The seven members of the banned Jamaat-ul-Mujahideen Bangladesh (JMB) were arrested last night in the capital, bdnews quoted police as saying.
Several Jihadi books, CDs, seven Pakistani and Bangladeshi passports, seven mobile phones and about Rs 27,000 were seized from them, it said.
"They have admitted to have met to revive the JMB and plot sabotage in Bangladesh," Dhaka Metropolitan Police spokesperson Monirul Islam told reporters.
He said several groups of banned militant outfit JMB, loyal to its chief Saidur Rahman, were waging what they describe as 'Jihad' or holy war.
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About the Pakistani passports, Islam said they were valid.
"But their frequent visits are mysterious," he said.
Bangladesh has in the past three months witnessed murders of an Italian aid worker, a Japanese farmer, the attack on a Shiite rally, killing of two policemen and assassination of a progressive book publisher.
According to US-based SITE Jihadist monitoring group, the Islamic State (ISIS) claimed responsibilities for most of the murders.