Commandos are fighting room-by-room through two luxury hotels in Mumbai, nearly 24 hours after a series of devastating attacks across the city.
Indian officials said the Taj Mahal hotel had nearly been cleared of gunmen and trapped guests were being freed.
Indian Prime Minister Manmohan Singh vowed to track down the attackers. At least 110 people have been killed.
Another 300 people were injured when gunmen targeted at least seven sites in Mumbai late on Wednesday.
A security official said one gunman remained in the Taj Mahal hotel and that the military was in control of the situation.
Commandos were continuing their sweep of another hotel, the Oberoi-Trident, where a number of guests were trapped in their rooms or being held hostage, said JK Dutt, of the National Security Guards.
A home ministry official said earlier there might be 20-30 people being held hostage at the Oberoi-Trident. Owners said some 200 people were trapped in the hotel.
India's Prime Minister Manmohan Singh: "Whatever measures are necessary"
But Maj Gen Hooda said he did not think there were any hostages there, and 39 people had been rescued.
"When the search was carried out from room to room these were the people, they had locked themselves into the rooms," he said.
At a third stand-off, at a Jewish centre, seven hostages had been released, a security official said.
One militant reportedly phoned local TV from the centre offering to negotiate over the release of hostages.
Israel's embassy in New Delhi had earlier said at least 10 Israeli nationals were trapped or being held hostage in Mumbai.
In other developments:
· The Indian navy said it was searching ships off the west coast following reports that gunmen had arrived in Mumbai by boat
· The UK Foreign Office said a British national, Andreas Liveras had died; a German, a Japanese man and an Italian are also among the dead
· The Pakistan-based militant group Lashkar-e-Toiba, which has been blamed for past bombings in India, denied any role in the attacks
In a televised address, Mr Singh said the government "will take whatever measures are necessary to ensure the safety and security of our citizens".
He said the attackers were based "outside the country" and that India would not tolerate "neighbours" who provide a haven to militants targeting it.
He described the attacks as "well-planned and well-orchestrated... intended to create a sense of panic by choosing high profile targets and indiscriminately killing foreigners".
MUMBAI ATTACKS
Flames and black smoke billow from the Taj Mahal Palace hotel, Mumbai, on 27/11/08
India has complained in the past that attacks on its soil have been carried out by groups based in Pakistan, although relations between the two countries have improved in recent years and Pakistani leaders were swift to condemn the latest attacks.
Maj Gen Hooda said authorities had intercepted conversations between some of the attackers speaking in Punjabi, an apparent reference to Pakistan-based militants.
Earlier reports said the attackers spoke Hindi, indicating they were from India.
But Pakistani Foreign Minister Shah Mahmood Qureshi, in New Delhi for talks, said no-one should be blamed until investigations were finished.
"Our experience in the past tells us that we should not jump to conclusions," he told Dawn television.
Amid international condemnation of the attacks, US President George W Bush telephoned Mr Singh to offer his condolences and support.
Claim of responsibility
In the attacks late on Wednesday night gunmen, using grenades and automatic weapons, targeted at least seven sites including the city's main commuter train station, a hospital and a restaurant popular with tourists.
Police say 14 police officers, 81 Indian nationals and six foreigners have been killed.
Four suspected terrorists have also been killed and nine arrested, they add.
People escaping from the Taj Mahal Palace hotel
At the height of the stand-off at the Taj Mahal hotel, gunfire and explosions could be heard from inside.
Earlier eyewitness reports from the hotels suggested the attackers were singling out British and American passport holders.
If the reports are true, our security correspondent Frank Gardner says it implies an Islamist motive - attacks inspired or co-ordinated by al-Qaeda.
A claim of responsibility has been made by a previously unknown group calling itself the Deccan Mujahideen. Our correspondent says it could be a hoax or assumed name for another group.
Indian officials said the Taj Mahal hotel had nearly been cleared of gunmen and trapped guests were being freed.
Indian Prime Minister Manmohan Singh vowed to track down the attackers. At least 110 people have been killed.
Another 300 people were injured when gunmen targeted at least seven sites in Mumbai late on Wednesday.
A security official said one gunman remained in the Taj Mahal hotel and that the military was in control of the situation.
Commandos were continuing their sweep of another hotel, the Oberoi-Trident, where a number of guests were trapped in their rooms or being held hostage, said JK Dutt, of the National Security Guards.
A home ministry official said earlier there might be 20-30 people being held hostage at the Oberoi-Trident. Owners said some 200 people were trapped in the hotel.
India's Prime Minister Manmohan Singh: "Whatever measures are necessary"
But Maj Gen Hooda said he did not think there were any hostages there, and 39 people had been rescued.
"When the search was carried out from room to room these were the people, they had locked themselves into the rooms," he said.
At a third stand-off, at a Jewish centre, seven hostages had been released, a security official said.
One militant reportedly phoned local TV from the centre offering to negotiate over the release of hostages.
Israel's embassy in New Delhi had earlier said at least 10 Israeli nationals were trapped or being held hostage in Mumbai.
In other developments:
· The Indian navy said it was searching ships off the west coast following reports that gunmen had arrived in Mumbai by boat
· The UK Foreign Office said a British national, Andreas Liveras had died; a German, a Japanese man and an Italian are also among the dead
· The Pakistan-based militant group Lashkar-e-Toiba, which has been blamed for past bombings in India, denied any role in the attacks
In a televised address, Mr Singh said the government "will take whatever measures are necessary to ensure the safety and security of our citizens".
He said the attackers were based "outside the country" and that India would not tolerate "neighbours" who provide a haven to militants targeting it.
He described the attacks as "well-planned and well-orchestrated... intended to create a sense of panic by choosing high profile targets and indiscriminately killing foreigners".
MUMBAI ATTACKS
Flames and black smoke billow from the Taj Mahal Palace hotel, Mumbai, on 27/11/08
India has complained in the past that attacks on its soil have been carried out by groups based in Pakistan, although relations between the two countries have improved in recent years and Pakistani leaders were swift to condemn the latest attacks.
Maj Gen Hooda said authorities had intercepted conversations between some of the attackers speaking in Punjabi, an apparent reference to Pakistan-based militants.
Earlier reports said the attackers spoke Hindi, indicating they were from India.
But Pakistani Foreign Minister Shah Mahmood Qureshi, in New Delhi for talks, said no-one should be blamed until investigations were finished.
"Our experience in the past tells us that we should not jump to conclusions," he told Dawn television.
Amid international condemnation of the attacks, US President George W Bush telephoned Mr Singh to offer his condolences and support.
Claim of responsibility
In the attacks late on Wednesday night gunmen, using grenades and automatic weapons, targeted at least seven sites including the city's main commuter train station, a hospital and a restaurant popular with tourists.
Police say 14 police officers, 81 Indian nationals and six foreigners have been killed.
Four suspected terrorists have also been killed and nine arrested, they add.
People escaping from the Taj Mahal Palace hotel
At the height of the stand-off at the Taj Mahal hotel, gunfire and explosions could be heard from inside.
Earlier eyewitness reports from the hotels suggested the attackers were singling out British and American passport holders.
If the reports are true, our security correspondent Frank Gardner says it implies an Islamist motive - attacks inspired or co-ordinated by al-Qaeda.
A claim of responsibility has been made by a previously unknown group calling itself the Deccan Mujahideen. Our correspondent says it could be a hoax or assumed name for another group.
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