The overnight crisis ended around 12 hours after up to nine gunmen took over the Holey Artisan Bakery, which is popular with foreigners and middle class locals.
Brig. Gen. Naim Ashfaq said 13 people were rescued when commandos stormed the Spanish restaurant. Six militants were killed and one other detained in the raid.
“Most of the victims were killed brutally with sharp weapons,” Ashfaq said. He said the bodies had been taken to a military hospital for autopsy and the identities of the dead would be released as soon as possible.
The atrocity was claimed by Daesh though the Amaq media outlet linked to the terror group.
Prime Minister Sheikh Hasina congratulated the security forces on ending the siege. “We don’t want terrorism in Bangladesh,” she said, adding: “I don’t understand their belief -- what kind of Muslims are they?”
The hostage crisis begun at around 9.20 p.m. local time (1520GMT) Friday when militants armed with guns and explosives stormed the restaurant in the city’s Gulshan neighborhood, which is home to several embassies and one of the most secure districts of the capital.
Police tried to make contact with the hostage-takers in an effort to end the crisis peacefully.
When a joint police and military force stormed the restaurant they were met by heavy gunfire and explosions.
Two police officers were killed and at least 10 others were in the incident, local TV reported.
The Daily Star, a local English-language newspaper, cited the father of one hostage who said that hostages who were unable to recite verses of the Quran were tortured.
Later Saturday, the U.S. administration condemned the attack in the strongest terms, confirming that the casualties include one American citizen as well.
"This is a despicable act of terrorism, and the United States stands with Bangladesh and the international community in our resolve to confront terrorism wherever it occurs," a White House statement said.
Offering condolences to the victims and a speedy recovery for the injured, the U.S. State Department reiterated that the U.S. supports the Bangladeshi government’s efforts to combat terrorism.
"We remain in close contact with the government of Bangladesh and have offered our assistance in their efforts to bring to justice those responsible for these attacks," U.S. State Department spokesman John Kirby said in a written statement.