New Delhi: Indian commandos killed two gunmen at a Jewish centre in Mumbai but failed to save two hostages who appeared to have died.

"We have neutralised two terrorists," India's National Security Guards chief J.K. Dutt said.

The bodies of five hostages were found on Friday after Indian security forces attacked gunmen at a Jewish religious centre in Mumbai, an Israeli diplomat told Israeli television by telephone from the scene.

"Five bodies of hostages have been found inside the Chabad House. We still don't know whose bodies," Haim Choshen told Channel 2.

Earlier, Israel's ambassador to India said he believed about six Israeli nationals had been held hostage at the centre, including a rabbi and his wife.

The militants had been holding hostages at the centre for almost 48 hours.

An Israeli rescue service run by Orthodox Jews said staff it had sent to Mumbai to help also believed that hostages in the Chabad centre had died.

"Apparently the hostages did not remain alive," the Zaka service said in a brief statement quoting its staff in Mumbai, without elaborating.

Earlier Indian commandos were seen leaving the upper floors of the Mumbai Jewish Centre prompting Indian TV channels to report that operations there have ended.

The commandos had blown a hole outside the wall of the building where several hostages, including Israelis, were being held by militants.

The building was cloaked with thick smoke after the blast, televison showed.