• If action needed for my country, then I will take it, says Yunus.
• Student leaders choose Nobel laureate to lead interim govt.
• President dissolves parliament as per student leaders demand.

Nobel laureate Muhammad Yunus will be the chief adviser of the Bangladeshi interim government, The Daily Star reported on Wednesday, citing a press release of Bangabhaban.

The Nobel winner said he is ready to head a caretaker government, a day after the military took control as mass protests forced longtime ruler Sheikh Hasina to flee.

Microfinance pioneer Yunus, 84, is credited with lifting millions out of poverty — earning the enmity of ousted Hasina and the wide respect of millions of Bangladeshis.

"If action is needed in Bangladesh, for my country and for the courage of my people, then I will take it," he told AFP in a statement, also calling for "free elections", after student leaders called for him to lead an interim government.

Hasina, 76, had been in power since 2009 but was accused of rigging elections in January and then watched millions of people take to the streets over the past month demanding she quit.

Hundreds of people were killed as security forces sought to quell the unrest but the protests grew and Hasina finally fled aboard a helicopter on Monday after the military turned against her.

Army chief General Waker-Uz-Zaman announced Monday the military would form an interim government, saying it was "time to stop the violence".

The president dissolved parliament on Tuesday, a key demand of the student leaders and the major opposition Bangladesh National Party (BNP), which has demanded elections within three months.

'In Dr Yunus we trust'

"In Dr Yunus, we trust," Asif Mahmud, a key leader of the Students Against Discrimination (SAD) group, wrote on Facebook.

The military on Tuesday reshuffled several top generals, demoting some seen as close to Hasina, and sacking Ziaul Ahsan, a commander of the feared and US-sanctioned Rapid Action Battalion paramilitary force.

Ex-prime minister and BNP chairperson Khaleda Zia, 78, was also released from years of house arrest, a presidential statement and her party said.

Streets in the capital were largely peaceful on Tuesday — with traffic resuming, shops opening and international flights resuming at Dhaka's airport — but government offices were mainly closed a day after chaotic violence in which at least 122 people were killed.

Millions of Bangladeshis flooded the streets of Dhaka to celebrate after Waker's announcement on Monday — and jubilant crowds also stormed and looted Hasina's official residence.

"We have been freed from a dictatorship", said Sazid Ahnaf, 21, comparing the events to the independence war that split the nation from Pakistan more than five decades ago.

Deadliest day

Police said mobs had launched revenge attacks on Hasina's allies and their own officers, as well as broke into a prison, releasing more than 500 inmates.

Monday was the deadliest day since protests began in early July, with a further 10 people killed on Tuesday, taking the total toll overall to at least 432, according to an AFP tally based on police, government officials and doctors at hospitals.

Protesters broke into parliament and torched TV stations. Others smashed statues of Hasina's father, Sheikh Mujibur Rahman, Bangladesh's independence hero.

Some businesses and homes owned by Hindus — a group seen by some in the Muslim-majority nation as close to Hasina — were also attacked, witnesses said.

Bangladeshi rights groups, as well as US and European Union diplomats, said Tuesday they were "very concerned" about reports of attacks on religious, ethnic and other minority groups.

Key police unions said their members had declared a strike "until the security of every member of the police is secured", offering their "apology" for police actions against the protesters.

Key regional allies of Bangladesh, neighbouring India and China, both called for calm on Tuesday.

China hopes that "social stability can be restored in Bangladesh" soon, the foreign ministry in Beijing said on Tuesday, while Indian foreign minister S. Jaishankar said he was "deeply concerned till law and order is visibly restored".

Political prisoners freed

The unrest began last month with protests against civil service job quotas and escalated into wider calls for Hasina to stand down.

Her government was accused by rights groups of misusing state institutions to entrench its hold on power and stamp out dissent, including through the extrajudicial killing of opposition activists.

Mothers of some of the hundreds of political prisoners secretly jailed under Hasina's rule waited outside a military intelligence building in Dhaka on Tuesday.

"We need answers," said campaigner Sanjida Islam Tulee.

The fate of Hasina, now in India, is also uncertain.

A source had said she wanted to go to London but calls by the British government for a UN-led investigation into the "unprecedented" violence put that in doubt.

Thomas Kean from the International Crisis Group said the new authorities faced a daunting challenge.

"The interim government that will now assume power... needs to embark on the long task of rebuilding democracy in Bangladesh, which has been so badly eroded in recent years," he said.