The bodies of five hostages were recovered from the building, an Israeli emergency medical crew that entered the building after the raid, said.
Among the bodies were those of Rabbi Gavriel Noach Holtzberg, who ran the centre, and his wife, the Chabad Lubavitch organisation said.
A day earlier, two workers and the rabbi's son had escaped from the building.
The battle at the building that houses the headquarters of Chabad Lubavitch, included a team of at least nine commandos rappelling onto the roof from helicopters. Several large explosions were also heard.
Elsewhere in the city, gunfire and grenade blasts were heard at the Taj Mahal hotel and security forces at another hotel, the Trident-Oberoi, found 24 bodies after gaining control of the building.
More than 155 people are now known to have been killed since the attackers launched a series of assaults across Mumbai on Wednesday night.
Indian troops earlier took control of the Trident-Oberoi hotel, which had also been the scene of a hostage standoff, killing two attackers, the chief of India's national security guard said.
"We are just now sanitising each and every room," J K Dutt said.
Some frightened civilians inside the hotel are refusing to leave their rooms, he said.
Twenty-four bodies were found inside the hotel, Hasan Ghafoor, Mumbai's police chief, said.
Meanwhile, at the Taj Mahal hotel at least one gunman was said to still be inside.
"The Oberoi-Trident is completely clear, there is one terrorist left in the Taj who is giving us trouble and he could hold hostages and that is why we are very cautious," Gafoor said.
|Commandos were dropped onto the roof of
the Nariman House [Reuters]
James Bays, Al Jazeera's correspondent outside the Taj Mahal hotel, reported: "The authorities believe they have secured the majority of the Taj hotel. We were told some time ago their attention was focused on the ballroom, but it's still a confused situation."
The chief of India's Marine Commando Force said that his troops had come across "12 to 15 bodies" while sweeping through the Taj.
"The [attackers] were the kind of people with no remorse - anybody and whomsoever came in front of them, they fired," the commando said.
"We could have got those terrorists but for so many hotel guests ... The bodies were lying strewn here and there. There was blood all over and in trying to avoid the casualty of those civilians, we had to be that much more careful," he said.
Ratan Tata, who runs the company that owns the Taj Mahal hotel, said the attackers had detailed knowledge of the layout of the buildings.
The strikes by small bands of armed men starting on Wednesday night shocked Mumbai, the nerve-centre of India's growing economic might and home to the Bollywood film industry.
At least eight foreigners, including an Australian, a Briton, an Italian and a Japanese national, have been killed.
Fourteen policemen, including the head of Mumbai's counter-terrorism force, have also been killed, police say.
A US investigative team is heading to Mumbai, a state department official said on Thursday evening.
Police said they had taken nine suspected attackers into custody.
The Indian media, citing unidentified police investigators, reported that three alleged attackers had confessed to being members of Lashkar-e-Tiyaba, a Pakistan-based group which aims to end Indian rule in Kashmir.
Lashkar-e-Tiyaba had earlier denied any role in the attacks.
The Hindu newspaper said interrogation of the suspects revealed that Lashkar operatives had left Karachi in Pakistan in a merchant ship early on Wednesday and went ashore at Mumbai on a small boat before splitting up into teams to attack multiple locations.
|India pressed anti-terror commandos into action after the attacks [AFP]
Earlier, a little known group calling itself the Deccan Mujahidin claimed responsibility for the attack in emails to news organisations.
Dipankar Banerjee, a retired Indian general, told Al Jazeera that he does not rule out the possibility that the Indian Mujahidin, blamed for previous attacks, were responsible for the Mumbai assaults.
In a speech on Thursday, Manmohan Singh, the Indian prime minister, blamed "external forces", a phrase sometimes used to refer to Pakistan-based fighters.
Pakistan has condemned the attacks and has said it will fully co-operate with an Indian investigation.
But in a diplomatic exchange that raised the prospect of renewed tension between India and its neighbour, Pranab Mukherjee, the Indian foreign minister, urged Pakistan to dismantle infrastructure that supported armed groups.
Al Jazeera's Kamal Hyder, reporting from Islamabad said: "More and more people here are inclined to think that this is an indigenous, internal Indian phenomenon and that India is scapegoating Pakistan.
"Since yesterday the Indian media insinuated that elements within Pakistan were involved. However on the Pakistani side there has been relative quiet and also a sense of responsibility shown by the journalists not to jump to conclusions," he said.
The Associates Press reported that US officials and Indian diplomats were working out details for the departure of a team of FBI agents to join the investigation into the Mumbai attacks.