Indian forces began launching grenades at the Taj Mahal hotel Friday night, where one or two militants were believed to be holed up in a ballroom, officials said.
More than 15 loud explosions could be heard from inside the hotel. Eyewitnesses say there is continuous gunfire.
The Taj Mahal hotel was wracked by hours of intermittent gunfire and explosions throughout the day, even though authorities said they had cleared it of gunmen the night before.
At the same time, Indian commandos are searching rooms of the hotel looking for victims.
More than 150 people were killed in the violence that began when gunmen attacked 10 sites across India's financial capital Wednesday night. Fifteen foreigners, including up to six Americans, were among the dead.
Earlier, commandos who stormed the headquarters of an ultra-orthodox Jewish group found the bodies of six hostages inside, Indian and Israeli rescue officials said.
The discovery of the bodies brought to a tragic end the two-day effort to rescue the Jewish hostages from their Islamic terrorist captors.
The New York-based Chabad-Lubavitch movement confirmed Friday that a New York rabbi and his wife were among the dead.
A spokesman, Rabbi Zalman Schmotkin, said Rabbi Gavriel Noach Holtzberg and his wife, Rivka, were killed inside the Mumbai center. The couple ran the movement's local headquarters, which was one of the sites attacked.
The couple's toddler son, Moshe Holtzberg, was taken out of the center by an employee, and is now with his grandparents.
A delegation from Israel's ZAKA emergency medical services unit entered the building after the raid and reported through an Indian aide that the hostages and two gunmen were dead, a ZAKA spokesman in Israel said. The spokesman had no information on the hostages' identities or whether there were wounded inside.
Jewish law requires the burial of a dead person's entire body, and the mission of the ultra-Orthodox ZAKA volunteers is to rescue the living — and in the case of the dead, carry out the task of gathering up all collectable pieces of flesh and blood.
Two other Americans, Alan Scherr, 58, and daughter Naomi, 13, were in a cafe Wednesday night in Mumbai when they were killed, said Bobbie Garvey, a spokeswoman for the Synchronicity Foundation. The U.S. State Department confirmed their deaths on Friday morning.
The meditation group said in a statement that four other members of the 25-person group — two Americans and two Canadians — who were staying at the Oberoi Hotel were wounded by gunfire, and were believed in stable condition.
The Associated Press learned the name of one victim: Andi Varagona of Nashville, Tenn. She called her mother from a hospital Thursday and said she had been shot in the arm and leg while eating dinner at the Taj Mahal Palace and Tower hotel.
She said another Tennessee woman traveling with her was also injured, according to the mother, Celeste Varagona, but the woman's identity was not immediately available.
State Department spokesman Robert McInturff said U.S. officials have activated a phone tree to contact American citizens who registered with the U.S. consulate in Mumbai.
President George W. Bush issued a statement on Friday, saying the wounded were in his thoughts and prayers.
"My Administration has been working with the Indian government and the international community as Indian authorities work to ensure the safety of those still under threat. We will continue to cooperate against these extremists who offer nothing but violence and hopelessness," Bush said.
White House Spokeswoman Dana Perino said senior administration officials met Friday afternoon and focused on ensuring everything possible is being done to help American citizens affected by the attacks.
She said they are continuing to work with the Indian government at all levels and has offered assistance and support.
The State Department urged Americans not to travel to the stricken city, at least through the weekend.
A FOXNews.com reporter outside the hotel said there were several explosions believed to be grenades and intensifying gunfire, and that fires had broken out inside the building.
Indian security officials, meanwhile, declared the siege over at two other hotels after commandos killed the two last gunmen inside the nearby Oberoi earlier in the day.
"The hotel is under our control," J.K. Dutt, director general of India's elite National Security Guard commando unit, told reporters, adding that 24 bodies had been found. Dozens of people — including a man clutching a baby — had been evacuated from Oberoi earlier Friday.
Security officials said their operations were almost over.
"It's just a matter of a few hours that we'll be able to wrap up things," Lt. Gen. N. Thamburaj told reporters Friday morning.
The group rescued from the Oberoi, many holding passports, included at least two Americans, a Briton, two Japanese nationals and several Indians. Some carried luggage with Canadian flags. One man in a chef's uniform was holding a small baby. About 20 airline crew members were freed, including staff from Lufthansa and Air France.
"I'm going home, I'm going to see my wife," said Mark Abell, with a huge smile on his face after emerging from the hotel. Abell, from Britain, had locked himself in his room during the siege.
The well-coordinated strikes by small bands of gunmen starting Wednesday night left the city shell-shocked.
Late Thursday, after about 400 people had been brought out of the Taj hotel, officials said it had been cleared of gunmen, but they later said two to three more were still inside with about 15 civilians.
Early Friday, Thamburaj, the security official, said at least one gunman was still alive inside the hotel and had cut of electricity on the floor where he was hiding. Shortly after that announcement, another round of explosions and gunfire were heard coming from the hotel.
On Friday, India's foreign minister pointed an accusing finger across the border at rival Pakistan.
"According to preliminary information, some elements in Pakistan are responsible for Mumbai terror attacks," Pranab Mukherjee told reporters in the western city of Jodhpur.
"Proof cannot be disclosed at this time," he said, adding that Pakistan had assured New Delhi it would not allow its territory to be used for attacks against India. India has long accused Islamabad of allowing militant Muslim groups, particularly those fighting in the disputed Himalayan region of Kashmir, to train and take shelter in Pakistan. Mukherjee's carefully phrased comments appeared to indicate he was accusing Pakistan-based groups of staging the attack, and not Pakistan itself.
Earlier Friday, 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."
Indian home minister Jaiprakash Jaiswal said a captured gunmen had been identified as a Pakistani and Patil, the Maharashtra state official, said: "It is very clear that the terrorists are from Pakistan. We have enough evidence that they are from Pakistan."
Neither provided further details.
Pakistan's government said Friday that it will send its spy chief, Lt. Gen. Ahmed Shujaa Pasha, to India to help probe the attacks.
The gunmen apparently came to Mumbai by boat, and Indian forces expanded their investigation to the sea. Authorities stopped a cargo ship off the western coast of Gujarat that had sailed from Saudi Arabia and handed it over to police for investigation, said Navy Capt. Manohar Nambiar.
They also stopped a cargo ship that had come to Mumbai from Karachi, Pakistan, but released it when nothing suspicious was found on board.
The British government, meanwhile, was investigating whether some of the attackers could be British citizens with links to Pakistan or the disputed Himalayan territory of Kashmir, a British security official told The Associated Press on condition of anonymity because of the sensitivity of his work.
The gunmen were well-prepared, apparently scouting some targets ahead of time and carrying large bags of almonds to keep up their energy.
"It's obvious they were trained somewhere ... Not everyone can handle the AK series of weapons or throw grenades like that," an unidentified member of India's Marine Commando unit told reporters, his face wrapped in a black mask. He said the men were "very determined and remorseless" and ready for a long siege. One backpack they found had 400 rounds of ammunition inside.
He said the Taj was filled with terrified civilians, making it very difficult for the commandos to fire on the gunmen.
"To try and avoid civilian casualties we had to be so much more careful," he said, adding that hotel was a grim sight. "Bodies were strewn all over the place, and there was blood everywhere."
India has been shaken repeatedly by terror attacks blamed on Muslim militants in recent years, but most were bombings striking crowded places: markets, street corners, parks. Mumbai — one of the most populated cities in the world with some 18 million people — was hit by a series of bombings in July 2006 that killed 187 people.
These attacks were more sophisticated — and more brazen.
They began at about 9:20 p.m. with shooters spraying gunfire across the Chhatrapati Shivaji railroad station, one of the world's busiest terminals. For the next two hours, there was an attack roughly every 15 minutes — the Jewish center, a tourist restaurant, one hotel, then another, and two attacks on hospitals. There were 10 targets in all.
FOXNews.com's Judd Berger, the Associated Press and Reuters contributed to this report.