A series of blasts targeting Shia Muslims in Dhaka killed at least one person and wounded dozens more early on Saturday as they gathered for a procession in the old part of the Bangladesh capital to mark the holy day of Ashura, police said.

Police cordoned off the area and were investigating the blasts, which they said were caused by improvised explosive devices. They said it was unclear who carried out the attack.

Witnesses said that people ran frantically after blasts, losing their flip-flops and sandals as they scattered.

At least 10 people were admitted to Dhaka Medical College Hospital, and most of them were in a stable condition, according to Nazimunnesa, a deputy director.

Attacks on the Shia minority have been rare in Sunni majority Bangladesh, but Sunni militant groups have become more active.

"This is not a militant attack, rather it is a planned and destructive attack aiming only to destabilize the situation of the country," Asaduzzaman Khan, Bangladesh's home minister told Reuters.

The minister dismissed parallels with an attack on a Shia procession in Pakistan on Friday in which 16 people were killed.

"Though the attack came hours after a suicide bombing in Pakistan, we strongly believe the situation is not similar at all as we live peacefully with Shia community," he said.

Azizul Haque, officer in charge of Chawkbazar police station where the incident took place told Reuters that four suspects had been detained.

The attack marks part of a wider increase in Islamist aggression in Bangladesh after four bloggers have been hacked to death this year for criticising Islam.