While the embassy declined to provide the nationalities of the victims, Chabad has said that the hostages there included rabbi Gavriel Holtzberg, an Israeli citizen, and his wife Rivka. Fighting at the building lasted into Friday night, with Indian commandos launching a major operation to storm it at nightfall.

First Account of Hotel Assault

The terrorists also were well-armed with ammunition, bullets and dried fruit for survival. Troops found a bag with seven magazines for an AK-47 as well as grenades and plastic explosives. Commandos also recovered several hundred spare rounds of ammunition in their assault, which took place overnight Wednesday and into Thursday morning.

Indian army commandos took up position around Chabad House Friday as they prepared to enter the Jewish center to free hostage.

The dead included Alan Scherr, 58 years old, and his daughter Naomi, 13, who were in a cafe Wednesday night when they were killed, the U.S. State Department said. The Scherrs were from a Virginia community that promotes a form of meditation, and were among 25 people attending a spiritual program in Mumbai; other members of the program were injured, including two women from Tennessee. Also among the dead were Australians, a Japanese, an Italian, a Briton, a German and a Canadian, according to Indian and foreign officials.

 It is unclear how many terrorists were involved in the attacks, where they came from, or how many have been killed by security forces.

At one point, the terrorists held a total of several dozen hostages at the Taj Mahal, the Oberoi-Trident hotel complex and the Chabad House. Most had been freed or had escaped by Friday afternoon, but it wasn't clear whether others are still being held by the attackers.

Gunfire was reported at luxury hotels, a restaurant, police headquarters and a train station.

Indian security forces, led by the Marine commandos, tried to mop continued pockets of resistance and rescue any remaining hostages at several sites Friday.

Raid on Jewish Center

In the morning, masked commandos dropped from helicopters onto the roof of a Jewish center where suspected militants were holed up, possibly with hostages, as sharpshooters kept up a steady stream of fire at the five-story building in Mumbai's Colaba district. The commandos later emerged from the center with their assault rifles raised.

The assault came as commandos freed about two dozen captives from the nearby Oberoi Trident hotel complex as the troops searched the building for attackers.

Friday afternoon, a senior Indian military official said the Oberoi and Trident hotel complex was in government control. Mumbai police chief Hassan Ghaffar said two terrorists there had been killed, and that police had found 24 dead bodies in the hotels. Some people had yet to be evacuated because they were locked inside their rooms, he added.

Credit Cards Found

Describing their effort to root out terrorists at the Taj Mahal, Indian commandos said they found seven credit cards in the bag abandoned by the attackers there. The cards were issued by, among others, ICICI Bank, a big Indian bank, as well as Citibank and HSBC, both of which have operations in India.

One commando said they also found a national identity card issued by the government of Mauritius. The identity card and at least one of the credit cards bore the same name, which they didn't give. In cash, they found almost 6,800 rupees (about $130) and $1,200.

The commandos said two of their force had been injured in the Taj Mahal fighting. Initially, the troops had sought information from a room containing closed circuit television cameras, but had been unable to gain access. They were told the three or four terrorists were on the seventh or eighth floor of the old wing of the Taj Mahal, but then heard gunshots on the second floor. When they rushed toward the shots, the troops came under fire. When the commandos fired back, they were assaulted with grenades.

Staff members removed the dead and injured guests to ambulances Friday morning. About 20 minutes later, the commandos heard more shots and were told by staff that the terrorists had moved to a room in the newer tower of the hotel, next to the old building. The two buildings are connected by a large lobby.
Hotline Numbers
The U.S. State Department has established a Consular Call Center for Americans concerned about family or friends who may be visiting or living in Mumbai, India. The number is (888) 407-4747.
The U.K. government has set up hotlines for people worried about the safety of friends and family. The U.K. number is 44 (0)20 7008 0000. The number in India is (0091) 1124192288.


The commander said there was an exchange of fire "but because the room was absolutely dark and they were accustomed to the darkness there, that made it a little difficult for us," he said. He did not say why the troops didn't have lights. One of the commandos was seriously injured, another received splinter wounds.

"These people were very, very familiar with the layout of the hotel," the commander said, "They knew all the entries and exits." He said it appeared they had previously carried out a survey of the hotel.

Until about 6 a.m. Thursday morning, the two sides had exchanged fire. The commander said the commandos later found out that the room had a terrace and moved to block the exit. When there was no movement inside the room, the forces entered to find it empty. "They probably escaped in the lull," he said. In the room, they found the rucksack, ammunition, provisions, cash and credit cards, as well as four grenades of different makes and a little plastic explosive.

"Obviously they had been trained somewhere," the commander said. He said the terrorists didn't wear masks, were dressed in T-shirts, and appeared to be less than 30 years old.

With gun volleys still ringing out Friday and a fire blazing in the Oberoi Trident complex, Indian officials were just beginning to piece together their investigation. Almost immediately, several blamed traditional archenemy Pakistan.

While not mentioning Pakistan by name, Prime Minister Manmohan Singh Thursday pledged to "take up strongly with our neighbors that the use of their territory for launching attacks on us will not be tolerated."

Pakistani President Asif Ali Zardari and Prime Minister Yousaf Raza Gilani have both condemned the bloodshed in Mumbai, and the government said Friday it will send its spy chief to India to help probe the attacks. Pakistan's Defense Minister Ahmed Mukhtar, in Islamabad, denied involvement by his country: "I will say in very categoric terms that Pakistan is not involved in these gory incidents."

The scale and sophistication of the Mumbai attacks, as well as the choice of targets, however, appeared to point to a more insidious threat than the Indian government has been reluctant to acknowledge so far -- the potential involvement of extremists within the country's own Muslim community, which, at 150 million, is the world's third-largest after Indonesia and Pakistan. It is also one of India's most economically and politically disadvantaged minorities.

In a statement that couldn't be independently authenticated, a previously unknown group, the Deccan Mujahideen, claimed responsibility for the Mumbai operation, describing itself as hailing from the south Indian city of Hyderabad. Hyderabad was the world's largest Muslim-ruled monarchy until it was invaded and annexed by India in 1948.

Indian security officials cast doubt on this statement, saying that the attacks bore the hallmarks of al Qaeda and Pakistani militant groups. They also claimed to have found a boat on which ammunition for the attacks was allegedly smuggled from Pakistan. That couldn't be confirmed.

While independent security experts said it is likely that the attackers received some support from like-minded radicals in Pakistan, they also stressed that such a massive operation would have been nearly impossible without a deep-rooted local network inside India itself.

"It would be extremely difficult for foreigners to come in and operate in this manner," said Rohan Gunaratna, head of the International Center for Political Violence and Terrorism Research in Singapore. "They certainly had intimate knowledge of the city. The pre-eminent threat to India is home-grown."

Christine Fair, a South Asia specialist at the Rand Corp. think tank, added that the modus operandi of the Mumbai militants -- coordinated small-arms assaults and hostage-takings, rather that suicide bombings -- didn't match the signature of the best known Pakistani militant groups or al Qaeda.

"I think it's very much a home-grown attack," she said. "There are very deep and unresolved social justice issues for Indian Muslims. They have a lot of motivation."

India's Muslims are among the country's poorest communities, partly because much of the Muslim professional class emigrated to Pakistan at partition in 1947.

In addition to being disproportionately targeted in outbreaks of religious violence, they are severely underrepresented in the country's government bureaucracy, universities and security services. On literacy scores, young Indian Muslims now lag behind even the country's historically most disadvantaged group, the Dalits, or Hinduism's "untouchables."



While Indian intelligence officials tried to determine who was behind the attacks, mopping up operations to kill or capture the remaining terrorists and free any hostages continued in Mumbai, a city of almost 19 million people.

At the Oberoi Trident hotel complex, a group of people were evacuated Friday afternoon, including about 20 airline crew members, almost all Westerners. Several of the rescued airline staff were in Lufthansa and Air France uniforms, and a bus immediately took them away from the hotel.

One crew member in a Lufthansa uniform who wore a name tag identifying her as L. Laurence said things inside the hotel "were definitely not good," according to the Associated Press. "We're just very glad we're out."

About two dozen people had been evacuated from the hotel earlier Friday.

The Friday morning commando attack on the headquarters of the ultra-orthodox Jewish outreach group Chabad Lubavitch was punctuated by gunshots and explosions from within the building as forces cleared it floor by floor. Nearly 12 hours after the battle began, Indian troops left the building to cheers from the crowd, but the fate of the two to three hostages believed to be inside was unclear, said Mumbai Police Chief Hassan Ghaffoor. He added that "the operation was ongoing" but in its "final stage."

Israel's ambassador to India, Mark Sofer, said they believed there were up to nine hostages inside. Mr. Sofer denied reports that Israeli commandos were taking part in the operation.

The well-coordinated strikes by small bands of gunmen starting Wednesday night left the city shell-shocked.

The gunmen were well-prepared, even carrying large bags of almonds to keep up their energy during the fight. Their main targets appeared to be Americans, Britons and Jews, though most of the dead seemed to be Indians and foreign tourists caught in the random gunfire.

"They have AK-47s and grenades. They have bags full of grenades and have come fully prepared," said Maj. Gen. R.K. Hooda, according the AP.

Detailed Knowledge of Hotel

Ratan Tata, who runs the company that owns the elegant Taj Mahal, said they had detailed knowledge of the layout of the hotels.

A U.S. investigative team was heading to Mumbai, a State Department official said Thursday evening, speaking on condition of anonymity because the U.S. and Indian governments were still working out final details. The official declined to identify which agency or agencies the team members came from.

India's main opposition movement, the Hindu nationalist Bharatiya Janata Party, has repeatedly accused the ruling Congress party of undermining the country's anti-terror effort by extending "political patronage" to supporters of radical Islam. The Congress-led central government, which usually relies on the Muslim vote, has earned BJP's ire by scrapping draconian anti-terror laws passed by the previous BJP administration, and by staying a death sentence against a Muslim cleric convicted of orchestrating a 2001 attack against the Indian Parliament.

"People are very concerned about the soft policies of the present government," Mukhtar Abbas Naqvi, a BJP spokesman, said after the Mumbai attacks.

Addressing the country on television Thursday, Prime Minister Singh promised to prevent similar attacks in the future. He said India will create a new federal investigative agency and tighten legislation "to ensure that there are no loopholes available to terrorists to escape the clutches of the law."

Despite the carnage in Mumbai, Indian financial markets were only slightly weaker Friday despite risk aversion caused by the terrorist attacks, with hopes the broader economy would not be affected too much by the violence.

Stocks, bonds and the currency all slipped but there was no major panic among investors; there was no large-scale exodus in particular by foreign investors, many of whom had already exited the market in recent months anyway.
—The Associated Press contributed to this article.

Write to Paul Beckett at paul.beckett@wsj.com, Yaroslav Trofimov, at yaroslav.trofimov@wsj.com, Peter Wonacott at peter.wonacott@wsj.com and Subhadip Sircar at subhadip.sircar@dowjones.com