Dhaka: Explosions and gunshots rocked a city in northeastern Bangladesh today after police laid a siege to a five-storey building where suspected militants belonging to an Islamist group behind the country's worst terror attack were holed up.


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A team of counter-terror officials from the capital Dhaka surrounded the building in Sylhet at 3am.


"Sounds of intermittent explosions and gunshots rocked the area since morning as militants preferred not to give up," a journalist told PTI.


"We have come to know that female militants are also there," Sylhet's police commissioner Golam Kibria said, adding that preparedness was underway to launch a full scale raid to "neutralise" the extremists.


Officials said 12 families were staying in the building.


"We are proceeding with utmost caution so that the innocent residents are not hurt," a police officer told reporters.


Police said militants are believed to be the operatives of neo-Jamaatun Mujahideen Bangladesh (neo-JMB).


The neo-JMB, said to be inclined to the Islamic State, was behind the July 1 terror attack on a Dhaka cafe in which 22 people, including 17 foreigners, were killed.


The police headquarters recently circulated a list of nearly 5,000 suspected militants to district police chiefs as part of a nationwide anti?militancy drive.
Bangladesh witnessed a spate of attacks on secular activists, foreigners and religious minorities since 2013.


The country launched a massive crackdown on militants specially after the Dhaka cafe attack.