Article published on the 2008-11-27 Latest update 2008-11-27 10:25 TU
The two hotels are five-star hotels and foreign tourists are among the dead. Nationals of the UK, Japan, Australia, and Italy have so far been confirmed to have been killed. Some reports have put the number of foreign dead as high as nine.
The wounded include Australian, US, UK, Spanish, Norwegian, Canadian and Singapore nationals.
"Areas around the Taj Mahal and Trident hotels were cordoned off. army snipers and police marksmen could be seen on rooftops" on Thursday morning, correspondent Phil Hazlewood said. Businesses, shops and the stock exchange were all shut in India's financial capital, he said.
Police were clearing the Taj Mahal "room by room", said Police Commissioner AN Roy on Thursday morning, while they were trying to regain control of the Oberoi-Trident.
On Thursday morning, hostages were being held in both hotels and in a residential complex, Nariman House. Officials said that between 40 and 50 people remained inside the Taj Mahal hotel, adding that there were four to five attackers in the area.
A Jewish rabbi is being held hostage at a prayer and study centre, which is also a hostel for tourists, in Nariman House, according to the Indian Jewish Federation, which says that the rabbi's wife and daughter were also captured but are reported to have been released.
The attacks began at around 10.30 pm local time on Wednesday and were carried out by small groups armed with AK-47s and grenades. Gunfire and explosions were still being heard at 9 am local time on Thursday morning at the Taj Mahal hotel where army commandos were reported to have earlier stormed the building.
A group of British and American tourists had been moved to the roof of the hotel by the attackers and police said two gunmen had been shot dead with two more still in the building.
Gunmen were also believed to be in the Oberoi Trident hotel, the second hotel attacked. At the city's main Chatrapati Shivaji railway station, men had also opened fire with automatic weapons and had thrown grenades.
A gunman told Indian television that he was a member of a group called Deccan Mujahedeen and called for the release of Islamic militants in Indian prisons. A group by the same name claimed responsibility for the attacks in an email sent to Indian media.
Condemnation of the attacks has come from leaders in India, Vietnam, South Korea, Bangladesh, China, the US and the UK. England has cancelled its current cricket tour of India.
Wednesday night's attacks came on the eve of elections in four Indian states. The votes begin on Thursday in Madhya Pradesh state and will run until the 4 December polls in Rajasthan ahead of next year's general election.