Bangladesh police stormed a militant hideout outside Dhaka Saturday, shooting dead three Islamist extremists, including the suspected mastermind of an attack on a cafe that killed 22 mostly foreign hostages last month.
"We can see three dead bodies here," senior police officer Sanwar Hossain told AFP.
"Tamim Chowdhury is dead. He is the Gulshan attack mastermind and the leader of JMB (Jamayetul Mujahideen Bangladesh, a domestic militant outfit)," he said.
Chowdhury, a Bangladeshi-Canadian citizen, had earlier been named by police as the suspected mastermind of the attack on the cafe in Gulshan, an upscale Dhaka neighbourhood.
The bodies were retrieved after police staged an hour-long gun battle with extremists in Narayanganj, a city 25 kilometres (16 miles) south of Dhaka, Hossain said.
"The operation went on for an hour. We can see three dead bodies. They did not surrender. They threw four-five grenades at police and fired from AK 22 rifles," Bangladesh national police chief A.K.M Shahidul Hoque told AFP police.
"Three extremists were killed. Among them, one of the dead persons looked exactly like the photo of Tamim Chowdhury that we have."
Bangladesh's government has blamed the JMB for the July 1 cafe attack in which 20 hostages, including 18 foreigners, were killed along with two policemen.
Police say Chowdhury, 30, who returned from Canada in 2013, has been leading a faction of the militant group, also said to be behind scores of murders of members of religious minorities.
"We heard that Tamim Chowdhury is among the dead. (His) physical appearance shows that it was Tamim Chowdhury. But we need to be 100 per cent sure," Bangladesh home minister Asaduzzaman Khan told AFP.
Police on August 2 announced a two million taka ($25,000) reward for information leading to the arrest of Chowdhury, who disappeared after allegedly masterminding the cafe attack.
Together with the elite security force, the Rapid Action Battalion, they have carried out a series of raids on suspected militant hideouts.
In June more than 11,000 people were arrested in a bid to quash a spate of brutal murders of secular writers, gay rights activists and religious minorities.
The Islamic State group claimed responsibility for the Gulshan attack, releasing photos from inside the cafe during the siege and of the five men who carried out the deadly assault and were shot dead at its finale.
Bangladeshi authorities have rejected the claim, saying international jihadist networks have no presence in the world's third largest Muslim majority nation.
Bangladesh has been reeling from a deadly wave of attacks in the last three years, including on foreigners, rights activists and members of the country's religious minorities.
Both IS and a branch of Al-Qaeda have claimed responsibility for many of the attacks.
Critics say Prime Minister Sheikh Hasina's administration is in denial about the nature of the threat posed by Islamist extremists and accuse her of trying to exploit the attacks to demonise her domestic opponents.