A police official, who was injured in the intermittent firing by the gunmen shouting "Allahu Akbar" from inside the Holey Artisan Bakery, succumbed to his injuries late tonight.
The armed men, whose number could not be ascertained, barged into the restaurant, popular with expatriates and diplomats, and opened fire at around 9:20 PM (local time).
Several foreigners are believed to have been taken hostage inside the restaurant in the upscale area, police said.
The attackers hurled bombs from inside the restaurant, and were firing intermittently, injuring policemen, including an Additional Commissioner of Dhaka Metropolitan Police, and some people at the restaurant.
Firing of gunshots and sounds of explosions were heard from time to time near the restaurant.
MEA sources in New Delhi said they were monitoring the situation in Dhaka and trying to ascertain the details.
Local media reports said that the number of gunmen could be as high as 20 but there was no official word on it.
A kitchen staff of the bakery, who managed to escape, said several armed men entered the restaurant around 8:45 PM and took the chief chef hostage, media reports said.
"They set off several crude bombs triggering panic," he added.
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