As relatives went to morgues to claim their dead or visited the injured in hospitals, investigators of Monday's bombings focused their probe on Muslim militants.
These included groups that Hindu-majority India alleges are backed by Muslim Pakistan — sparking fears of increasing tensions just when relations between the nuclear-armed neighbors appeared on the mend.
Pakistan condemned the carnage as "wanton targeting of civilians," and the United Nations and the United States also denounced the attack.
"Acts of terror are intended to sow fear and chaos among free peoples," President Bush said in a statement. "I hope that the perpetrators of these murders will be identified quickly and brought to justice."
Indian police and officials said they had no direct evidence of who carried out the bombings and no group immediately claimed responsibility for the attack, which killed Hindus as well as Muslims.
"I can say it is a terrorist group, but which group, we can't say," said Kripa Shankar, the home minister of Maharashtra state where Bombay is located.
Terrorist attacks in the past have triggered severe tit-for-tat sectarian violence, and Muslims in Bombay worried that they would be blamed by Hindus.
"There is a fear gripping the city," Muslim community leader and businessman Sohail Rokadia said. Overnight, roads in several parts of the city — usually clogged with traffic — were deserted.
But the metropolis of 16 million people, India's largest, appeared calm as daybreak brought the usual hectic activity. Office-goers crowded pedestrian crossings on their way to work and schoolchildren were seen off by their parents.
The bombs in two taxis exploded minutes apart, ripping through a crowded jewelry market, the Zaveri Bazaar, and in front of a colonial-era tourist attraction, the Gateway of India. The blasts shattered window panes of the luxury Taj Mahal hotel facing the gateway and several other buildings.
Some of the aftermath was too horrifying to broadcast, reports CBS News Correspondent Tom Fenton.
"There were quite a few injured obviously. I saw one of the taxis, it literally flew and landed in front of the hotel," said eyewitness Ghulam Noor.
Many people were being interrogated, including the driver of the taxi that blew up in the parking lot in front of the Gateway of India.
The Indian Express newspaper said police have launched a manhunt for five suspects including two women who hired the taxi to go to the Gateway of India. They got off the taxi, purportedly for lunch, leaving a bag inside. The driver also was strolling outside when the car blew up, the Express said. The driver of the second cab at the Zaveri Bazaar died in the explosion.
The timing of the blasts raised concerns they were linked to a dispute over a religious site in the northern city of Ayodhya claimed by both Hindus and Muslims that has been the source of much bloodshed in the past.
The bombings came hours after the release of a long-awaited archaeological report on the site that itself showed divisions over the site's history.
Many Bombay residents said the bombers seemed intent on triggering strife between India's two largest religious groups, and recalled the horror of the last large-scale attack in the city — serial blasts in March 1993 that killed more than 250 people.
On Tuesday, the Hindu nationalist World Hindu Council demanded an immediate ban on Islamic schools, and said its members will hold nationwide demonstrations on Wednesday.
Police Commissioner Ranjit Sharma said investigators were focusing on the Students Islamic Movement of India, or SIMI, a militant Muslim students' group outlawed in 2001, and Lashkar-e-Tayyaba. The latter is one of more than a dozen Islamic rebel groups fighting Indian security forces in Kashmir since 1989, seeking independence for the Himalayan province or its merger with Muslim-dominated Pakistan.
Advani also suggested the involvement of SIMI and Lashkar-e-Tayyaba, citing a string of blasts in Bombay in recent months blamed on the two groups.
India's Deputy Prime minister Lak Krishna Advani created a stir Tuesday by telling reporters the bodies of two blast victims were still unclaimed and may be Pakistani nationals.
But about an hour later he told reporters that he had misunderstood the facts given to him by police. He said the unclaimed bodies were in fact those of two Pakistani militants killed in a gunbattle in March.
The two neighbors — which have gone to war three times since independence from Britain, twice over Kashmir — have made recent moves toward reconciliation, including reinstating diplomats and restoring bus links.
In Zaveri Bazaar, the city's gold and jewelry trading hub, many shops are owned by Hindus but many of its artisans are Muslims. The Gateway of India arch, a landmark built by British colonizers to mark a royal visit, is a popular spot for both Muslims and Hindus.
Women wailed as the body of 19-year-old tourist guide Krishna Thakur, wrapped in a white shroud and marigold flowers, was taken away for cremation.
A few miles away at a Muslim burial ground, mourner prayed as the bodies of Sadique Ahmad, 42, and his nephew, Mohammed Sohail Latif Wadiwala, 21, were lowered into separate graves.
"Even after the blasts, both Hindus and Muslims were together in the rescue," Rokadia, the Muslim leader, said before the ceremony.