Indian Prime Minister Manmohan Singh suggested the group behind the terrorist attacks, which killed 125 people, was based outside the country.
CNN reporters said regular gun fire and blasts could be heard at the Oberoi and Taj Mahal hotels and a Jewish center in the city.
Police had some success with 10 hostages reportedly freed from the Oberoi despite a major fire.
Shortly after authorities said the siege had ended at the Taj Mahal hotel, two explosions were heard, similar to the six blasts heard earlier.
It was not immediately clear what caused any of the explosions. Witnesses said continuous gunfire could be heard at the hotel.
A fire from earlier billowed smoke through one of the hotel’s windows, as firefighters poured water over the plumes.
A few blocks away, at the Hotel Oberoi, a major fire raged Thursday night through one floor there, CNN’s sister network in India, CNN-IBN said.
The network reported 30 people were trapped, and said gunshots could be heard. Later, an explosion was heard from the hotel’s rear side.
At least three or four terrorists are still holding hostages in both the Taj Mahal and Oberoi hotels, British officials told CNN on Thursday.