The Indian National Security Guard (NSG), which is engaged in a gun battle with the terrorists at Taj hotel in Mumbai, said Friday morning that just one terrorist was still hiding and hoped to wrap up the flush-out operation at the Trident-Oberoi hotel and Nariman House very soon.

Two foreigners are rescued after being held as hostages for 24 hours in Mumbai on November 28, 2008. [Enorth.com.cn]

"There is one terrorist in the Taj (hotel). He has been injured and I think we will be able to mop up the operation there very quickly," Director General of NSG J K Dutt said.

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He said the injured terrorist has not yet been captured but they "will be able to do so soon".

Dutt said two terrorists are holed up in the 8th floor of the Oberoi hotel while in the Trident section the combing operation has been completed.

"As far as Trident is concerned, we have been able to completely clean up and we do not have any report of any terrorist being holed up over there.

"As far as Oberoi is concerned, yes, we have engaged two terrorists on the 8th floor," he said.

Smoke and fire billows out of the Taj Hotel in Mumbai November 27, 2008. [Xinhua]

He said that the operation to clean up the Nariman House was still going on.

Meanwhile, two grenade blasts were heard at Nariman House in South Mumbai where terrorists are hiding as the commandos continued their operation to flush out the terrorists.

At least seven of the attackers were killed and nine suspects had been taken into custody, according to the local police. They said 12 policemen were killed, including Hemant Karkare, chief of the police anti-terrorist squad in Mumbai.

Mumbai anti crime military soldiers prepare to fight terrorists on November 27, 2008. [Xinhua]

At least six foreigners, including one Australian, a Briton, an Italian and a Japanese national, were killed. Scores of others were trapped in the fighting or were being held hostage.

So far, 125 people were killed and 327 others injured when terror struck the Indian financial capital of Mumbai from Wednesday night in a coordinated series of explosions and indiscriminate gunfire that rocked 13 areas of the city.