DHAKA (AFP) - Two suspected followers of a banned Bangladeshi Islamist outfit were killed on Monday (Dec 28) in an explosion outside the capital Dhaka as security forces raided a third extremist hideout in four days.

The Rapid Action Battalion (RAB) launched the raid on an abandoned house at Gazipur, 40km north of Dhaka, just after midnight, said a spokesman for the elite police unit.

Suspected members of Jamayetul Mujahideen Bangladesh (JMB) hurled bombs towards the raiding party before an explosion in the building. Two bodies were later recovered.

"We opened fire at them after a law enforcer was injured as the JMB militants hurled an IED (improvised explosive device) at our officers when we surrounded the house," said RAB spokesman Major Rumman Mahmud.

"After we shot several rounds of bullets we heard an explosion inside the den. Later we found two bodies lying on the floor," he told AFP.

Unexploded IEDs, grenades, a pistol, bullets and JMB propaganda leaflets were found at the premises.

It was the third raid on a suspected militant hideout in four days as security forces intensify a hunt for extremists following a series of deadly attacks on foreigners as well as an attack at a mosque at a naval base.

The raid came hours after three alleged JMB militants were arrested in the port city of Chittagong. Police found a modern assault rifle, a huge cache of bullets, bombmaking equipment and army uniforms during the operation.

"The worst part of our concern is they have local military fatigues, which makes it harder for the police to monitor their movement," Chittagong Metropolitan Police Commissioner Abdul Jalil Mandal told AFP.

Last Thursday, the police raided a multi-storey building in Dhaka's Mirpur suburb and arrested seven suspected JMB men after a 15-hour operation. Police said they recovered hand grenades and suicide bombers' vests.

The high-profile raids and arrests have raised fears Islamist militants have regrouped a decade after they carried out a series of bombings.

The nationwide blasts coincided with the launch of a campaign to introduce Sharia law in the Muslim-majority but officially secular nation.

In recent months a string of attacks and murders of foreigners, secular bloggers, publishers, Sufi leaders, Shiites and Ahmadi Muslims were claimed by the Islamic State in Iraq and Syria (ISIS).

The government has denied that ISIS has a presence in Bangladesh, while the police blame homegrown militant group JMB for the recent violence.