Indian commandos freed hostages from Mumbai's Taj Mahal hotel today but faced continued resistance in other parts of the city from Islamist militants still holding between 50 and 200 of hostages and demanding the release of extremists held in Indian jails.
The commandos stormed two buildings in the late afternoon, seizing the lobby of the Oberoi hotel and taking positions around a tower block where a number of militants were believed to be holed up. Indian television reported that some hostages were freed from the Oberoi.
Security forces seized grenades, bullet magazines for AK-47 machine guns and provisions from the Taj hotel, according to NDTV. A large fire has broken out in the old wing of the hotel, and NDTV reported more explosions from both hotels.
A National Security Guard spokesman said 200 more NSG commandos were being rushed to Mumbai. An Indian army major, quoted by the Times of India, said the force was preparing for a final assault.
The gunmen arrived yesterday in India's financial capital by boat before fanning out to launch a series of bloody attacks on luxury hotels, restaurants, a rail terminus and an ultra-orthodox Jewish centre, killing more than 100 people. British and Americans were reportedly rounded up as hostages.
Today, one of the kidnappers in the Oberoi said the hostages, some of whom were believed to be westerners, would only be released if "mujahideens" and Islamic militants were released from Indian jails.
The kidnapper, who identified himself as Sahadullah, told Indian TV that he was one of seven attackers inside the Oberoi hotel. "Release all the mujahideens, and Muslims living in India should not be troubled," he said.
India's prime minister said the government would ensure those responsible did not escape the law. Manmohan Singh said in a national address: "We intend to ensure the safety of our citizens. We salute the police and men who lay down their lives in fighting these terrorists.
"The well-planned and well-orchestrated attacks, probably with external linkages, were intended to create a sense of terror by choosing high-profile targets."
Police and gunmen exchanged heavy fire early this morning and a number of people managed to flee the Taj Mahal hotel.
The deputy state chief of Maharashtra, RR Patil, confirmed the commandos had caught one militant alive as they tried to flush them out of the hotels.
"They have held a few people hostages," he said. "Therefore, the operation is taking place at a slower pace. Five have been killed and one has been caught alive. We have got all the information."
Gunmen seized the Mumbai headquarters of the ultra-orthodox Jewish outreach group Chabad Lubavitch. Commandos surrounded the building this morning and witnesses said gunfire could be heard from inside.
A militant holed up in the centre phoned an Indian television channel to offer talks with the government for the release of hostages, but also to complain about abuses in Indian Kashmir. "Ask the government to talk to us and we will release the hostages," said the man, identified by the India TV channel as Imran, speaking in Urdu with what sounded like a Kashmiri accent.
"Are you aware how many people have been killed in Kashmir? Are you aware how your army has killed Muslims?" he said.
One police officer who encountered the gunmen as they entered the Jewish centre told the Guardian the attackers were "white", although this could mean they were paler-skinned Indians from the country's north.
"I went into the building late last night," he said. "I got a shock because they were white. I was expecting them to look like us. They fired three shots. I fired 10 back.
"We know they have kept five Jewish families as hostages. They are in the building below the flat where the terrorists are in. Every time the Jewish families try to move out, the terrorists shoot them. They have grenades, they have AK47s. The neighbours told us these men had brought 100kg of chicken. They want to last out for a few days."
A senior government official for Maharashtra state said the dead included at least one Briton, an Australian and a Japan. The Italian foreign ministry in Rome said an Italian was killed.
A German media manager named as 51-year-old Ralph Burkei died from his injuries after trying to escape from an upper floor of the Taj hotel.
"Ralph wanted to flee from an upper floor of the building but he fell," Munich's Abendzeitung newspaper quoted an unnamed friend as saying. The friend said Burkei called on his mobile phone from a lower rooftop saying: "I've broken all the bones in my body. If no one helps me right now, I won't make it." Burkei died on the way to hospital.
The home secretary for Maharashtra state, Bipin Shrimali, said four suspects were killed at two battle scenes in Mumbai when they tried to flee in cars, while four more gunmen were reported killed at the Taj Mahal hotel.
Reports said a previously unknown group calling itself the Deccan Mujahideen had claimed responsibility for the attacks in emails to several media outlets. There was no way to verify that claim.
Witnesses said the attackers were young south Asian men in their early 20s, most likely of Indian nationality, and spoke Hindi or Urdu.
Dr George Kassimeris, an expert in conflict and terrorism at the University of Wolverhampton, said the terrorists behind the coordinated attacks had followed a "blueprint" created by al-Qaida.
Professor Richard Bonney, the author of Jihad: From Qu'ran To Bin Laden, said: "This attack looks more dangerous and better planned, though not directed against possible government targets but economic ones and of course the western allies."
A spokesman for the Pakistan-based militant group Lashkar-E-Taiba denied it was involved.
Mumbai is today a ghost town, with the normally chaotic and crowded streets eerily still.
The Indian navy said its forces had boarded and were searching a cargo vessel suspected of ties to the attacks.
Navy spokesman Captain Manohar Nambiar said the ship, the MV Alpha from Karachi, Pakistan, had recently docked at Mumbai.