Bangladesh’s government has staunchly denied that IS or any international militant network has gained a foothold in the country.
Instead, it has blamed local extremists for a deadly siege at a cafe in Dhaka last month and a series of killings of liberal activists and people from religious minorities.
But speaking after meeting with Prime Minister Sheikh Hasina on a one-day visit to the capital, Dhaka, Kerry said there was “no argument” that extremists operating in Bangladesh had links to counterparts in Syria and Iraq.
Must Read: Bangladesh cafe attack ‘mastermind’ killed
“There is evidence that ISIL in Iraq and Syria has contacts with about eight different entities around the world and one of them is in South Asia,” Kerry said after meeting with Hasina.
“They are connected to some degree with some of the operatives here and we made that very clear in our conversation. There was no argument about it.”
IS has claimed responsibility for the July 1 attack on the upscale cafe in Dhaka in which 22 people were killed and pictures of the attackers holding IS flags were posted online.
Kerry however, defended Hasina’s administration against accusations that it is in denial about the nature of the extremist threat it faces.
“I don’t believe that the government of Bangladesh has its head in the sand. I do not believe that,” he said.
Kerry said the United States stood firmly behind Bangladesh in its fight against IS militants, and both countries have agreed to increase cooperation between their respective intelligence agencies.
Militants shot dead
But Kerry also said democracy was a key to combating extremism, as Bangladesh comes under pressure over a crackdown on opponents that has seen thousands of activists arrested.
“Just as important, we understand that to defeat terrorists, we must uphold, not betray, the democratic principles we cherish and they abhor,” Kerry told labour activists and union leaders after the talks with Hasina.
“Democracy still provides the most resilient and reliable platform we have for preventing and responding to violent extremism.”
Kerry was speaking just hours after Bangladesh police shot dead two suspected members of the local militant Jamayetul Mujahideen Bangladesh (JMB) group during a gunbattle with security officers.
“They were declared dead after being brought to a local hospital,” police spokesman Gaziur Rahman said.
The shootings came just two days after police killed the suspected mastermind of the cafe attack during a gunbattle outside Dhaka. Police named the suspect as JMB leader Tamim Chowdhury, a Bangladeshi-born Canadian.
Police have conducted a series of raids on suspected militant hideouts since the cafe attack that have killed at least 26 extremists.
Critics say Hasina’s administration has been trying to exploit the attacks to demonise her domestic opponents and say a government crackdown on opponents has pushed many towards extremism.
The country’s biggest Islamist party is banned while the main opposition leader Khaleda Zia also faces a string of corruption, sedition and other charges that her supporters say are aimed at keeping her out of politics.
Zia’s Bangladesh Nationalist Party and its allies boycotted the last general election in 2014 over fears that they would be rigged, leaving the field clear for Hasina’s party.
Thousands of opposition activists were arrested in a government crackdown last year following an opposition-led transport blockade that left scores dead in a failed bid to force Hasina to resign.
Kerry will fly to neighbouring India later Monday to take part in a regular India-US strategic dialogue on economic cooperation and security issues.
He will hold talks with Prime Minister Narendra Modi, amid rising tensions in the disputed region of Kashmir which is divided between India and Pakistan.