at America's striving ambition and boundless confidence. Thirty years later, we were all Americans again. This time, not in hope but in fear.

By 10.25am, Elliott Nadel had reached the first floor of the North Tower. Hampered by crowds and intense heat, the evacuation had been slow: it had taken him almost an hour and a half to walk down the stairs from his office on the 85th floor.

Rescue workers guided the evacuees through the doors and down on to the lower concourse level, the World Trade Center's main shopping centre.

As he hurried past the shops Mr Nadel heard a roar, like a huge waterfall. Suddenly, the ceiling gave way. A rush of air, followed by a huge ball of debris, pushed him to the ground.

Other evacuees, desperate to escape, trampled over him as he lay. The lights failed, plunging the concourse into darkness. The air was thick with dust from debris. Every breath meant swallowing a mouthful of grime.

For the first time, it occurred to him that he might not survive. But he forced the notion from his mind. "Your number's not up yet. You're going to get out of here," he thought.

In the gloom he spotted a beam of light. It was a torch, held by a firefighter. He grabbed hold of the hand.

"My name is Elliott - what's your name?" he said. "Dan," the fireman replied. "Well Dan," Mr Nadel said. "It looks like you're going to be my date for the evening."

Holding hands in the darkness, a group of other evacuees formed a daisy chain behind the firefighter. For several minutes they floundered in the darkness. Then they found an escalator leading to ground level. Mr Nadel helped others up the stairs and then rushed into the open.

The ground was scattered with shards of metal, glass and other debris. Everything was coated with a thick layer of grey dust, which also hung in the air like a dense fog, making it hard to see or breathe - like a nuclear wasteland.

Mr Nadel rushed into a nearby bank. Covered in soot and dust, he rushed to a payphone and called his wife, who was almost hysterical. "What happened?" he asked. For a few moments, he could not understand what she was saying. Finally the answer came: "The World Trade Center has been demolished."

What Mr Nadel had not seen while he was making his escape were the sights that will haunt many for the rest of their lives. While the towers were still standing, they burned ferociously. A man cycling to work joined a distraught crowd at the corner of Church Street and Chambers Street, who were looking up at the flaming towers. "Oh my God! Did you see that?" he shouted as he saw a man fall from the 80th floor. "He wasn't the first," someone in the distraught crowd said, and as they spoke, two, three more people plunged to their deaths. Some of them were on fire. Many hit the side of the building as they fell. Two people clung to a sliver of stray metal which jutted out from the building horizontally, for a couple of minutes they swayed like flags before finally losing their grip.

And when the tower collapsed it looked like an avalanche, a cloud of dark grey smoke and debris hurtled down the streets. Screams and a stampede were instantly replaced by white-grey smoke and the sounds of people choking on dust and gases.

One woman inched back in disbelief, shrieking while clutching her head. Then instinct took hold. She turned and bolted in an attempt to outrun the oncoming cloud.

Later in the day, on the corner of Christopher Street, a group of fireman stood around talking. "He's crying like a baby in there," an older man said, gesturing toward a younger colleague in the fire truck. "His whole company went in and he's the only one that came out."

Yassir Arafat, the Palestinian leader, had been meeting Miguel Moratinos, the EU envoy to the Middle East peace process, on the first floor of his Muntada complex on the sea front in Gaza city when they were interrupted. Something terrible had happened.

Mr Moratinos and Mr Arafat broke off their talks and, like much of the rest of the world, sat down to watch television.

A gloom descended quickly over Mr Arafat. He kept on repeating to himself "unbelievable, unbelievable". Although he knew immediately the bombing was a calamity for his cause, he could not grasp the scale of what was happening.

He disappeared down the corridor and went into conference with his closest advisers later to emerge and repeat in front of the world's press that he thought it was "unbelievable, unbelievable, unbelieveable".

Half a world away in Tokyo, Tsutomu Himeno, an aide to prime minister Junichiro Koizumi, was attending a dinner party when the first tower was hit.

The hostess heard the news at 10.25pm, switched on the television - and the dinner guests, clutching wine glasses, gathered around.

Mr Himeno started frantically calling his colleagues in the Koizumi government on his mobile phone, while never taking his eyes off the screen.

"We Japanese saw the World Trade Center as a symbol of strength," he said. Japan is a culture that loves "brands" - and the WTC was considered one of the strongest New York corporate brands. A number of Japanese banks thought that too, and had based the American operations in the towers.

Mr Himeno rushed through the dark streets of Tokyo to the prime minister's personal residence, where Mr Koizumi and his colleagues such as Yasuo Fukuda, cabinet secretary, established a crisis centre. "When I first heard the news I turned on my television and felt as if I was sitting in a cinema watching a movie," recalls Mr Koizumi. "What I saw was just unbelievable" - that word again.

Just before 2pm on Wednesday, Jimmy Cayne strode into the boardroom on the 7th floor of Bear Stearns' head office in midtown Manhattan.

In the windowless, wood-paneled room the chairman and chief executive of Bear Stearns was greeted by the cream of the Wall Street financial establishment.

Among those crowded around the boardroom table were Richard Grasso, chairman and chief executive of the New York Stock Exchange; his counterpart at Nasdaq, Wick Simmons; and Peter Fisher, the deputy under-secretary of the Treasury.

Despite being forced to evacuate their headquarters in lower Manhattan senior executives of Goldman Sachs, Merrill Lynch and Lehman Brothers were all present. Philip Purcell and Bob Scott of Morgan Stanley, whose firm had spent the past 24 hours frantically contacting thousands of employees who worked in the World Trade Center, had also made the trip across town. The room was so crowded some had to stand.

The men had set aside their traditional rivalries to tackle a pressing question: how to shore up the stability and credibility of the US financial markets in the wake of the previous day's assault.

The hurried meeting had been called by Harvey Pitt, the bearded chairman of the Securities and Exchange Commission. White House officials were anxious that markets re-open quickly to demonstrate their resilience to the attack.

Although US markets were immediately closed after the disaster, shares had been tumbling around the world. The Nikkei had fallen below 10,000 for the first time since 1983. Traders had also been dumping the dollar. A delay could further undermine investors' confidence.

But the challenges were immense, as Mr Pitt had already found out. The meeting had originally been scheduled to be held at the New York Stock Exchange, just a few blocks from the World Trade Center. When it became clear that attendees would not be able to get to lower Manhattan, which had been cordoned off by rescue workers, Bear Stearns offered its offices as an alternative.

As the black town cars started pulling up outside the offices at 245 Park Avenue, security was tight. Ray Kelly, the former New York police commissioner who is Bear Stearn's chief of security, had stationed 30 of his staff in and around the building.

Inside Mr Cayne, dressed in a dark suit and a tie but without his trademark cigar, sat down and thanked everyone for attending at such a difficult time. Before starting the meeting, he asked everyone to observe a moment's silence.

Mr Grasso then asked each of those present to describe the state of their systems and their readiness to start trading the following day. A bleak picture emerged. One executive after another spoke of evacuated offices and traumatised staff, damaged communications networks and unreliable transport systems.

Larry Babbio, vice-chairman of the local telecom group Verizon, laid out the damage suffered by telecom networks in lower Manhattan. Mr Grasso later said they had been hit by the equivalent of "several small earthquakes". Executives worried that if they resumed trading too early, systems might be overwhelmed by the expected flood of orders.

Towards the end of the two-hour meeting a consensus emerged. The banks and the US Treasury would signal their confidence by resuming trading in US government bonds the following morning. But the stock market would remain closed for at least another day, and possibly until Monday morning.

Some participants were impressed by the lack of acrimony. It was a stark contrast with a similar meeting in 1998, when Wall Street's largest firms had squabbled over the fate of Long Term Capital Management, the failed hedge fund.

Nonetheless, the US stock markets would be closed for more than two days for the first time in almost 70 years. The suicide bombers had achieved a disruption not even caused by the Japanese attack on Pearl Harbour.

Written by:
Peter Thal Larsen
Richard Wolffe
Peter Spiegel
Victoria Griffith
Nancy Dunne
James Harding
Stephen Fidler
Farhan Bokhari
Gillian Tett
James Drummond
Mark Odell
Kevin Done
Abigail Rayner
Stephanie Kirchgaessner
Tally Goldstein

Part One

Part Three