Two days of national mourning are underway in Bangladesh following a deadly terror attack in the capital city Dhaka.

20 people died in a 10-hour siege at the Holey Artisan Bakery café.

Military officials say six attackers died after troops stormed the building. One was arrested.

Two police men and a number of Italians and Japanese citizens are among the dead. An American and an Indian were also killed.

Confirming the deaths of five Italian women and four men, Prime Minister Matteo Renzi said the country was "like a family which has suffered a painful loss."

The seven Japanese victims are said to have been involved in international development projects.

Japanese Prime Minister Shinzo Abe, quoted in the Japan Times, said: “I feel profound anger that so many innocent people have lost their lives in the cruel and nefarious terrorism.”

Islamic State has claimed responsibility for the attack. However that has yet to be verified, with reports this morning suggesting the attackers may have been from Bangladesh.

It is thought that eight or nine attackers stormed the café in Dhaka's diplomatic zone late on Friday.

One kitchen staffer said the attackers were armed with guns and bombs, entering the building at around 9.20pm local time and taking customers and staff hostage. 

A massive firefight erupted outside the cafe, which is located in the Gulshan area of the capital.

13 hostages were rescued by security forces.