DHAKA (Agencies) - Nine hours of high drama that included a fierce gunbattle in Bangladesh ended Wednesday evening after Prime Minister Sheikh Hasina declared a general pardon for the revolting soldiers of the Bangladesh Rifles. She assured them that the government would meet their demands in phases. A Minister in the Government Jahangir Kabir Nanak said the BDR mutineers had agreed to surrender their arms after the meeting with the Prime Minister at her official residence. The BDR mutineers, who staged an armed mutiny, have started laying down their weapons, a local television channel reported, quoting the Home Minister. Earlier, the BDR guards launched an armed mutiny on Wednesday, taking officers hostage and sparking a fierce gunbattle in the capital that left at least five people dead and 42 wounded. The members of border Security force are holding over 100 hostages, including senior officers, a senior security official told AFP. The deputy head of Bangladesh's Rapid Action Battalion (RAB), Colonel Rezaul Karim, said the hostages included the head of the Bangladesh Rifles, Maj-Gen Shakil Ahmed and dozens of sector commanders. "More than a hundred people have been taken hostage," he said. Thousands of police and troops with canons and heavy arms cordoned off the headquarters of the Bangladesh Rifles (BDR) after the paramilitary border security force took up arms against their superiors over low pay. An armed forces spokesman said the guards quickly seized control of the BDR headquarters in the capital Dhaka, home to between 3,000 to 4,000 troops, and fired at army helicopters hovering over the barracks. The Bangladeshi Prime Minister has offered a general amnesty to border guards to try to end the mutiny at their HQ in the capital. Representatives who met Sheikh Hasina at her office have reportedly agreed the mutineers will lay down their arms. They have returned to the barracks with the PM's offer. The Premier and senior ministers met 14 of the renegade Bangladesh Rifles (BDR) troops at her office after they were escorted there from the HQ. She agreed to consider their demands, minister Jahangir Kabir Nanak told reporters. After hours of gunfire and panic in the city, one of the mutineers' leaders said late Wednesday they were prepared to lay down their arms and return to barracks following an offer of a general amnesty from Bangladeshi Prime Minister Sheikh Hasina. "We have pledged to her that we will lay down arms and go back to barracks. She has agreed to meet our demands gradually," said Tauhid, an Assistant Director of BDR, after talks with the prime minister. But the mutineers said they would not lay down their arms unless troops surrounding the compound are removed. Sporadic gunfire could still be heard into Wednesday evening and the country's Home Minister had to back off from entering the headquarters, an AFP reporter at the scene said. With no surrender in sight, thousands of troops cordoned off the area housing barracks and headquarters, an army major at the scene told AFP. "We are ready for any circumstances," he said, adding some 800 students from nearby Dhaka University dormitories had been evacuated. Officials said tensions in the force had been simmering for months but exploded into violence when senior officers dismissed appeals for more pay, subsidised food and holidays. At least five people have been killed, including two top army officers and 42 others wounded, police and medical officials said. The bodies of the two senior officers were found dumped in a drain outside their barracks, police said. Both had shot wounds. Red Crescent ambulances have been allowed to collect injured soldiers from the barracks and headquarters, and private ATN Bangla television quoting a mutineer said 10 more dead bodies were lying scattered inside the compound. Several television channels also reported that the head of the BDR had been injured or possibly killed in the fighting, but this could not be confirmed. It is the biggest challenge to face Sheikh Hasina since she took office less than two months ago after a landslide election victory that ended two years of army-backed government. She appeared keen to bring a quick and peaceful end to a stand-off that has highlighted the frustrations felt by many Bangladeshis, including high food prices, a sluggish economy and rampant corruption within the country's ruling classes. Some rebels have accused their chiefs of stealing government funds meant for soldiers. Although there was no apparent threat of a coup, an unnamed soldier described as a participant in the mutiny told ATN Bangla the mutineers would not give up and had taken their officers hostage.