UPDATE 1-Three Pakistani militants held in Mumbai - media

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NEW DELHI, Nov 28 (Reuters) - Three of the militants who attacked India's financial capital have confessed they are members of the Pakistan-based Lashkar-e-Taiba group, the Hindu newspaper reported on Friday.

Indian newspapers squarely blamed Lashkar-e-Taiba, one of the largest Islamist militant groups in South Asia, for the attacks that killed more than 100 people and wounded more than 300 which began late on Wednesday.

Indian commandos were still battling to flush out militants in several pockets on Friday, including two luxury hotels.

Lashkar-e-Taiba denied on Thursday it had any role in the attacks, which also targeted a popular cafe, a Jewish centre and the city's main railway.

But Indian Prime Minister Manmohan Singh has said the assault was carried out by groups based outside India, usually an allusion to India's nuclear-armed neighbour Pakistan.

One of the militants was a resident of Faridkot in Pakistan's Punjab province, the Hindu newspaper said, citing unidentified police investigators.

"Based on the interrogation of the suspects, the investigators believe that one or more groups of Lashkar operatives left Karachi in a merchant ship early on Wednesday," the newspaper said.

It said the group came ashore at Mumbai on a small boat and then split up into small teams to attack multiple locations.  Continued...