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Updated at 11.00 GMT (16.30 Bombay)

Indian commandos stormed a Jewish centre in a residential building in Bombay and continued to comb through two luxury hotels, releasing dozens of trapped foreigners from rooms littered with dead bodies, as they closed in on the last few militants inside.

The Times saw an Indian air force helicopter dropping 17 commandos on the roof of Nariman House, which contains a Jewish centre where militants are thought to be holding several hostages, including Israeli citizens.

Snipers in buildings across the road peppered the building with bullets as the commandos were lowered, shortly after dawn. Earlier, at least six trucks of soldiers were brought in to surround the building, which houses the local headquarters of the ultra-orthodox Jewish group Chabad Lubavitch. One senior police officer at the scene said: "It's the final clean-up, we hope."

As the operation continued, Indian special forces gave their first account of their ongoing mission to liberate the Taj Mahal Hotel. They described a sequence of running battles with gunmen in corridors and rooms strewn with dead bodies and serious injured guests.

As gunfire crackled in the air outside the Jewish building, a few hundred metres away police struggled to keep back a crowd of several hundred Indian onlookers, while hundreds more watched from the balconies and roofs of surrounding buildings.

Firemen unravelled a hose pipe in the narrow lane leading to Nariman House as smoke was seen coming from one of its windows.

Peter Keep, a Briton who lives near the Taj, watched the commando operation from the outset.

"At about 7.30am, commandos abseiled from a single helicopter that made several visits to the building," he told The Times. "I counted 15 commanders coming from the helicopter at one time.

"At about 7.55am, we heard shots and a series of explosions. A gun battle has been taking place on and off since. Sometimes it's been very intense," he said.

"At one stage the commandos measured out a rope – it looked like they were preparing to abseil down the building.

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