It's a vision not unlike that of the Hilton hotel chain in the 1950s, when the U.S. State Department thought opening beacons of modernity and Western comfort in exotic settings could bolster economic and political stability amid fears of rising Soviet influence. Washington actually financed part of Hilton's overseas expansion through the Marshall Plan, funneling millions of dollars through the State Department's Foreign Buildings Operations program to pay for construction in places such as Baghdad, Berlin, Cairo, and Istanbul.

In today's Afghanistan and Pakistan -- where Serena runs nine hotels, including its heavily guarded flagship in the heart of Islamabad -- the properties are supported and partly owned by the World Bank's International Finance Corp. and Norfund, the Norwegian-backed development institution. "Other partners see things are going sour and they want to pull out," says Kjartan Stigen, Norfund's investment director. "They hang in there in bad times."

Serena's philosophy finds its ultimate test in places like Quetta, Pakistan, the Taliban's headquarters south of the Durand Line. Home to the Haqqani network, the surrounding area is rife with Islamic militants and suicide attacks -- and a Baluchi separatist insurgency. But the hotel, built with curving mud walls typical of local architecture, is a haven of cool marble tiles and flower-filled courtyards. Wood and onyx decorations dot the public areas, which include three restaurants, a swimming pool, and two posh presidential suites. For all its opulent amenities, however, the Serena resembles a military barracks from the outside. "It's a fortress, but a very elegant, luxurious fortress with terrific restaurants," says Jonathan Landay, a national security correspondent for McClatchy Newspapers.

Across the border in Afghanistan, the Kabul Serena was converted into an oasis of well-being with marble bathrooms, a health spa, sun deck, swimming pool, pastry shop, and banquet hall, as well as its own electric generators after a $36 million overhaul of the battle-scarred and decrepit Hotel Kabul. So far, the Serena has been attacked three times. Within months of its 2005 opening, rioters rampaged through the lobby, driven by a mistaken belief that the hotel served alcohol. (Other hotels in the chain do.) In 2008, Taliban suicide bombers struck again, killing eight people, including a Filipino spa worker. Then, in 2009, two rockets hit the premises, shattering windows and filling the reception area with smoke.

With each attack, the hotel has beefed up security, installing blast barricades, high perimeter walls, and armed guards. A loyal clientele of dignitaries, diplomats, consultants, aid workers, and journalists keeps occupancy rates above 60 percent. "Kabul would not have an international-standard hotel, which it needs, without the Serena," says Barnett Rubin, a State Department advisor on Afghanistan, "and no normal hotel company would have done it."

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