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A gun battle is taking place between police and unidentified attackers in the diplomatic area of the Bangladeshi capital, Dhaka, officials say.
Three people, including two police officers, have been wounded after gunmen stormed a cafe in the Gulshan district, police say.
The Dhaka Tribune said at least 20 civilians had been taken hostage, but this was not confirmed.
Police and security forces have sealed off the area.
The US embassy in Dhaka tweeted that there were "reports of shooting and hostage situation".
"Unknown number of people are still inside but we cannot confirm whether they are held hostage," police officer Sayedur Rahman told AFP news agency.
Local media reported that several gunmen had entered the Holey Artisan Bakery cafe and opened fire.
The cafe is described as being popular with expatriates, diplomats and middle-class families.
It is not clear who the attackers are, although a police officer told the BBC that Islamic militants were suspected.
BBC South Asia editor Jill McGivering says that although high-profile gun attacks are rare in Bangladesh, the latest incident follows a series of murders widely blamed on Islamist extremists.
Chak De India
Three people, including two police officers, have been wounded after gunmen stormed a cafe in the Gulshan district, police say.
The Dhaka Tribune said at least 20 civilians had been taken hostage, but this was not confirmed.
Police and security forces have sealed off the area.
The US embassy in Dhaka tweeted that there were "reports of shooting and hostage situation".
"Unknown number of people are still inside but we cannot confirm whether they are held hostage," police officer Sayedur Rahman told AFP news agency.
Local media reported that several gunmen had entered the Holey Artisan Bakery cafe and opened fire.
The cafe is described as being popular with expatriates, diplomats and middle-class families.
It is not clear who the attackers are, although a police officer told the BBC that Islamic militants were suspected.
BBC South Asia editor Jill McGivering says that although high-profile gun attacks are rare in Bangladesh, the latest incident follows a series of murders widely blamed on Islamist extremists.
Chak De India