Several firefighting units have been dispatched to the factory in the Bayezid Textile area
The bodies of the nine Italians, most of whom worked in the clothing industry, were flown back to Rome on Tuesday.
Autopsies showed that many of them had been slashed with knives and had suffered slow deaths. Some had been mutilated, the source said.
In all, 20 people died in the Dhaka assault, which started on Friday night. The victims, mostly foreigners, included seven Japanese, one Indian and three Bangladeshis, one of whom was a naturalised US citizen, as well as the Italians.