Gunfire, explosions rock Mumbai hotel

By Krittivas Mukherjee

MUMBAI (Reuters) - Gunfire and explosions rocked a luxury Mumbai hotel early on Saturday, the last battleground after three days of attacks by Islamist militants in India's financial capital that have killed at least 144 people.

Two or three gunmen remained holed up in the vast, 105-year-old Taj Mahal hotel, but all the others had been killed or taken into custody, officials said.

India blamed the strike on "elements" from Pakistan, raising tensions between the nuclear-armed rivals. Pakistan said the two countries faced a common enemy and it would send its spy chief to share intelligence.

On Thursday, elite Indian troops stormed a Jewish center and another luxury hotel, the Trident-Oberoi. They killed two gunmen at the Jewish center after sliding down ropes from helicopters onto its roof, but failed to save the lives of five hostages, including a New York-based rabbi and his wife.

The commandos freed 143 hostages at the Trident-Oberoi, including foreign tourists and businessmen who emerged with harrowing stories of the bloodshed inside. Two gunmen were killed.

As onlookers cheered and chanted "Victory to mother India," many of the troops moved to the Taj, where militants have been fighting for over 48 hours.

"In view of the firing and the positions they have occupied, I would say there are at least two or three of them," said Jyoti Krishna Dutt, head of the paramilitary National Security Guards. The gunmen may be holding hostages, other officials said.

Police said 24 bodies had been found inside, but that number could rise.

ENGINE ROOM

The militants' action has struck at the heart of the city of 18 million people, engine room of an economic boom that has made India a favorite emerging market.

It is also home to the "Bollywood" film industry, the epitome of glamour in a country still blighted with poverty.

An Indian state minister said one of the militants arrested was a Pakistani national and Prime Minister Manmohan Singh warned of "a cost" if India's neighbors did not take action to stop their territory being used to launch attacks.

But Pakistan's Foreign Minister Shah Mehmood Qureshi struck a conciliatory note and promised full cooperation.

"Whoever has done this is neither your friend nor our friend," he told reporters in New Delhi. "We are not responsible for this, nor is it in our interest to get involved in something like this."

The attacks were carried out by a small army of young men armed with rifles and grenades, some of whom arrived by sea, who fanned out across Mumbai on Wednesday night to attack sites popular with tourists and business executives.