Indian commandos stormed a Jewish centre in Mumbai today and found two bodies which appeared to be of hostages, the country's National Security Guards chief said.
J.K. Dutt also told Indian television that the commandos had killed two militants in operations at the centre.
"We have neutralised two terrorists," Dutt said. "Along with that we have also found two bodies. Those bodies appear to be of hostages."
An Israeli rescue service run by Orthodox Jews said its staff sent to Mumbai to help at the siege believed that hostages in the Chabad Centre had died.
"Apparently the hostages did not remain alive," the Zaka service said in a brief statement quoting its staff in Mumbai. It did not identify the hostages nor say how many may have died.
Earlier, Israel's ambassador to India said he believed about six Israeli nationals had been held hostage at the centre, including a rabbi and his wife.
A short way across the city, frequent gunshots and explosions also rang out from the luxury Taj hotel as elite commandos fought cat-and-mouse battles with a lone gunmen.
Officials have been vowing to bring a quick end to the nearly two-day-long stand-off that they say has killed 124 people and wounded 284.
At third site, the Trident-Oberoi Hotel, commandos killed two militants and freed 143 guests earlier in the day. Well-dressed foreigners and Indians, some dragging their suitcases, trickled out and were escorted into waiting buses and cars.
One foreign member of the hotel staff left holding a baby in his arms, others wept as police showed them photographs of dead relatives for identification.
As anger mounted, India blamed "elements" from Pakistan for the coordinated assault on its financial capital, which seemed designed to scare off foreign executives and tourists.
Pakistan said the two countries faced a common enemy. Urging New Delhi not to play politics, it agreed to send its spy chief to share intelligence on the suicide attacks.
Police said 24 bodies had been found at the Trident-Oberoi today, potentially inflating the death toll still further.
On Thursday night they had predicted a quick end to the siege at the nearby Taj hotel. But hundreds of elite commandos have still failed to dislodge a lone gunmen, thought to be wounded, in the maze of corridors of the 105-year-old hotel.
"He is moving in two floors, there is a dancefloor area where apparently he has cut off all the lights," Lieutenant-General N. Thamburaj told reporters.
"This morning while carrying out the operation we heard the sound of a lady and a gentleman, so it is possible that this terrorist has got two or more hostages with him."
The head of an elite commando unit said the militants knew the layout of the hotel better than they did and called them "a very determined lot, remorseless".
The commander, his face disguised by a black scarf and sunglasses, said he had seen 50 bodies in the Taj, including 12 to 15 in one room.
One of the militants arrested in Mumbai was a Pakistani national, the interior minister of Maharashtra state, R.R. Patil, told reporters.
In a diplomatic exchange that raised the prospect of renewed tension between the nuclear-armed rivals, Foreign Minister Pranab Mukherjee urged Pakistan to dismantle infrastructure supporting militants.
Prime Minister Manmohan Singh also warned on Thursday of "a cost" if India's neighbours did not take action to stop their territory being used to launch such attacks.
On Friday he asked the head of Pakistan's military intelligence service, the ISI, to visit to share information.
Pakistani President Asif Ali Zardari, who says he wants much better relations with India, called Singh by telephone on Friday and agreed to the request for the visit.
But Pakistan's Foreign Minister Shah Mehmood Qureshi called on India not to play politics over the attacks.
"Do not bring politics into this issue. This is a collective issue. We are facing a common enemy and we should join hands to defeat the enemy," he told reporters during a visit to the Indian town of Ajmer.
Mumbai, a city of 18 million, is the nerve-centre of India's growing economic might and home to the "Bollywood" film industry.
India's main stock markets reopened on Friday after being closed on Thursday due to the attack, but the main share index closed up 0.73 percent.
An estimated 25 men armed with assault rifles and grenades - at least some of whom arrived by sea - had fanned out across Mumbai on Wednesday night to attack sites popular with tourists and businessmen, including the city's top two luxury hotels.
At least eight foreigners, including three Germans, one Australian, a Briton, Canadian, an Italian and a Japanese national, were among the dead, according to the governments of India and other nations.Reuse content