(CNN) -- The rebellion by paramilitary Bangladesh Rifles troops apparently ended Thursday after they handed over their weapons inside their headquarters in the capital city's Pilkhana district, the national press agency quoted Prime Minister Sheikh Hasina as saying in a nationwide televised address.
However, the fate of top military officers who were taken hostage Wednesday was unclear, according to the news agency, Bangladesh Sangbad Sangstha, or BSS, on its Web site.
Home Minister Sahara Khatun "oversaw a rescue campaign along with a government delegation in search of bodies of officers, BDR soldiers, their family members and relatives," the agency said.
The Bangladesh Rifles is also known as the BDR.
Bangladeshi soldiers take position armed with automatic weapons in Dhaka on Wednesday.
Earlier Thursday, the country's home minister, Sahara Khatun, said mutinous paramilitary troops were close to laying down their arms and many had returned to their barracks.
"They have raised white flags and the situation is in its last stages," added a government official who did not want to be identified because he is not authorized to speak to the media. "The army presence is a means to secure the area and there is nothing to be worried about."
Still, for a jittery city, the heavy military presence near the gates of the Bangladesh Rifles (BDR) headquarters in the Pilkhana area raised fears of a potentially deadly confrontation.
"This cannot be good," said Palash Chowdhury, who was watching the drama unfold from his uncle's house a few blocks away. "This cannot be good."
Meanwhile, police in about six other towns reported shooting incidents involving Rifles troops, another government official confirmed to CNN. The incidents do not appear to have resulted in casualties, but had raised fears that the mutiny would spread outside the capital.
Bangladesh Police spokesman Kamrul Ahsan disputed the reports to CNN. But concerned residents were not so readily appeased.
"Yesterday, people thought this was an internal BDR grievance and it would be worked out," said Rashid Zaman, a Dhaka resident. "Now, we see the scope is much broader, that it's getting serious. There's an uncertainty. No one knows which way things will turn." Watch a witness describe seeing and hearing the gunbattle »
Shops and offices in the capital sent workers home.
Adding to the city's paranoia: Dhaka residents suddenly found themselves unable to make or receive calls from elsewhere in the country.
"Many people are finding this troubling," said Zahid Hussain, a former journalist who is now part of a U.S.-funded effort to create an investigative journalism center in the country. "Whenever the army has gone into action in the past, they cut off the mobile connection so nobody can pass information."
The standoff at the Bangladesh Rifles headquarters began Wednesday morning after a gun battle.
At least 50 officers and civilians were feared dead in the gunfire, the country's law minister said. Watch how paramilitary revolt has spread »
As dawn broke Thursday, the rebelling troops with the Bangladesh Rifles allowed government officials entry into the headquarters.
They went door-to-door at officers' quarters to assure frightened women and children it was safe to come out.
CNN was not immediately able to confirm the exact casualty count, with medical officials saying a final number would come after they had a chance to comb through the premises looking for bodies.
At least six bodies were recovered from rivers and drainage ditches Thursday, bringing the total to eight. Many of them had on military uniforms, government officials said.
Authorities say the men had been killed and their bodies dumped in sewers. They were recovered after they floated for miles down rivers.
The Bangladesh Rifles is responsible primarily for guarding the country's borders. The force, numbering more than 65,000, also takes part in operations such as monitoring polls.
The troops staged their rebellion on the second day of BDR Week, when officers and troop members from various BDR outposts along the border were in the capital for celebrations.
At least 5,000 BDR personnel were inside the compound when the mutiny occurred about 7:45 a.m. local time Wednesday, said Mohammed Sajjad Haider, spokesman for the information ministry.
The rebelling troops were low-ranking members of the BDR, akin to infantrymen, who were angry at the way they were treated by their superiors, Haider said.
"They have several demands," Haider said. "They want pay parity with the army, they want job security, they want better food rations."
The mutiny is the most serious crisis for Bangladesh's newly elected government, which came into power in December after two years of army-backed rule.
CNN's Saeed Ahmed contributed to this report