Twenty foreigners killed at Holey Artisan Bakery in Dhaka Bangladesh

Troops raided the cafe 12 hours after the siege began  (AFP/GETTY IMAGES)

Twenty people, all of them foreigners, were killed during an attack by suspected Islamists on a cafe in Bangladesh, officials say.

Gunmen stormed the Holey Artisan Bakery cafe in Dhaka late on Friday before troops entered almost 12 hours later.

Six of the attackers were also killed and one was arrested, a government spokesman said. The attack was claimed by the so-called Islamic State (IS).

Most victims were reportedly from Italy and Japan.

In the latest developments:

• Army Brig Gen Naim Asraf Chowdhury said the victims had been "brutally" attacked with sharp weapons
• Japan's Deputy Chief Cabinet Secretary Koichi Hagiuda said seven other Japanese nationals were in the cafe, but that the government had not yet been able to contact them
• Seven Italian nationals are believed to have been in the cafe, the Italian ambassador in Dhaka, Mario Palma, was quoted as saying by Italian media
• Italian news agency Ansa said most victims were from Italy and Japan - Italian media said many of those dining at the cafe worked in the garment industry
• Gen Chowdhury said 13 people were rescued including one Japanese national and two Sri Lankans

The siege began as diners were gathering to break their fast during the Muslim holy month of Ramadan.

Relatives of some of those inside the cafe are gathering for updates  (Image: AP)

"It was an extremely heinous act," Prime Minister Sheikh Hasina said in a televised statement. "What kind of Muslims are these people? They don't have any religion.

"My government is determined to root out terrorism and militancy from Bangladesh."

Bangladesh's Daily Star newspaper said the gunmen tortured anyone who was unable to recite the Koran. They provided meals overnight for only the Bangladeshi captives, it said.

Sumon Reza, a supervisor at the cafe, was in the restaurant in Gulshan district when the attack began, but managed to flee to the roof.

"The whole building was shaking when they set off explosives," he told media in Bangladesh. He later jumped off the roof and escaped.

"From 08:00 it all started," said Rashila Rahim, who lives near the cafe. "Gunshots, tank sounds... It was like we were in the middle, and gunshots from all around."