Fresh explosions and gunfire have been heard in Mumbai at the Taj Mahal Palace hotel, one of several sites targeted in attacks that have killed at least 130 people in India's financial capital.
Loud blasts have also rocked a Jewish outreach centre where commandos were attempting to free several hostages.
Israeli diplomats said the bodies of five hostages were found inside Nariman House after a long battle. Two kidnappers were also reported killed.
India's foreign minister said "elements with links to Pakistan" were involved in the attacks on Mumbai.
The attacks began on Wednesday night when gunmen armed with automatic weapons and grenades opened fire on crowds at a major railway station, the two hotels, the Jewish centre, a hospital and a cafe frequented by foreigners.
Earlier, nearly 100 guests and staff - many of them westerners - were rescued from the Oberoi-Trident hotel, and the battle with gunmen there appeared to be at an end.
Around 370 people have been wounded to date. The BBC reports the death toll is expected to rise as more bodies are discovered.
Seige at Jewish centre
Commandos were earlier lowered from helicopters onto the roof to Nariman House, the venue of a Jewish outreach group, Chabad Lubavitch.
Part of the wall of the fourth floor of the building was blown up as smoke bombs were dropped to create confusion.
Three loud explosions have been reported inside the building.
The only people confirmed as leaving the building were a woman and child although it was unclear whether they had managed to escape or were released.
The child was identified as the two-year-old son of Rabbi Gavriel Noach Holzberg.
Indian security forces said they believe at least one gunman with "two or more hostages" remains in the Taj Mahal Palace hotel.
There have been large explosions and gunfire from the building for most of the day after truckloads of commandos entered the hotel.
Commandos say they found at least 30 bodies in a hall inside the hotel.
The commandos also said the attackers were well aware of the layout of the hotel.
Earlier, the Indian navy took control of two Pakistani merchant navy ships and began questioning their crews after witnesses said some of the attackers came ashore on small speedboats.