"Three terrorists have been killed," J.K. Dutt, director-general of the National Security Guard, told a throng of reporters outside the smoldering Taj Mahal Hotel, site of the terrorists' final stand.
Police Chief Hussain Gafoor said all the gunmen at the hotel had been killed.
But Dutt said it was still possible more terrorists remained holed up inside the hotel. And until security forces had finished combing through the 565 rooms of the Victorian structure, authorities will not officially declare the operations over, he said. The process is expected to take several hours.
Dutt told CNN-IBN at about 11 a.m. Saturday (12:30 a.m. ET) that officers had found one "trembling" hostage in the Taj but no hostages' bodies.
By Friday, the casualty toll from the attacks had reached 160 dead and 327 wounded, officials said. The death toll was expected to rise.
Meanwhile, thousands gathered at the city's largest park, Shivaji Park, to say farewell to Hemant Karkare, the head of Mumbai's anti-terrorism squad.
Karkare was shot three times by gunmen outside the Cama Hospital, one of nine sites that attackers targeted Wednesday night. He was one of at least 17 police officers who died in the attacks.
Back at the Taj, Dutt appealed to guests who may have been hiding in their rooms since the attacks to open their window curtains to signal their presence to security officials.
He said that doing so would also help police snipers determine, by looking into the rooms, if any of the guests is in fact a terrorist with a weapon.
The director-general spoke to reporters about 8:30 a.m. local time (10 p.m. ET). Minutes earlier, a fire -- which Dutt said had been set by the terrorists as a diversionary tactic -- swept through the ground floor of the 105-year-old building and coincided with an end to rifle fire. It was quickly brought under control.
Indian officials on Friday found five bodies of hostages who had been held inside the Chabad House, a Jewish community center.
The dead included an American rabbi, his Israeli wife, a second American rabbi and two other people -- as well as two gunmen.
Rabbi Gavriel Noach Holtzberg, the city's envoy for the Chabad community -- a Hasidic Jewish movement -- and his wife were found dead inside, said Chabad-Lubavitch International in the United States. Holtzberg had dual U.S.-Israeli citizenship; his wife was Israeli.
Also found dead in the house was Rabbi Leibish Teitelbaum, a New York native who moved to Jerusalem several years ago, the office of New York Mayor Michael Bloomberg said.
The couple's nanny spirited their toddler son out of the building on Wednesday.
In all, at least five Americans were killed and two more were wounded in the attacks, the U.S. State Department said.
Two of the other slain Americans were identified as Alan Scherr, 58, and daughter, Naomi, 13, who belonged to a meditation group in Virginia.
The group, the Synchronicity Foundation, said the two were killed at Hotel Oberoi, where 36 people were found dead, according to Bhushan Gagrani, a state official for Maharashtra, where Mumbai is located.
The Americans were among at least 18 foreigners who were killed, according to a tally by CNN compiled from Indian officials and governments of various nations.
The official death toll does not include the 11 gunmen killed in battles with security forces. A British security source told CNN that British security officials are investigating why two bodies believed to be those of terrorists were found with British identification documents.
He said another gunman was captured alive.
Indian officials said the gunmen came from Pakistan, an assertion that Pakistan disputed.
"The preliminary investigation indicates that some elements in Pakistan are involved," said Pranab Mukherjee, India's foreign minister.
Pakistan protested that it was too early to pinpoint where the attackers came from.
In a statement from his office, Pakistani Prime Minister Yousuf Raza Gilani said he would send a representative of his intelligence agency to help with the investigation. The office rescinded an earlier statement that the chief of the agency would be sent.
After the Hotel Oberoi had been cleared of gunmen, police found pistols, military assault rifles and grenades. The gunmen were in their 20s and appeared well-trained, a member of the Indian navy's commando unit said. Their identities remained a mystery.
Police say boats took the men to Mumbai's waterfront near the Gateway of India monument and across from the Taj Mahal Hotel.
State media Press Trust of India, citing Union Cabinet Minister Kapil Sibal, reported the gunmen had prepared for months, setting up "control rooms" in the two luxury hotels that were targeted.
British Parliament member Sajjad Karim was in a herd of people running from gunfire in the lobby of the Taj when another gunman appeared before them and opened fire.
"From the very brief glimpse that I got of him, he was fairly young man of south Asian appearance, and he was wearing a smile on his face as he started to spray the bullets," Karim told CNN's Wolf Blitzer.
Karim said he spent eight hours barricaded in a room at the Taj with 40 to 50 people before commandos rescued him.
Peter Dillane, an Irish businessman based in New York, said he was in the Taj when he saw "kids" with backpacks and automatic weapons "methodically knocking on doors."
"They were so young, it didn't feel real," said Dillane, who escaped a barricaded room when firefighters broke out the window and helped him to the ground.
Indian authorities said no one had claimed responsibility, although a group calling itself Deccan Mujahideen said in e-mails to Indian news outlets that it was behind the attack.
"They were so young, it didn't feel real," said Dillane, who escaped a barricaded room when firefighters broke out the window and helped him to the ground.
Indian authorities said no one had claimed responsibility, although a group calling itself Deccan Mujahideen said in e-mails to Indian news outlets that it was behind the attack.