Indian commandos traded fire with Islamist militants as the endgame neared at a luxury hotel and a Jewish centre in Mumbai on Friday, but the gunmen were thought to be still holding a handful of foreign hostages, officials said.
The head of one commando unit flushing out militants at the luxury Taj Mahal hotel said he had seen 12 to 15 bodies in one room among a total of 50 in the hotel.
The commandos found money, ammunition and an identity card from Mauritius that they suspected belonged to the militants, the commander, his face disguised by a black scarf and sunglasses, told a news conference.
Government and army officials said operations would be wrapped up within hours after Wednesday's brazen, coordinated attacks that killed at least 121 people.
But Indian TV channels reported fresh firing outside Mumbai's main railway station.
At another site, the Trident-Oberoi Hotel, well-dressed guests, some dragging their suitcases, trickled out and were escorted into waiting buses and cars after a 36-hour siege. One foreign member of the hotel staff left with a baby in his arms.
Police said 93 guests had been evacuated so far.
"They are evacuating everyone," said one Indian woman leaving the hotel with her husband. "Everyone is being taken care of."
At least one militant was still thought to be holding two hostages in the luxury Taj Mahal Hotel, an army commander said.
Army Commander Lieutenant-General N. Thamburaj told reporters that almost all guests and staff had been evacuated from the Taj and the operation would be wrapped up in a few hours.
"He is moving in two floors, there is a dance floor area where apparently he has cut off all the lights," he said.
"This morning while carrying out the operation we heard the sound of a lady and a gentleman, so it is possible that this terrorist has got two or more hostages with him."
Gunfire was still being heard at the hotel and the Jewish centre, where hours earlier Indian commandos, their faces covered by balaclavas, rappeled from helicopters onto the roof to flush out another group of militants there.
At the centre, in a crowded part of the city, a Reuters witness said troops fired inside to provide cover as commandos made at least three sorties and took up positions on the roof.
Gunmen are thought to be holding an Israeli rabbi and around three other people hostage there, officials said.
Mumbai, a city of 18 million, is the nerve-centre of India's growing economic might and home to the "Bollywood" film industry.
Hindu-dominated India, which has a sizeable Muslim minority, has been hit by militant attacks for decades. But this strike seemed aimed at crippling its ability to draw foreign investment.
Australia upgraded its travel warning for India on Friday, telling its nationals to reconsider any plans to go there "because of the very high risk of terrorist activity".
India's main stock markets reopened on Friday after being closed on Thursday, the main share index down around half a percent by 0715 GMT.
PINNING BLAME
Prime Minister Manmohan Singh pinned blame for the attacks on militant groups based in India's neighbours, usually an allusion to Pakistan, raising prospects of renewed tension between the nuclear-armed rivals.
He warned of "a cost" if these nations did not take action to stop their territory being used to launch such attacks.
An estimated 25 men armed with assault rifles and grenades — at least some of whom arrived by sea — had fanned out across Mumbai on Wednesday night to attack sites popular with tourists and businessmen, including the city's top two luxury hotels.
Police said at least seven attackers were killed and nine suspects taken into custody. Twelve policemen were killed, including the chief of Mumbai's anti-terrorist squad.
At least eight foreigners, including one Australian, a Briton, a Canadian, an Italian and a Japanese national, were killed. Scores of others had been trapped in the fighting or held hostage. Police said 279 people were wounded.
PAKISTAN GROUP
The Hindu newspaper said at least three of the attackers taken into custody were members of the Lashkar-e-Taiba group, based in Pakistan.
The group made its name fighting Indian rule in disputed Kashmir, and has been closely linked in the past to the Pakistani military's Inter Services Intelligence agency, the ISI.
Lashkar-e-Taiba has denied any role in the attacks.
"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," Prime Minister Singh said on Thursday.
"We will take up strongly with our neighbours that the use of their territory for launching attacks on us will not be tolerated, and that there would be a cost if suitable measures are not taken by them," he said in a televised address.
Pakistan, condemning the assault, promised full cooperation.
The militants appeared to specifically target Britons, Americans and Israelis, witnesses said. About 10 Israelis were being held in several different sites, authorities have said.
The attacks brought the biggest chaos to the city since serial bombings in 1993, blamed on the city's Muslim crime syndicates, killed 260 people and injured hundreds.
