A suspected member of Jamayetul Mujahideen Bangladesh (JMB) blew himself up and another was shot dead after Bangladesh's anti-terrorism officers raided their hideout early Sunday, police said.
Police cordoned off a one-storey building in a remote village in the western district of Jhenaidah on a tip-off that extremists were holed up there.
"There was an exchange of fire between counter-terrorism police and the extremists. An extremist was killed," district police chief Mizanur Rahman told AFP.
"And when we came closer to the building, another extremist carried out a suicide blast. He died on the spot," he said, adding two police officers were also injured in the blast.
JMB is blamed for a wave of deadly attacks against religious minorities and foreigners.
These include a major attack on a Dhaka cafe last July in which 22 people were killed, most of them foreigners.
The Islamic State group claimed that attack and several others, but Dhaka insists they were the work of homegrown Islamist groups.
Police have arrested scores of suspected extremists and killed more than 60 people since the cafe attack.
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