  We present a new numerical relativity code designed for simulations of
compact binaries involving matter. The code is an upgrade of the BAM code to
include general relativistic hydrodynamics and implements state-of-the-art
high-resolution-shock-capturing schemes on a hierarchy of mesh refined
Cartesian grids with moving boxes. We test and validate the code in a series of
standard experiments involving single neutron star spacetimes. We present test
evolutions of quasi-equilibrium equal-mass irrotational binary neutron star
configurations in quasi-circular orbits which describe the late inspiral to
merger phases. Neutron star matter is modeled as a zero-temperature fluid;
thermal effects can be included by means of a simple ideal-gas prescription. We
analyze the impact that the use of different values of damping parameter in the
Gamma-driver shift condition has on the dynamics of the system. The use of
different reconstruction schemes and their impact in the post-merger dynamics
is investigated. We compute and characterize the gravitational radiation
emitted by the system. Self-convergence of the waves is tested, and we
consistently estimate error-bars on the numerically generated waveforms in the
inspiral phase.
