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All the infants were between a month and three months old, a doctor said.
Fire broke out in the Bhandara district hospital at around 2 am, he said. There were 17 babies in the unit and seven were rescued, he added.
Another doctor said a nurse first noticed smoke coming out from the neonatal section of the hospital and alerted doctors and other staff who reached there in five minutes.
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The cause of the fire in the four-storeyed building is not known but could have been the result of an electrical short circuit, he said.