Of the eight targets hit today, authorities say there are still hostages at two of them:
A.N. Roy, a senior police officer, said police were continuing to battle the gunmen. "The terrorists have used automatic weapons and in some places grenades have been lobbed, the encounters are still going on and we are trying to overpower them," he said.
Local television said army troops had begun moving into one of the hotels, the Oberoi, containing hostages.
The Times Online has more specific information:
The gunman, armed with automatic weapons and grenades, targeted British and American tourists in the city's luxury hotels and bars. They were reported to be holding Western tourists hostage at the Taj Mahal Palace, Bombay's top hotel, where a group of British MEPs were staying...
"I guess they were after foreigners, because they were asking for British or American passports," said Rakesh Patel, a British witness who lives in Hong Kong and was staying at the Taj Mahal hotel on business. "They had bombs."
"They came from the restaurant and took us up the stairs."
From the Taj Mahal hotel:
Sajjad Karim, an MEP for the North West of England who was a member of an EU delegation visiting Bombay said he had seen a gunman opening fire in the lobby of Taj Mahal Palace Hotel.
Speaking via mobile phone, he said: "I was in the lobby of the hotel when gunmen came in and people started running â€¦ A gunman just stood there spraying bullets around, right next to me. I managed to turn away and I ran into the hotel kitchen and then we were shunted into a restaurant in the basement." "We are now in the dark in this room and we've barricaded all the doors. It's really bad." Outside the Taj hotel, injured guests were being stretchered away on the hotel's golden-coloured luggage carts.
All American diplomats have been accounted for, but the State Department is still working to track down tourists and visitors who might have been staying in the hotels.
Mumbai's chief of the Anti Terror Squad, Hemant Karkare, has died from injuries suffered while leading an operation against terrorists holding hostages at one of the five-star hotels targeted.
Karkare (54), who is probing the Malegaon blasts case, was gunned down when he was leading an operation at Hotel Taj against terrorists who had taken 15 people, including seven foreigners, as hostages. He was hit by three bullets in his chest. One MP Krishan Das and 200 people were stranded in Taj hotel.
Another IPS officer Ashok Marutirao Kamte, a 1989 batch IPS officer, was killed while fighting terrorists at Metro Cinema in the city along with encounter specialist Vijay Salaskar who also gunned down as one of the worst terror strikes brought Mumbai to the knees.
Fighting was ongoing in the city as the first reports emerged from the chaos:
Gunmen opened fire on two of the city's best known luxury hotels, the Taj Mahal and the Oberoi. They also attacked the crowded Chhatrapati Shivaji Terminus station in southern Mumbai and Leopold's restaurant, a Mumbai landmark.
The gunmen also attacked police headquarters in south Mumbai, the area where most of the attacks took place.
"We are under fire, there is shooting at the gate," said constable A. Shetti by phone from police headquarters.
MSNBC offers some raw footage from India in their report, and a glimpse of one of the gunmen, some of whom witnesses are describing as "very young."
Video below the fold: