Manmohan Singh (file photo)

Indian Prime Minister Manmohan Singh says the perpetrators of coordinated attacks on the financial capital Mumbai were likely based outside the country.

Mr. Singh addressed the nation Thursday a day after heavily armed men attacked 10 sites in the city, killing about 100 people and wounding about 300.  Without specifying another nation, he said he will tell "neighbors" that the use of their territory for launching terrorist attacks will not be tolerated.

As Mr. Singh was speaking, Indian security forces were moving through two luxury hotels, The Taj Mahal Palace and the Oberoi-Trident, in an attempt to free hostages and find remaining gunmen. Gunfire and explosions were heard from the hotels, and another fire broke out at the Taj after an earlier blaze caused serious damage to the historic building.

Firefighters try to douse a fire at the Taj Mahal hotel in Mumbai, India, 27 Nov 2008

Police were also trying to resolve a standoff at a building belonging to a Jewish group, Chabad house.

Wednesday night, groups of assailants with machine guns and grenades attacked several locations popular with foreigners and business people, including hotels and train stations.

Witnesses said gunmen were looking for U.S. and British citizens.

Local media report a previously unknown militant group, called the Deccan Mujahideen, has claimed responsibility.  The term Mujahideen is associated with Islamist extremists, while Deccan may be a reference to the Deccan Plateau - an area of southern India.

Islamic militants have been blamed for past bombing attacks.

Among those reported killed in the attacks were Mumbai's anti-terror chief, Hemant Karkare, and at least 11 policeman.  Foreign nationals, including an Australian and a Japanese citizen were also killed.

Police say at least four gunmen have been killed and nine arrested, but it is not clear where these encounters occurred.

Some information for this report was provided by AFP and Reuters.