Twenty civilians, most of them foreigners, were killed by suspected Islamist militants who took them hostage during an hours-long siege at a restaurant in the Bangladeshi capital, Dhaka.
Bangladeshi troops stormed the Holey Artisan Bakery restaurant in Dhaka's diplomatic zone to end the siege, and killed six terrorists, before recovering the bodies of 20 civilians, the army's press wing said.
Two police officers were also killed, the military said Saturday.
A statement circulated online by apparent supporters of the Islamic State extremist group claimed responsibility for the attack.
The statement, whose authenticity dpa could not verify, said that five Islamic State fighters had attacked "a gathering of subjects of the crusader states in the city of Dakka in Bangladesh."
It claimed that they had killed 22 "crusaders" including seven Italians and threatened that "subjects of the crusader states" would not be safe anywhere "as long as their aircraft are killing Muslims."
Nine Italians, seven Japanese nationals, one Indian and one American citizen were among those killed, their countries confirmed.
The Foreign Ministry in Rome released the names of the nine victims, who included five women and four men.
Government officials in Tokyo confirmed the deaths of seven Japanese nationals, the Kyodo news agency reported. One Japanese civilian taken hostage on Friday night was rescued with injuries, government spokesman Yoshihide Suga said.
The United States "condemns in the strongest terms the horrific terrorist attack in Dhaka," the White House said in a statement, adding that an American citizen was among the victims.
"This is a despicable act of terrorism, and the United States stands with Bangladesh and the international community in our resolve toconfront terrorism wherever it occurs," it said.
Indian Foreign Minister Sushma Swaraj identified the Indian national killed as 19-year-old Tarishi Jain, who had studied at the American School in Dhaka and was currently a student at the University of California, Berkeley.
Emory University in Atlanta, Georgia, confirmed two of its students - Abinta Kabir and Faraaz Hossain - were killed. Kabir was from Miami and Hossain from Dhaka.
"The Emory community mourns this tragic and senseless loss of two members of our university family. Our thoughts and prayers go out on behalf of Faraaz and Abinta and their families and friends for strength and peace at this unspeakably sad time," a university statement said.
"I know they killed some Chinese, an Indian and some Bangladeshi," Diego Rivera, an Argentine chef who worked in the restaurant that was targeted, was quoted as saying in Italian media.
Rivera managed to flee from the attackers, along with other staff, climbing on a roof above the kitchen and then jumping off it.
Italian Prime Minister Matteo Renzi called for a united response against terrorism in defence of "our values," as it was "the only way in which we can honour the memory of these fallen brothers of Italy."
He said that an Italian state plane was leaving for Bangladesh, presumably to repatriate the bodies of the Italian victims.
Indian Prime Minister Narendra Modi said "the attack in Dhaka has pained us beyond words."
In Germany, authorities said there was no indication of any German casualties from the attack.
Most of the victims were "hacked to death by sharp weapons" inside the restaurant in the Gulshan diplomatic district of Dhaka on Friday, the army's press wing ISPR said.
In a televised address to the nation, Bangladeshi Prime Minister Sheikh Hasina announced two days of national mourning on Sunday and Monday.
Hasina called on the people of Bangladesh to strengthen her hands to rid the country of terrorists.
"I'm making a fervent appeal to all to face terrorism by involving the anti-terrorism committees, community police and the general people," she said.
Earlier, Hasina said that troops were able to rescue 13 hostages and capture one of the terrorists.
Two of the 13 rescued were Sri Lankan nationals, the army said.
The militants were killed during a raid lasting 12 to 13 minutes, the military spokesman said. They found a number of weapons at the scene, including pistols, AK-22 rifles and knives.
The gunmen entered the restaurant at about 8:45 pm Friday [1445 GMT] as customers were eating. A tense standoff carried into early morning, after two police officers were killed in an initial exchange of gunfire.