The nearly 10-minute shootout sparking off panic in the locality also left a police sub-inspector wounded.

Witnesses said a traffic police signalled a black cab with four passengers speeding along Rokeya Sarani towards Mirpur to stop at Bottola in Taaltola area at around 8:00pm. But driver Monir Hossain ignored the bidding.

On information, a police patrol team at Shewrapara tried again to flag down the cab (Dhaka Metro-Pa-12-3339). But, in a bid to dodge the police, the driver entered a lane known as West Shewrapara Jame Mosque lane, which is too narrow for a car to drive.

Witnesses said, as the policemen proceeded towards the taxi, two youths came out of it and hurled two bombs at them injuring SI AB Siddique. The gang of four also started to shoot away at the police team, triggering off the firefight, said Mirpur police.

All the four cab riders were bullet-hit in the encounter.

As the police rushed them to Dhaka Medical College and Hospital (DMCH), doctors declared two of them dead on arrival. The third youth died half an hour later, while the condition of the fourth was said to be critical.

The identities of the cab riders could not be known immediately. All of them appear to be aged below 20.

The police recovered four hand-made bombs, two revolvers and four knives from their possession and arrested Monir, the driver.

Monir denied any involvement with the youths. "The four hired my cab from Agargaon and asked me to ignore the police signals," he told reporters at Mirpur Police Station.

Locals of Shewrapara brought out a procession celebrating the deaths of the thugs.