The death toll from the Mumbai terror attacks topped 100 today, with parts of the city still under siege.
The attackers specifically targeted Britons and Americans at hotels and restaurant, witnesses said.
Teams of gunmen stormed the hotels, a popular restaurant, hospitals and a crowded station in co-ordinated attacks across India's financial capital -formerly known as Bombay - yesterday, killing at least 101 people and taking Westerners hostage.
A group of suspected Muslim militants have reportedly claimed responsibility.
State home minister RR Patil said of the gunmen: "We're gong to catch them dead or alive. An attack on Mumbai is an attack on the rest of the country."
Police and gunmen were exchanging occasional gunfire at two luxury hotels and an unknown number of people were held hostage, said AN Roy, a top police official.
Pradeep Indulkar, a senior official at the Maharashtra state Home Ministry said 101 people were killed and 287 injured.
The attacks on Google Maps
Officials said at least six militants had been killed since the overnight attacks began at around 9.30pm local time.
Today police loudspeakers declared a curfew around Mumbai's landmark Taj Mahal hotel, and black-clad commandos ran into the building as fresh gunshots rang out from the area, apparently the beginning of an assault on gunmen who had taken hostages in the hotel.
Ambulances were seen driving up to the entrance to the hotel and journalists were made to move even further back from the area.
A series of explosions had rocked the Taj Mahal just after midnight. Screams were heard and black smoke billowed from the century-old edifice on Mumbai's waterfront. Firefighters sprayed water at the blaze and plucked people from balconies with extension ladders. By dawn, the fire was still burning.
Meanwhile media reports said gunmen had seized the Mumbai headquarters of ultra-orthodox Jewish outreach group Chabad Lubavitch overnight, and that shots had been heard coming from the building.
Representatives of the New York-based group referred questions to their website, which said the Israeli consulate had earlier been in touch with the rabbi who lived in the house, "but the line was cut in middle of the conversation. No further contact has since been established".
An Indian media report said a previously unknown group calling itself the Deccan Mujahideen had claimed responsibility for the attacks in emails to several media outlets.
The NDTV news channel showed several yellow and black rubber dinghies on a beach near the hotels, apparently used by the gunmen to reach the area.
Police reported hostages being held at the Taj Mahal and Oberoi hotels, two of the best-known upscale destinations in this crowded but wealthy city.
Gunmen who burst into the Taj "were targeting foreigners. They kept shouting, 'Who has US or UK passports?'," said Ashok Patel, a British citizen who fled from the hotel.
Authorities believed seven to 15 foreigners were hostages at the Taj Mahal hotel, said Anees Ahmed, a top state official.
Officials at Bombay Hospital said a Japanese man had died there and nine Europeans had been admitted, three of them in a critical condition with gunshot wounds. All had come from the Taj Mahal, the officials said.
Blood smeared the floor of the Chhatrapati Shivaji station, where attackers sprayed bullets into the crowded terminal.
Nasim Inam, hands shaking, said he saw commuters gunned down as they walked to catch late trains home.
Other gunmen attacked Leopold's restaurant, a landmark popular with foreigners, and the police headquarters in southern Mumbai, the area where most of the attacks took place. The restaurant was riddled with bullet holes and there were blood on the floor and shoes left by fleeing customers.
Several EU politicians were among people who barricaded themselves inside the Taj, a century-old seaside hotel complex and one of the city's best-known destinations.
"I was in the main lobby and there was all of a sudden a lot of firing outside," said Conservative MEP Sajjad Karim, part of an EU delegation visiting Mumbai before a European Union-India summit.
As he turned to get away, "all of a sudden another gunmen appeared in front of us, carrying machine gun-type weapons. And he just started firing at us ... I just turned and ran in the opposite direction," he said on his mobile phone.
Hours later, Mr Karim remained holed up in a hotel restaurant, unsure if it was safe to come out.
India has been wracked by bomb attacks the past three years, which police blame on Muslim militants intent on destabilising the largely Hindu country. Nearly 700 people have died.