The suicide bombing in the middle of a crowd in the town of Dakshin Surma, Sylhet right outside a militant den appears to be a compound attack.
Two of the people injured in the blast have died. At least 40 others are injured, police say.
Court Inspector Abu Kawser was killed by the bomb dropped by the suicide attacker.
Inspector Monir of Sylhet police and Surma police station OC Shah Harun Ur Rashid were among those injured in the blast.
It cannot be ascertained at this point whether the crowd of spectators was the real target of the terrorists, and the den itself was a decoy, or if the attack was a distraction to aid the militants inside in some way.
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A crowd of at least 5-600 people were standing about 250 metres from the militant den where the attack took place. Our Sylhet Correspondent Serajul Islam, on the spot, saw a gory scene of wounded persons lying around as the remaining crowd fled after the explosion.
Police and army para-commandos have been trying to penetrate the militant den on the ground floor of the building since around 9am Saturday after having it cordoned off for roughly 30 hours. Their attempts have so far been foiled by explosives laid out around the building.
Locals of the town have been standing around the cordoned area since the beginning.
The last time a terrorist attack claimed such a large group of victims was in Dhaka's Gulshan last July when five militants barged into an upscale cafe and killed 22 people.