The flames raced through four adjoining buildings, which were also used as chemical warehouses, including for storing plastic granules and body sprays.
"So far we have recovered 41 bodies. The number of bodies may increase," Bangladesh's fire service chief Ali Ahmed told news agency AFP.
Witnesses said the victims also included passersby, some people who were eating food at a nearby restaurants and some members of a wedding party. Over 50 people, including women and children, were also injured and admitted to nearby hospitals, including Dhaka Medical College Hospital (DMCH) and Sir Salimullah Medical College Hospital (Mitford Hospital).
Some of the residents were injured after they jumped off the building. The officials said 37 fire fighting units were moved to the scene but narrow lanes made it difficult for fire engines to reach the spot. The fire fighters used helicopters and long hose pipes to set off the blaze.
The fire from the building immediately caused an electric transformer to explode, which set ablaze several cars parked on the alley. The alley was packed with people because of a wedding ceremony that was being held in the nearby community centre.
An investigation panel has been formed to identify the reason behind the fire. The fire brings back the terrifying memories of another massive blaze in 2010 in an old Dhaka building, which was also used as a chemical warehouse, that killed more than 120 people in one of the worst fire tragedies in Bangladesh.
It had sparked a public outcry, demanding the relocation of chemical warehouses and stores from the area, but little has been done in the last nine years.
A similar fire in 2010 in an old Dhaka building, which was also used as a chemical warehouse, killed more than 120 people in one of the worst fire tragedies in Dhaka.
(agency inputs)