At least five Chabad House hostages have been killed scroll down for pictures & Videos

Five hostages in Mumbai's Chabad House have been killed, Israeli rescue forces reported from Jerusalem Friday afternoon.

Commando fires at terrorists holed up in Chabad House.
Photo: AP

Two gunmen were also killed in the operation against Islamic terrorists that had holed themselves up inside the building, Sky News quoted Indian National Security Guards chief J.K. Dutt as saying.

Earlier, following reports that the operation had reached its conclusion, Mumbai Police Chief Hassan Ghaffoor stressed to the crowd outside the Chabad center that "the operation is ongoing" but in its "final stage."

It came after commandos blew a hole in the wall of the besieged building as they tried to box in the Islamic terrorists who were holding an unspecified number of hostages.

The massive explosion shook the Chabad center, blowing out windows in neighboring buildings, while gunfire and smaller explosions followed the blast.

Commandos had rappelled from helicopters to storm the center earlier Friday, two days after a chain of Islamic terrorist attacks across India's financial center left at least 143 people dead and the city in panic.

Israel's ambassador to India, Mark Sofer, said he believed there had been up to nine hostages inside. Sofer denied reports that Israeli commandos had taken part in the operation.

The hostages were believed to include Chabad Rabbi Gavriel Holtzberg and his wife, Rivka.

Haim Hoshen, the Foreign Ministry's Head of Asia and South Asia Department, told the Jerusalem Post that two to four Israelis were being held inside the building.

The Foreign Ministry said that a total of 17 Israelis were still unaccounted for in Mumbai.

Meanwhile, the Holtzberg's two-year-old son, Moshe, who was rescued from the attack, was reunited with his grandparents, Shimon and Yehudit Rosenberg, who arrived from Israel to take custody of him.

Speaking to Army Radio on Friday, a relative, Yitzhak Dovid Grossman, said there was "an eruption of emotion" when the grandparents met their grandson. But he said they soon resumed "worrying about what is happening with Rivki and her husband."

Also Friday morning, two Israeli businessmen were freed together with the dozens of hostages rescued late Friday morning from Mumbai's Oberoi hotel.

Earlier, an El Al plane carrying some 300 Israelis arrived at Ben Gurion Airport from Mumbai.

One of the passengers described the atmosphere in the city to Army Radio.

Bystanders gather around a police commando outside the Mumbai Jewish center (AFP/Getty Images)