Four people including two policemen were killed and seven were wounded in a bomb explosion and gun-battle on Thursday near a mass Eid prayer gathering in Kishoreganj in Bangladesh.
One attacker was captured alive by security forces, said Bangladesh Information Minister Hasanul Haq Inu.
Bangladesh's second terror attack in a week took place 140 km from capital Dhaka, where seven terrorists stormed a popular cafe last Friday, killing 22 people.
A group of attackers reportedly attacked one of the policemen with a knife and threw homemade bombs at a school about a kilometer from a prayer ground where at least 200,000 people were gathered to mark the start of Eid. The terrorists are believed to be hiding in the school.
"They threw a bomb at a police checkpost. A police constable was killed in the explosion. One attacker was killed and another was arrested," Mahbubur Rahman, a police officer in the district control room, told foreign media.
Tofazzal Hosain, the district's deputy police chief, told foreign media that several people had taken part in the attack and some had been armed with machetes - a hallmark of recent attacks in Bangladesh.
"They first threw a small bomb targeting police and then attacked them with machetes. Police retaliated by returning gunfire," Mr Hosain said.
Some reports suggest that the attack was targeted at the imam or chief cleric of Kishoreganj, who is known for his liberal views. He had reportedly started a signature campaign to condemn terrorism in the name of Islam.
'How can people attack those who have been doing (prayers) namaz?' asked Prime Minister Sheikh Hasina.
Last weekend, 20 people, including 18 foreigners, were hacked to death at the Dhaka cafe.
Bangladesh has faced a growing wave of attacks since the turn of the year, many of which have been claimed by the ISIS or an offshoot of the Al Qaeda network.