The terrorists, who created havoc in Mumbai overnight, came by boats and struck at 10 places but their number is not known immediately, Chief Minister Vilasrao Deshmukh said.
Addressing a press conference in the wee hours, he said two terrorists had been killed in encounters with police and security forces and nine suspects have been detained.
The terror attacks began between 9 pm and 9.15 pm with indiscriminate firing and bomb blasts, Deshmukh said.
The terrorists came by boats and started firing, he said but their number was was not immediately known.
The attackers threw grenades and fired indiscriminately while storming the hotels across Mumbai, he added.
At least two sten guns have been recovered from the terrorists, the Chief Minister said.
To a question, he said it was not immediately known as to who was involved in the attacks as the entire police force is concentrating on saving lives.
He said around 200 National Security Guard (NSG) commandos had been dispatched from Delhi for the operation to flush out terrorists.
Asked whether foreigners were the target of the attacks, the Chief Minister disagreed, saying it could not be said.