Indian commandos stormed a Jewish centre in Mumbai on Friday evening, killing two Islamist gunmen but failing to save five hostages, after two days of bloodshed that have created fresh tensions with old foe Pakistan.
As the neighbours quarrelled, a lone gunmen continued to hold out at the luxury Taj hotel in Mumbai, explosions and gunfire erupting regularly as he played cat-and-mouse with the elite Indian commandos through the maze of corridors and rooms.
At a third site, the Trident-Oberoi Hotel, commandos killed two militants and freed 143 guests earlier in the day.
"The Oberoi/Trident is completely clear, there is one terrorist left in the Taj, who is giving us trouble and he could hold hostages and that is why we are very cautious," Mumbai's police chief Hasan Gafoor told Reuters.
Officials have been vowing to bring a quick end to the nearly two-day-long stand-off that has killed at least 130 people and wounded 284. "The toll could go up further a bit, but not a lot," Gafoor said.
Just before dusk, commandos blew up an outer wall of the Jewish centre as they made their final assault.
India's National Security Guards chief J.K. Dutt said they had "neutralised two terrorists" there. Gafoor said five hostages had been found dead.
There had been relief for some earlier in the day as well-dressed foreigners and Indians, some dragging their suitcases, trickled out of the five-star Trident-Oberoi hotel and were escorted into waiting buses and cars.
One foreign member of the hotel staff left holding a baby in his arms, others wept as police showed them photographs of dead relatives for identification.
Police said 24 bodies had been found inside the hotel on Friday, potentially inflating the death toll still further.
As anger mounted, India blamed "elements" from Pakistan for the coordinated assault on its financial capital, which seemed designed to scare off foreign executives and tourists.
Pakistan said the two countries faced a common enemy. Urging New Delhi not to play politics, it agreed to send its spy chief to share intelligence on the suicide attacks.
On Thursday, security forces had predicted a quick end to the siege at the 105-year old Taj hotel. But elite commandos have still failed to dislodge a lone gunmen, thought to be wounded but holding out in the hotel's ballroom.
"He is moving in two floors, there is a dancefloor area where apparently he has cut off all the lights," Lieutenant-General N. Thamburaj told reporters.
"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."
The head of an elite commando unit said the militants knew the layout of the hotel better than they did and called them "a very determined lot, remorseless". The commander, his face disguised by a black scarf and sunglasses, said he had seen 50 bodies in the Taj, including 12 to 15 in one room.
One of the militants arrested in Mumbai was a Pakistani national, the interior minister of Maharashtra state, R.R. Patil, told reporters.
In a diplomatic exchange that raised the prospect of renewed tension between the nuclear-armed rivals, Foreign Minister Pranab Mukherjee urged Pakistan to dismantle infrastructure supporting militants.
Prime Minister Manmohan Singh also warned on Thursday of "a cost" if India's neighbours did not take action to stop their territory being used to launch such attacks.
On Friday he asked the head of Pakistan's military intelligence service, the ISI, to visit to share information.
Pakistani President Asif Ali Zardari, who says he wants much better relations with India, called Singh by telephone on Friday and agreed to the request for the visit.
But Pakistan's Foreign Minister Shah Mehmood Qureshi called on India not to play politics over the attacks.
"Do not bring politics into this issue. This is a collective issue. We are facing a common enemy and we should join hands to defeat the enemy," he told reporters during a visit to the Indian town of Ajmer.
Mumbai, a city of 18 million, is the nerve-centre of India's growing economic might and home to the "Bollywood" film industry.
India's main stock markets reopened on Friday after being closed on Thursday due to the attack, but the main share index closed up 0.73 percent.
Young 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 business executives, including the city's top two luxury hotels.
At least 13 foreigners, including three Germans, two Americans, one Australian, a Briton, one Canadian, two French, an Italian, a Japanese and a Singaporean national, were among the dead, according to the governments of India and other nations. (Reuters)