About 70 Australians were believed to have been caught up in the violence. Two Sydney men are confirmed dead, Doug Markell and Brett Taylor.

Mr Markell, 71, a former Woollahra councillor, was on an organised tour with his wife, Alison. He is believed to have been shot when the Oberoi hotel was overrun by gunmen.

The couple's sons, Charles and David, have left for Mumbai to be with their mother.

A former council colleague of Mr Markell, Christopher Daw-son, said he was a charming man with a great community spirit. "He was not very boisterous and he got on with his work."

Mr Markell was president of the Sydney Probus club and the head of the office supplies company Zions Systems.

His friend at the Probus club, Stuart Renwick, said Mr Markell was an avid Sydney Swans fan, a vintage car collector and an active skier. News of his death devastated staff at Zions Systems. "If anybody were to depict a typical well-mannered gentleman that's what Douglas would be," said the chief executive, Jason Givens.

"He was a very gentle man, always happy and always smiling . . . It was always a pleasure to have Doug around."

The family of Brett Taylor, 49, of North Turramurra, a timber merchant, did not wish to comment on his "tragic death". Mr Taylor was shot and pronounced dead on arrival at hospital late on Wednesday. In a statement his family said the exact circumstances of his death were unknown. He was a member of the NSW trade delegation.

Another member of the delegation, Garrick Harvison, a young father from Wollstone-craft, said the military secured a critical breakthrough during a three-hour gun battle early yesterday Sydney time.

"The Indian armed forces were going through and clearing the rooms floor by floor," he told ABC radio from his hotel room.