Aminur Islam alias Alam, 23, who was arrested on Tuesday during a raid at a village in Bogra's Sherpur sub district was the northern regional commander of the armed wing of Jamaatul Mujahideen Bangladesh.
He was killed in a pre-dawn shootout as operatives of the outfit attacked the van he was travelling in with law enforcement agency personnel at Jamnagar village under Sherpur upazila, police said.
"We took him as our guide to a neo-JMB hideout when the gunmen attacked our van forcing us to retaliate and Amin came under fire and died instantly," a police officer said.
Northwestern region police chief said Amin was in-charge of regrouping neo-JMB, believed to be close to ISIS.
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The incident came a day after counter-terrorism unit arrested another neo-JMB commander who led a syndicate that supplied ingredients for grenades and arms used in the attack on the Holey Artisan restaurant in Dhaka on July 1, 2016 that left 22 people dead, including 17 foreigners.
Counter-terrorism unit officials said acting on a tip off they arrested 60-year-old Mizanur Rahman alias Boro Mizan as he was travelling in a bus in the capital.
The country had launched a massive crackdown on militants specially after the Dhaka cafe attack.
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