Hostages of a schizophrenic who hated Americans and claimed to hear voices endured seven hours of bizarre conversations and gunfire in a hotel bar.

They also saw one of the hostages killed and seven other people wounded before the gunman died in an explosion of police bullets."When he took a head count of us he started counting his rounds as well," said Doug Moore, among 33 people held by Mehrdad Dashti. "He watched every single move. Every time someone moved, he flinched."

Dashti, 30, commandeered Henry's Publick House and Grille at the Durant Hotel, a block south of the University of California's Berkeley campus, early Thursday.

The siege, punctuated by Dashti's gunfire and the escape of some hostages, ended when police decided they could not talk him into coming out and stormed the bar.

Dashti was described as a paranoid schizophrenic on an Alameda County mental health form found in his cluttered Berkeley apartment. Police knew of no clear motive for the attack.

"He was apparently very confused," said Berkeley police Capt. Phil Doran. "Deranged is not a bad description."

Dashti, who grew up in Iran and came to the United States eight years ago, expressed animosity toward Americans.

"The foreigners in there, he told them he wasn't going to bother them. He was after the Americans," Moore said.

He claimed the "government owed him $16 trillion for mental telepathy work and this was his way of getting it back," said Moore, 25, a student at the nearby campus and manager of the hotel bar, a popular gathering place for students.

Dashti, in an unmailed letter to President Bush obtained by the San Francisco Examiner, claimed to have spoken with "invisible intelligent species" from the world of the dead.

Moore said Dashti also disliked blond women. During the ordeal, Dashti made them take off their pants but let them keep on their underwear, hostages said.

Carrying a briefcase, Dashti walked into Henry's shortly before midnight and had a drink, Moore said. Moore made a "last call" and the remaining crowd of more than 40 people clustered at the bar.

There was a bang. Dashti had concealed a pistol, a revolver and an "assault-type pistol" in the briefcase, police said. Moore said he looked up to see Dashti point a gun into the crowd and fire several more shots.

"I saw the gun and I hit the ground," said John Landa, 21, who was shot in the right arm but escaped with several others.