DHAKA, Bangladesh -- Heavy gunfire and explosions rang out Saturday morning as Bangladesh security forces backed by armored vehicles moved to end a 10-hour standoff with heavily armed militants holding dozens of people hostage, including foreigners, after storming an upscale restaurant at the heart of Bangladesh's diplomatic zone.
After a standoff overnight, a large contingent of security forces moved in Saturday morning to rescue the hostages being held inside the Holey Artisan Bakery in Dhaka's Gulshan area. About 35 people had been taken hostage, including about 20 foreigners, when gunmen stormed the restaurant on Friday night.
Lt. Col. Tuhin Mohammad Masud, the commanding officer of Bangladeshi commandos, said at least six of the gunman had been killed and 13 hostages rescued.
"We have gunned down at least six terrorists and the main building is cleared but the operation is still going on," Masud told The Associated Press.
He said other hostage-takers had been captured, but did not say how many.
The rescued hostages include a Japanese citizen, who was injured, and two Sri Lankans, according to Masud. He said there were casualties among other hostages, but did not provide details.
Local media reported that an Argentine and two Bangladeshis were also rescued, but details about their condition were not immediately available.
Bangladeshi TV stations reported that the rescue operation began at 7:40 a.m. It included army personnel with automatic weapons and at least seven armored vehicles. Several ambulances were on standby.
Commandos storming the restaurant discovered five bodies lying in blood, a police official who was not identified told Channel 24 TV station. It wasn't clear if they were militants or hostages.
Two police officers were killed and at least 26 people wounded in an earlier gunbattle. Ten of the injured were listed in critical condition. The injuries include bullet wounds and broken bones, they said.
The Islamic State of Iraq and Syria, or ISIS, claimed responsibility for the attack. ISIS and al Qaeda affiliates have claimed responsibility for many recent attacks in the country but the government denies that either group has a presence there.
The attackers had "not responded to authorities' calls for negotiation," a member of the Rapid Action Battalion, identifying himself as Lt. Col. Masood, said during an interview late Friday with the Indian TV channel Times Now. He said the police cordon would prevent any of the attackers from escaping.
"Some derailed youths have entered the restaurant and launched the attack," Benazir Ahmed, the head of the Rapid Action Battalion told reporters Friday night. "We have talked to some of the people who fled the restaurant after the attack. We want to resolve this peacefully. We are trying to talk to the attackers, we want to listen to them about what they want."
"Some of our people have been injured. Our first priority is to save the lives of the people trapped inside," Ahmed said.
Sumon Reza, a kitchen staffer who was among more than 10 people who managed to run to the rooftop and escape, said the attackers chanted "Allahu Akbar" (God is Great) as they launched the attack around 9:20 p.m. Friday, initially opening fire with blanks.
Seven Italian nationals were thought to be among the hostages, Italian state television said, quoting the Italian ambassador to Bangladesh. The ambassador said one Italian who escaped said seven other businessmen were trapped inside.
Among the hostages were a businessman, his wife and two children, according to his uncle Anwarul Karim.
"My nephew Hasnat Karim called me and said he was inside with his family. He told me, 'Please save us, please!' And he hung up," he said. "We do not know what is going on there."
In Washington, State Department spokesman John Kirby told reporters: "We are aware of reports of what appears to a hostage situation in the Gulshan neighborhood of Dhaka."
"Our embassy in Dhaka has confirmed 100 percent accountability of all official American personnel with no injuries reported," Kirby said. "We are working with the local authorities to determine if any U.S. citizens and locally-employed staff were affected."
He said it was too early to say who was involved in the assault and their motivation.
"We have seen ISIL claims of responsibility, but cannot yet confirm and are assessing the information available to us," Kirby said. "We are in ongoing contact with the Government of Bangladesh as the situation continues to unfold. We have offered our assistance in their efforts to bring to justice those responsible for these attacks and to combat terrorism and violent extremism."
All Defense Department employees in the area were accounted for, CBS News national security correspondent David Martin reports.
On Twitter, the U.S. Embassy in Dhaka advised people to shelter in place.
President Obama was briefed on the situation by his counterterrorism adviser, Lisa Monaco, a White House official told CBS News. Mr. Obama asked to be kept informed as the situation developed.
Bangladesh, a traditionally moderate Muslim-majority nation, has recently seen an upsurge in militant violence. Nearly two dozen atheist writers, publishers, members of religious minorities, social activists and foreign aid workers have been slain since 2013 by attackers wielding machetes. The frequency of attacks has increased in recent months. On Friday, a Hindu temple worker was hacked to death by at least three assailants in southwest Bangladesh.
The attacks have raised fears that religious extremists are gaining a foothold in the country, despite its traditions of secularism and tolerance.
On Thursday, the State Department officially designated al Qaeda's affiliate in Bangladesh, al Qaeda in the Indian Subcontinent, as a foreign terrorist organization. The group has claimed responsibility for the killings of U.S. citizen Avijit Roy and U.S. Embassy worker Xulhaz Manna, who was hacked to death, according to the department.
Prime Minister Sheikh Hasina's government has cracked down on domestic radical Islamists. It has accused local terrorists and opposition political parties - especially the main opposition Bangladesh Nationalist Party and its Islamist ally Jamaat-e-Islami - of orchestrating the violence in order to destabilize the nation, which both parties deny.
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