Police in Bangladesh's capital, Dhaka, killed nine militants on July 26 who were thought to be plotting violence similar to a July 1 attack on a cafe that killed 22 people.
National Police Chief Shahidul Hoque said authorities surrounded the militants inside a building in Kalyanpur on the outskirts of Dhaka.
He said the militants opened fire on police who tried to enter, starting an intense gunbattle.
Hoque said the militants were thought to be members of a banned extremist group called Jamaat-ul-Mujahedin Bangladesh, which has pledged allegiance to Islamic State militants.
One wounded militant was captured and another managed to escape.
Authorities seized weapons and a large quantity of explosive gel from the building where the militants were holed up.