Local media report that a group of up to nine attackers took hostages inside a restaurant frequented by both locals and foreigners in a diplomatic zone in Bangladesh's capital.

Bangladesh TV stations reported that the attackers entered the Holey Artisan Bakery in Dhaka's Gulshan area around 9:20 p.m. Friday and were holding customers and staff hostage.

The TV reports said the identities of the attackers were not immediately known.

The reports say a huge contingent of security guards cordoned off the area and the restaurant as they traded gunfire with the attackers who set off explosions.

Jamuna Television reported, quoting a kitchen staff worker at the restaurant who escaped the attack, said that the gunmen chanted "Allahu Akbar" (God Is Great) as they launched the attack.