NEW DELHI- THE deputy chief minister of India's Maharashtra state said on Thursday that there could be between 100 and 200 guests and workers trapped in the Trident-Oberoi Hotel, with 10-12 militants also inside.

'There could be 100-200 people inside the hotel, but we cannot give you the exact figure as many people have locked themselves inside their rooms,' R.R. Patil told reporters.

'There could be 10-12 terrorists inside the hotel. There are no negotiations with the terrorists.'

An Islamist group calling itself the 'Deccan Mujahedeen' said it carried out the attacks late on Wednesday on the Taj Mahal and Oberoi Trident hotels, and eight other locations, including the main train station, a hospital and a popular restaurant.

One of the gunmen holed up in the Trident told the India TV channel by phone that the little-known terror outfit wanted an end to the persecution of Indian Muslims and the release of all fellow Islamic militants detained in India.

'Muslims in India should not be persecuted. We love this as our country but when our mothers and sisters were being killed, where was everybody?' he said from inside the hotel, which was surrounded by army commandos.

Maharashtra state's Director General of Police A N Roy said around 100 people were killed in the precisely targeted assaults by small groups of gunmen armed with AK-47s and grenades that began around 10.30 pm (3am, Thursday, Singapore time).

Up to 300 other people were also reported wounded.

Some foreign tourists were reported to be among the dead, although there was no official confirmation about how many.

Witnesses said the gunmen had specifically chosen US and British citizens to take hostage.

Another siege was in progress at Nariman House, an office building that houses a Jewish centre. The chairman of the Indian Jewish Federation, Jonathan Solomon, said a rabbi and his family was being held inside by gunmen.

Frequent bursts of gunfire in and around the two five-star hotels continued to be heard through Thursday morning, as south Mumbai, including the normally thriving main business hub between the two scenes, was shut down.

The main Bombay Stock Exchange, itself hit by a terror attack in 1993, was also closed, as were shops, schools and businesses.

Army commandos stormed the Taj under the cover of night, apparently leading to the release of some guests inside, with television footage showing people being shepherded out of the building.

Shortly afterwards, the upper floors of the landmark hotel became engulfed in flames.

Police said two gunmen were shot dead, but two more were still believed to be holed up inside the hotel. Explosions and gunfire were still being heard at 9 am.

Fire engines were brought in to rescue trapped guests through their windows.

Earlier, several men armed with AK-47 rifles had stormed into the passenger hall of Mumbai's main Chhatrapati Shivaji railway station, firing indiscriminately and throwing grenades.

Firing was also reported at Cama Hospital in south Mumbai, and three people

were reported killed in what police called a 'bomb blast' in a taxi in the southeast of the city.

Witnesses said the attackers were young South Asian men speaking Hindi or Urdu.

Television footage showed gunmen in a pick-up truck spraying people with rifle fire as the vehicle drove down a Mumbai street.

Hotel staff were seen evacuating wounded on luggage trolleys, with passers-by covered in blood after they rushed to help. Some clambered down ladders to safety.

Other distressed guests stood at hotel windows, although a slow trickle could later be seen leaving the Taj hotel through a back gate, surrounded by heavily armed troops and police.

Schools were closed and a curfew was imposed around the Gateway of India, a colonial-era monument. But train services were running as normal taking people to work in the stunned city.

At least two guests, trapped in their rooms in the Taj, phoned TV stations. One said the firedoors were locked, another said he had seen two dead bodies by the swimming pool.

'Two of my colleagues are still in there and the last we heard from them was three hours ago and then the phone battery died,' said a German national who escaped the Taj.

Rakesh Patel, a British witness who was staying at the Taj Mahal hotel on business, said the attackers were looking for British and US passport holders.

'They came from the restaurant and took us up the stairs. They had bombs. 'Young boys, maybe 20 years old, 25 years old. They had two guns,' he told the NDTV channel, smoke stains covering his face.

Japan's foreign ministry said at least one Japanese national had been killed and one injured in the attacks, while South Korea said 26 of its nationals had escaped unharmed.

Australia said two of its nationals had been injured but the toll could rise.

In Washington, the White House and President-elect Barack Obama condemned the attacks, as did France, current president of the European Union, and UN Secretary General Ban Ki-moon.

Bruce McIndoe, a travel security expert and President of iJET Intelligent Risk Systems, a private intelligence firm, said he had already advised his corporate clients to postpone travel to Mumbai, and warned there would be 'ripple effects'. -- Reuters, AFP.