DHAKA (BBC) -- A court in Bangladesh has told police to investigate whether former prime minister Khaleda Zia should face murder charges over a 2004 grenade attack.

Twenty-seven others, including her son Tarique Rahman and senior members of her Bangladesh Nationalist Party (BNP), are also under investigation.

At least 20 people died in the attack on the Awami League rally in Dhaka. Its leader Sheikh Hasina was injured.

Ms Zia, who was in power at the time, denied she had tried to kill her rival.

The BNP joint secretary general Salima Rahman described the case as "false and politically motivated to destroy the image of Khaleda Zia and her party leaders".

The case was brought by Awami League supporter Alhaj Badr Aziz, who was injured in the attack on 21 August 2004.

He told AFP news agency that he had asked police to investigate the attack while the BNP-led coalition government was in power but had been rebuffed.

"I tried to file the case but no police station took it," he said.

The BBC's Waliur Rahman in Dhaka says that the authorities are still some way away from filing a final charge-sheet in the case, which means that the prospects of Khaleda Zia appearing in court in the immediate future are slim. Police investigations into the attack - the worst on a political rally in recent years - were inconclusive. The court ordered police to report back as soon as possible. "Government actions after the incident proved that the then prime minister and her colleagues engaged professional killers to eliminate opposition leader Sheikh Hasina once

[and] for all," a court official - quoting from the case petition - told Reuters news agency.

Sheikh Hasina escaped the blasts with minor leg injuries and partial loss of hearing. Shots were fired at her vehicle as she was taken away by aides. "She came as close as you can possibly come to being assassinated. It was a well coordinated and well thought-out attack," her political secretary Saber Hossain Chowdhury told AFP at the time.

Others being investigated by police are Motiur Rahman Nizami, head of the BNP's largest coalition partner Jamaat-e-Islami, and a number of senior BNP figures, including former home minister Lutfuzzaman Babar.

Babar is among 150 high-profile detainees - including politicians, businessmen and civil servants - arrested since January on suspicion of corruption.

Sheikh Hasina - who herself faces murder and extortion charges - has always maintained that the BNP and its Islamist allies were behind the incident. The BNP and its Islamist allies have always denied any involvement in the attack. Khaleda Zia's government stepped down in October 2006.

Street demonstrations ahead of elections set for January led to their cancellation and the imposition of a state of emergency.

Rescheduled elections are expected by the end of 2008, by which time the military-backed caretaker government has pledged to rid the country of corruption.

Sheikh Hasina and Khaleda Zia alternated as prime minister since 1991 and are bitter foes.