Update: At least nine men opened fire and took approximately 20 people hostage at the Holey Artisan Bakery in Dhaka, Bangladesh. The bakery is popular with expats and they could be the main targets of the attack. CNN stated that the gunmen are threw grenades and exchanged gunfire with the police. Two police officers are reported dead. The US Embassy states that all American citizens are accounted for. The Daily Mail reported:

One local police station chief, Mohammed Salahuddin, who was earlier injured in the shoot-out, has been declared dead according to a top official at Dhaka Metropolitan Police.

A second policeman, Robiul Islam, assistant commissioner of Uttara zone Detective Branch, has also died in the shooting, top police officials confirmed.

Another 25 officers and one civilian are being treated for injuries from gunshots and shrapnel, with 10 people in a critical condition, according to hospital authorities.

One member of staff from the restaurant who managed to escape, Sumon Reza, told Bangladeshi newspaper The Daily Star: ‘They blasted several crude bombs, causing wide-scale panic among everyone.

‘I managed to flee during this confusion.’

He added: ‘They came armed with pistols, swords and bombs. They shouted Allahu Akbar [God is great] before blasting the bombs.’

Early reports indicate that ISIS has claimed responsibility for the attack, according to SITE Intelligence Group.

It claimed ISIS’ Amaq News Agency reported fighters from the Islamic State group had carried out the attack.

Mr Reza claimed an Argentinian and an Italian are among those being held hostage. A source at the Italian foreign ministry has supported the claim, although they said it is not yet clear how many Italians may be involved.