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Bangladeshi police stormed a restaurant in the capital Dhaka and rescued up to 10 hostages on Saturday, one official said, after an attack claimed by Daesh terrorist group (IS).

According to ILNA, gunmen attacked the upscale cafe in the diplomatic area of Dhaka late on Friday and had been holding about 20 hostages, including foreigners, before police poured into the building to try to free those stuck inside. At least two police were killed.

A police officer at the scene said that when security forces tried to enter the premises at the beginning of the siege they met a hail of bullets and grenades.

Television footage showed a number of police being led away from the site with blood on their faces and clothes. Heavily armed officers were seen milling on the street outside.

The number of hostages still in the restaurant was unclear, Mizanur Rahman Bhuiyan, a deputy director at the Rapid Action Battalion force, told Reuters.

Bhuiyan told Reuters one foreigner, probably Japanese, was among those who escaped after more than 100 commandos launched an operation to secure the restaurant.

IS, which has claimed the attacks, posted photos of what it said were dead foreigners killed in the assault on the cafe, where police believe eight to nine gunmen are holed up and armed with assault rifles and grenades.

Gowher Rizvi, an adviser to Bangladesh Prime Minister Sheikh Hasina, told Reuters that security forces had tried to negotiate a way out of the crisis.

Police said the gunmen attacked the Holey Artisan restaurant in the Gulshan district of Dhaka, popular with expatriates, in an assault that began around 9 p.m local time on Friday. The assailants exchanged sporadic gunfire with police outside for several hours after the attack.

IS said 24 people had died. Bangladesh police denied that, saying two police officers had been killed and at least 20 people wounded.

Italian and Indian nationals were among the hostages, said a duty officer at Rapid Action Battalion's (RAB) control room.

Italy's ambassador to Bangladesh, Mario Palma, told Italian state TV seven Italians were among the hostages. A Japanese government spokesman, quoting Dhaka police, said 12 people had been rescued but it was not known if any Japanese were among them.

Attack Bangladesh restaurant hostages