Bangladesh security forces found the scattered body parts of up to eight people including women and possibly children when they stormed an Islamist hideout on Thursday, police said.
Security forces entered the building after a two-day stand-off with armed fighters believed to be from a new faction of an extremist group the government has blamed for a wave of deadly attacks targeting foreigners and religious minorities.
The head of the counter-terrorism unit, Monirul Islam, said police believed the group holed up inside had blown themselves up to avoid being taken by police.
He said some of those killed were women, and that there could also be children among the dead.
"There was an explosion late yesterday afternoon when the operation began. They died due to that explosion," he told reporters.
"We think there were seven to eight bodies of different ages."
Police came under the grenade attack when they raided two Islamist hideouts in the northeastern district of Moulvibazar on Wednesday.
Militants threw at least eight grenades as police cordoned off the two houses, both owned by a Bangladesh-origin British citizen.
Counter-terrorism officers and the elite SWAT unit then stormed one of the hideouts and found body parts scattered across two rooms, Islam said.
Last week army commandos stormed a five-storey building in the nearby city of Sylhet, triggering a violent three-day stand-off.
At least four extremists died and another six people including two police officers were killed when two bombs went off on Saturday near a crowd watching the operation.
The Islamic State group claimed the twin bomb attacks, but the government has rejected the claim and instead blamed the banned homegrown Islamist organisation, Jamayetul Mujahideen Bangladesh (JMB).
There has been a resurgence of extremist attacks in recent weeks in the Muslim-majority nation of 160 million after a relative lull since five IS-linked gunmen killed 22 people including 18 foreign hostages at a Dhaka cafe on July 1.
IS has also claimed at least two of three other incidents this month in which attackers blew themselves at security checkpoints, including one targeting an elite security force tasked with tackling Islamist militancy.
Analysts say Islamist militants pose a growing danger in conservative Bangladesh, where a long-running political crisis has radicalised opponents of the government.
Bangladesh prides itself on being a mainly moderate Muslim country. But that perception has been damaged by a series of gruesome killings of atheist bloggers, foreigners and religious minorities.
Since the cafe attack, security forces have launched a nationwide crackdown on Islamist extremist groups, killing around 60 suspected militants.
These include the founders of a new faction of the banned Jamayetul Mujahideen Bangladesh, which has been blamed by authorities for most attacks.