MORE than 80 people are dead after terrorists used grenades and automatic weapons to attack crowds at hotels, a restaurant and train station in Mumbai, India.
The Chief Minister of Maharashtra state said the situation was not yet contained as commando units attempted to wrest back control of two luxury hotels, where scores of westerners are believed to being held hostage.

Parts of Mumbai remained under siege, with police and gunmen exchanging gunfire at the Taj Mahal and Oberoi Trident hotels.

"The situation is still not under control and we are trying to flush out any more terrorists hiding inside the two hotels," said Vilasrao Deshmukh.

Gunfire and explosions were heard at the landmark Taj Mahal hotel and thick plumes of smoke rose from the building, witnesses said.

There were also explosions at the Oberoi hotel and firing at a hospital where gunmen were surrounded.

"The terrorists are throwing grenades at us from the rooftop of the Taj and trying to stop us from moving in," police Inspector Ashok Patil said.

Police said at least 250 people were wounded in the attacks, but some reports say up to 900 were hurt in the coordinated attacks, which also targeted a railway station, hospitals, the main railway station and airport.

Cafe Leopold, perhaps the most famous restaurant and hang-out for tourists in the city, also faced a series of blasts.

An organisation calling itself the Deccan Mujahideen said it was behind the attacks, television channels said. The previously little known group sent an email to news organisations claiming responsibility.

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

Early unconfirmed reports suggest the disaster has brought the financial capital's stock exchange to a standstill.

Teams of heavily-armed men launched coordinated attacks overnight that survivors said were aimed at killing Westerners.

Officials now say 86 people have been killed, and at least 120 wounded, with scores of Western hostages still being held.

A previously unknown group calling itself the Deccan Mujahideen claimed responsibility for the attacks in emails to several media outlets.