Two police officers -- Assistant Commissioner of the Detective Branch Rabiul Alam and Officer In-charge of Banani Police Station Salahuddin -- were killed and at least 40 injured in a gun battle between terrorists and law enforcers when gunmen stormed a popular cafe in Gulshan in the capital, taking a number of people hostages last night, officials said. Both Alam and Salahuddin succumbed to injuries after being taken to the United Hospital in Gulshan area. They were hurt while exchanging gunfire with the terrorist. Two of the hostages were taken to safety after they managed to come out of the cafe. Meanwhile, US-based SITE Intelligence Group tweeted quoting pro-IS Amaq News Agency that IS fighters carried out the attack. The Independent could not verify the claim independently. According to Amaq, the attackers have killed at least 20 people.  Amaq’s twitter account says, “Over 20 people of different nationalities have been killed in the #ISIS attack in #Dhaka #Bangladesh”.
At least 40 others, including about 20 foreigners, were still trapped inside the two-storey building that houses Spanish restaurant O' Kitchen and the Holey Artisan Bakery cafe, said kitchen staffer Sumon Reza who was among more than 10 people who managed to run to the rooftop and escape.
Police and security forces had sealed off the area and were trying to negotiate the hostages' release till filing of the report around 3am today. "We want to resolve the crisis peacefully. We are trying to talk to the attackers," said Benazir Ahmed, director general of the Rapid Action Battalion (RAB).
"Our first priority is to save the lives of the people trapped inside," said the chief of Bangladesh’s anti-crime elite force.
Police said the gunmen stormed into the Holey Artisan Bakery cafe around 9:20pm yesterday and opened fire.
The cafe is described as being popular with expatriates, diplomats and affluent families.
Several witnesses said the attackers shouted "Allahu Akbar", meaning "God is greatest", while attacking the café.
An eyewitness said she heard a loud noise, followed by continuous gunfire.
"The glass of my drawing room shattered," Rashila Rahim said.
"My auntie, her daughter and two friends went there for Iftar (breaking of the Ramadan fasting) and they have not come back. We cannot even check where they are." Another local resident, Tarique Mir, said he could hear sporadic gunfire nearly three hours after the attack began.
"It is chaos out there. The streets are blocked. There are dozens of police commandos," he said.
As police exchanged fire with the gunmen, the attackers threw explosives at officers, a source at the scene said. RAB DG Benazir told reporters after midnight that the attackers were still inside the Holey Artisan Bakery restaurant.
"We are trying to communicate with them (gunmen). We want to resolve it peacefully," he said.
Assailants were throwing explosives at police, a source at the scene said.
Witness Sharmin Hussain told a news agency that her cousin has four friends who are in the restaurant.
Hussain says the hostages' relatives have come to the scene but have received no word from their family members. Hussain said she heard the gunshots from her apartment, about a five-minute walk from the restaurant.
Police are trying to find out the demands of the gunmen holding hostages, an officer said. The gunmen have not made any demands.
A police bomb disposal unit was on standby to go in.
Farzana Azim, who lives nearby, says she heard explosions outside her home. "We heard the first bomb blast at 8:30 in the evening," Azim said. At first, she thought it was the sound of a plane, but a few minutes later another blast echoed through the neighbourhood of Gulshan. Within half an hour, the gunshots started, she said.
"I never thought something like this could happen. It is next to a small hospital. This is family-friendly restaurant. Everyone loves to go there," the 49-year-old told newsmen.
Hussain said the restaurant was popular among young people, who would have packed the restaurant about the time of attack as they broke their fast for the day.
The US Embassy in Dhaka warned of the situation on Twitter, advising people to shelter in place and noting that a hostage situation had been reported. Later, the embassy advised it had accounted for all of the American citizens working under the chief of the mission authority. The British and the Canadian high commissions in Dhaka also asked their citizens in Bangladesh to remain vigilant.
According to a report by the Times of India, Indian foreign ministry has said that all Indian officials are safe and the Indian high commissioner is closely monitoring the situation.
In Washington, State Department spokesman John Kirby told reporters: “We are aware of reports of what appears to a hostage situation in the Gulshan neighborhood of Dhaka.''
He said it was too early to say who was involved in the assault and their motivation. The Gulshan attack comes on the same day a Hindu priest was hacked to death at his temple in Jhenaidah.
That incident was the latest in a wave of murders across Bangladesh of secular bloggers, academics and religious minorities such as Hindus, Christians, Buddhists and Sufi Muslims -- despite a nationwide government crackdown and the arrest of more than 14,000 people.