Rebel representatives of Bangladesh Rifles came out of the besieged headquarters to sit in talks with the home minister to end the impasse over their surrender at a nearby hotel Wednesday.
State minister for local government Jahangir Kabir Nanak, two local MPs Mirza Azam and Fazle Noor Tapash were also present at the meeting from around 9.45pm in the Ambala Inn, a few metres from the main gates of the Rifles Headquarters.
Nearly 12 hours into an armed rebellion to seek better pay and break army control, the Bangladesh Rifles said Wednesday night they would not surrender arms until the army was fully withdrawn from around the Peelkhana headquarters and 46 BDR units countrywide.
Heavy gunfire again rocked the compound at around 9:25pm.
The mutinous BDR men had earlier agreed to surrender their arms after a two-hour meeting with the prime minister at her official residence, government spokesman Nanak told reporters.
But border guards inside the compound began demanding through loudspeakers that the army withdraw otherwise, as they feared the military could "finish them at any time".