Dhaka sources have stated that Bangladesh security forces were preparing to free around 20 hostages, including several foreigners, from a restaurant in an upmarket area of the capital Dhaka early on Saturday, after gunmen stormed the building killing at least two policemen.


It is stated that Gowher Rizvi, an adviser to Bangladesh Prime Minister Sheikh Hasina, has told Reuters that security forces were trying to negotiate an end to the crisis, failing which they would launch an offensive to end the siege, possibly as soon as daybreak.


Meanwhile the hostage crisis marks an escalation from a recent spate of murders claimed by ISIS and al Qaeda on liberals, gays, foreigners and religious minorities, and could deal a major blow to the country's vital $25 billion garment sector.


The US State Department has said all Americans working at the US mission there had been accounted for. A spokesman said in Washington the situation was "very fluid, very live" and the President Barack Obama has also been briefed about the attack, the White House has said.


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